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FTC Sues AT&T For Throttling 'Unlimited' Data Plan Customers Up To 90%
An anonymous reader writes The U.S. Federal Trade Commission today announced it is suing AT&T. The commission is charging the carrier for allegedly misleading millions of its smartphone customers by changing the terms while customers were still under contract for "unlimited" data plans that were, well, limited. "AT&T promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise," FTC Chairwoman Edith Ramirez said in a statement. "The issue here is simple: 'unlimited' means unlimited."
How apropos.
If AT&T wants to apply a soft cap, either throttle based on QoS requirements at the time of use or adjust their throttling upward. I rarely hit 5gb a month that causes me to throttle, but it becomes difficult to use modern websites that have no concept of bandwidth control in their design or the ads they allow. Given that I can go from 15mb to 100k at the flip of a switch, I don't see why they couldn't just throttle based on the available bandwidth when it's needed at that point. If I'm abusing my contract and hitting my softcap and bandwidth is tight, sure, throttle me down, but there's no reason to cut me down to ISDN speed when the bandwidth is otherwise underutilized.
But shouldn't AT&T also have to reimburse the customers for the value of the contract portion they did not deliver?
AT&T issues press release defending action as within the definition of "unlimited" they found in the dictionary in that one empty cubicle the temp was using last week.
Settlement agreed upon with the FTC to include your choice of $2.99 worth of AT&T credit on your account or a check for $1.19 if you send 3 years of back statements, including the envelope, to Dewey, Cheatam & Howe who will be overseeing the settlement process.
Until it's not.
Verizon defines "Unlimited" differently in their terms of service than you do.
Bait and switch is illegal. Where are the criminal indictments against the decision makers?
Seems like AT&T changed their definition of unlimited at some point.
I feel like popping some popcorn. And I don't even like popcorn.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
The *expenses* that any utility has providing services fall into three broad categories:
1) One time costs of putting in infrastructure - or at least they appear one-time for any human lifetime, as lots of pipes (and even copper phone wires from the 30s) outlast people. But everything needs replaced eventually on some "lifecyle" of 20-120 years. These costs are handled by large banks loaning money over long periods so that it becomes a yearly cost that can be broken down per subscriber, or reasonably apportioned to subscribers by usage category (you vs Netflix, they pay thousands of times more).
2) Yearly fixed costs. They have to employ X guys to keep the lines strung through snowstorms, whether your line falls or not. Again, this breaks down to a monthly bill per subscriber and regulators can routinely agree how much you vs netflix pays, based on whether your "category" is 1-500 GB/month or 500-5000 or >5000.
3) Costs that are exactly proportional to usage. The actual cost of water per gallon, once all the pipes and plants are paid for; the actual cost of electricity per kWh, after all wires are bought and maintained. And there can be complexities here with utilities that have "rush hours" where using power when they're maxed reequires buying more expensive power - these can be addressed with "peak time surcharges" if needed.
With power especially, these are routinely broken out so that you don't pay $0.11 per kWh - you pay $20/month plus $0.07 per kWh. That's only fair. Any kind of pro-rating means some subscribers subsidize others.
With internet, every single ISP tries to blend all their costs into one monthly charge, and so you have $50/month and $80/month and $120/month "plans" with caps. It's all hogwash. THere should be ONE formula. And from the Netflix corporate filings, we know the Big Secret: data in bulk is now transmitted for barely 2 cents per GB.
So, your $50 plan should be a $48 plan, plus a nickel per GB - that's still giving them a vast profit per GB transmitted, but nobody will care as few use more than 100GB per month.
If they were regulated into breaking out fixed costs vs per-GB costs, all this crap with "data caps" and throttling would go away. No caps, because you pay per GB and they want you to buy more. No throttling for the same reason.
Even DISCUSSING the notion of a "cap" or a "throttling" is buying into their model of pricing, which is good for them and not for you. Don't do it.
I am not sure how you can fix the impact AT&T has had on their prior customers. I simply had to leave their service after my throttled connection wouldn't allow for me to use GPS while traveling.
How do you put right what they did wrong? A fine won't do it, since innocent shareholders will suffer. Forcing them to adopt unmetered accounts won't fix the fact I am now on Verizon's network unable to use the service as it is sold. Tossing a few dollars to me won't make up for what I have had to deal with regarding Verizon's war on their customers.
This should be the turning point for AT&T, which is that the only way to make this right is to have them deal with the same issues we all dealt with. That is, they should enact regulation and then split the company apart and force them to compete with themselves.
Thank you! I am full bore libertarian, but this is fraud. Go get 'em!
Next up: Compabies selling me Internet servislce at certain speeds, then throttling Netflix and YouTube unless they pay a kickback. I didn't consent to it in my contract with the cable company. You provide X speed (within your network you control) for all things. If it's clogged, it all slows down. Throttling for extortion is extortion and fraud on that.
Go get those frauds, too.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
Err? The current FTC Chair(wo)man is a Democrat appointed by Obama, and the FTC Commissioners are majority Democrat.
Tell me where I agreed to anything in my contract that has to do with guaranteed bandwidth? My contract states unlimited data, which is tempered by the bandwidth assigned to me. Just like any normal home internet connection, where you are assigned bandwidth and you have unlimited within those constraints.
Use as much as you want. For a fixed price. For the rest of your life.
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Have gnu, will travel.
Back in the 70s, most urban areas and many rural areas had "unlimited local calling" and "unlimited incoming calls." This was fine until the rise of home-based BBSs which tended to use more of the limited telephone-switch resources 24x7 than the telephone company's planners envisioned. The "Baby Bells" (the descendants of the breakup of the original AT&T/"Ma Bell") tried to get these systems billed at business rates. Eventually, I think there was a compromise either nationally or in the state I lived in at the time: If you ran less than X number of phone lines you could publicly advertise your non-business BBS and still be billed at residential rates. Anything more than X number of phone lines and you would be charged at business rates.
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I shall achieve in time —
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The punishment fit the crime;
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Of innocent merriment!
The advertising quack who wearies
With tales of countless cures,
His teeth, I've enacted,
Shall all be extracted
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And it looks like AT&T hasn't learned their lesson. Break 'em up again. Do the same to Comcast and Verizon. Hell, break up Microsoft and Google as well, just for shits and giggles. America is long overdue for some trust-busting.
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You do realize the load has drastically changed since they offered Unlimited data, right? I don't agree with AT&T's choice to throttle down to only 10% of available bandwidth, but realistically they sold those unlimited plans at a time when it was more feasible than now. I think AT&T is being more restrictive than needed with their data plans, but unlimited data caps doesn't equal unlimited speed on the connection.
So it's the customer's fault that there isn't enough bandwidth because they're using too much, rather than AT&T's fault for not expanding the network to cope with all the millions they salt away in tax havens?
"Wait. Something's happening. It's opening up! My God, it's full of apricots!"
heh, partisan politics has very little place in the actual function of government, When it gets down to things like this both sides gladly work together, usually to screw us.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
Tell me how unlimited has any meaning at all if it's interpreted that way and the company fiddles with your assigned bandwidth based on your cumulative monthly usage. That's the misleading part.
I used to have AT&T unlimited, but changed to a limited plan when I realized that my unlimited plan didn't behave in a way consistent with any definition of "unlimited" and behaved nearly identical to a hypothetical "3GB per month" plan.
Seems like AT&T changed their definition of unlimited at some point.
Technically it is still unlimited the same way a slumloard could close the main water valve to allow barely a trickle and claim that he hasn't shut off your water.
FTC is not the FCC. Now granted it would be nice if they were on the same page, but that rarely happens.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
Indeed, nothing is ever unlimited is it? My lifetime supply of Doritos that I won in a contest is actually a fixed number for month, my unlimited supply of sunlight I receive is actually up until the sun goes nova, my unlimited dialup AOL actually is limited by my 56k baud modem, etc.
Unlimited means that I get fair access to available bandwidth and I never get charged extra no matter how much I use.
AT&T's implementation of unlimited means that if I use more total data in a billing period than they think a typical customer should use, then my service is degraded more than other customers service is degraded. In many cases, they are throttling unlimited users at times when there is surplus bandwidth - that's just vindictive.
They could limit you to 1 byte per second at cap, and still not be lying. Do you really believe that ? Furthermore unlimited data use the assumption is that no speed throttling will happen (beside the announced sped). if you DO throttle speed, then essentially you are simply throttling the max data. Remmember speed*time=max amount transferable. 100K.s-1 is max 361 Mb.h is 8G.day. It is a limitation they impose which is LOWER than what you can expect had they not limited your speed. This is de facto 15 time lower than the max transfert you could expect if you were left at 1.5 Mb.s-1. You announce an unlimited data plan, only to limit the maximum data which you allow to transfert (again , remember max data=speed*time, so by imposing a lower speed, you limit the max transfert, and cannot pretend to have an unlimited data plan).
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Umm.. all I said was that AT&T was offering unlimited plans when they could manage unlimited plans. Mobile data usage has skyrocketed in a rather short period of time. On top of all this, because it's cellular data there are other limits on their ability to provide more bandwidth per user per tower.
I am just waiting for the day where every service is priced at $.01 ("plus fees and taxes"). Price comparisons are meaningless when a large chunk of the price is mandatory fees.
I don't mean baggage fees on flights, since one may choose not to take baggage, but such things as the "resort fee" which hotels add to bills in certain locations, etc.. These "fees" are a cost of business and should be included in the base price.
Other examples are rental car companies charging a fee to cover their agent's salary (yes, really!) or the property taxes for the vehicle (which the rental company must pay irrespective of whether someone rents the vehicle or it sits in the garage).
The real "Libtards" are the Libertarians!
I am OK with AT&T throttling my ads.
The real problem is Marketing creep. "1000 gigs of data over here". Yeah well, "2000 over here". "Oh yeah??? We sell unlimited".
Limits that could probably be solved using the money they were paid for such services?
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Nothing is unlimited from every angle, but that doesn't make unlimited a meaningless word. If AOL cut my 56k unlimited access back to 5k after 10 hours, I would ask for credit for anything I paid above a 10 hour plan. The lifetime supply of Doritos was likely advertised as a fixed number of bags per month, so that isn't similar. And if someone puts a tent over my property, they've taken away my unlimited access to sunlight.
I had the unlimited plan. I was keeping it just to keep it. At the time I had two phones and ran a Blackberry through AT&T.
I never used more than 2 gigs of data but I loved the idea of having an unlimited plan. After the caps were put in place I held out hope it would change. While it never truly affected me I ended up canceling and leaving AT&T all together out of principle about a year later.
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No matter how "unlimited" a data cap supposedly is, if the bandwidth is limited, then there is only a limited amount of data you will ever be able to pull through it over a monthly period. So therefore it's limited, QED.
To posit an absurd example to prove the point, if AT&T advertised an "unlimited bandwidth" connection that could only download one byte per minute, your effectively monthly data cap would be: 60 (seconds) * 60 (minutes) * 24 (hours) * 31 (days) = 2.67 Mb per month.
Artificially throttling bandwidth is imposing a lower data cap, period.
Which is EXACTLY what others are trying to say, yet you're arguing with them at every turn.
I don't remember the exact figures but AT&T did something like a 7000% expansion 2007-2011 and it has continued expanding since then. AT&T most certainly has put a fortune into expanding the network. The big thing holding back cellular data in the United States at this point is the stupid way other bandwidth is being used, most obviously broadcast television.
I have been a happy t-mobile customer for a decade. Not a problem mind you, but the t-mobile unlimited data plan has a soft cap. They DO inform you of the cap, and I do not know what the penalty feels like because I have never consumed enough of my plan to reach it. And what about my hard wired ISP? Selling me 15 MB/s and giving me never more than 8? Now I would like to see the FTC step in there and right that wrong...
When many of us signed up for unlimited. We signed up for UNLIMITED 3G speeds. Anything below that due to throttle is in fact a breach of contract. They can throttle the 4G, but the 3G should NOT be throttled.
I should always get my approx. 1mbps service in an uncongested area. I should NOT be reduced to 60K.
When these contracts were signed. They were signed for Unlimited 3G service. And that is what I expect. If there is a good signal in an uncongested area, I should receive 3G quality service. I should NOT be throttled down to 60K.
Seriously, would you rather we wage economic sabotage against AT&T cell towers. It's like Cable TV. I have Comcast, and no other available options. They're not going to change unless enough people wine and complain. And guess what...
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Have probably complained to our congressmen, the FTC, the FCC, etc.
I'm arguing because the statement that we both agree on is completely meaningless from a practical perspective. I stated it up front to show that I wasn't insane enough to disagree with the fact that unlimited is a very strong word and no plan could ever be "purely unlimited". Then I went on to show that AT&T's plan not only doesn't meet the academic definition of unlimited, but doesn't meet any practical definition of "unlimited cellular data plan".
You chose to point out that I agree with the academic statement while completely ignoring the fact that I said that it doesn't matter whether it does or not. If the only way you can think of the word "unlimited" is from an unrestricted academic sense, then you are speaking a different version of English than the rest of us. That's why this FTC position, or almost everyone else's view, doesn't make sense to you.
These allegations are of no surprise to those of us who have been customers of these companies for years now. They all do this. To think that a company like verizon or at&t doesn't participate in this is silly. They don't even have the physical infrastructure required to give all the customers they've signed up today all their money's worth. They stay behind the curve of customer demand to go fast on upgrades to infrastructure .. it's part of their business model.