Officials of AT&T are vowing to fight a decision by the FCC to impose a record fine of $100 million on the company for throttling (i.e., slowing down) the Internet transmission speeds of certain wireless subscribers who have signed up for unlimited data plans.
Issued on Wednesday, the Notice of Apparent Liability for Forfeiture (NALF) caps an investigation that began last year when the FCC delivered letters to each of the four national wireless carriers to request information on the companies’ data throttling practices. The accusations outlined in the NALF also mirror a Federal Trade Commission (FTC) lawsuit, filed last fall, in which the FTC alleged that AT&T failed to notify unlimited data customers that their transmission speeds would be throttled once they reach a certain level of usage during the monthly billing cycle. According to the FCC, the capped speeds were so much lower than AT&T’s advertised broadband speeds that affected customers found themselves significantly impeded in “their ability to use common data applications such as GPS mapping or streaming video.” FCC officials also confirmed that AT&T’s throttling practices have impacted millions of customers who had their data speeds reduced for an average of 12 days per billing cycle.
As one senior FCC official described the proposed $100 million fine as the largest in the agency’s history, FCC Chairman Tom Wheeler proclaimed that “broadband providers must be up front and transparent about the services they provide,” adding: “the FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.” Declaring, “we have been fully transparent with our customers,” and pointing to past precedent in which the FCC “has specifically identified this practice as a legitimate and reasonable way to manage network resources,” an AT&T spokesman told reporters: “we will vigorously dispute the FCC’s assertions.”