FTC Says AT&T Misled Customers About 'Unlimited' Data Plans

By Sam Sanders / NPR

Published October 29, 2014 at 1:05 PM PDT

This story was published more than 10 years ago.

The Federal Trade Commission has filed complaint in federal court against AT&T; over just how unlimited the company's unlimited data plans are. The FTC says that by "throttling," or slowing down, the data of high-volume users, AT&T; in fact was not giving users unlimited data. This throttling would sometimes reduce users' data speeds by 90 percent.

In a statement, FTC Chairwoman Edith Ramirez said AT&T; let customers down. "AT&T; promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise. ... The issue here is simple: 'unlimited' means unlimited."

NPR reported on AT&T;'s throttling back in 2012. Bloomberg's Rich Jaroslovsky explained the practice to Morning Edition Host David Greene:

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"It's basically a way for the carriers to limit their unlimited customers. What they're doing is basically saying OK, we're not going to limit your data usage. But if you reach a certain threshold, if you are one of the 5 percent heaviest users on your unlimited data plan, we're going to slow you down. It's kind of like if you rented a car that had unlimited miles, but after you've gone 100 miles, the car won't go any faster than 30."

The FTC alleges that 3.5 million customers were throttled, more than 25 million times.

The New York Times reports that AT&T; has responded to the allegations:

"AT&T; said that the charges were 'baseless' and that it had been 'completely transparent' in its dealings with customers.

" 'We informed all unlimited data plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented,' said Wayne Watts, AT&T;'s senior executive vice president and general counsel."

The company doesn't seem to have ended the practice either. On its website today, NPR found details of just how AT&T; is still throttling:

"Reducing data speed (data throughput) and network management are common practices in the wireless industry. How we are managing the network only affects a small minority of the heaviest smartphone data users still on unlimited data plans — more than 97 percent of our smartphone customers are not impacted by this."

You can read the FTC complaint here.