AT&T sued by FTC over ‘throttling’ unlimited-data customers

AT&T is being sued by the US government over allegations it misled millions of smartphone customers who were promised unlimited data but had their internet speeds cut by the company, making it difficult for them to open web pages or watch streaming video, Associated Press reported.

The Federal Trade Commission (FTC) yesterday filed a complaint against AT&T Mobility Inc, over the failure of the telecom company to adequately disclose to customers that it would slow data speeds if they exceeded a certain limit in the billing cycle.

The practice, called throttling, slowed web browsing, GPS navigation or streaming videos.

According to the complaint, at least 3.5 million consumers had been affected and some customers, according to the agency, had data speeds slowed by nearly 90 per cent.

According to FTC chairwoman Edith Ramirez, the FTC expected companies to fulfill promises they made about services.

She said the company stopped the unlimited data plan offers for new customers in 2010, and in 2011, started throttling speeds for existing customers with unlimited data plans.

The charge has been denied by AT&T.

"We have been completely transparent with customers since the very beginning," Wayne Watts, senior executive vice president and general counsel for AT&T, said in a statement. "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."

Meanwhile, The Verge reported that the FTC  described as AT&T's policy as "deceptive" and "unfair".

AT&T had drawn thousands of complaints over the policy from consumers who feel unlimited data should not come with restrictions. Consumers have complained to the FTC, Federal Communications Commission (FCC), Better Business Bureau, and AT&T itself.

However, AT&T was not alone in slowing down those on unlimited plans, but the FTC was particularly upset with how the carrier had handled things in recent years.

According to a press release from the FTC, the regulator worked closely with the FCC in piecing together the complaint.

Responding to the FTC action, AT&T said in the statement, "The FTC's allegations are baseless and have nothing to do with the substance of our network management program.

"It's baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts."