Network operators have redefined what the word “unlimited” means, or at least as it applies to data. What they really meant was limited unlimited data that incurred consequences once you hit certain conditions. That may be common practice but AT&T may have tried to get away with it until the FTC slapped it with a lawsuit. Now five years later, the major US carrier has decided to just pay the fine, long after the case could have any significant effect in the industry.
The point of contention in the 2014 FTC lawsuit was that AT&T knowingly and willfully misled its customers with its promises and advertising of unlimited data. What it didn’t tell them, at least not outright or in a very visible way, was that it would throttle their speed after they reached certain data caps, which was a rather measly 2 GB half a decade ago. It has, in fact, been doing that since 2011 without any of the customers knowing about it. At least not until the FTC came knocking on AT&T’s legal doors.
AT&T and other carriers would later argue that such throttling practices are necessary to prevent users from abusing the networks to the point of affecting other legit subscribers. It has, in fact, become industry practice, though an unpopular one at that. Interestingly enough, the FTC has no issues with throttling. Instead, it is more concerned about the marketing of “unlimited data” plans.
As such, part of the settlement requires AT&T to prominently disclose any caveat to any plan or promo that it describes as “unlimited”. In other words, it’s OK for AT&T to use the term and still throttle customers as long as it makes it clear in black and white that it will be doing so. Basically what it and other carriers may already be doing, except AT&T is also prohibited from pushing it to some fine print or another page.
AT&T is also paying a $60 million fine that will be used to provide partial refunds to customers who signed up for that unlimited data promise prior to 2011 but were secretly throttled. The FTC page doesn’t disclose how much those customers are entitled to. Almost ironically, AT&T did just recently announce new Unlimited plans that may be more confusing than ever before.