FCC Fines T-Mobile $48 Million for Throttling Download Speeds on ‘Unlimited’ Data Plans
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Unlimited. “You keep using that word. I do not think it means what you think it means.” – Inigo Montoya
It turns out that T-Mobile’s “unlimited” data plan wasn’t so “unlimited” after all. The company recently agreed to a $48 million settlement with the Federal Communications Commission after finding that the carrier failed to disclose speed and data restrictions placed on certain users subscribing to their “unlimited” data plan.
Under a policy T-Mobile calls the “Top 3 Percent Policy”, T-Mobile throttles the speed of users on the unlimited data plan after they reached 17 gigabytes of data within a month. Many customers, who the FCC claims were not informed of the data limit or speed throttling, labeled data speeds after reaching the 17GB limit as “unusable” during certain periods of the day. According to a statement released today by the FCC,
“Under its “Top 3 Percent Policy,” T-Mobile “deprioritizes” its “heavy” data users during times of network contention or congestion. This potentially deprived these users of the advertised speeds of their data plan. According to consumers, this policy rendered data services “unusable” for many hours each day and substantially limited their access to data. The bureau believes that the company failed to adequately inform its “unlimited” data plan customers that their data would be slowed at times if they used more than 17 GB in a given month.”
As part of the settlement, T-Mobile will pay a $7.5 million fine to the US Treasury, will provide $5 million in tablets and other electronic devices to low income school districts, and the remaining $35.5 will be used to provide “consumer benefits” for customers. Eligible T-Mobile customers will automatically receive an additional 4GB of data for the month of December, as well as 20% off or up to $20 off the regular price of any accessory the company has in stock as part of the “consumer benefits” package.
Although T-Mobile has not admitted that they intentionally misled their customers, the company will also be required to update their marketing materials to clearly state data restrictions for their “unlimited” plan. FCC executive Travis LeBlanc said in a statement, “Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations.”
The FCC fined AT&T $100 million in 2015 for similar practices – the company severely throttled speeds for customers using their “unlimited data” plan when they exceeded only 5 GB per month. AT&T has since challenged the FCC’s decision, and the two still have yet to come to an agreement.
