Legal Issues

by Karl Bode


Filed Under:
fcc, lies, throttling, unlimited data

Companies:
t-mobile



FCC Fines T-Mobile For Abusing The Definition Of 'Unlimited' Data

from the abusing-the-dictionary dept

For the better part of the last decade, wireless carriers have had an often vicious, adversarial relationship with the dictionary. More specifically, they've struggled repeatedly with the definition of the word "unlimited," often pitching data services that proclaim to be unlimited, only to saddle users with onerous, often confusing restrictions. For the last decade, regulators have tried to cure them of this behavior, from Verizon paying $1 million to New York's Attorney General in 2007, to the FCC fining AT&T $100 million last year.

Yet despite repeated warnings, the problem persists. Case in point: this week the FCC announced it had struck a $48 million settlement with T-Mobile (pdf) for advertising unlimited data plans without making it clear the limitations of these connections. More specifically, the FCC says T-Mobile didn't clearly inform consumers that these "unlimited" lines would be throttled during periods of network congestion, or after users consumed 17 GB of data in any given month:
"The FCC’s investigation found that company policy allows it to slow down data speeds when T-Mobile or MetroPCS customers on so-called “unlimited” plans exceed a monthly data threshold. Company advertisements and other disclosures may have led unlimited data plan customers to expect that they were buying better and faster service than what they received. The Commission’s 2010 Open Internet transparency rules require broadband Internet providers to give accurate and sufficient information to consumers about their Internet services so consumers can make informed choices."
All told, T-Mobile will pay a $7.5 million fine and dole out $35.5 million in "consumer benefits" (mostly just minor discounts on select hardware and plans) from T-Mobile and its prepaid subsidiary MetroPCS. This will, the FCC insists, surely teach T-Mobile a lesson about marketing unlimited data tiers that aren't:
"Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” said FCC Enforcement Bureau Chief Travis LeBlanc. “When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for. With today’s settlement, T-Mobile has stepped up to the plate to ensure that its customers have the full information they need to decide whether ‘unlimited’ data plans are right for them."
While this sounds superficially nice, there are a few problems with the FCC's move here. For one thing, the FCC has been making it abundantly clear that it's ok to sell "unlimited" plans with all manner of misleading limits -- you just have to make sure your marketing fine print makes those limitations clear. And while that's good, these kinds of wrist slaps clearly aren't working. And just ensuring transparency is not the end of this particular conversation.

For example, T-Mobile's and Sprint's newest plans, which the FCC hasn't raised a peep about, offer users "unlimited" connections, but throttle all games, video and music unless users shell out a monthly premium if they actually want these services to work as intended. That's a fairly obvious violation of net neutrality principles and an abuse of the word "unlimited," yet the FCC has made it abundantly clear it thinks this sort of behavior is perfectly ok. In other words, you can be a misleading cheat. You just have to make it clear you're a misleading cheat via fine print in your three-hundred page terms of service.

We've noted repeatedly how the FCC simply refuses to acknowledge how usage caps and zero rating are causing significant problems, and it doesn't look like it's an issue that's going to get fixed anytime soon. While current FCC boss Tom Wheeler's pro-consumer bent was a surprise to many (especially given his cable and wireless lobbying past), there are growing signs that his tenure will be up at the end of the year. And given the particular leanings of both Trump and Clinton, there's certainly no guarantee his replacement will have the political courage to stand up for consumers and finish what Wheeler started.

Reader Comments

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  • icon
    DannyB (profile), 20 Oct 2016 @ 11:51am

    Abusing the definition

    Does Comcast abuse the definition of Customer Service?

    reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 20 Oct 2016 @ 11:57am

    Causing significant problems?

    Zero Rating and Usage Caps don't cause anyone significant problems. Unless you're talking about those pesky customers. Oh, yeah. Them again. But for the mobile operators and ISPs zero rating is a great revenue double dipping scam. And usage caps can be a way to upsell customers, yes, those pesky nuisance customers again, to a more expensive service plan.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2016 @ 12:15pm

    What significant problems have zero-rating policies caused so far?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Oct 2016 @ 12:32pm

      Re:

      Zero rating doe its damage in a subtle way, it directs users to those services that are zero rated, and away from competitors that are not. It can also damage sites like reddit, as users become unsure as to which videos are zero rated and which will push them over their data caps.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Oct 2016 @ 12:38pm

        Re: Re:

        Subtle but significant? I'm not buying it. I think Bode is making things up.

        > It can also damage sites like reddit, as users become unsure as to which videos are zero rated and which will push them over their data caps.

        Wouldn't it be great if nothing was zero-rated? That way they would know for sure which videos are using their data - all of them. That would be so much better for Reddit, right?

        If there have been significant problems, list the worst of them. Even better would be to come up with an estimate of the net economic effect. I'd be surprised if it was a negative number.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Oct 2016 @ 1:00pm

          Re: Re: Re:

          Its unquestionably an economic albatross for the Internet where Zero-Rating is used. It inserts *yet another* middleman that gets to decide which businesses are winners and which are losers online. It might help pad Comcast's bottom line, but it'll hurt everyone else's.

          I'd be surprised if you aren't receiving a paycheck from a telecom company.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 20 Oct 2016 @ 1:34pm

            Re: Re: Re: Re:

            I wish I was getting a paycheck for commenting on this blog...

            I'm just asking Bode to back up his "significant problems" claim. I think that's wishful thinking on his part.

            I don't have a problem with zero-rating programs so far because they are open and don't require any payment by the service provider. If T-Mobile were to start restricting who could join or required a fee to join, then my position may change.

            I don't see it all that different than when my bank refunds ATM fees that I pay when using many out-of-network ATMs.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 20 Oct 2016 @ 3:54pm

              Re: Re: Re: Re: Re:

              Just look up net neutrality. It has only been explained many, many, many, many time before.

              reply to this | link to this | view in chronology ]

              • identicon
                Anonymous Coward, 21 Oct 2016 @ 6:27am

                Re: Re: Re: Re: Re: Re:

                I'm well aware of the theoretical problems. I don't think anybody has been harmed so far. Bode's statement seems to indicate that he knows otherwise.

                reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Oct 2016 @ 2:02pm

          Re: Re: Re:

          If you have time to fill, and YouTube is zero rated and Vimeo is not, isn't your ISP deciding which one you will use?

          reply to this | link to this | view in chronology ]

    • identicon
      I.T. Guy, 20 Oct 2016 @ 1:05pm

      Re:

      Thats like looking at a car stuck on train tracks saying there has been no damage done.

      reply to this | link to this | view in chronology ]

    • icon
      DannyB (profile), 20 Oct 2016 @ 1:18pm

      Re:

      One of the several problems with Zero Rating is that the customer is now paying for their bandwidth twice.

      I pay for my bandwidth.
      Netflix pays (quite handsomely) for its bandwidth.

      Now comes the evil zero rating . . .

      The ISP charges Netflix for zero rating. Netflix ultimately will pass that cost along to customers. Now Netflix is paying it's own ISP (handsomely) for it's bandwidth, and Netflix is paying MY ISP. And I am paying my ISP.

      My ISP is double dipping.

      If My ISP doesn't like how much bandwidth I'm using on Netflix, then CHARGE ME FOR IT. It is ME using that bandwidth, not Netflix. Netflix doesn't just magically start using bandwidth on my connection. I am using that bandwidth, for my own pleasure, at my own request. Netflix is just answering my requests with responses.

      The double dipping, that's what's wrong (or one of several things wrong) with zero rating. I'm paying my ISP for my bandwidth, and I'm paying my ISP for Netflix being able to be zero rated -- which is not something I need if I had a fair bandwidth cap.

      And that brings me to bandwidth caps. TD has already had stories covering how bandwidth caps are not necessary. The only reason for bandwidth caps is to have a way to introduce the scam of Zero Rating. Without bandwidth caps that scam couldn't exist.

      Hope that helps clear things up.

      reply to this | link to this | view in chronology ]

  • icon
    Roger Strong (profile), 20 Oct 2016 @ 12:27pm

    > ...or after users consumed 17 GB of data in any given month

    Or to put it another way, you could be penalized for being over your monthly "unlimited" limit starting just three hours into the month.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Oct 2016 @ 1:07pm

    All advertising of network services should include the amount of time at maximum usage when you hit any bandwidth cap and/or additional charges. Fast speeds are no good if you can only use them 24 hours out of the month before getting hit with a screwage fee.

    reply to this | link to this | view in chronology ]

    • icon
      DannyB (profile), 20 Oct 2016 @ 1:23pm

      Re:

      Ad networks should have to pay their own freight. If they're going to start playing a video through the ad, they darn well ought to be paying for that bandwidth.

      How about the ISPs charge ad networks to be zero rated?

      And ad networks that aren't zero rated are blocked by the ISP.

      I think I like that plan.

      My ISP gets more money from the advertiser.

      If the advertiser is paying to be zero rated, then my user agent will block the ad at my own browser. So I'm still safe and secure and oblivious to having web pages polluted with twitching screaming blinking seizure inducing ads.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Oct 2016 @ 1:33pm

        Re: Re:

        > Ad networks should have to pay their own freight. If they're going to start playing a video through the ad, they darn well ought to be paying for that bandwidth.

        Don't hold your breath.

        reply to this | link to this | view in chronology ]

  • identicon
    Avior, 20 Oct 2016 @ 1:36pm

    Given the particular leanings of both Trump and Clinton...

    we're screwed.

    reply to this | link to this | view in chronology ]

  • icon
    Jeremy Lyman (profile), 21 Oct 2016 @ 4:24am

    Consumer Tip

    If it says "unlimited" it's false. They should probably switch to using "delimited" instead, as in "set forth boundaries." It'll still mislead people but it won't be objectively incorrect.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 21 Oct 2016 @ 5:59am

    So basically I can release some snake oil claiming it prevents HIV from developing AIDS on humans as long as I include in the fine print that you must use it in conjunction with current medicine for the results to show. Awesome. Now we must read the fine print not to be fooled. Transparency in all its glory.

    reply to this | link to this | view in chronology ]

  • icon
    Padpaw (profile), 21 Oct 2016 @ 6:30am

    Why would they call it a deal instead of a fine?

    Sounds like they haggled over how much T-mobile would pay instead of just telling them. Then took whatever number T-mobile decided to give them.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Oct 2016 @ 6:05pm

    Japan has much better data plans

    While I was visiting japan, at the airport, there was kiosk that sold international sims cards. Not just any sim, cards with cheap disposable data plans. Like say, 1500 yen for 35gb of data.

    We've still got a long ways to go.

    reply to this | link to this | view in chronology ]

  • identicon
    Victor Holness, 5 Nov 2016 @ 10:46am

    improper billing statements over billing for data plans.

    Next month will be 1 year with T-mobile..it been a nightmare because service in my area is limited to T'mobile, PCS mobile' and some basic nor wifi service company, t-mobile and pcs-mobile are co-companies joined at the hip and if to by a phone at T-mobile their sister company will not honor its use on their network forcing you to buy another phone with them or worst service,both have the habit of receiving your money on time for billing but not entering it on your account for 24-48 hours later, causing your due dates to change each month with additional fees! Hmmm? if you call in to pay that can take 15 minutes or two hours of waiting only for your payments to be entered late once again..the give you the option of allowing them to remove it from your account .. honesty after all that who would be so stupid to trust a company that's ripping you off in the first place..I don't but ITS catch 22 because the other companies are an hours drive away and the phone lines were at on time owned by At&t who the heck owns them now.."I have no Idea" But what you article reports has happened to me by both those companies and still even this month with T-mobile and I thought I was the only one because after moving here I found myself surrounded by people who never fight back(sadly I would really enjoy a good open Fight for justice and our community.)So lastly who do I need to get it touch with to get my over payments back? T-Mobile has said nothing to me!

    reply to this | link to this | view in chronology ]


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