A Decade Later, AT&T Pays A Pittance For Lying About Its Unlimited Data Plans

from the ill-communication dept

Back in 2014 the FTC sued AT&T for selling "unlimited" wireless data plans with very real and annoying limits. The lawsuit noted that starting in 2011, AT&T began selling "unlimited" plans that actually throttled upwards of 90 percent of your downstream speeds after using just two or three gigabytes of data. AT&T spent years trying to wiggle out of the lawsuit via a variety of legal gymnastics, including at one point trying to claim that the very same net neutrality and FCC Title II rules AT&T was trying to kill prevented the FTC from holding it accountable.

Nearly a decade after AT&T's molestation of the dictionary began, the company has finally agreed to a $60 million settlement with the FTC without actually admitting any wrongdoing. That $60 million, after lawyers get a cut, will be split among millions of customers who signed up for AT&T unlimited data plans before 2011. Moving forward, AT&T also has to clearly disclose any limits on its "unlimited data plans" in a conspicuous manner (read: not hidden via fine print or embedded in a hyperlinked asterisk).

For a company that pulled down $46 billion in revenues in the last three months that's not much of a penalty. And because the FTC's ability to rein in telecoms is restricted only to policing offenses that are very clearly "unfair and deceptive" under the FTC act, AT&T is, of course, still imposing all manner of restrictions on its unlimited data plans, it's just being marginally more clever about it. For example. AT&T's latest "unlimited" plans, released just last month, include all manner of restrictions on how you can use them and how much bandwidth you can use, AT&T's just marginally more up front about it.

The problem is the government has been doling out wrist slaps on this subject for the better part of a decade without much to show for it. New York's Attorney General forced Verizon to dole out $100 million in refunds as long ago as 2007 in a bid to get the company to stop lying. Fast forward to 2019, and Verizon's still selling unlimited data plans with limits; in fact it now charges its unlimited data users extra if they want to actually view movies in HD. Sprint has also experimented with throttling video, music, and games on its unlimited data plans unless you pony up more cash.

Regulators have generally looked the other way while carriers use their dominance to impose arbitrary nickel-and-diming limits. But because they inform users of the restrictions in a 400 page EULA, the FTC lacks the authority to really crack down on the behavior (assuming it had the resources or bandwidth to even do so in the first place) because it's not crystal clear they're being "unfair and deceptive." The FTC's Rohit Chopra issued a statement making it clear that a lack of competition is the primary culprit here:

"AT&T’s bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition,” he said. ”Their market power, financial resources, and one-sided information gives them license to ignore their own contractual obligations while aggressively enforcing every little clause in the fine print."

This sort of stuff is only going to get worse. While the FTC's authority is limited, the FCC was built from the ground up to hold telecoms accountable. But the FCC's recent decision to self-immolate at lobbyist request not only gutted net neutrality, it eliminated much of this authority over ISPs. It also eliminated transparency rules requiring ISPs be transparent about the types of connections they're selling. Eroding the FCC's power and shoveling oversight to a resource and authority constrained FTC was always the entire point of the gambit, something many folks still don't seem to understand.

In other words, unless states get involved (unlikely in more than half of them given AT&T's immense regional lobbying power), there's really not much stopping ISPs from misleading consumers about the type of connections they're buying, proving they're just modestly clever about it. And with the looming T-Mobile Sprint merger eroding 25% of existing competition, there's less incentive to compete on price or much of anything else. Guess what happens when you combine lobbyist-neutered regulatory oversight with limited competition?

Filed Under: competition, false advertising, ftc, settlement, transparency, unlimited, wrist slap
Companies: at&t


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  1. identicon
    Anonymous Coward, 7 Nov 2019 @ 7:07am

    Oh, they paid!

    They paid their lobbyists.
    They paid off their congressional critters.
    OH THEY PAID!

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

  2. identicon
    TFG, 7 Nov 2019 @ 8:03am

    Let's play "If I were in charge" - the game everyone loves that may or may not be realistic!

    If I were in charge, the fine for some underhanded nonsense like this would be mandated to be no less than the profit received from the underhanded nonsense.

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

  3. icon
    murgatroyd (profile), 7 Nov 2019 @ 8:11am

    Misunderstanding

    Oh, I get it now. I thought it was $60 million per customer who had been lied to. My bad.

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

  4. identicon
    Anonymous Coward, 7 Nov 2019 @ 8:11am

    they paid the most important one, PAI!! and i suspect the other Republican Representatives on his panel!

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

  5. identicon
    Anonymous Coward, 7 Nov 2019 @ 10:01am

    HD limitation

    in fact it now charges its unlimited data users extra if they want to actually view movies in HD

    For them to do that, they first have to determine someone is watching a movie. Either they're throttling all connections to a speed that can't support an HD movie, or they're violating net neutrality (as is legal now) by using the packet content or source/destination to detect HD movies... and then throttling them. Either way, they're artificially limiting the connection.

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

  6. icon
    ECA (profile), 7 Nov 2019 @ 11:13am

    Subject internet interconnections

    I would really like to know, IF the Internet national connections are owned by companies or not.
    Who is responsible for them.

    For 1 big reason.
    Who are the ISP's paying to get access to...
    National interconnection of Landlines, cellphones, Internet, TV, local distribution from sat and cable.. and over 90% of the communications of this nation.

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

  7. identicon
    Anonymous Coward, 7 Nov 2019 @ 12:35pm

    Comcast and at ,t own their own networks and all the cables in the area,s where they have customers,
    some cables have fallen into disrepair even though they get billions in tax breaks to provide a service to low income customers and rural customers .
    All the big isp,s and telecoms have internet pairing agreements to carry each others data traffic because there are servers in every town and state in america .
    they charge companys like netflix a fee to send data to netflix customers ,
    cos netflix uses a massive amount of data .

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

  8. identicon
    Richard Bennett, 8 Nov 2019 @ 12:52am

    This is what happens when you put in hard work instead of campaigning for pirates, Bodeface.

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

  9. icon
    ECA (profile), 8 Nov 2019 @ 10:14pm

    Re:

    Those are End of the lines.. The cities and towns..

    Who Owns the stuff across the nation?? Or are the corps responsible to keep them up.. Who installed all the fiber out in the middle..

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


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