U.S. FTC sues AT&T over mobile data throttling

An AT&T logo is seen atop a store in Beverly Hills, California August 31, 2011. [REUTERS/Danny Moloshok]

The U.S. government today filed a lawsuit against AT&T, accusing the nation's second-largest wireless carrier of selling users unlimited data plans, then slowing down Internet speeds after they hit a certain data use threshold.

Here is the FTC's press release. Snip:

The FTC alleges that AT&T, despite its unequivocal promises of unlimited data, began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. According to the complaint, the throttling program has been severe, often resulting in speed reductions of 80 to 90 percent for affected users. Thus far, according to the FTC, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.

According to the FTC’s complaint, consumers in AT&T focus groups strongly objected to the idea of a throttling program and felt “unlimited should mean unlimited.” AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program. Some consumers quoted the definition of the word “unlimited,” while others called AT&T’s throttling program a “bait and switch.” Many consumers also complained about the effect the throttling program had on their ability to use GPS navigation, watch streaming videos, listen to streaming music and browse the web.

From Reuters:

The Federal Trade Commission said this throttling of Internet feeds was deceptive and that in some cases data speeds were slowed by nearly 90 percent. FTC Chairwoman Edith Ramirez said that AT&T wanted to retain longtime customers and so allowed them to buy unlimited data plans, in some cases after new customers were no longer offered unlimited plans. Then they unilaterally changed the terms, she said. "They stopped providing the service that customers understood they had purchased when they entered into their contract," she said. "Customers would be subject to an early termination fee if they wanted to get out of their existing contract."

AT&T called the allegations "baseless" and said the practice was needed to manage network resources.

The case in the U.S. District Court for the Northern District of California is Federal Trade Commission v. AT&T Mobility, LLC.