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T-Mobile Pays $48 Million Fine For Throttling 'Unlimited' Users

The FCC this morning announced that it has struck a $48 million settlement with T-Mobile over the restrictions included in T-Mobile's "unlimited" data plans. According to the FCC, advertisements for both T-Mobile and the company's prepaid MetroPCS service don't make it clear enough to consumers that their connections may be throttled after they consume a set amount of bandwidth. The FCC's 2010 Open Internet transparency rules require that ISPs "give accurate and sufficient information to consumers about their Internet services so consumers can make informed choices."

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According to the FCC, T-Mobile failed to do enough to make its throttling restrictions clear.

The agency says it received numerous complaints from consumers who say they were surprised to discover that their "unlimited" data plans included "de-prioritized" data speeds after using a fixed amount of data each month. Under T-Mobile's "Top 3 Percent Policy," the company "de-prioritizes" its "heavy" data users during times of network contention or congestion.

At the time of the complaints, T-Mobile also restricted users who consumed more than 17 GB in any given month, a total that has since been bumped to 26 GB per month for the company's newest unlimited plans.

"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."

Ironically the FCC has let arguably worse behavior by T-Mobile slide. T-Mobile's latest "unlimited" plans, for example, automatically throttle all user video to 480p unless users pay a $20 premium for HD quality video. And while net neutrality advocates say this runs contrary to net neutrality principles, the FCC has yet to even comment on T-Mobile's plan or similar efforts by Sprint. A promised "informal inquiry" launched by the FCC last year into such behavior appears to have gone nowhere as FCC boss Tom Wheeler's time at the agency draws to a close.

In short, the current FCC seems ok with all manner of throttling, restrictions, and zero rating (exempting some content from usage caps), just as long as the ISPs' are relatively clear about what they're doing.

Under its settlement with the FCC in this instance, T-Mobile will update its disclosures to clearly explain the “Top 3 Percent Policy." The FCC also says T-Mobile must "provide clear and conspicuous disclosures about all restrictions on the amount and speed of data provided for “unlimited” data plans," or stop using the term unlimited entirely.

You can find additional detail in the full FCC announcement (pdf).

Most recommended from 33 comments


CyberGuy
join:2006-08-21
Colbert, WA

5 recommendations

CyberGuy

Member

Limited Unlimited Data

How can they make it any clearer than that; and, by that, I mean like a REALLY muddy mud puddle?
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

3 recommendations

BiggA

Premium Member

Should be Obvious

It should be obvious that there must be some limitation or throttling to an Unlimited wireless data plan, and it was clearly disclosed by T-Mobile on their site and through numerous media outlets. Unlimited simply means they won't shut data off, and won't charge you extra for it, not that it will perform at any particular speed.

That being said, forcing users to have throttle video, audio and tethering is a HORRIBLE practice, and something that the FCC should NOT be allowing. Binge On and Stream On were fine when it was purely a carrot. If you didn't want the 480p video, it was your choice to turn it off, and use the 6GB of data that the plan included. Defaults were powerful, but ultimately it was the customer's choice if they cared enough to switch it off and use their data for HD streaming. Nothing lost. This, however, is bad, since it is putting price points on actual, unthrottled access, effectively creating a stick in the process to push people into lower quality streaming.