The Federal Trade Commission this morning filed suit against AT&T over the company’s practice of reducing data speeds for customers on unlimited data plans after they reach certain thresholds for data usage in a particular month.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez in a statement announcing the lawsuit. “The issue here is simple: ‘unlimited’ means unlimited.”
The suit, filed in U.S. District Court in Northern California, seeks a permanent injunction against AT&T and damages including restitution and refunds for customers affected by the practice. The FTC notes that data speeds can be reduced by nearly 90 percent in some cases, making basic smartphone features like web browsing, GPS navigation and streaming video nearly impossible.
GeekWire’s John Cook is among many AT&T customers who have been caught by surprise by the throttled data speeds in the past.
AT&T issued this statement from its general counsel, Wayne Watts.
“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program. It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts.
“We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press releasethat resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”