AT&T fined $100M over ‘unlimited’ data caps

AT&T Mobility has been hit with a $100 million fine for offering consumers "unlimited" data but then slowing their Internet speeds after they used a certain amount.

The Federal Communications Commission (FCC) said Wednesday that the company misled consumers into buying plans that they believed would allow them to send and receive unlimited amounts of data — for example, for Web browsing, GPS navigation and streaming videos. But the FCC said that after consumers reached a certain level, data transmission was slowed down significantly, to speeds lower than advertised.

AT&T said it would "vigorously dispute" the fine, the largest proposed in FCC history.

"The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers and has known for years that all of the major carriers use it," the company said in a statement released to reporters. "We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."

If AT&T can provide evidence that the FCC allegations are untrue, the fine could be reduced. But FCC officials said they were sure that AT&T was profiting off the deceptive advertising.

“Consumers deserve to get what they pay for,” said FCC Chairman Tom Wheeler. “Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.”

Last fall the Federal Trade Commission, which enforces rules against deceptive advertising, filed a lawsuit filed against the company, seeking punitive damages and refunds for customers who were offered the unlimited data packages. The suit is still working its way through a federal court in California.

Earlier this year, the Federal Trade Commission accused TracFone Wireless of similar tactics. TracFone agreed to settle the case for $40 million. 

Al Jazeera and The Associated Press