AT&T ( T ) which is CNN's parent company, allegedly started gas, or slowing speed, for customers with unlimited data plans in 2011, according to the FTC. The practice made it difficult to surf the web or perform other functions, and in some cases reduced data rates by almost 90 percent, according to the FTC. Throttling was allegedly launched after customers consumed as little as 2 gigabytes of data during a billing period, the FTC said in a press release today.
In a statement to CNN Business, an AT&T spokesperson said: "Although it has been years since we used this network management tool in the manner described by the FTC, we believe this is in the best interests of consumers." [1
9659006] The settlement money will be used to issue partial reimbursement to affected customers who signed up for unlimited plans before 2011, according to the complaint. Customers do not need to file a claim to receive the money. Current customers will receive credit on their bills, and past customers will receive checks.
In 2015, the Federal Communications Commission was fined AT&T $ 100 million for similar allegations of misleading "unlimited" plans. The FCC found AT&T exposed to unlimited data plan customers for lower speeds after using more than a certain amount of data per billing cycle.
Under this new settlement, AT&T will no longer be able to make claims about the speed or amount of mobile data, including that they are "unlimited" without revealing relevant limitations. All such disclosures must be clearly placed, not hidden by lowercase or behind hyperlinks, according to the settlement.
"AT&T promised unlimited data – without qualifications – and failed to deliver on that promise," FTC's Bureau of Consumer Protection Director Andrew Smith said in a press release. "While it seems obvious, it is repeated that ISPs have to tell people about any restrictions on the speed or amount of data promised."
AT&T tried to challenge the FTC's authority over the case for years, but in 2018, an appeals court ruled in favor of the FTC.
Throttling has been a problem in the telecom industry as smartphones have become ubiquitous and data usage has increased. In July 2014, Verizon faced criticism from the FCC for plans to iron out connections to unlimited data plan customers. The company abandoned the plan in October 2014.
However, in 2018 Verizon allegedly strangled data from a fire department in Northern California as their firefighters fought the largest fire in state history. The issue was mentioned in a lawsuit on neutrality filed by several states in 2018. At that time, Verizon acknowledged that it had made a mistake and said it would "resolve any issues ahead."