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FCC Hit's T-Mobile with $48M Settlement

October 20, 2016

 

The increasingly common industry practice of throttling data speeds for consumers on “unlimited” plans should they attempt to access services from a congested cell tower while being over an arbitrary data amount is set to cost T-Mobile US $48 million.

 

The Federal Communications Commission said it reached an agreement with the carrier to “resolve an investigation” into claims the carrier did not adequately inform unlimited data customers of those speed and data restrictions. The claim is connected with consumers on both the carrier’s branded service as well as its MetroPCS prepaid brand.

 

The FCC cited its 2010 Open Internet transparency rules, which require broadband internet providers to “give accurate and sufficient information to consumers about their internet services so consumers can make informed choices.” An FCC statement on the settlement appeared to indicate a positive response from the carrier.

 

“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, in a statement on the settlement. “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.”

 

As part of the settlement, T-Mobile US is to pay a $7.5 million fine and provide $35.5 million in “consumer benefits” to those with impacted plans in the form of 20% off of accessories and four gigabytes of additional data. The carrier also is on the hook to provide at least $5 million in services and equipment to schools “to bridge the homework gap facing today’s students,” with the program to begin in October 2017, and to enroll up to 80,000 students over a four-year period.

 

In terms of adjusting its practices, T-Mobile US is expected to update its disclosures in regards to the possibility of throttling data speeds for unlimited data customers; discontinue the use of the term “unlimited” in describing those plans; exclude “unlimited” data plan customers from its policy of limiting speeds for its highest data users; or limit any speed reductions for “unlimited” data plan customers to the minimum speed advertised for that plan.

 

T-Mobile US CEO John Legere, who has pushed a strong consumer-first image, noted via his Twitter page“good settlement with the FCC today. [T-Mobile] believes more info is best for customers,” and “glad we could help schools with this solution as well.”

 

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