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Feds Fine T-Mobile For Throttling ‘Unlimited’ Data Customers

FCC says fine print was too fine 10/19/2016 12:30:00 PM Eastern

T-Mobile has agreed to pay a $48 million fine for failing to adequately disclose speed and data restrictions on its unlimited data plans.

According to the Federal Communications Commission (FCC), customers with unlimited plans complained that their data speeds were throttled after using more than 17GB in a given month, rendering data services unusable for many hours a day.

T-Mobile considers such customers “heavy users,” and “deprioritizes” them during times of network congestion under its “Top 3 Percent Policy.”

Customers contacting the FCC said they felt misled by the carrier’s advertised promise of unlimited data.

“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.”

Under the settlement, the magenta carrier will pay a $7.5 million fine to the U.S. Treasury, and will provide $35.5 million in benefits to T-Mobile and MetroPCS subscribers with unlimited data plans. The benefits include a 20 percent discount (up to $20) on any in-stock accessories, and 4GB of additional data for those with tablet plans.

T-Mo will also cough up another $5 million to provide free mobile devices and low- or no-cost mobile broadband access to low-income school districts, and must either end its Top 3 Percent Policy, make its disclosures clearer and more conspicuous, or drop the term “unlimited” from its data plans.

In separate tweets this morning, outspoken T-Mobile CEO John Legere described the FCC sanctions as a “good settlement."

The company presently provides the following small-print disclosure with its new T-MobileONE unlimited everything plan:

“On all plans, during congestion the top 3% of data users (>26GB/mo.) may notice reduced speeds until next bill cycle. Video typically streams on smartphone/tablet at DVD quality (480p). Tethering at Max 3G speeds.”

In a similar case, the FCC proposed a $100 million fine against AT&T last year in a throttling lawsuit.

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