With no hint of ambiguity, and suggesting little room for argument, the FCC said today that it plans to fine AT&T $100 million for misleading customers about "unlimited" mobile data plans. The decision to do so was made along party lines, with the three Democratic commissioners voting for, and the two Republican commissioners voting against.
Under the 2010 Open Internet Transparency Rule, all fixed and mobile broadband operators are required to communicate clearly with customers about "network management practices, performance, and commercial terms of their services." However, in 2011, AT&T Mobility LLC introduced a "Maximum Bit Rate" policy whereby customers with existing unlimited data plans had their speeds throttled after hitting a maximum usage threshold. According to the Federal Communications Commission (FCC) 's investigation, millions were unfairly impacted when AT&T "failed to adequately notify" customers about the potential for throttling and for receiving broadband service at speeds below those advertised.
"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."
The transparency rule has already been challenged in court, but was upheld by the D.C. Circuit in the case of Verizon v. FCC.
The new fine also comes on the heels of new Open Internet rules that passed in February and were put into effect less than a week ago. Those updated rules are also being challenged in court, but are in contention primarily for the FCC's decision to regulate Internet providers as common carriers. (See Title II Rules Take Effect and FCC Vote Shows Net Neutrality Strains.)
In response to the FCC's proposed fine, several news organizations are reporting that AT&T is promising to "vigorously dispute" the regulatory agency's charges.
In a related piece of news, the web hosting company Commercial Network Services is reportedly planning to file the first net neutrality complaint related to the 2015 Open Internet rules against Time Warner Cable Inc. (NYSE: TWC). CNS claims that TWC will not agree to a settlement-free peering deal, and that as a virtual monopoly, it should be required to do so.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading