Feds charge AT&T for slowing 'unlimited' speeds

Federal regulators are accusing AT&T of misleading millions of customers by promising them “unlimited” data plans that were actually slowed after hitting a certain limit.

The Federal Trade Commission (FTC) on Tuesday filed a lawsuit over AT&T’s practice of slowing speeds for high data users, a practice known as “throttling.”

According to the FTC, the wireless giant slowed some people’s speeds by as much as 90 percent without giving them fair notice, effectively making it impossible to surf the Web or watch videos through their phone.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramirez said in a statement announcing the action. “The issue here is simple: ‘unlimited’ means unlimited.”

Wireless companies have asserted their right to slow users’ service if they are using a number of data-hungry applications — such as constantly streaming video or playing some games — while networks get busy.

According to the FTC, AT&T has slowed the speeds for at least 3.5 million people a combined 25 million times since 2011.

Because it made repeated promises that its “unlimited” data plans were, in fact, unlimited, the FTC claims that AT&T violated the law.

AT&T rebutted the charges, calling them “baseless.”

“It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts,” AT&T general counsel Wayne Watts said in a statement.

“We have been completely transparent with customers since the very beginning,” he added, pointing to bill notices and a press release from 2011.

Ramirez on Tuesday told reporters that those efforts were “inadequate,” but declined to detail which notifications would meet the agency’s muster.

While companies maintain that slowing some users’ speeds is necessary to fairly manage their networks, the practice has drawn the ire of regulators.

Federal Communications Commission (FCC) Chairman Tom Wheeler has previously worried that companies throttle to take advantage of consumers, and FCC staffers worked with the FTC on Tuesday’s suit.

“Wireless customers across the country are complaining that their supposedly ‘unlimited’ data plans are not truly unlimited, because they are being throttled and they have not received appropriate notice,” an FCC spokesman said after the FTC filed its lawsuit.

“We continue to work on this important issue, including with our partners at the FTC, and we encourage customers should contact the FCC if they are being throttled by AT&T or other cellular providers.”

— This story was updated at 2:58 p.m.