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AT&T urges FCC to walk away from planned record-high fine

AT&T urges FCC to walk away from planned record-high fine
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AT&T has asked the Federal Communications Commission (FCC) to withdraw and cancel a document proposing the company be hit with a $100 million fine for misleading customers.

The company also said that the commission should, at the very least, halt enforcement of proposed non-monetary penalties until the courts could weigh in on their legality. It also asked that any fine leveled against the company not exceed $16,000.

The commission alleged last month in a document called a Notice of Apparent Liability (NAL) for Forfeiture and Order that AT&T had failed to appropriately tell a small set of customers who had “unlimited” data plans that their speeds would be slowed once they used a certain amount of data.

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In a filing earlier this month, obtained by The Hill, the telecom giant insisted it had properly disclosed the terms of the plans to customers and took issue with the proposed punishments. The fine is the largest proposed in the agency's history.

“The Commission’s findings that consumers and competition were harmed are devoid of factual support and wholly implausible,” the company wrote in its filing. “Its 'moderate' forfeiture penalty of $100 million is plucked out of thin air, and the injunctive sanctions it proposes are beyond the Commission’s authority.”

And the company tried to cast doubt on the commission’s motives. Its efforts, the company said, were evidence of “an unseemly effort to coerce settlement.”

The company says that it notified customers on a variety of platforms, including posting a disclosure online and texting customers with “unlimited” plans, about the slower speeds they would encounter if they exceeded a certain amount of data usage.

“Under any lawful mode of analysis, the fact that AT&T complied with the Transparency Rule’s requirements by posting an online disclosure containing the information the Commission required should end this case. AT&T, however, went well beyond the Rule’s requirements and directly notified all users affected by the MBR policy in numerous additional ways,” the company said in its filing.

The FCC says it has the authority to level the punishment against AT&T because of a “transparency” provision in a 2010 net neutrality order that requires providers to properly tell customers of network management policies. AT&T claimed in its filing that that authority is based on a misreading of the law.

The NAL, “quotes a portion of the 2010 Open Internet Order that does not apply to congestion management practices, but alters the quotation to pretend that it does.”

The company also claims that the FCC used dictionary definitions it took out of context to make its case.

AT&T is also taking umbrage at the sanctions proposed by the commission, which it called “arbitrary and excessive.”

In announcing the fine, the FCC proposed that AT&T be required to notify customers that it had failed to disclose its network management practices and to give customers a way to leave their “unlimited” plans.

AT&T said that the FCC would be acting outside its authority in imposing the fine and in making the other requests — in part because it said the statute of limitations on the alleged violations had already lapsed.

The primary filing was accompanied by two affidavits, one filed by an AT&T executive and another from an economist who found that “evidence on actual consumer purchase decisions indicates that the vast majority of [unlimited plan] subscribers were sufficiently informed about [the policies], such that they were either not surprised by being throttled or not materially affected by throttling (or both).”

An FCC spokesman declined to comment on AT&T's filing.

AT&T is likely to find allies on the Republican side of the commission.

Republican commissioner Ajit Pai said in a statement last month that “the justice dispensed here condemns a private actor not only in innocence but also in ignorance.” His Republican colleague Michael O’Rielly also dissented from the decision to propose the fine.