The United States Federal Communications Commission has ordered T-Mobile to pay a fine—and offer new benefits—to customers for failing to effectively explain the restrictions on its “unlimited” data plans. The mobile communications company will pay a $7.5 million fine along with the $35.5 million in benefits to those affected customers—as well as at least $5 million in services and equipment to schools in the US—after an FCC probe found that T-Mobile slows data speeds when customers (including those on MetroPCS) on “unlimited” plans exceed their monthly threshold.
Of course, this is nothing new to the industry, but the lawsuit asserts that customers were not aware of this “throttling” policy.
According to FCC enforcement bureau chief, Travis LeBlanc, “Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations. 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.”
Furthermore, the FCC explains, “Company advertisements and other disclosures may have led unlimited data plan customers to expect that they were buying better and faster service than what they received,” which is, in fact, a violation of the FCC’s 2010 Open Internet transparency rules. The agency also comments having received various complaints from both T-Mobile and MetroPCS customers who felt the company misled them about this lack of transparency.
The FCC took particular issue with the carrier’s “Top 3 Percent Policy” which goes on to explain the terms: “Under its ‘Top 3 Percent Policy,’ T-Mobile ‘de-prioritizes’ its ‘heavy’ data users during times of network contention or congestion. This potentially deprived these users of the advertised speeds of their data plan. According to consumers, this policy rendered data services ‘unusable’ for many hours each day and substantially limited their access to data.”
The agency specifically took issue with T-Mobile’s “Top 3 Percent Policy” to “de-prioritize” those users with the heaviest data-use during times of highest network congestion. Of course, consumers complained that the policy actually leaves some consumers with absolutely no data services during several hours of the day.
Accordingly, the FCC also explains, “The bureau believes that the company failed to adequately inform its ‘unlimited’ data plan customers that their data would be slowed at times if they used more than 17 GB in a given month.” They add that T-Mobile will now have to more clearly define and explain this Top 3 Percent Policy, including who it may affect, and how.