Is your “unlimited” mobile data really unlimited if your carrier throttles it down to slower speeds at certain times? Per Re/code, the Federal Trade Commission this week ordered prepaid mobile carrier TracFone to pay $40 million for throttling its customers’ data connections despite the fact that they had signed up for “unlimited” data plans. However, it’s the FTC’s rationale for why TracFone should pay up that really ought to make larger carriers like AT&T worry.
“The issue here is simple: When you promise consumers ‘unlimited,’ that means unlimited,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.
Rich went on to clarify that the FTC has no issue with carriers throttling their customers if they exceed certain limits or if they just need to throttle customers to manage traffic during peak hours. The issue here is entirely how carriers market their mobile data plans: If a customer signs up for an “unlimited” plan they should expect to get an unlimited amount of high-speed data with no caveats.
This argument is particularly important because AT&T recently argued that the FTC has no jurisdiction over its network management practices — instead, AT&T argued, any disputes over how it handles data on its network should be overseen by the Federal Communications Commission. However, if the FTC makes this a case about deceptive advertising and not network management, it might be able to assert authority over AT&T in this particular case.
The FTC this past fall sued AT&T for allegedly misleading its customers “by charging them for ‘unlimited’ data plans while reducing their data speeds, in some cases by nearly 90 percent” if they used too much of their “unlimited” data. AT&T has called the charges baseless and is vowing to fight the FTC’s suit.