T-Mobile agreed to a penalty of “at least” $48 million, the FCC says today, to settle an investigation into whether it did enough to let customers with “unlimited” data plans know that speeds would be throttled after they used 17 GB a month.
“Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” FCC Enforcement Bureau Chief Travis LeBlanc says.
Shortly after announcing the action, the FCC released a report detailing its consumer protection efforts over the last few years.
“The commission has repeatedly stepped in to stop unfair business practices and, in many cases, required the companies to take concrete measures to prevent future indiscretions,” Chairman Tom Wheeler says in a blog post on CNET.
The post also talked up proposals before the FCC that would give internet users more power to keep online data private, and enable independent manufacturers to sell cable and satellite set top boxes.
In today’s action, the bureau concluded that T-Mobile didn’t do enough to tell customers about the throttling, which some told regulators made their data services virtually “unusable” for many hours each day. The wireless provider’s “Top 3 Percent Policy” would “de-prioritize” the heaviest data users when the network was congested.
With the settlement, LeBlanc says, “T-Mobile has stepped up to the plate to ensure that its customers have the full information they need to decide whether ‘unlimited’ data plans are right for them.”
The company’s penalty includes a $7.5 million fine, $5 million or more in services and equipment to schools, and $35.5 million in benefits to T-Mobile and Metro PCS customers who had “unlimited” plans.
The company has until December 15 to contact those eligible for the benefits.
They’ll receive a 20% discount (up to $20) off the price of an in-stock accessory. Those with T-Mobile’s “Simple Choice MINT” plan, or a tablet plan from MetroPCS, can get 4GB of additional data.
T-Mobile must provide “clear and conspicuous disclosures” about data restrictions, and not use the term “unlimited” to refer to plans that include throttling.
The $5 million for schools will provide some public schools with free devices, including tablets, that students can use for homework. T-Mobile will also offer a discounted price for schools to buy mobile broadband, while students using the devices would not have to pay anything.
The benefit will begin a year from now and go to 5,000 students per quarter over four years.
Last year the FCC proposed a $100 million fine against AT&T Mobility for what it says was a policy that misled customers with “unlimited” mobile data.
And last week regulators hit Comcast with a $2.3 million fine — the largest civil penalty the FCC has assessed a cable operator — to resolve an investigation into charges for services and equipment that consumers did not request.
The actions “demonstrate the importance of continued FCC oversight over the communications marketplace and in particular the transparency obligations which are critical to the FCC’s net neutrality rules,” Public Knowledge Policy Fellow John Gasparini says. “Consumers deserve to know what they’re paying for, and to get the services advertised.”