FCC to Fine AT&T $100 Million for Lying to Customers About Data Plans

By Wayne Rash  |  Posted 2015-06-17 Print this article Print
FCC Fines AT&T

That's when AT&T stopped offering unlimited data, instead offering plans with a data cap. Customers who wanted more data could buy a higher data cap.

But the customers who had already purchased an unlimited data plan were grandfathered in. They were given and paid for unlimited data—or so they thought.

What really happened is that AT&T issued a press release that announced its revised data plans and said rather vaguely that customers with unlimited data plans might be affected. The company also sent some notices to its customers about the plan.

But those notices didn't mention how much data was allowed. In particular, they didn't say what would happen when customers exceeded the 5 GB limit. In addition, AT&T continued to call those grandfathered unlimited plans "unlimited" when they clearly weren't.

Meanwhile, back in Washington a familiar pattern has emerged. The enforcement action was approved by three FCC Commissioners and two Commissioners dissented. Once again, the three Commissioners who agreed with the action are the Democrat appointees, while the two dissenters are the Republicans. Both of the dissents said that the fine was out of proportion to the violation.

However, when I asked a question about the size of the fine during the FCC press conference, I was told that the amount could have been substantially larger and that the amount was moderated because it was being done for the first time.

A senior FCC official speaking on background said that the amount of the fine was small in relation to the billions of dollars that AT&T reaped from those unlimited contracts that weren't unlimited. His comment was that the FCC wanted the fine to be large enough that AT&T didn't see it as a "cost of doing business."

So what's really going on here? It would appear from some background comments that the FCC has been trying to negotiate a settlement with AT&T, and that the carrier hasn't been willing to meet the Commission's demands.

The $100 million fine isn't really what the FCC expects to get from AT&T. Rather, it's the government's way of getting AT&T's attention and making sure the carrier knows it's serious.

What will likely happen now is that negotiations will resume after a required amount of legal theater in which both sides make stuffy pronouncements, wave their arms the required number of times, and loudly assert the righteousness of their position and then they will quietly come to an agreement.

Once that happens, AT&T will pay some nominal fine, unlimited customers will either get a real unlimited plan or it will stop being called an unlimited plan or those customers who need access to unlimited data will switch to another carrier.

Since all of this insanity was ultimately about customer retention, AT&T will likely return the unlimited plan to being really unlimited and then start charging accordingly.


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