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FTC sues AT&T for alleged customer rip-off

FTC sues AT&T for alleged customer rip-off
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AT&T customers, have you noticed that your Internet speeds get really slow near the end of your billing cycle? It's not just you.

In a stunning turn of events, the FTC has decided to sue AT&T for throttling over 3.5 million customer speeds as much as 80-90%. That's even if customers paid for the unlimited data plan.

Throttling is nothing new to cell providers. Many defend the practice of throttling, or artificially slowing data speeds, as a way to provide better service to those that pay for an unlimited or tiered data plan.

I'm of the opinion that it's just another way to squeeze money out of their customers for "better" data speeds. The FTC apparently decided enough was enough.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramirez said in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”

The problem was not just that AT&T was throttling speeds, but that it was targeting customers even if they weren't in a congested area. AT&T claims that it changed this when it rolled out a new policy in July, but the FTC says that nothing actually changed.

The FTC lawsuit transcript describes AT&T actions:

"The speed reductions and service restrictions in effect under Defendant’s throttling program are not determined by real-time network congestion at a particular cell tower. Throttled customers are subject to this reduced speed even if they use their smartphone at a time when Defendant’s network has ample capacity to carry the customers’ data, or the use occurs in an area where the network is not congested. Once customers have been throttled during a given billing cycle, Defendant caps their download speed until the end of the billing cycle, at which time Defendant restores the data speed for these customers to full speed.

Since October 2011, Defendant has throttled its customers more than 25 million times, affecting more than 3.5 million unique customers. When a customer is throttled, the customer’s data speed is reduced, on average, for the last twelve days of the customer’s thirty-day billing cycle.

... At the same time that Defendant has been throttling unlimited mobile data plan customers who exceed 3 or 5GB of data usage during a billing cycle, Defendant has been offering individual tiered mobile data plans for data usage of at least 30GB per billing cycle. Defendant does not throttle its tiered mobile data plan customers, regardless of the amount of data that a tiered mobile data plan customer uses."

AT&T has fired back, saying that the company has been completely transparent about its practices and is contesting the lawsuit.

There is no word yet from the FTC whether it plans to take other cell carriers to court. "Since FTC investigations are non-public, we can’t confirm or deny whether we’re investigating any other company," a commission spokesperson said.

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