When companies advertise unlimited data plans for its customers and then renege on that promise, the Federal Communications Commission (FCC) definitely wants some answers. The latest wireless company to come under the watchful eye of the FCC is none other than T-Mobile, which has long touted its unlimited data plans as an advantage over its competition.
However, the company began throttling “data hogs” on its unlimited plans back in 2015 if they consumed more than 17GB of data per month (the “Top 3 percent” according to T-Mobile). This “magical” threshold for throttling was not explicitly made clear to customers at first — it was not until customers complained about the reduced data speeds that T-Mobile decided to come clean and explain its actions. Customers who were on T-Mobile’s MetroPCS prepaid service were also shackled by the throttling policy.
Needless to say, the FCC was not amused. The FCC’s main issue wasn’t with the fact that throttling was taking place, but that customers weren’t properly informed how and when such throttling would take place beforehand:
T-Mobile’s public disclosures about the de-prioritization policy prior to June 2015 were not sufficient to fully inform consumers about limitations imposed on the UDPs, because they did not identify the data usage threshold that would trigger application of the policy, did not explain how the policy could impact a de-prioritized customer’s ability to use their service, or discuss the data throughput speed reduction a de-prioritized customer could experience.
The FCC says that going forward, T-Mobile must properly disclose all of its policies for T-Mobile and MetroPCS customers with regards to unlimited data, throttling thresholds, and what speeds will be reduced to when throttling is enabled. T-Mobile must also make these policies clear in all relevant marketing and advertising.
“Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” said FCC Enforcement Bureau Chief Travis LeBlanc. “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. With today’s settlement, 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.”
As a result of its transgressions, T-Mobile is being forced to pay a $48 million in “total financial commitments.” $7.5 million will be dedicated to the actual FCC fine, while $35.5 million will reserved for “customer benefits” for T-Mobile and MetroPCS customers on unlimited data plans. Another $5 million will be reserved for providing services and tech equipment to low-income school districts.