T-Mobile FCC Settlement: Uncarrier To Pay Hefty $48 Million Fine For Misleading Unlimited Data Customers
T-Mobile is in hot water with the Federal Communications Commission, and has reached a settlement to pay a $48 million fine for misleading unlimited data customers.
The FCC went after the Uncarrier over claims related to its unlimited data plan policy, which was not exactly unlimited after all. T-Mobile misled customers when it advertised its unlimited data plans, but ultimately throttled their speeds.
Under the settlement it has now reached with the FCC, T-Mobile will pay a $7.5 million federal fine, offer $5 million in equipment and services to schools in the United States, and pay $35.5 million in discounts and data credits.
— John Legere (@JohnLegere) October 19, 2016
The FCC's probe into T-Mobile's practices targeted the way the Uncarrier promoted its unlimited data plan. According to the FCC, customers expected to be allowed to use as much data as they desired without experiencing lower speeds, but some data users faced throttling.
Although it failed to properly notify customers, T-Mobile throttled the data speeds of customers who used a large amount of data, the FCC points out. More specifically, T-Mobile unlimited data plan users who exceeded 17 GB of data in one month ended up with slower speeds during "heavy" use.
"[I]n order for consumers to choose and use the Internet service that best fits their needs, they must not be subjected to the caprice of undisclosed restrictions that mislead them or contradict representations from providers about their broadband Internet access service," says the FCC.
The Commission further cites the Transparency Rule, which requires providers to offer consumers accurate and sufficient information so they can make informed decisions about what broadband internet access service they want to purchase and use.
T-Mobile, for its part, is well-known for its aggressive offers that always try to undercut rivals and lure in more customers from competing carriers. Back in August, the self-proclaimed Uncarrier announced that it was shifting to a single, unlimited data plan for all customers with T-Mobile One.
The operator eventually tweaked its promotion a bit, but at first it advertised its unlimited plan in a way that made customers believe they were getting a "better and faster" service than what was actually on the table, argues the FCC. T-Mobile's plan includes videos in standard definition, while those who want to play videos in HD have to pay an extra monthly fee.
The FCC argues that consumers should not be put in a position where they have to guess whether their unlimited data plans are actually unlimited or in fact contain various restrictions such as speed or data caps and other material limitations.
In addition to agreeing to pay a fine, T-Mobile's settlement with the FCC also stipulates that the Uncarrier will update its policy disclosures and alert customers when they're getting close to that 17 GB monthly data threshold.