FCC Hits AT&T With $100 Million Fine For Throttling Broadband Data
June 18, 2015 at 4:27 AM (PT)
The FCC has proposed a $100 million fine against AT&T MOBILITY, LLC for throttling "unlimited data" customers after they exceeded certain data caps, an action that drew sharp dissents from the two Republican commissioners on the panel. The Commission objected to AT&T's "Maximum Bit Rate" policy instituted in 2011, saying that the move violates the 2010 Open Internet Transparency Rule by calling the data plans "unlimited" and providing what the Commission called "inadequate" notice of the change.
Chairman TOM WHEELER said, “Consumers deserve to get what they pay for. Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.” And Enforcement Bureau Chief TRAVIS LEBLANC added, “Unlimited means unlimited. As today’s action demonstrates, the Commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits.”
In his dissent, Commissioner AJIT PAI called the Commission's move "Kafkaesque" and added, "Because the Commission simply ignores many of the disclosures AT&T made; because it refuses to grapple with the few disclosures it does acknowledge; because it essentially rewrites the transparency rule ex post by imposing specific requirements found nowhere in the 2010 Net Neutrality Order; because it disregards specific language in that order and related precedents that condone AT&T’s conduct; because the penalty assessed is drawn out of thin air; in short, because the justice dispensed here condemns a private actor not only in innocence but also in ignorance, I dissent."
He pointed out that the rules require only that carriers "post disclosures on their websites and provide disclosure at the point of sale," which AT&T did do, and that "The rule specifically does not require 'multiple disclosures targeted at different audiences' nor that ISPs 'bear the cost of printing and distributing bill inserts or other paper documents to all existing customers" as in the FCC's decision. "This enforcement action," PAI concluded, "only confirms my concern that the Internet is now governed not by engineers and innovators but by regulators and lawyers. Stay tuned, for the message sent to innovators by the Commission today is a loud and clear one: 'Be afraid. Be very afraid'."
And Commissioner MIKE O'RIELLY, who recently called out the Enforcement Bureau for its heavy-handed approach of late, dissented as well, saying, "AT&T took several steps to ensure that its unlimited data subscribers are aware of the MBR policy. Yet the Commission casts these efforts aside, and relies on a focus group study finding that consumers generally did not support the idea of intentionally slowing traffic to conclude that AT&T meant to deceive its subscribers. Would a company trying to mislead its subscribers create a website, send e-mails and text messages, and add language to its customer agreement about this very policy? I don't think so. Further, if the Enforcement Bureau thought there were deficiencies in some of AT&T’s disclosures, it should have taken steps to rectify any concerns prior to imposing a Draconian $100 million penalty and compliance measures."