On Wednesday, the FCC announced that the mobile carrier T-Mobile will pay out $48 million to settle a dispute over "unlimited" data plans that are not truly unlimited. According to the FCC, $7.5 million of the $48 million will be paid as a fine to the FCC, while the remaining portion will be "consumer benefits" offered to T-Mobile customers with unlimited plans. $5 million of the total is also being kicked in as equipment for American Schools.
The complaints filed against T-Mobile were largely due to T-Mobile's practice of "de-prioritizing" - which is a nice way of saying "throttling" - heavy data users during peak network times. The FCC states, T-Mobile did not do enough to inform its customers that they will be throttled if they used over 17 GB of data a month.
The FCC took issue with T-Mobile's "Top 3 Percent Policy," which throttles the data of its heaviest users during the busiest times. In a statement, the FCC outlined the problem:
“Under its “Top 3 Percent Policy,” T-Mobile “deprioritizes” its “heavy” data users during times of network contention or congestion. This potentially deprived these users of the advertised speeds of their data plan. According to consumers, this policy rendered data services “unusable” for many hours each day and substantially limited their access to data. The bureau believes that the company failed to adequately inform its “unlimited” data plan customers that their data would be slowed at times if they used more than 17 GB in a given month.”
The settlement the FCC has reached with T-Mobile has three major effects: T-Mobile will pay a $7.5 million fine to the FCC; it will have to update its marketing materials so that restrictions on data are clearly labeled, or just stop describing things as “unlimited”; and provide $35 million in “consumer benefits” aka free stuff for customers.
Specifically, customers will be able to get 20 percent off any accessory sold by T-Mobile, and 4GB of free data for a month on a mobile internet plan.
In a statement, FCC executive Travis LeBlanc said that “Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” which is difficult to argue with.
T-Mobile is not the first mobile network to be fined for misunderstanding what “unlimited” really entails, but it has been one of the biggest proponents of sorta-unlimited data plans. With more and more networks incorrectly describing things as Unlimited, it’s good to see the FCC taking real action.