What $100 Million AT&T Fine Says About The FCC - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Mobile // Mobile Business
Commentary
6/18/2015
04:02 PM
Eric Zeman
Eric Zeman
Commentary
100%
0%

What $100 Million AT&T Fine Says About The FCC

The FCC's bruising attacks on broadband companies show its strong focus on consumers. The $100 million fine against AT&T is just the latest in this fight.

6 Top Programming Languages For Mobile Development
6 Top Programming Languages For Mobile Development
(Click image for larger view and slideshow.)

It's almost like Federal Communications Commission Chairman Tom Wheeler has something to prove. The former cable lobbyist has declared war on internet providers, almost as if to account for past sins. AT&T is the latest to feel the policy-maker's wrath.

On June 17 the FCC blasted AT&T for sneakily slowing down the wireless Internet speeds of its customers. The government wants AT&T to cough up $100 million to make up for its transgressions.

AT&T used to offer "unlimited" service. It charged customers $30 per month, and in return those customers were able to use as much of AT&T's wireless network as they wanted -- at least in theory.

Eventually, AT&T ceased offering unlimited plans as the entire industry moved to metered buckets of data. Many customers held onto their unlimited plans, however, grandfathered in under AT&T's older terms of service. AT&T eventually began targeting these customers for over-use of the network by lowering the maximum speed at which they could surf the Web on their mobile phones.

The problem? AT&T didn't tell its customers.

(Image: franckreporter/iStockphoto)

(Image: franckreporter/iStockphoto)

Those customers complained to the FCC in droves. The agency said it received thousands and thousands of letters from AT&T customers who felt they had been deceived by the company. The FCC took action.

"Consumers deserve to get what they pay for," said Wheeler. "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."

This isn't the first time Wheeler's FCC has gone on the attack.

In April, the FCC tagged Verizon with a $3.4 million fine for failed 911 services in California. That same month, the agency dinged AT&T $6.9 million for violating the Lifeline program. In January, it fined AT&T $640,000 for using some of its equipment improperly. The FCC also went after Verizon in January to the tune of $5 million for failing to connect wireless calls made in rural areas.

The agency isn't alone. The Federal Trade Commission has nailed all four major carriers in the last year with fines totaling well more than $200 million.

[Read more about Wheeler and the fight over net neutrality.]

If Wheeler's FCC has proven anything, it is that the agency plans to fight for the users.

AT&T, of course, claims it did nothing wrong.

"We will vigorously dispute the FCC's assertions," according to AT&T's statement given to several media outlets. "The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers, and has known for years that all of the major carriers use it. We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."

Lest you think the $100 million fine is rather steep, keep in mind that AT&T generated $32.6 billion in revenue during the first quarter of the year. If anything, the size of the fine clearly shows the FCC is serious about stamping about abusive behavior.

Keep it up, Wheeler. Keep it up.

Eric is a freelance writer for InformationWeek specializing in mobile technologies. View Full Bio
We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Ariella
50%
50%
Ariella,
User Rank: Author
6/19/2015 | 7:48:56 AM
Re: That would be one heck of an agency picnic
@Gary_El It's funny the way things repeat. Back in the day ATT was Ma Bell and regarded as a "natural monopoly." I still recall that term from early economics books applied to the phone company. Then came the breakup and competiton, but now we're moving toward eliminated competition once again.
Ariella
50%
50%
Ariella,
User Rank: Author
6/18/2015 | 8:39:49 PM
Re: That would be one heck of an agency picnic
Interesting question. It should be a matter of public record what the FCC does with the money from fines.
Charlie Babcock
50%
50%
Charlie Babcock,
User Rank: Author
6/18/2015 | 6:35:50 PM
That would be one heck of an agency picnic
That's interesting, Rman. What will the FCC do with the $100 million? It would make for a heck of a company picnic. AT&T is possibly serving as the whipping boy here but there's a need for someone, if not the FCC, then who? to act as the consumer's watchdog. 
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

News
Becoming a Self-Taught Cybersecurity Pro
Jessica Davis, Senior Editor, Enterprise Apps,  6/9/2021
News
Ancestry's DevOps Strategy to Control Its CI/CD Pipeline
Joao-Pierre S. Ruth, Senior Writer,  6/4/2021
Slideshows
IT Leadership: 10 Ways to Unleash Enterprise Innovation
Lisa Morgan, Freelance Writer,  6/8/2021
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Slideshows
Flash Poll