AT&T, who prefers to keep as many $100 millions as they can, has strongly suggested to the FCC that the carrier should not be required to pay the $100 million fine levied for throttling users on unlimited data plans. The punishment comes for failing to make it clear to customers that have grandfathered packages that while their service is called "unlimited," they will actually be throttled to 2G speeds once monthly usage exceeds an arbitrary amount that is not disclosed to subscribers.
To sum up AT&T's rebuttal, they say that the FCC is wrong about the current law and wrong about whether AT&T informed their customers about how unlimited data plans work. The Hill obtained a copy of the formal filing that contests the fine, which says in part:
The Commission’s findings that consumers and competition were harmed are devoid of factual support and wholly implausible. [. . .] Its 'moderate' forfeiture penalty of $100 million is plucked out of thin air, and the injunctive sanctions it proposes are beyond the Commission’s authority.
To recap the problems found by the FCC in a document released last month, let's start with AT&T's methods of telling customers.
- Hosted a page labeled "Broadband Information" at the bottom of the company's homepage that included, among other things, specifics on the policy. Over time, other pages given similar prominence also included some details about throttling.
- Issued a press release before beginning to throttle users. It discusses the changes in general terms, emphasizing that even the heaviest users still may use unlimited data.
- Put a 63-word warning on subscriber's paper bills once, two months before the program was implemented.
- Changed contractual wording one year after the program began to define unlimited as meaning "you pay a fixed monthly charge for wireless data service regardless of how much data you use." Elsewhere in the contract, the more relevant info is included, saying, "AT&T may reduce your data throughput speeds at any time or place if your data usage exceeds an applicable, identified usage threshold during any billing cycle.”
After the program launched, sent emails to the heaviest data users warning that they had received a "grace month" and that if their usage continued to be in the "top 5 percent" of subscribers, they would see reduced speeds.
- Starting a few months into the program and ending a few months later, users would receive a warning text message the first time they met 75% of the threshold and another when it was exceeded. In future months, no texts would be sent to those users. This policy was later adjusted to only contact users via text once they reached 95% of the cap and then never again. They said,
Your data usage on your 4G LTE smartphone is near 5GB this month. Exceeding 5GB during this or future billing cycles will result in reduced data speeds, though you’ll still be able to email & surf the Web. Wi-Fi helps you avoid reduced speeds. Visit www.att.com/datainfo or call 866-344-7584 for more info.
The emails to heavy users and texts are going to be AT&T's strongest argument and are what they emphasize in their rebuttal. We'll be getting into nitty gritty legal interpretations about just what misleading really is since it is clear that it wasn't impossible for savvy consumers to figure things out. However, AT&T does use a few other angles to combat the allegations.
They say the statute of limitations has passed, so it's too late to punish them. They also don't think any customers spent more money than they otherwise would have or had anything happen that cost them money as a result of throttling, so it's a victimless crime. To address the charge that the misleading policy hurt competition among carriers, AT&T says that nobody remained subscribed as a result of being fooled about the plan.
Last but not least, even if AT&T is guilty, the filing states that the fine is too large. Instead they propose $16,000 as a more appropriate amount for their non-crimes.
The FCC will read through the arguments and decide whether they will move forward, cancel the punishment entirely, or comply with another AT&T request by waiting for some court cases to decide whether the regulations involved are legal.
- The Hill