FTC Levies $40M Fine Against TracFone for Throttling Unlimited Data Customers

[Archon]

People who say read the fine print, unlimited is data not speed, etc really need to understand how AT&T market this service to the customers.

I've been using the iPhone since gen 1 on day 1 and how AT&T sold me on their network is unlimited and "broadband" like speed. I remember this vividly.

So don't tell me my service is this with huge fanfare and then alter the deal in a whisper down the road. My data speed gets throttled down by 90%...NINETY!!

Ridiculous!

I found this ATT press release to support my opinion.

http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=25791

"Broadband Speed and New Capabilities Enhance Iconic Mobile Device"

"AT&T anticipates that these offers will drive increased sales volumes and revenues among high-quality, data-centric customers."

"With a two-year contract, the price of an 8GB iPhone 3G will be $199; the 16GB model will be priced at $299.
Unlimited iPhone 3G data plans for consumers will be available for $30 a month, in addition to voice plans starting at $39.99 a month.
Unlimited 3G data plans for business users will be available for $45 a month, in addition to a voice plan."

 

[wolfaaron]

3G is not a speed.

Ask any grown up, they will tell you that.

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you may not be the only person, but I would expect that AT&T would be happy to see you and others go if it represents a disproportionate amount of usage.

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Ehh...you may want to actually read your contract before you make statements like that.

You are right that 3G is not a speed. However, if you were to compare a 2g and a 3G network side by side, it is very likely that 3G will be faster than 2g in an uncongested untouched environment. However, ATT and Verizon artificially mess with it and they take your 3G connection (or 4g) and they artificially slow you down even if the network is not congested.

 

[bushman4]

FCC fining ATT and Verizon for throttling will only encourage them to discontinue the unlimited plans. Will the customers win? Hard to say.

 

[BuffaloTF]

The data is NOT unlimited if you throttle it. That's the marketing BS to twist your mind.

Think of this scenario in car speed. In the first day of the month, you can drive as fast as you can (lets assume your car can go 100 mph in terms of LTE cap speed). So you can drive 2400 miles on the first day.

Then your car is throttle down to 10 mph, that's only 240 miles for each day in rest of the month. The result is 240 miles x 29 days = 6960 miles.

That means you can drive no more than 9560 miles each month.

So there is your "limit".

Please never use a car analogy again, ever. First off, these aren't analogous, so they can't be used as a 1:1 example, making it a false analogy off the cuff. Second off, your car CAN go 100 mph, even little Smart ForTwo death traps can get there; but there's a speed limit on each road you'll ever put it on, instantly killing any hope you had at drawing an analogy to support what you are trying to argue.

In fact, the speed limits will get lower as population density increases and roads narrow, aren't split by a median, and/or have lots of traffic -- so now your false analogy is proving the counter-argument to your statement correct... that speeds should get lowered as usage increases or limited arteries get jammed up by the traffic all using the same road. Further, if I owned a Ferrari, the only real chance I'd have to get it to its max speed would be on a closed track, where it's only myself or a few others using it at the same time. Driving at max speed on normal roadways would negatively impact those around me, and potentially harm them. So speed limits are put in place to keep me moving at a set speed -- or close to it -- so that I don't.

 

[I7guy]

But I did not agree to the harassment and accusations that I tether because I'm using the unlimited data that I agreed to pay for.

But if you are on verizon you also have to pony up $30 for tethering.

 

[CEmajr]

Always funny that T-Mobile advertises unlimited data but have multiple pricing points. Totally misleading advertising and when they throttle, the phone is barely usable. But this has been a sleazy practice for the last 10 years, kind of suspicious that now that T-Mobile is gaining traction the Govt finally cares.

The difference with T-Mobile is that their plans clearly state the throttle threshold before customers even sign up for it.

These prepaid carriers often state "unlimited data" and have no mention on their ads of throttling after certain limits which leads people to believe that they can really use as much data as they want.

Then in AT&T's case they sold users on an "unlimited data" plan and they basically performed a bait and switch by throttling after 5GB later on when they decided that they couldn't deliver on said promise.

 

[H2SO4]

I'd say that's it folks. No more unlimited plans for the grandfathered customers on VZ/ATT. Once the contract is up they're free to change plan terms.

Who cares? They should state what they are giving you up front. All those whio said, ‘But it is unlimited - you can still download as much as you like’, your semantics have finally caught up with you.

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Everyone to whom throttling would be relevant knows about throttling, and nows the carriers do it. And its in the contract that they can do it. It's not like this stuff is a secret. So they did it on some people, and those people are now pissed because they don't like the terms of the contract that they signed anymore. But worry not, bureaucrats to the rescue. Let's just steal their money back because they're not happy with their decision anymore.

Losers.

This I agree with but it should be made plain not hidden in the reams and reams of text like Apple contracts.

 

[H2SO4]

The data is unlimited. They didn't say you'd get it all at the same speed.

Oh God another one, you are obviously trolling.

Ok, let’s finish this.
In absolute terms nothing is unlimited, yes we know that.

If you place a throttle on my pipe you have just limited it. FACT.
If that throttle is such that in the space of 60 seconds I can download only 1MB you have in effect said that for my monthly fee of X dollars, I can download 44640MB.
I fail to see a place where I can insert the word unlimited and use it properly in the above sentence.
The package is called unlimited data not unlimited download time.

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Please never use a car analogy again, ever. First off, these aren't analogous, so they can't be used as a 1:1 example, making it a false analogy off the cuff. Second off, your car CAN go 100 mph, even little Smart ForTwo death traps can get there; but there's a speed limit on each road you'll ever put it on, instantly killing any hope you had at drawing an analogy to support what you are trying to argue.

In fact, the speed limits will get lower as population density increases and roads narrow, aren't split by a median, and/or have lots of traffic -- so now your false analogy is proving the counter-argument to your statement correct... that speeds should get lowered as usage increases or limited arteries get jammed up by the traffic all using the same road. Further, if I owned a Ferrari, the only real chance I'd have to get it to its max speed would be on a closed track, where it's only myself or a few others using it at the same time. Driving at max speed on normal roadways would negatively impact those around me, and potentially harm them. So speed limits are put in place to keep me moving at a set speed -- or close to it -- so that I don't.

Nice to see you have deliberately refused to see the truth.

 

[BuffaloTF]

Oh God another one, you are obviously trolling.

Ok, let’s finish this.
In absolute terms nothing is unlimited, yes we know that.

If you place a throttle on my pipe you have just limited it. FACT.
If that throttle is such that in the space of 60 seconds I can download only 1MB you have in effect said that for my monthly fee of X dollars, I can download 44640MB.
I fail to see a place where I can insert the word unlimited and use it properly in the above sentence.
The package is called unlimited data not unlimited download time.

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Nice to see you have deliberately refused to see the truth.

What truth? That people try to justify a bad position with an even worse analogy? That resource-restricted pipes get clogged and people trying to drive too fast on them when there's traffic will crash and inhibit others usage of the road, so speed limits are set and enforced? 10 mhz can only support so much through it. They can't magically add air to that to widen it. Just like you can't magically add another lane to a road.

The truth is the car isn't the carrier, it's the device. The road is the carrier. And roads can only support so many cars at the same time before it gets to a standstill, and people caught abusing the speed limits repeatedly get their license revoked and spend that period riding slow-moving buses.

 

[H2SO4]

What truth? That people try to justify a bad position with an even worse analogy? That resource-restricted pipes get clogged and people trying to drive too fast on them when there's traffic will crash and inhibit others usage of the road, so speed limits are set and enforced? 10 mhz can only support so much through it. They can't magically add air to that to widen it. Just like you can't magically add another lane to a road.

The truth is the car isn't the carrier, it's the device. The road is the carrier. And roads can only support so many cars at the same time before it gets to a standstill, and people caught abusing the speed limits repeatedly get their license revoked and spend that period riding slow-moving buses.

Wow, ignored it twice in a row, good going there.
You know exactly what point is being made yet choose to play dumb with semantics like the carriers.
Can’t give me unlimited? Fine, no problem with that at all. Don’t advertise that I can get it. As I said above we all know that hardware has limits, these limits are not the same as one that is artificially imposed by the carrier.

 

[mtneer]

I'm always amazed at the amount of people on here that root for the corporations and not for the customer.

Most things in law and regulations rely on what is reasonable. It is reasonable to assume that unlimited data means you get to use any amount of data during the period purchased at speeds consistant with other users in your network area.

Now, corps can put all the stipulations they want in the fine print. But if they advertise to get your business one way while using fine print to further clarify to the point where it voids the ad...that's a bait and switch and it's wrong.

People that support corps that use these tactics over customers will always amaze me.

Throttling customers on unlimited plans to the point where their data is unusable is wrong. The corps know throttling is wrong. That's why the corps are dumping unlimited plans. Because they were never really unlimited and now they are getting called on their shenanigans & paying for misleading the public.

I held on to my 3 unlimited plans until 2 weeks ago. With throttling it wasn't worth keeping. Data rollover was the only thing that convinced me to rid myself of those expensive farce plans.

If I don't have it... why should anyone else have it?

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For those fearing that AT&T/ VZ will drop "unlimited" if the FCC dares to look their way - so what?

That plan ain't "unlimited" today. It will just be called "limited 5GB" or "Ultimate Life 5GB" or whatever the MBA suits fart out. At least you will know what exactly you are paying for.

 

[BuffaloTF]

Wow, ignored it twice in a row, good going there.
You know exactly what point is being made yet choose to play dumb with semantics like the carriers.
Can’t give me unlimited? Fine, no problem with that at all. Don’t advertise that I can get it. As I said above we all know that hardware has limits, these limits are not the same as one that is artificially imposed by the carrier.

I'm not the one choosing to ignore the truth. Unlimited is unlimited. It is unlimited at any speed - you're playing games with semantics if you disagree with that, plain and simple. They aren't selling a speed though. They're selling unlimited access to the Internet. What's got Slim in trouble is outright canceling people's paid-for plans after selling it as one cohesive product and listing nowhere in the terms that it could happen and not disclosing when it could happen.

Other carriers previously offered it as a *feature* disassociated from the purchased plan. It can be canceled or modified at any time, without consequence - and the terms and conditions you *agreed to* state they can do it to you.

These are not the same things. They're very, very different in every legal sense. Words matter. And terms and conditions are there for a reason. In fact, the FTC does not oppose throttling whatsoever so long as they are clearly disclosed to customers. They are on other carriers.

Case dismissed.

 

[cmwade77]

I'd say that's it folks. No more unlimited plans for the grandfathered customers on VZ/ATT. Once the contract is up they're free to change plan terms.

Actually, that will depend on the state in which you live. For example, in California, they are not allowed to change your plan unless you give permission to do so. Now Verizon had the tactic of if you have an unlimited data plan, we won't give you a discounted upgrade and they can do things like that to encourage you to change, but they can't simply take it away and force you to change.

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I'm not the one choosing to ignore the truth. Unlimited is unlimited. It is unlimited at any speed - you're playing games with semantics if you disagree with that, plain and simple. They aren't selling a speed though. They're selling unlimited access to the Internet. What's got Slim in trouble is outright canceling people's paid-for plans after selling it as one cohesive product and listing nowhere in the terms that it could happen and not disclosing when it could happen.

Other carriers previously offered it as a *feature* disassociated from the purchased plan. It can be canceled or modified at any time, without consequence - and the terms and conditions you *agreed to* state they can do it to you.

These are not the same things. They're very, very different in every legal sense. Words matter. And terms and conditions are there for a reason. In fact, the FTC does not oppose throttling whatsoever so long as they are clearly disclosed to customers. They are on other carriers.

Case dismissed.

Actually what AT&T sold us was "Unlimited data with the fastest speeds in the U.S." Well I would say they were selling a speed at that.

 

[BuffaloTF]

Actually what AT&T sold us was "Unlimited data with the fastest speeds in the U.S." Well I would say they were selling a speed at that.

Unless you haven't purchased a new device in the past decade, then no... No they didn't sell you that. And the Terms and Conditions of the feature very clearly spell out at what levels it occurs on what technologies. Terms & Conditions you accepted by purchasing it. They govern your agreement, and a contract is not required to be bound by them. Sorry bout your luck.

 

[AllieNeko]

Only in the bizarre, bizarre world of MacRumours do people feel sorry for a partnership between América Móvil and Walmart because they're "the little guys" - ugh. No, no no. They're large, ruthless giants who've been selling a terrible service and calling it something it isn't.

 

[Nickerbocker]

TracFone was smart when they introduced Net10 and advertised that as 1.5GB of LTE data and then 3G data speeds when you go over that.

Just tell us what it is we are paying for up-front. That's what the consumers want. And placing a footnote next to "UNLIMITED" with the tiny text reading "not really, hah" shouldn't count. That's just lying and shouldn't be allowed.

What if we allowed car manufacturers to advertise 60MPG*? Oh wait...nevermind... we let them do that already. It needs to stop.

 

[michelepri]

I wish they had an FTC in Germany, but unfortunately big corporations make the rules, the laws and the judgements in Berlin so customers get a kick in the butt if they dare complaining about being ripped off like they usually are.

 

[brianb9]

As much as I hate the throttling of data (I'm with AT&T), if you agreed to their terms you agreed to the throttling. You still get unlimited data, you just agreed to a little line that says they can throttle that unlimited data after a certain limit.

It sucks but every single one of us who signed a contract agreed to those terms.

So for all those saying we knew what the terms were when we signed the contract, I call false. I have had ATT since the very first iPhone and it was their terms offering unlimited data and there were no restrictions at that time. Only when the iPhone became very popular and they saw an opportunity for more revenue than the original $130/month unlimited talk, text and data from the people as they began to use their data, did they try to add the term throttling. I have paid for unlimited data since day one and I expect it. So ATT deserves whatever they get fine wise, and it has been a long time coming and I can't wait for Randall Stephenson to take the hit we have all been taking. Not that it will make one ounce of difference in his pay or bottom line. I have no problem with corporations making money, but they need to stand by the terms they set originally and respect their loyal customers, rather than viewing them as a well of money that is unlimited.

 

[custom1]

OK FTC, but dole out the fines to more than just the cheap(est) players. It will be wrong to fine a player like this while allowing AT&T, Verizon etc to carry on without fines. Of course, AT&T & Verizon make big campaign contributions so lets see if the Gov punishes wrongdoing or if this "wrongdoing" is defined as not contributing enough to campaigns.

Seems odd that a relatively small player would get a headline fine for throttling while the much bigger, much deeper pocketed players are left out.

FTC always looking for a payday. FTC > For The Cash
I do realize that there are very real complaints against the carriers on throttling issues and how that effects the users. The FTC should apply the fines bilaterally.

 

[AllieNeko]

What if we allowed car manufacturers to advertise 60MPG*? Oh wait...nevermind... we let them do that already. It needs to stop.

Actually, there is a specific EPA testing protocol to determine advertised miles per gallon. So, while you may not accomplish it, there is a standardised way the number is obtained and it is comparable between cars. Personally, I usually beat that standardised number with the new protocol (they changed it a few years ago to get lower results) and I would often manage to make it with the old one...

 

[spinedoc77]

Haha, FUUUUUU straight talk. One of the most god awful MVNO's I've ever used, had so many issues with them including getting throttled.

 

[terraphantm]

Actually, there is a specific EPA testing protocol to determine advertised miles per gallon. So, while you may not accomplish it, there is a standardised way the number is obtained and it is comparable between cars. Personally, I usually beat that standardised number with the new protocol (they changed it a few years ago to get lower results) and I would often manage to make it with the old one...

But the EPA doesn't conduct the tests themselves. It's not unheard of for manufacturers to fudge the numbers a bit when doing their testing.

 

[mikeray]

i agree it will end the contracts but either way they will be forced to state what they are stilling in actual terms not be allowed to false advertise IE Unlimited thats limited.


as an original AT&T unlimited customer they may want to think twice before ending the unlimited plan i may just find another carrier...and its not one of the big two I'm eyeballing these days

Switch to Cricket Wireless, it uses the same network as ATT but I only pay $60/month contract free (their most expensive plan btw)

 

[macwh0re]

Switch to Cricket Wireless, it uses the same network as ATT but I only pay $60/month contract free (their most expensive plan btw)

Cricket just came out with a new advanced plan that has 20GB of LTE and it's only $55 if you do autopay.

 

[GrandMstrBud]

So is Straight Talk going to change it to non throttled now?