The Federal Trade Commission (FTC) announced on Tuesday, Nov. 5, 2019 that its lawsuit against AT&T for misleading its customers over its ‘unlimited’ data plans has been settled resulting in the FTC is issuing a fine against AT&T for $60 million.
The suit was filed five years ago in 2014, when the five commissioners of the FTC determined that AT&T had been ‘throttling’ data on its customers’ ‘unlimited’ plans that went as far back as 2011. Throttling data is the slowing down of data speed. The allegation made in the lawsuit was that the company instituted this throttling practice once its customers who were on the specific unlimited data plan(s) reached a certain usage threshold.
AT&T responded to the fine it received, that its throttling practice which it referred to as a ‘network management tool,’ was in the best interest of its customers.
It appears that AT&T does not have any objections to the fine of $60 million it received. When you compare that figure with the over all perspective of AT&T’s revenue, it comes as no surprise. AT&T makes more or less an average of $150 billion in annual revenue, so the fine comes to about 0.04% of that. If you made $50,000 a year and you had just received a 0.04% fine on your salary, that would come to a $20 fine.
It looks like AT&T’s political lobbying has paid off over the years as it continues to receive just a ‘tickle on the wrist’ in fines from the US government. But there’s more than meets the eye at stake here. It seems as though fines issued by the FTC as well as past fines by the Federal Communications Commission (FCC) against AT&T in the amount of $100 million (for a person it would be $35), makes it look like the company is paying its dues for its throttling practices.
However, even though these minimal fines are implemented making it look like the FTC is making good on the FCC’s promise that regulations would continue after net neutrality was repealed, it’s really far from what needs to be done.
Net neutrality rules, implemented by the Obama administration to keep things neutral among network providers, were repealed by the FCC in June of 2018 as being unnecessary and heavy handed regulations. They were replaced with common sense regulations to promote investments and broadband deployment.
Friendly fines and the appearance of enforcement are far different though than enforcing AT&T to stop its throttling practice and stop lying about it.