Can AT&T regain the trust of wireless users after $100 mn penalty?

Verizon Wireless, Sprint and T-Mobile need to worry now because their main rival AT&T is facing a record $100 million penalty for promising unlimited data to telecom customers and slowing Internet speeds after certain amount.

The record penalty will be an eye opener for several telecoms in the world. Several data users in India are unhappy about the 2G and 3G data coverage and data speed. For instance, Idea Cellular’s data card does not work inside the home in select circles forcing several customers to get out of the building to enjoy seamless data connectivity.

Telecom operators such as Bharti Airtel, Reliance Communications, Vodafone, etc. are also offering controlled data plans. Indian telecoms never faced any huge penalty from TRAI (the Telecom Regulatory Authority of India) despite complaints.

Dallas-based AT&T said it will fight the charges. AT&T has 30 days to respond and convince the FCC. It will be difficult to regain the trust of AT&T customers. The FCC says AT&T’s approach to unlimited plans violated the agency’s transparency rule.

The Federal Communications Commission (FCC), the telecom regulator in the U.S., said that AT&T influenced wireless consumers to buy unlimited data plans for sending and receiving data, including Web browsing, GPS navigation and streaming videos. AT&T limits the data usage once the consumer hit a certain level. AT&T offers poor speed, which is lower than advertised, the FCC said.
AT&T data plans
AT&T in a statement said that it would vigorously dispute the $100 million fine, the largest proposed in the history of FCC. If AT&T can provide evidence that the FCC allegations are wrong, the fine could be reduced.

“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,” said AT&T in a statement.

AP reported that Verizon slows down speeds for its heaviest users, but only on certain smartphones when there is congestion. Once the bottleneck eases, speeds return to normal.

Until this spring, AT&T was slowing speeds until the customer’s next billing cycle, even when there was no congestion.
Both Verizon and AT&T had phased out their unlimited plans after data usage grew following the launch of Apple iPhone in 2007. Existing customers, however, were able to keep their unlimited plans.

“As today’s action demonstrates, the commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits,” said Travis LeBlanc, the FCC enforcement bureau chief.

According to media reports, FCC alleges that AT&T severely slowed down the data speeds for unlimited data customers if they used more than about 5 gigabytes of data during a month. Currently, AT&T does not sell unlimited data plans to new customers, but those who subscribed to the plans when they were on the market can continue to claim their right to use as much data as they want.

Baburajan K
[email protected]