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Feds sue AT&T for slowing down “unlimited” data plans

Unlimited data?  Not so fast!

You may pay to cruise along on your data package–watching Netflix, checking email, streaming YouTube videos, listening to Spotify– but those speeds may not be what you think.

The Federal Trade Commission (FTC) announced Tuesday that it is suing AT&T for slowing down speeds for customers who thought they were receiving “unlimited” data plans.

Specifically, the FTC said AT&T did not “adequately” inform unlimited data plan customers that their speeds would be slowed– in some cases up to 90%– if they used a certain amount of data, which was sometimes as little as 2 gigabytes per billing cycle.  It is alleged that AT&T has slowed speeds for at least 3.5 million unique customers a total of more than 25 million times.

AT&T says this “throttling” is necessary to ease network congestion (more people on the network= slower speeds for all) and that they informed wireless customers through bill notices.

But the FTC made it clear they aren’t buying it:

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez in a press release. “The issue here is simple: ‘unlimited’ means unlimited.”

We’ve written a lot about net neutrality in the past, and the principal at stake here is similar:  Companies shouldn’t be allowed to slow down speeds for customers who aren’t paying more (it is suspected that some of this “throttling” is related to the fact that AT&T is phasing out its unlimited data plans for more lucrative offers).

Fortunately, it looks like the Feds are finally cracking down on companies trying to get away with high-speed murder.

Stay tuned to the WatchBlog for more updates on this issue.