T-Mobile has come to an agreement with the Federal Communications Commission to pay at least $48 million for not telling its customers that there were actually limits to its highly publicized unlimited-data plans.
The settlement, announced Wednesday, is a result of an FCC investigation that began last year into whether the mobile carrier had adequately informed its customers that heavy users could have their data speeds slowed down or even halted during periods of network congestion, the Los Angeles Times reports.
T-Mobile will pay a $7.5 million fine and provide $35.5 million in customer benefits that will include a data upgrade and accessory discounts. Additionally, the company will spend at least $5 million to improve mobile high-speed internet access for 80,000 low-income public school students.
“Consumers should not have to guess whether so-called unlimited-data plans contain key restrictions, like speed constraints, data caps and other material limitations,” Travis LeBlanc, head of the FCC’s Enforcement Bureau, said.
“When broadband providers are accurate, honest and up front in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for,” LeBlanc added.
T-Mobile CEO and President John Legere tweeted Wednesday: “Good settlement with FCC today. @TMobile believes more info is best for customers.”
The settlement applies only to T-Mobile’s unlimited-data plans. Binge On, a plan that allows customers to stream unlimited video without having it count toward their data plans, is not part of the settlement.
According to the FCC, the investigation began in March 2015 after customers of T-Mobile and prepaid carrier Metro PCS (which T-Mobile had acquired two years earlier) complained that they “felt misled when they discovered their ‘unlimited’ data plan included ‘de-prioritized’ data speeds after using a fixed amount of data each month.”
Whenever the network became congested, unlimited-data-plan subscribers who had used more than 17 gigabytes of data in a given month had their data speeds significantly slowed down, a practice known as "throttling."
“According to consumers, this policy rendered data services ‘unusable’ for many hours each day and substantially limited their access to data,” the FCC said.
The FCC said that T-Mobile failed to disclose the restrictions to its unlimited-data customers from August 2014 to June 12, 2015.
T-Mobile has agreed to improve the way it discloses this information to customers, including notifying them when their data usage approaches the threshold at which it could be slowed.
Eligible unlimited-data customers will receive up to 20 percent off the regular price for accessories, with a cap of $20 applied to the discount, and an automatic upgrade of 4 gigabytes of data for one month, a $15 value, which can be used over the course of a year as part of T-Mobile’s “data stash” program.
T-Mobile must notify all eligible customers by Dec. 15.
Read more at the Los Angeles Times.