T-Mobile reaches $48M settlement with FCC for slowing speeds to 'unlimited' customers

Image: T-Mobile

T-Mobile’s lack of transparency with "unlimited" plans that actually slow speeds at times for high-end users will cost the carrier $48 million or more, the FCC said.

The nation’s third-largest mobile network operator will pay a fine and provide benefits to consumers totaling “at least” $48 million as part of a settlement regarding its policies that slowed data speeds for both T-Mobile and MetroPCS customers who exceeded their monthly data allotments. The Commission said its 2010 Open Internet transparency rules require that broadband providers “give accurate and sufficient information to consumers” regarding those policies.

“The FCC’s investigation found that company policy allows it to slow down data speeds when T-Mobile or MetroPCS customers on so-called ‘unlimited’ plans exceed a monthly data threshold,” the Commission said in a press release. “Company advertisements and other disclosures may have led unlimited data plan customers to expect that they were buying better and faster service than what they received.”

The FCC said it received complaints from T-Mobile and MetroPCS customers “who felt misled” when data plans that had been marketed as unlimited included “de-prioritized” speeds once monthly data allotments were reached. The Commission said T-Mobile slows data speeds for its heaviest users who’ve consumed their monthly data quotas when network traffic is particularly heavy.

“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 bureau believes that the company failed to adequately inform its ‘unlimited’ data plan customers that their data would be slowed at times if they used more than 17 GB in a given month.”

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T-Mobile has long offered unlimited plans that reduce data speeds for its hungriest customers. The operator recently introduced a streamlined offering of unlimited data plans branded as T-Mobile One, which slows data speeds for the top 3 percent of data-consuming customers when the network is congested.

T-Mobile CEO John Legere took to Twitter to praise the resolution. “Good settlement with FCC today,” Legere tweeted. “@TMobile believes more info is best for customers.”

The deal requires T-Mobile to pay a $7.5 million fine to the U.S. Treasury as well as funding “a $35.5 million consumer benefit program” for customers affected by its “unlimited” policies. Eligible customers will be offered discounts of as much as 20 percent off (up to $20) for any in-stock accessory as well as 4 GB of additional data if they have a mobile web data plan or a tablet plan under the MetroPCS brand.

The carrier also agreed to spend at “at least $5 million” to provide free devices to students in low-income school districts and mobile broadband services to those devices at a reduced cost to the schools. That program will launch in October 2017 and enroll 5,000 students per quarter over four years.