The FTC alleges that AT&T, despite its unequivocal promises of unlimited data, began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. According to the complaint, the throttling program has been severe, often resulting in speed reductions of 80 to 90 percent for affected users. Thus far, according to the FTC, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.

According to the FTC’s complaint, consumers in AT&T focus groups strongly objected to the idea of a throttling program and felt “unlimited should mean unlimited.” AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program. Some consumers quoted the definition of the word “unlimited,” while others called AT&T’s throttling program a “bait and switch". Many consumers also complained about the effect the throttling program had on their ability to use GPS navigation, watch streaming videos, listen to streaming music and browse the web.

The complaint charges that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

FTC staff worked closely on this matter with the staff of the Federal Communications Commission. The Commission vote authorizing the staff to file the complaint was 5-0.  

AT&T was quick to respond, calling the allegations "baseless".

“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program," said Wayne Watts, Senior Executive Vice President and General Counsel, AT&T. "It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts.

“We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”

Stay tuned to the Pipeline News Center for more on this story as it develops.

Internet of Things (IoT) ramping up

The Internet of Things (IoT), or what Cisco calls the "Internet of Everything," promises to transform the modern world and the way we interact with it. In October, Telefónica unveiled one of the first mass-market consumer IoT solutions, Thinking Things, which could accelerate the speed of adoption of the technology. The innovative product is like Lego blocks equipped with various sensors and connectivity, making it easy for anyone to create a smart solution - it doesn't require any specialized infrastructure or programming knowledge.

Speaking of Cisco, last month the company linked up with Tieto, the largest IT services company in the Nordic countries, to collaborate on the Internet of Everything. Tieto is the first Nordic company to join the application developer community for Cisco's IOx, which provides an application platform for running Linux-based software directly on Cisco's tested, high-grade IoT network platforms.

"With machines and sensors producing an ever-increasing amount of data, companies are facing an unprecedented challenge. They need to act in real time with the incoming data and work within the limits of available bandwidth. In order to retain low latency and high QoS, data can be processed locally closer to the data source, be it a factory supply chain, traffic system, power distribution system, basically anything that produces data," said Kip Compton, Vice President and general manager of the IoT Systems and Software Group at Cisco. "With Tieto, we now have the first relationship in place in the Nordics to develop fog computing solutions that will alleviate the data tsunami and bring broader Internet of Everything benefits to key industries.