T-Mobile and the FCC agreed to a $48 million settlement after an investigation found its unlimited data plan isn’t really unlimited.
T-Mobile has agreed to a $48 million settlement with the Federal Communications Commission over claims it misled customers when promoting its unlimited data-plan policy.
T-Mobile must pay a $7.5 million federal fine, give $5 million in services and equipment to U.S. schools and give affected customers $35.5 million in discounts and data credits.
The FCC’s investigation targeted T-Mobile’s marketing of its unlimited data plan. Customers expected to be able to use as much data as they wanted at high speeds, the FCC said, but speeds for some data users were being slowed.
T-Mobile slows down, or “throttles,” data speeds for customers that use a large amount of data. The policy means customers who use more than 17 GB of data in a month may see slower speeds during times of “heavy” use, according to the FCC.
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Bellevue carrier T-Mobile has become known for premiering new and flashy benefits that are meant to attract people away from competitors. A recent promotion called T-Mobile Tuesdays gives customers weekly perks, ranging from movie tickets to free pizzas.
In August, T-Mobile said it was moving to one, unlimited data plan for all customers, an idea it has tweaked slightly after facing criticism. The plan includes videos in standard definition. Those who want HD can pay an additional fee every month.
T-Mobile’s marketing for its original unlimited plan made some customers think they were buying “better and faster” service than what they got, the FCC said.
“Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” FCC enforcement-bureau chief Travis LeBlanc said in a statement.
As part of the settlement, T-Mobile will update its policy disclosures and inform customers when they near the 17 GB monthly data threshold.
T-Mobile directed a request for comment to CEO John Legere’s Twitter account. Legere tweeted “Good settlement with FCC today. @TMobile believes more info is best for customers. #themoreyouknow.” He added he was glad T-Mobile “could help schools” as part of the settlement.
AT&T paid a similar, $100 million fine in 2015, after the FCC said the carrier had misled its customers about an unlimited data plan.