Court fines AT&T for data speed throttling

data speed throttlingIn a decision that is already having an impact on the industry, the FCC won in court against AT&T for throttling data charges on plans that were termed “unlimited data”. While AT&T has plans to appeal the $100 million dollar fine, Sprint has already announced that it will end the practice for its customers that are on contract plans that include unlimited data. This is a milestone decision in the push towards regulations to preserve net neutrality. Carriers will continue to fight against throttling restrictions, but the wording of the advertising may have to change across the industry.

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What happened to unlimited?

Back in the heyday of no contract phones the biggest difference between their service and the major carriers were that they offered monthly packages based around unlimited phone, text and data access. This was quickly copied by the contract companies and the struggle began for market share. The problem was that with so many people adopting Internet capable phones, offering them unlimited data access began to be an issue. While insiders say there is a point at which the sheer volume of traffic will slow down speeds naturally, carriers were looking at other impacts. The data packages for cell phones were designed to allow people to check the news, weather and emails. With the rise of the smartphone and feature phone, people are playing games, watching movies and shopping. That not only is a massive increase on bandwidth use, but it shows how much time and money are willing to spend online. For major carriers, this represented a lost potential for income.

 

Throttling unlimited accounts

The backdoor solution was to place a data cap on unlimited accounts. While many carriers were upfront about this with their customers – at least in placing the cap notice in the terms and conditions – others like AT&T served their customers no notice of the action. This is why they were fined. When consumers found out that their unlimited accounts were capped they were understandably angry. Activists raised the concern of control of access to the Internet being placed in the hands of companies who also rely on advertisers for their income. Net Neutrality is the move to define access to the Internet as a basic right, and that throttling access speeds sets up a form of discrimination that will close off access.

 

The other battle rising

Another practice that major telecommunications companies are pushing for is what they term preferential speed. This is almost a code word for throttling data speeds on certain customers. The definition of this cap wouldn’t be triggered by bandwidth usage, but it would identify certain sites as having full speed access. The sites, coincidentally, coincide with the major advertisers behind the communication company’s funding.