FCC Reaches $48m Settlement with T-Mobile Over ‘Unlimited' Data Plans

The Federal Communications Commission’s Enforcement Bureau announced that T-Mobile will pay a fine and provide benefits to consumers totaling at least $48 million as part of a settlement resolving an investigation into whether the company adequately disclosed speed and data restrictions for its “unlimited” data plan subscribers.

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. 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 Commission’s 2010 Open Internet transparency rules require broadband Internet providers to give accurate and sufficient information to consumers about their Internet services so consumers can make informed choices. The settlement includes $48 million in total financial commitments from T-Mobile. This includes a $7.5 million fine in addition to $35.5 million in consumer benefits offered to T-Mobile and Metro PCS customers with “unlimited” plans and at least $5 million in services and equipment to American schools to bridge the homework gap facing today’s students. Eligible subscribers will be offered discounts on accessories and additional data. T-Mobile will update its disclosures to clearly explain the “Top 3 Percent Policy,” who may be affected by it, what triggers its application and the impacts on data speeds.

T-Mobile will also be required to notify individual customers when their data usage approaches the threshold. The company will also adopt the FCC’s “Consumer Broadband Label” to provide more information and clarity on service terms, including speed, reliability and cost, such as fees and other add-on charges. Under the settlement, T-Mobile is required to update and improve its disclosures regarding its “unlimited” plans. It must either: provide clear and conspicuous disclosures about all restrictions on the amount and speed of data provided for “unlimited” data plans; cease the use of the term “unlimited” to label such plans; exclude “unlimited” data plan customers from the “Top 3 Percent Policy” or any similar practice; or limit any speed reductions for “unlimited” data plan customers to the minimum speed advertised for that plan.

In addition to the $7.5 million fine to be paid to the U.S. Treasury, the settlement requires T-Mobile to fund a $35.5 million consumer benefit program for T-Mobile and MetroPCS “unlimited” mobile data customers. Eligible T-Mobile and MetroPCS customers will be offered both:

• Discounts of 20 percent off (up to $20) of the regular price for any in-stock accessory.
• 4 GB of additional data if they have a mobile Internet data line – specifically T-Mobile’s “Simple Choice MINT” plan – or a tablet plan under the MetroPCS brand.