T-Mobile has agreed to pay $48 million to settle an Open Internet investigation by the FCC into whether the company adequately disclosed speed and data restrictions for what the company called an “unlimited” mobile data plan.
The T-Mobile Open Internet settlement will include a $7.5 million fine and a commitment to invest $35.5 million to carry out a variety of measures aimed at benefiting unlimited data plan subscribers and assure such practices don’t continue. T-Mobile also is to provide at least $5 million in services and equipment to schools to help bridge the digital divide.
Advertisements and information from promotional campaigns for T-Mobile and MetroPCS unlimited plans may have led customers to believe they were buying into a better and faster service than they received, the Enforcement Bureau explains in a news release.
The FCC said that violates the terms of the commission’s 2010 Open Internet transparency rules, which require broadband providers to provide accurate and sufficient information to consumers so they can make informed choices.
T-Mobile Open Internet Settlement
T-Mobile broke new ground for a major U.S. wireless carrier when it officially introduced unlimited data plans back in 2012. But after customers hit a specific monthly data limit of 17 gigabytes, their data speeds were “de-prioritized,” meaning that at times they were slowed, the FCC explains. In addition, T-Mobile imposed a “Top 3 Percent Policy” that de-prioritized “heavy” data users during times of network contention. As the FCC explains: ¨Under the settlement, T-Mobile will update its disclosures to clearly explain the ‘Top 3 Percent Policy,’ [to those] who may be affected by it, what triggers its application and the impacts on data speeds.¨
The company also will be required to notify customers when their data usage approaches the monthly threshold and re-word how pertinent policies are described or discontinue those policies.
The T-Mobile Open Internet settlement also calls for the company to use the $35.5 million to fund a benefits program for T-Mobile and MetroPCS unlimited data plan subscribers. Eligible subscribers will be offered both:
- Discounts of 20%, up to $20, off 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.
According to the consent decree, eligible T-Mobile and MetroPCS customers will be notified of these benefits by December 15 this year. Additional information is available on the following company websites: http://T-Mobile.com/customerbenefit and http://MetroPCS.com/customerbenefit.
The company will also adopt the FCC’s “Consumer Broadband Label” in order to provide more information and clarify service terms. That includes data and information regarding service speeds; costs, including add-on charges; and reliability.
“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 was quoted.
“When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for. With today’s settlement, T-Mobile has stepped up to the plate to ensure that its customers have the full information they need to decide whether ‘unlimited’ data plans are right for them.”