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AT&T deceived its customers by charging them for "unlimited" data plans and then reducing mobile Internet speeds for heavy users, sometimes by nearly 90 percent, the Federal Trade Commission said Tuesday.
"AT&T promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise," said FTC Chairwoman Edith Ramirez, announcing a lawsuit against the communications giant. "The issue here is simple: 'unlimited' means unlimited."
In a blog on the FTC's website, FTC attorney Lisa Weintraub Schifferle says the FTC also sued AT&T because the company kept customers from using data that they paid for and then forced them to pay early termination fees when they tried to get out of their AT&T contracts.
"The FTC’s case, filed in the U.S District Court for the Northern District of California, seeks to stop AT&T from using data throttling on customers who have been promised unlimited data plans. It also asks for refunds for people who paid early termination fees when they cancelled their unlimited data plans after their data was throttled," The FTC attorney write.
At least 3.5 million unique customers were affected, the FTC said.
"The FTC's allegations are baseless and have nothing to do with the substance of our network management program," Wayne Watts, AT&T senior executive vice president and general counsel, said in a statement.
He added that the case was "baffling" and that the firm has been "completely transparent with customers since the very beginning," including a well-reported press release on the matter in 2011.
The data program has only affected about 3 percent of customers, Watts said.
Some wireless carriers slow down, or "throttle," speeds for their heaviest users. The Federal Communications Commission has been seeking to end the practice. The FTC's complaint is objecting to AT&T's use of the word "unlimited," and charging customers for a service they are not receiving.
-- CNBC, NBC News and Reuters