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T-Mobile Pays $48 Million to Settle FCC Disclosure Inquiry

The FCC is continuing its crackdown on unlimited data plans that include limits on the heaviest users.

The FCC says T-Mobile has agreed to pay $48 million to close an FCC investigation into whether it had adequately disclosed the broadband speed and data restrictions in its "unlimited" data plan.

In June 2015, the FCC proposed a $100 million fine of AT&T Mobility for "misleading" customers about its unlimited plan, a fine and finding AT&T has called 'indefensible coercion.'

The FCC's 2010 Open Internet order requires ISPs to provide information sufficient for subs to make "informed choices" about service offerings.

The FCC concluded that T-Mobile customers "may" have been led to expect that the unlimited plan "provided better and faster service than what they had received."

“Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” said FCC Enforcement Bureau chief Travis LeBlanc in announcing the settlement.

The settlement includes a $7.5 million fine, $35 million in "consumer benefits" to customers (discounts and additional data), and a $5 million payment (plus whatever goes unredeemed from its $35 million in consumer redress) for equipment to schools to "bridge the homework gap." T-Mobile "will provide free devices, such as tablets, to eligible public schools that students may take home and use for school work. They will also provide mobile broadband to the devices at a reduced cost to the schools, and at no cost to the students or their families. T-Mobile is expected to start the program in October 2017 and enroll 5,000 students per quarter over four years, totaling up to 80,000 students."

T-Mobile has agreed to update its disclosures to explain what triggers the slowing of service to the top 3% of data users (more than 17 gigs in a month).

And in terms of its "unlimited" claims for data plans, T-Mobile 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."

“We applaud the FCC’s continued enforcement against anti-consumer practices," said Public Knowledge policy fellow John Gasparini. "This follows last week’s strong action against abusive billing practices engaged in by Comcast. Throughout their tenure, Travis LeBlanc & Chairman Wheeler have been appropriately aggressive in pursuing the FCC's enforcement activities. We hope and expect that the next FCC will continue with this strong record of protecting consumers."

That money for schools pleased James Steyer, founder of Common Sense Kids Action, which has long pushed for getting high-speed broadband to schools and libraries as a national priority.

"We applaud the FCC and T-Mobile for working together to address concerns over whether T-Mobile customers truly knew what they were getting when they signed up for 'unlimited' data plans. We are particularly excited that the settlement will, in addition to improving transparency for customers, improve the lives of tens of thousands of low-income students by helping to close  the homework gap," he said.

"By providing students with devices and free and reduced-cost mobile broadband, T-Mobile will be helping to close the digital divide.  That has been and clearly remains a top priority for the FCC and the Obama Administration, and it is a top priority for Common Sense too."