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AT&T to pay $60M over U.S. allegations it lied in 'unlimited data' pledge (reuters.com)
174 points by ishikawa on Nov 5, 2019 | hide | past | favorite | 106 comments


Pocket change. Cost of doing business.

They made way more money by misleading customers and will continue to do so with penalties that small.


Yes. AT&T now offers "AT&T Unlimited Starter", "AT&T Unlimited Extra", and "AT&T Unlimited & More Premium".

"Available when Stream Saver is turned off. Learn more at att.com/streamsaver. After 15 GB hotspot speed limited to maximum of 128Kbps. Customers may temporarily experience slower speeds during busy times. On AT&T Unlimited & More Premium, if you exceed 22 GB of data on a line in one billing cycle, your speed may be slowed until the end of that billing cycle when the network is congested. All AT&T Unlimited Starter and AT&T Unlimited Extra customers have a limit of 1.5 Mbps (SD quality) when video streaming, and may experience temporarily reduced speeds when the network is congested."

The FTC didn't even make them stop using the term "Unlimited".



Yes, but content is typically bursty: Visiting a website, sharing a photo or video, etc.

Waiting for a single 3MB photo to show up (or send) would take 4 minutes.


Do they mean kilobits or kilobytes?


This has to be bytes, you wouldn't be able to open a website in entire minutes if it were bits.


Oh they do mean bits, it is indeed completely unusable after you hit the limit and get throttled.


It's bits; they're limiting you to 2G. And yeah, it's basically useless.


Internet speeds are usually measured in bits though, and include the protocols overhead, not just the final bytes transferred in HTTP.

Right now my download speed is 10.62Mbps and upload speed is 13.38Mpbs. That is some heavy throttling indeed.


“Unlimited & More” just makes me laugh so cynically.

It reminds me of a time I saw an Olive Garden food truck offering unlimited soup, salad and breadsticks.

Do the people in line understand conservation of mass? What must be happening inside that truck to support “unlimited” food.


It reminds me of a time I saw an Olive Garden food truck offering unlimited soup, salad and breadsticks.... Do the people in line understand conservation of mass? What must be happening inside that truck to support “unlimited” food.

I think in this case, the offer is well understood. "Unlimited" means as much as you can consume during one seating, without limit. If you can eat 5 orders of pasta by yourself, they should serve you 5 orders, they shouldn't serve 3, then make you wait 30 minutes between orders after that. If you only get 2 orders of pasta before they run out, then you should expect a refund since that's not "unlimited". No one thinks that the single food truck can feed the entire world, but I do expect it to feed me as much as I can eat.

When a cellular company advertises "unlimited data", that's similarly understood to mean as much data as you can consume in one billing period, without limit or throttling. It doesn't mean that I should be able to run my server farm over it and transfer petabytes of data every month, but if I'm a heavy Netflix user and want to transfer 100GB or more of data, I should be able to, if you can't support that use, then don't sell an "unlimited" plan.


I more mean if any big corp is offering “unlimited,” it’s a good indication of some version of a ripoff / unfair terms of use.

The added humor in the food truck case is that you can visually see both the extent of the physical supply and the queue of consumers rendering that physical supply incapable of supporting the “unlimited” offer all in one single field of view, leaving you to surmise the only possibility has to do with outrageous food engineering to reduce resource usage and leading to questionable end product (thus undermining the “unlimited” offer’s intended effect to draw customers).


I more mean if any big corp is offering “unlimited,” it’s a good indication of some version of a ripoff / unfair terms of use.

Consumers should stop accepting that as the status quo.

My ISP (Sonic.net) offers "unlimited internet", and they deliver, they have no bandwidth or download caps at all.

https://www.sonic.com/transparency#ii-b

Throttling: Sonic does not engage in any practice that degrades or impairs access to lawful internet traffic based on content, application, service, user, or use of a non-harmful device.


Your situation seems so exceedingly rare that it is inapplicable for the vast majority.


Pocket change is right. How about some real fines?


How much do you think they should be fined?


I'd like to see them make their customers whole by forcing them to refund the monthly payment for every month that a customer with an "unlimited" plan was capped or throttled.


Some multiple larger than one of the estimated amount of money they made by lying.


return the money that was taken unfairly from the customer would be a start.

And then a sizable fine over that, let’s say an additional 100%

These companies need to feel pain for unethical practices. Not a slap on the wrist.

Next where does that money for the fine go? It shouldn’t just disappear into the ether.

Using the money from the fine perhaps a third party committee should be formed that regularly audits this known exploitive behavior. Maybe 50M could get that off of the ground and moving.

That could be 36 months of auditing from a third party.

All of this of course isn’t how things work. It’s just what I think is ideal.


A refund for anyone affected and asks for one. At $100/mo, 60 million dollars translates to 25,000 pay periods. AT&T has 25 million subscribers. I think its fair to say they got away with lying here.


> At $100/mo, 60 million dollars translates to 25,000 pay periods. AT&T has 25 million subscribers.

I am failing to see how these numbers add up. What is the explicit formula you are using?


24 months at $100/month leads you to 25k subscribers at $60M.


Thank you. I was doing mental math and I think I was lazily confusing 24 with 25 and noticed my zeros were off and after a few tries decided to just ask.

The 24 months explains it. I figured a pay period was a month because I think of it as how often I have to pay.


they think a pay period is 24 months (it may be). 60 million / (24mo * $100/mo) = 25,000


Triple the amount of money reasonably attributable to the misrepresentation.


So I agree with this idea, but how do you calculate the amount? I'm not asking for a rule, I'm asking someone to calculate me a number for how big AT&T's fine should be.


You'd have to have the rule going in and have the parties present evidence on the amount attributable in the appropriate phase of the trial. Intuitively, the actual number awarded seems far below the minimum plausible if the treble-gains rule proposed were used, but I'll freely admit I don't have hard data to set what the likely actual damages should be under that rule.


Take the gross revenue collected by AT&T for all of the "unlimited" plans that were sold and multiply that by 2.


That's not the formula used when copyright violations are involved...


LOL


6 months of revenue would probably get the message across without bankrupting them.


I like this idea of it being a percentage of gross.

Make it hurt.


They should just double the fine after every violation.


A punitive amount.


Yeah but like, is it really also not "pocket change" to just actually give "unlimited" service? Or what about the effectiveness of the "unlimited" lie, was that worth spending an extra $60MM on the marketing?


Of course it is, the wholesale cost of data is peanuts comparatively. However there is _more_ money to be made by marking it up and charging $X per GB above an arbitrary cap.


I'm surprised that the FTC didn't push harder for an admission or some statement by AT&T to make this look like a win for the gov't. AT&T's statement:

> “None of these allegations were ever proved in court. We were fully prepared to defend ourselves, but decided settling was in the best interests of consumers,” said Jim Greer, a spokesman for AT&T.


I'm not sure the FTC really represents our best interests anymore. Seems like it may well be just one more captured agency paying lip service to the public while making sure corporations continue to get away with whatever makes them rich at our expense. In that case, not forcing them to admit guilt would line up quite nicely with their not fining AT&T enough to offset the profits they made by lying to consumers.


What would surprise me is if Randall Stephenson did something that wasn't some form of stealing from his customers.


Are you really surprised with this administration? I'd guess if I were a business with a pending investigation/lawsuit, I'd push really hard to "do business" with this environment, as opposed to what may come in 2021.


Some people will make anything an opportunity to say "orange man bad". Here's some other history:

* (2014) Verizon settles an overbilling case for $64MM, of which only $36MM went to payouts. [0]

* (2015) Verizon settles a robocalling class action for only $4MM. [1]

* (2009) Sprint settles an ETF class action for only $17.5MM [2]

* (2015) Sprint pays only $131MM to settle a lawsuit about their bungled $36 BILLION merger with Nextel [3]

This has far less to do with "this administration" and far more to do with how business is run in America. I'm not saying it's right, not at all, but I do want to point out that buying into this partisan nonsense distracts us (voters) from actually changing the system meaningfully (where "meaningful" is creating an environment where this doesn't happen).

[0] https://topclassactions.com/lawsuit-settlements/closed-settl...

[1] And more... https://moneyinc.com/10-verizon-lawsuits-you-should-know-abo...

[2] https://www.fiercewireless.com/wireless/sprint-settling-clas...

[3] https://www.fiercewireless.com/wireless/sprint-pays-131m-to-...


If you wanna have a good laugh:

Go to an AT&T store and purchase a plan with a phone using installments. Then, wait a day, and try to return it at a different AT&T store.

You will go through the absolutely worst customer experience imaginable; so bad, in fact, it'll make you laugh out loud. Their printers won't work, they'll be too slow, the systems will go down, the batteries will die in their payment devices. At least that's what I experienced on every one of the three times they asked me to come back to the store to return the phone(because each time their systems simply were unable to do it).

So it's no surprise to me that they got caught lying to their customers.


There needs to be a minimum acceptable speed threshold. “2G" is meaningless. They do not downgrade the protocol to 2G, hence that term only serves to confuse customers. 2G refers to EDGE that was available at 144kbps, which is faster than a bonded ISDN, which is fast enough to stream a 128kbit mp3.

I would actually be happy with true unlimited 144kbps. It’s usable. I can run RDP over that with reasonable refresh rate.

It is also not possible as a customer to voluntarily turn off high speed when you don’t need it.

From experience, once my connection gets limited to 2G, my speed is closer to 9600bps, which is absolutely unusable for interactive Internet use.

I have two phones. One has Visible from Verizon with allegedly unlimited but relatively slow data at 2-10mbit with unlimited tethering. The second is my T-mobile phone with an allegedly unlimited but in reality limited to 50GB much faster data with a 7GB hotspot.

I use my Tmobile data when I have to and the rest of the time that phone is tethered to my Visible phone. Visible is $40/mo, T-mobile is $80 and I may downgrade it to a limited plan with zero-rated video.


Why can big corps pay and get free? Its often happens, company x made crime y, pays government z and gets free.


It is a great quality of the Law that it allows both rich and poor alike to pay a lot of money to avoid jail time when caught committing a crime.


Everyone has the freedom to pay.


Everyone can pay their freedom, but inexplicably only certain people do.


In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.


I wish I knew.

FWIW, the film Law Abiding Citizen examines a similar topic: plea bargains in criminal cases against individuals. For me, it was a great thought-experiment about how one's anger about plea-bargaining could play out. But just a warning, it has some pretty horrific scenes that you might regret watching.


The end result in the real world is killdozer https://en.wikipedia.org/wiki/Marvin_Heemeyer


That’s an incredible read!


Who would go to jail? Corporations are built specifically to shield the employees/owners of the corporation from liability.

Like, I know the sovereign citizen stuff is all nonsense, but this is kind of their point. They're trying to get away with the same things corporations get away with on the regular.


> Corporations are built specifically to shield the employees/owners of the corporation from liability.

But that shield is not all-encompassing. The corporate veil can be pierced, and one of the things that can bring that result is lawbreaking on the part of a corporation.

This is a complex topic. A reasonable explanation can be found here: https://corpgov.law.harvard.edu/2014/03/27/the-three-justifi...


Because they don't actually want to stop them from doing these things. It's just a show to make it look like this 3 letter agency is actually doing something.


Because (at least in the US), money is power.


Just another form of bribing.


Interesting that "allegations" is in the link and the HN title, but not in the title at the link. I guess if they're paying $60M then something must have happened....


Better source: https://www.ftc.gov/news-events/press-releases/2019/11/att-p... direct from FTC links to the court documents regulating disclosure requirements.


$60M? So basically no punishment to deter them or competitors from doing it again? What is that, like less than 50 cents/customer?


I'm always weary of any telco pushing an "unlimited data" product, the terms and conditions attached to the product definitely makes one think twice and basically end up being "Unlimited data but [a lot of terms and conditions hidden at the very bottom that they know most people won't read and by the time they do it is too late]


Please go after T-Mobile next. They throttle their "unlimited" to unusable.


Just out of curiosity, where does the money from a fine like this go?


Generally speaking, the money goes into the federal treasury where tax revenue and the like goes.


Not where it should -- to the customers who got screwed.


If you are one of these customers (I am) this seems a little unfair. We overpaid way more than we’ll ever see back. What kind of refund does this translate to $6?


It translates to nothing for the party who was damaged. Literally they will get nothing. And if they don't like that deal the government can make it hurt more. Your life here ruined over an ounce of weed, but rob multiple people access you get a bonus and the company gets a small tax that mostly goes to lawyers.


They have about 150M customers, so about $0.38 each.


So new "other charges" line on my bill?


They should just come out and be honest and call it the 'middle finger fee'.


Well, it'd only be a one-time charge.


None of these allegations were ever proved in court. We were fully prepared to defend ourselves, but decided settling was in the best interests of consumers,” said Jim Greer, a spokesman for AT&T.

Stay classy Jim.


And shareholders

The international ones are the most concerned about a company’s domestic relationship with its government because the power imbalance is hard to comprehend and trust


They didn’t lie. They did give the users unlimited data, but just slowed down the loading of apps and web browsers. That is completely understandable because where are they going to store all of this data.


> That is completely understandable because where are they going to store all of this data.

AT&T doesn’t store the contents of your data usage; The NSA might, though...

But seriously, an unlimited data plan should be exactly that: unlimited. No throttling. If you’re gonna include throttling over a certain limit: say that; Don’t hide it in the fine print that no one but lawyers read. That’s deceptive advertising, and is illegal. The FTC should go after them for that.


There has to be some form of throttling at some point. Otherwise one person can consume all the bandwidth.


Yeah, don't claim that the data is unlimited then, problem solved. Either you say that you offer unlimited data, and you allow unlimited data, or you don't say or allow it.

I seem to recall that something similar as this case happened in Sweden (10+ years ago?), where a operator was forced to not claim "unlimited data" unless it truly is unlimited and without throttling, but I can't find any references to this right now...


Looking at ARN's past judgements, there doesn't seem to be any restrictions on marketing "unlimited data" plans with throttling in Sweden, as long as that's in the contract. There was one case in 2011 where the consumer was awarded a victory as the contract only said unlimited data and nothing about throttling.


Can a service ever offer unlimited data when there is a hard cap on the amount you could download 24/7?

Does it really matter if they change their branding to be unmetered rather than unlimited?


> Can a service ever offer unlimited data when there is a hard cap on the amount you could download 24/7?

No, not honestly.

There is a natural "hard cap", though. If you're paying for a certain speed, then the natural limit would be however much data you can pump at that speed over a set period of time.

I think it would be fair to call that "unlimited", in the sense that the service provider would not be imposing an artificial lower limit from what physics allows.

If a service provider isn't allowing that, then it's hard to see how they can characterize a service as "unlimited" without it being an outright lie.


Network management is allowed under most definitions of “net neutrality.” But if someone is consuming all the bandwidth, maybe you should upgrade your equipment? Maybe don’t sit, whine, and ask for more subsidies that you won’t use for that purpose.

Most people aren’t upset about network management throttling, but about the deceptive advertising that says you get unlimited, but in fine print: “limited to EDGE speeds (128Kb/s) after 2 GB”


T-Mobile solves this through de-prioritization, so your service is only degraded when there is congestion AND once you've crossed a certain threshold (53GB right now I think).


That's my understanding of AT&T's current implementation of unlimited at the moment


Is there any way to verify that that's what they're actually doing?


It'd be hard to prove it, but in practice it gets noticeably slower at peak usage times after exceeding the cap and stays fast at off-peak times, which matches the expected result of deprioritization.


Bandwidth is finite. On mobile LTE networks, about 35 Mbps is currently pretty average.

The problem is that mobile operators are incredibly underprovisioned. If your plan offers 1 GB of LTE data, at 35 Mbps, you can burn through a monthly allocation in 3.8 minutes. That's an average utilization of 0.0087%, or an underprovisioning by a factor of 11,500.

They sell it as if you're buying 35 Mbps access to the network all month long, when really, you can't use that for more than a few hours even on 'unlimited' plans.

I don't expect 1:1 access so that everyone can use their full bandwidth full time; I don't want to pay hundreds of dollars a month for that. But I'd pay a tenth of that for 1:10 underprovisioned access, and I'm sure that plenty would pay a few cents for the current 1:10,000 underprovisioned service...


Amazingly you can get cheaper cell plans including more data than these unlimited plans in the socialist bastion of Europe. I don't think the bandwidth is the problem it's the company and the regulatory capture. It's only this bad in the US and Canada.


Sure, that might be necessary, but I don't see why AT&T couldn't explicitly say "after 20GB, you're bumped down to a lower speed". Surely, AT&T engineers are smart enough to know how much bandwidth they can afford to give out, and if they can't afford to provide the service that they advertise, they should be in trouble, and they should stop advertising it.


If you are the only device in the network, yes.


Yes. But wouldn't it be better to deal with that individual when it's necessary? Give everyone what they pay for and if someone abuses it, deal with that person.


Hence the policy to throttle users that consume (comparatively) a lot of data. Typical metered data plans are 2GiB and throttling kicks in somewhere between 20 and 50GiB depending on the network.

Not good enough?


Not if they're advertising "unlimited" service.

In my view, the entire problem is that they want so badly to say "unlimited" while at the same time not allowing actual unlimited use.

The problem could be easily resolved at no cost -- all the companies have to do is stop using the word "unlimited".


isn't that exactly what throttling is...


"unlimited" means that there are no limits. Period.

Unlimited means no limits to speed, and no limits to quantity. If there is any type of artificial limit, then the thing ceases to be "unlimited". That is just straight up common sense, based on dictionary definitions.


I’ve long thought this is an issue of changing definitions. To anyone who was buying cell phone data plans when it was charged by the byte (and later in tiers of bytes with insane overage charges), “unlimited data” was easily understood to mean no overage charges, no per byte fees.

But somewhere along the way (or perhaps as an unfortunate consequence of not seeing far enough ahead to always throttle unlimited plans) the definition in consumer minds also seemed to include no speed limits either.


Cell phone plans are purchased with the speed of service. Unlimited data at 50 mbps, for example, stops being unlimited when the speed is no longer 50 mbps.


Cell phones are never sold with a speed of service. How could they be? Your speed is determined by congestion, the proximity of the tower, etc.


Those are natural limits, though. If I go to an all-you-can-eat buffet but just had my wisdom teeth removed, it's not their fault that I'll cry in a corner while delicately nibbling a small bowl of pudding. They were willing to let me eat more, even if I wasn't capable of it.

If the same buffet made you wait 2 hours between plates, then it's no longer realistically an all-you-can-eat buffet.


Taking the analogy to an extreme, if you went to an all you can eat buffet, it would only be open 24 hours a day and there is only so many times you could go through the line and the kitchen can only cook so much food.

If the restaurant is crowded, you’re going to have to both wait longer to get through the line and the kitchen won’t be able to cook enough to satisfy all of the customers.

There is also a known limit of how much data can be transmitted over a certain frequency and only certain frequencies are amenable to data.

For instance, T-mobile was infamous for not working well in buildings because the spectrum they were using couldn’t travel through buildings.


>I’ve long thought this is an issue of changing definitions.

Yes, everyone understood that unlimited meant "not limited". And then telecoms started trying to change that definition to mean "limited".


An artificial speed limit is, be definition, a data limit. If you have X time and Y bytes per time (artificial limit), then you cannot get more then Y/X bytes. Now obviously it's limited by the technology to some amount of Y bytes/time, but that's accepted. When it's limited by policy to lower than that, it's no longer unlimited data.


I think this is a reduco ad absurdum.

If AT&T didn't throttle, I suppose "unlimited" would still be a lie because there is still a limit to how fast your phone will download it. If you remove that it's still a lie because there's a limit to medium bandwidth, and so on.

All of these things are artificial! Should AT&T upgrade all users to phones with the latest modems because otherwise they are "artificially limiting" their experience? The impact on AT&T would be the same as stopping traffic shaping: spending more per user.


> I suppose "unlimited" would still be a lie because there is still a limit to how fast your phone will download it.

I disagree. In my view, "unlimited" means that the service provider will not introduce artificial limits. Of course there are natural limits (the speed of the devices involved, network congestion and signal quality, etc.). None of those are the service provider imposing an artificial limit, though.


"Pro" means that only professionals will use it. Period.

Or wait a minute...


Not sure if you're trolling or have no clue how ISPs work. They provide a pipe for data to travel through ( which can get congested ) however there is no requirement to store any of that data.


>That is completely understandable because where are they going to store all of this data.

Who is "they"? If it's the users, simple. Either on your harddisk or RAM (temporary).


Shopping in the US, is akin to asking the Genie for 3 wishes.

It is deceitful, regardless.




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