FTC says AT&T misled customers with unlimited data

Federal regulators are accusing AT&T Mobility of not giving millions of customers the unlimited data plan they purchased.

The practice is commonly referred to as throttling. Carriers slow Internet speeds to keep traffic on the super highway manageable, but the Federal Trade Commission says it can't do that without giving consumers proper notice.

The numbers in the eyes of consumer advocates are staggering.

About 3.5 million individual customers have been throttled by AT&T more than 25 million times.

Matthew Gold is the FTC attorney who filed the case in San Francisco. "They are promising unlimited data to their smartphone customers and not providing the unlimited data they promised," Gold said.

AT&T did not agree to go on camera, but by email its senior vice president and general counsel told 7 On Your Side, "We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3 percent of our customers."

But the FTC says the language was not understandable and that AT&T failed to disclose the threshholds of which people would be throttled.

Most important says Gold was the timing of AT&T's disclosures. "They haven't done the single thing that they should have done which is tell consumers at the point of sale that they were going to be throttled," he said.

The San Francisco-based Electronic Frontier Foundation applauded the lawsuit and questions how AT&T goes about throttling.

"AT&T is throttling regardless of whether or not the cell site you're connecting to is congested. It's just saying you use so much data and we're going to throttle you," Electronic Frontier Foundation Jeremy Gillula said.

AT&T called the lawsuit baseless and says its practices are fully transparent.

AT&T discontinued its unlimited data plan in 2011. The 14 million customers currently on the plan were grandfathered in.