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FTC rules that unlimited data plans cannot be throttled

The FTC has ruled that providers cannot throttle unlimited data plans, and levied a hefty $40 million fine on TracFone for the practice
By: Paul Alcorn | Mobile Devices, Tablets & Phones News | Posted: Jan 29, 2015 3:41 pm

The FTC has ordered mobile phone provider TracFone to pay a hefty $40 million fine for throttling data for users with 'unlimited' data plans. This fine has wide-ranging implications for the mobile industry overall, as several carriers, such as AT&T and Verizon, still have users with unlimited data plans. Neither company currently offers new unlimited subscriptions, but they still have to honor their plans that are grandfathered in from past agreements.




In addition to the fine, the FTC has ordered TracFone to provide refunds to customers who experienced data throttling. TracFone not only throttled speeds when customers reached two to three gigabytes of used data, but they were also shutting off customers who reached between four and five gigabytes.


The FTC issued a blunt assessment of the situation. "The issue here is simple: When you promise consumers 'unlimited,' that means unlimited," said Jessica Rich, director of the FTC's Bureau of Consumer Protection.


TracFone is insisting that the restrictions only apply to advertising techniques, and not the data throttling itself. This remains to be seen, but it is good that in either case customers will get what they pay for.

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