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AT&T To Pay $60 Mln To Settle For Throttling Unlimited Data Plans

AT&T Mobility LLC, a wholly owned subsidiary of AT&T Inc. (T), has agreed to pay $60 million to settle the U.S. Federal Trade Commission's allegations that the wireless provider misled millions of its customers by charging them for "unlimited" data plans while reducing their data speeds.

In a complaint filed in 2014, the FTC alleged that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce their data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use.

"AT&T promised unlimited data—without qualification—and failed to deliver on that promise," said Andrew Smith, Director of the FTC's Bureau of Consumer Protection. "While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised."

The FTC alleged that A&T began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. AT&T's alleged practices affected more than 3.5 million customers as of October 2014, according to the FTC complaint.

The $60 million paid by AT&T as part of the settlement will be deposited into a fund that the company will use to provide partial refunds to both current and former customers who had originally signed up for unlimited plans prior to 2011 but were throttled by AT&T.

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