Federal regulators are slapping T-Mobile with millions of dollars in fines and other requirements after consumers complained that the wireless carrier misled them with its advertising on “unlimited” data.
T-Mobile has agreed to pay $7.5 million (roughly Rs. 50 crores) to the government and to compensate affected consumers with $35.5 million (roughly Rs. 236 crores) worth of additional mobile data and discounts on phone accessories.
The federal probe, which began last year, targeted T-Mobile’s marketing of unlimited data plans. Unlike many phone plans with monthly data caps, unlimited data plans generally don’t charge overage fees when a customer uses too much data. But the FCC said Wednesday it had received hundreds of complaints about T-Mobile degrading the mobile data connections of its most data-hungry unlimited users.
“According to consumers, this policy rendered data services ‘unusable’ for many hours each day and substantially limited their access to data,” the FCC said. It added that T-Mobile didn’t do enough to tell its unlimited data customers that their plans, did, in fact, have some limits.
The news takes on even greater significance in light of the carrier’s efforts to promote unlimited data plans to all its customers. T-Mobile’s fine print states that the top three percent of data users will temporarily have their network usage de-prioritised – that is, kicked to the back of the line – when other customers are trying to use a heavily congested cell site.
The company didn’t respond to a request for comment. Under the terms of the settlement, T-Mobile will also have to provide at least $5 million in free tablets or other devices to children in low-income school districts, as well as free mobile data for their schools and families for four years. As many as 80,000 children are expected to benefit from the program, which begins next October, according to the FCC.
Federal regulators have taken a closer look at “unlimited” data plans and the surrounding marketing. Last year, the FCC proposed a $100 million fine for AT&T over the same issue.