T-Mobile, FCC Reach 10-Figure Settlement Agreement

October 21, 2016
By: Steve Anderson

It's a shot in the chops for T-Mobile (News - Alert), as the company recently agreed to a settlement with the Federal Communications Commission (FCC) over the matter of deprioritization in its unlimited data plan. Under the terms of the settlement, T-Mobile will have to pay out $48 million, and make some updates to its disclosure documents as well about the issue of heavy data use on unlimited plans.

More specifically, the matter started back in March 2015, when the FCC (News - Alert) started investigating T-Mobile over how it responded to users on the unlimited data plan. While “unlimited data” sounds like a great deal, some use “unlimited data” a lot differently than others. Indeed, some users, based on reports, ended up “deprioritized,” and speeds fell off substantially.

Thus, data was still unlimited, but the end result was that performance became so degraded that there was a limit of sorts. More importantly, however, T-Mobile didn't exactly make it clear at just what point the non-limit limit would kick in, nor that there was a non-limit limit to begin with. This led to a reported “hundreds” of complaints to the FCC from T-Mobile and MetroPCS customers, which in turn likely led to the investigation.

Following the investigation, T-Mobile not only agreed to change its disclosure schemes, telling customers when these deprioritization levels kicked in, but also set up some other changes as well. T-Mobile is set to spend fully $35.5 million for benefits for customers impacted by all this, offering a 20 percent accessory discount—with a maximum of $20 discounted—and an extra four gigabytes for customers currently with a mobile Internet plan.

T-Mobile will also spend at least $5 million for devices and mobile broadband services for students in low-income areas. That program, meanwhile, won't kick in until October 2017, though it's slated to run for four years. An additional $7.5 million penalty will be paid as part of this. CEO John Legere noted that this was a “good settlement,” and noted that “more info is best for customers.”

The whole affair just underscores one critical fact about not only mobile broadband but about broadband in general. People want, and need, more of it and the various providers are not being particularly hasty in providing it. While several technologies are coming around that might help here, starting with 5G in about three years and going on from there, it still doesn't do much to address the issues of bandwidth shortages we're seeing right now. Getting throttled for going over some arbitrary and unknown waypoint only tries to cut demand, not offer expanded supply.

Expanding bandwidth options is really the only thing that's going to take weight off this problem, and right now, that's not going near as far as it needs to. Hopefully soon, some of these new technologies will solve this growing problem that no amount of disclosure will fix. 

Edited by Alicia Young