AT&T still throttles unlimited data, and FCC isn’t promising to stop it

How long will AT&T continue to get away with throttling unlimited data plans? Even after the Federal Communications Commission’s recent net neutrality ruling banned throttling, the FCC isn’t saying whether it will put a stop to it.

All major US cellular carriers impose some form of throttling on unlimited data plans, but AT&T’s throttling seems most likely to fall afoul of the FCC’s rules. The big carriers generally reserve the right to slow down data speeds for customers with unlimited data plans after they hit a certain usage threshold each month, but they only do the actual throttling when the user is connected to a congested tower. AT&T, on the other hand, slows its unlimited LTE users down for the rest of the month once they’ve hit a 5GB threshold, and the throttling happens at all hours of the day and in all locations regardless of whether the user is connected to a congested tower.

More than any other throttling policy enforced by a major carrier, this one seems designed to push customers with grandfathered unlimited data plans onto newer, more expensive plans that charge automatic overage fees when customers go over their caps.

AT&T claims it will change its system sometime in 2015 so that it will throttle unlimited LTE plans only in times and places of congestion, but it’s fighting against government attempts to make it stop right away. AT&T is facing a Federal Trade Commission lawsuit over the practice but claims the FTC lacks jurisdiction. The FTC argued in a new court filing this week that AT&T is wrong.

The FTC actually could lose its jurisdiction over Internet providers because of the FCC’s decision to treat broadband as a common carrier service. But the FTC says it can still go after AT&T for illegal conduct that occurred before that decision.

The FCC’s new rules should prevent throttling once they go into effect, which will happen 60 days after they are published in the Federal Register. But there is an exception that could allow carriers to keep throttling.

The FCC rule banning throttling says, “A person engaged in the provision of broadband Internet access service, insofar as such person is so engaged, shall not impair or degrade lawful Internet traffic on the basis of Internet content, application, or service, or use of a non-harmful device, subject to reasonable network management.”

Carriers can try to argue that “reasonable network management” includes throttling the heaviest users of unlimited data in order to make the network run more smoothly for everyone, but there is some evidence the FCC will reject this argument. Last year, FCC Chairman Tom Wheeler pressured Verizon into giving up a plan to throttle unlimited 4G data. Wheeler argued the throttling was not “reasonable network management” even though Verizon planned to implement it only in congested areas. But Verizon faces special non-discrimination obligations because of rules that apply to a specific block of spectrum it purchased. While the net neutrality rules put Verizon and rival carriers on a more equal playing field, they don’t entirely replicate the obligations Verizon faces.

Some hints, but no specific ban

The net neutrality order talks about the negative impacts of carriers throttling unlimited data plans, but doesn’t explicitly ban it.

“[S]ignificant concern has arisen when mobile providers have attempted to justify certain practices as reasonable network management practices, such as applying speed reductions to customers using ‘unlimited data plans’ in ways that effectively force them to switch to price plans with less generous data allowances,” the FCC’s order says.

A summary of the rules released by the FCC last month takes a more forceful stand: “a provider can’t cite reasonable network management to justify reneging on its promise to supply a customer with ‘unlimited’ data,” it says. But that leaves open the question of whether merely throttling data instead of cutting it off entirely would constitute reneging on a promise of unlimited data.