When you offer unlimited data, you should provide unlimited data. The Federal Trade Commission (FTC) continues to impose that rule by fining mobile virtual network operator TracFone $40 million for throttling the data speeds of its subscribers.
According to the FTC, TracFone has misled its subscribers by advertising plans with unlimited data and then slowing down the data speeds (and in some cases, even shut down the data) when customers go beyond a certain amount of gigabytes of data per month.
TracFone apparently throttled data speeds when users consumed between 1 to 3 gigabytes of data within a billing period, and even completely cut off data after 4 to 5 gigabytes.
The FTC has issued a statement explaining that with TracFone, data throttling is not really the issue here. What really rankles the agency is the way the MVNO has failed to make good on its promise of providing unlimited data for its customers.
As the FTC sees it, TracFone's practice of slowing down data speeds by significant amounts is preventing the customers from taking full advantage of the advertised unlimited data. The reason consumers choose to get unlimited data plans in the first place is because they want to be able to enjoy unrestricted data use. So what is the point of labelling a service as unlimited when there is a limit after all? And one that not only impairs the customer's data use, but even shuts off the service completely.
Major wireless carriers like AT&T and Sprint have pointed out that their data throttling practices are actually just network management techniques to make sure that their connections remain congestion-free.
But as for TracFone, the FTC is in the opinion that the MVNO is not really doing it to optimize its network capabilities. On the contrary, the FTC believes that TracFone is doing it to get an unfair advantage over its customers, i.e. like getting them to pay for an all-you-can-eat buffet and then serving them just two or three dishes.
From here on, the FTC insists that TracFone start to clearly and explicitly state any limits it will impose on any data plans its advertises to customers, whether the plans are unlimited or not.
The $40 million fine will be utilized to refund those customers who bought any of TracFone's so-called unlimited plans via its brands Straight Talk, Net10, Simple Mobile, and Telcel America.
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