T-Mobile US has agreed to pay $48 million to resolve a federal probe into whether it adequately disclosed speed and data restrictions for its "unlimited" data plan subscribers, U.S. regulators said on Wednesday.
The settlement includes a $7.5 million fine, $35.5 million in consumer benefits for T-Mobile and Metro PCS customers with "unlimited" plans, and at least $5 million in services and equipment to U.S. schools "to bridge the homework gap facing today’s students," the U.S. Federal Communications Commission said in a statement.
In March 2015, the Enforcement Bureau (Bureau) of the Federal Communications Commission opened an investigation into, among other things, T-Mobile’s practice of de-prioritizing its T-Mobile and MetroPCS UDP customers during times of network "contention."
The Bureau’s investigation confirmed that during "contention," T-Mobile employs a "Top 3 Percent Policy," that de-prioritizes the data usage of customers on T-Mobile and MetroPCS UDPs who have exceeded a certain threshold of data usage.
T-Mobile referred to such UDP customers as "heavy
data users." When the Top 3 Percent Policy is applied, a network algorithm controls the heavy data users’ network access including, most notably, the speed of their data throughput.
Further, the FTC said that T-Mobile’s public disclosures about the de-prioritization policy prior to June 2015 "were not sufficient to fully inform consumers about limitations imposed on the UDPs, because they did not identify the data usage threshold that would trigger application of the policy, did not explain how the policy could impact a de-prioritized customer’s ability to use their service, or discuss the data throughput speed reduction a de-prioritized customer could experience. "