T-Mobile Us Inc (NASDAQ:TMUS) Will Pay $48 Million For Nondisclosure Of Unlimited Plans

The Federal Communications Commission has been carrying out an investigation over T-Mobile Us Inc (NASDAQ:TMUS) that is alleged to have failed to give its customers proper information about its “unlimited” data plans. The settlement of the inquiry demands a payment of close to $48 million by the country’s No. 3 wireless carrier.

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The FCC claims that the carrier had the policy to slow down the speeds of heavier data users, but on the other hand it did not let customers know what amount of data usage would result in low speed.

The investigation was launched following hundreds of complaints from consumers who felt that T-Mobile had deceived them. It was found out that a majority of carriers were operating under a “Top 3 Percent Policy”, which was a disadvantage to many heavy data users, especially during congestion or network contention. This resulted in the loss of many hours each day and significant limits on access to data.

The actions violated the Commission’s Transparency Rule

According to the FCC, T-mobile failed to adhere to a Transparency Rule that is found in the commission’s 2010 Open Internet Order. The law stipulates a public disclosure of accurate information in regards to network management practices, performance, and commercial terms. The information must be sufficient and reliable to assist consumers to make informed choices on services of preference.

In a statement, Travis LeBlanc, the FCC Enforcement Bureau Chief outlined, “Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations. When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised, and they get what they’ve paid for.”

T-Mobile’s take on the allegations and the payment

The FCC says that the carrier was on the right track with its disclosures in June 2015. However, the FCC claims that the information offered by the company was not sufficient. However, any efforts to seek comment from T-mobile’s representatives were redirected to CEO John Legere’s Twitter account.

But even as all this unfolds, the carrier has pledged to provide free internet service to low-income school districts. Nonetheless, the company’s spokesman Clint Patterson was non-committal on whether or not they would be making any further changes in its ads or policies. T-Mobile last traded at $50.46, an increase of $0.11 or 0.22%.

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