Government to AT&T: Three strikes and you’re out!

To say it’s not been a good month for AT&T would be a gross understatement. Take three of the scariest words in communications – cramming, throttling and spying – and you have the carrier’s troubles in a nutshell.

Last month, the Federal Communications Commission (FCC), Federal Trade Commission (FTC) and state attorneys general in the U.S. announced a $105 million settlement with AT&T over the issue of cramming, the largest such settlement ever awarded. The case involved unauthorized charges for so-called premium SMS services, a problem that has also recently dogged T-Mobile.

Not surprisingly, soon after the ruling the carrier was inundated with customer requests for refunds. More than 350,000 have asked for compensation through a simple form at the FTC’s site. Anyone entitled to a refund won’t see a penny until sometime in 2015, but the FTC has said that almost everyone who applies will see some cash.

Strike two against AT&T happened less than two weeks after the cramming scandal was settled and involves the telco allegedly slowing speeds for its unlimited data plan customers. Some users were slowed down by as much as 90 percent, leading to a lawsuit against AT&T by the FTC. The FCC has been working hand-in-hand on this case, which follows on from the agency’s hard line on cramming, as evidenced by Chairman Tom Wheeler’s no-holds-barred letter to Verizon last summer.

Some have argued that the throttling was a way for AT&T to force customers off their grandfathered unlimited data plans, which of course are no longer offered by the carrier, and on to their capped data plans.

And in what could be the biggest scandal of all, strike three for AT&T is a story straight out of the movies in which a former head of the National Security Agency (NSA) was not only leading an organization that was collecting billions of AT&T customer records but also trying to profit from them.

In a related turn of events that also involves Verizon, AT&T has been using ‘supercookies’ to track the mobile activity of millions of users. Unlike regular cookies, these supercookies can’t be easily evaded or deleted. They are meant to help better target ads and other marketing activity, but who’s to say those details won’t be passed on to government agencies or fall into even more nefarious hands?

These three strikes hitting in the space of less than a month bring to light some serious issues that are continuing to plague the industry. And in all cases the victims are the very customers that AT&T and other providers rely on to keep them in business.


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About Anita Karve 37 Articles
Anita is a writer and editor with 20 years of experience covering just about everything in the technology space with a focus on computer networking and telecommunications. She was managing editor of Billing & OSS World magazine and technology editor at Network magazine and most recently was in charge of newsletter coverage at TM Forum.

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