back to article AT&T: We did nothing wrong in promising unlimited data that wasn't. We're just giving the FTC $60m for fun

Toothless American consumer watchdog the Federal Trade Commission today agreed to let AT&T settle a five-year battle over phony “unlimited data” promises for just $60m. That's $40m less than expected, and less than one day of annual profit for the telco giant. The agreement [PDF] lets AT&T claim it did nothing wrong; the …

  1. LoPath

    Money can't buy you love

    Granted, it's a drop in the bucket versus the amount of money they bring in, but all of the hoops they're going to have to jump through to demonstrate compliance should be enough of a deterrent to get their attention.

    1. Anonymous Coward
      Anonymous Coward

      Re: Money can't buy you love

      Or just convince them it's time to bribe the FTC, too.

    2. JohnFen Silver badge

      Re: Money can't buy you love

      I love your optimism. I wish I could share in it.

      From where I sit, this looks like AT&T pretty much got off the hook with little more than a stern scolding.

      1. dnicholas Bronze badge

        Re: Money can't buy you love

        Exactly. How much of their profit is from misleading customers in the first place? Fines just become an operating expense to monopolistic corporations. Then they shaft captive customers harder.

        1. Wade Burchette Silver badge

          Re: Money can't buy you love

          That is why the CEO needs to pay a fine out of his own wallet. A fine on a business is just a tax write-off. You start making the CEO pay, then this stuff will stop real quick.

          1. JohnFen Silver badge

            Re: Money can't buy you love

            Or make the fines large enough that they actually hurt the company and its shareholders.

    3. edris90

      Re: Money can't buy you love

      If the company can afford the fine without going out of business then the fine is not high enough.

      To create an effective deterrent, they need to crack down hard, it so sets an example that reverberates through the business community that we won't argue with you, or give you the benefit of the doubt anymore due to years of industry abuse of that benefit.

      How about a three strikes rule with zero tolerance for business ,not just social behaviors??

      The only point of generating profit is to create emergency funds for a rainy day for future problems.

      If the problems are to be sustained then profitability is irrelevant too productively solving problems and is no longer a justifiable priority

      Consumers and their representative governing agencies need to send a strong message the gets through even the densest of profiteers.

      They need to feel what danger in the core of their being that We will not hesitate to sacrifice economic and political convenience to fix this problem.. We will destroy you and take your assets by eminent domain and give them as a grant to somebody else that hasn't f***** up yet.

      so tread lightly.

      What happens when they're fined lightly enough to stay in business is they just passed the fines on to their consumers and in the end have no net detriment.

      1. Cxwf

        Re: Money can't buy you love

        [quote]The only point of generating profit is to create emergency funds for a rainy day for future problems.[/quote]

        What? No, this is stupid. Corporations generate profit to allow reinvestment in growth, and to attract shareholders. Both are absolutely necessary for the long term health of a company.

        You can limp on for a little while with zero or even negative profits, and arguably it’s correct to expect that as a result of fines for unethical behavior. But after you’ve paid the fine you have to be able to go back to making a profit again.

        1. Charles 9 Silver badge

          Re: Money can't buy you love

          "Both are absolutely necessary for the long term health of a company.'

          Unless the market is saturated, in which case the game becomes zero-sum and the only way to grow is to scalp the competition. As noted by downward trends in cell phone sales, the US cell phone industry is pretty close to (if not already) saturated. The only way AT&T can grow is by stealing customers from, say, Verizon. That's why the smaller players (T-Mobile, for example) are in serious merger talks: they're out of options for becoming serious competition to the big boys.

          "You can limp on for a little while with zero or even negative profits, and arguably it’s correct to expect that as a result of fines for unethical behavior. But after you’ve paid the fine you have to be able to go back to making a profit again."

          But since most fines are one-offs, they tend to just get written off as one-time events. If you really want to hurt their bottom line, you need something that'll keep hurting them if they don't comply. Meanwhile, while stung by the fine, the company may decide that an investment in regime change (in amounts comparable to the fines) may make a better RoI long-term.

        2. edris90

          Re: Money can't buy you love

          I was speaking from the point of view of society which is a reaction to the composite needs of the population, which together forms the authority of governance. And licenses corporations to exist. Corporations are a structure allowed by society and if they counter the interest of society ,which is the composite interest and well-being of the entire populace ,then they must be put under control and occasionally reminded of their place or they become a detrimental obstacle to the society in which they operate. Removing justification for society to continue it's artificial maintain mint of the environment that allows for the concept of a corporation to exist.

          Corporations are as a concept depend upon society it's government and it's people to artificially sustain the environment necessary for the concept of a corporation exhist.

          It is a tool to society as a garden rake is a tool to a gardener.

          And if the tool overtime begins to operate less beneficially or begins to operate detrimentally then you delegate its role to a different unit that is more capable I'm working towards the intended purpose of its Creation and justification for maintenance and overhead to keep the tool around

          1. Charles 9 Silver badge

            Re: Money can't buy you love

            But like most tools of man, it can be usurped. And that usurpation may come with enough power to give greater society the finger and F.U.: change the rules if necessary.

      2. The IT Ghost

        Re: Money can't buy you love

        The problem with the "hit 'em where it hurts" idea - virtually bankrupting a major corporation, is that the people who pulled the "throttling" stunt will just take their golden parachutes, padding their already full bank accounts that much more, take a few months off and then start again as an executive somewhere else, once again earning big money. Its the workers who try to put in their week's work and get their paychecks to get by one more month that get hurt the most.

        1. Charles 9 Silver badge

          Re: Money can't buy you love

          The point well taken. Worse, it implies that there is an inherent "cushion" protecting executives and the like: sort of like a precondition to them signing on in the first place, making it difficult to really tackle the ones that matter.

          1. DJO Silver badge

            Re: Money can't buy you love

            Fines are pretty pointless.

            Substantial prison terms for executives of companies engaging in illegal practices is the only effective deterrent.

            1. Charles 9 Silver badge

              Re: Money can't buy you love

              Even there they can have cushions: scapegoats and plausible deniability, clandestine trips out of jurisdiction at the extreme.

  2. FreeRadical

    Why are you still an AT&T customer?

    I mean really. When you contract is up, switch providers. AT&T only care about numbers. Hit them in the wallet and they will be forced to change their ways. If nobody buys their products or services, guess what happens?

    NOT ROCKET SCIENCE PEOPLE

    1. Mark 85 Silver badge

      Re: Why are you still an AT&T customer?

      Given the limited choice (and it's about to get worse) and that the companies have sliced the US up like Christmas pie, where you going to go? I've got a choice of two... and they both seem to have the exact same prices.

      1. doublelayer Silver badge

        Re: Why are you still an AT&T customer?

        You assume here that the people are still customers. I'm guessing quite a few left after their contracts ended, tired of being lied to. But you also have to realize that people still need phone service. If only one provider provides useful service wherever you may be, then you are effectively locked into them. And even if you're in an area of good coverage from everyone, you still have to shop for the best plan. It might end up being that the plan from AT&T was a better value for money than the available plans from the competition, just without honesty.

        One can't always keep placing companies on the never-buy-from-them-again list; sometimes their services are needed as much as people dislike them for previous decisions. Your approach works fine in a market of perfect competition, but mobile service is not in a state of perfect competition anywhere in the world, let alone the U.S.

    2. JohnFen Silver badge

      Re: Why are you still an AT&T customer?

      "When you contract is up, switch providers."

      Switch to who? Please name a US carrier that is any better.

  3. Anonymous Coward
    Anonymous Coward

    > In short, this case is an extraordinary indicator of just how broken the American system of regulation is.

    I disagree. America is owned and run by corporations. Regulations are for their benefit. It therefore seems to be working perfectly - regulating that companies can do what they want, and the consumer must accept it.

    1. Anonymous Coward
      Anonymous Coward

      Besides.

      They know that if the right percentage of the cash doesn't go to the right person then things don't go through smoothly.

      (Is there a tag for cynical?)

  4. joemostowey

    Problem is AT&T just set the standard

    ALL the telecos in the USA practice this type of deceit on a regular, ongoing basis. Ye olde FCC and FTC are filled with Trump cronies, and GOP "Free market" delusionists.

    Verizon does it. Maybe a little differently, but the end result is the same. On Straight Talks "unlimited" plan The "Ultimate" good for 60 Gigs, the speed is throttled back in my neighborhood (only one tower for miles) to 0.17 MPS tonight at 7:00 PM and I've used less than 2 gigs in 20 days.

    When the FCC and FTC have lost their teeth, and actively campaign for LESS competition, you know the American people are screwed.

    The politicos have been purchased and we the people are being fleeced while the Telecos and our public "servants" and waltzing together off to the bank, which of course will get their share as well.

    Old joke: In Russia you rob bank, in USA, Bank (and every other corporate entity) rob you

  5. Anonymous Coward
    Anonymous Coward

    And yet just last year, ElReg was so fond of the American system

    Because a conservative administration, you know, was going to be totally an antitrust one.

    Ah well, that was one of the most bullshitting moments of Andrew. He had his moments of sanity, too.

    "After eight cosy years in which the Obama administration cuddled up to Silicon Valley, imposing meek remedies for abusing search and ad rivals, for example, the new administration is laying the groundwork, selling the idea of antitrust as a pro-market act of policing to conservatives."

    https://www.theregister.co.uk/2018/07/24/eu_vs_us_android_antitrust/

  6. STOP_FORTH
    Happy

    A suggestion for all telcos everywhere

    You are all richer than Croesus. Just buy the local, Scrabble-approved, authoritative dictionary (Webster's, Collin's, Oxford, whatever) and instruct the editor to change the meaning of the word "unlimited" to be "capped at the whim of a greedy corporation".

    Simples!

    1. Garymrrsn

      Re: A suggestion for all telcos everywhere

      Unlimited is by definition an infinite term and its use in advertising is just a fraudulent as advertising perpetual motion.

      1. Anonymous Coward
        Anonymous Coward

        Re: A suggestion for all telcos everywhere

        Language is relative. Definitions change. Words get reshaped by social convention.

        1. Aristotles slow and dimwitted horse Silver badge

          Re: A suggestion for all telcos everywhere

          No it's not. Definitions change yes - but "unlimited" has not done so. I would expect that if you asked 100 people to explain what it means then 99 people would be able to scrape up a similar meanings in volumetric terms. In this case this word is not being changed by "social convention" it is being distorted by liars in marketing departments to knowingly commit fraud and to mislead with no other goal than to line corporate pockets at the customers expense.

          1. Anonymous Coward
            Anonymous Coward

            Re: A suggestion for all telcos everywhere

            That's itself a social convention. If you don't believe in the fluidity of language, explain the corruption of the swastika. Words (and truth) are what people choose to believe, and if every seller claims limited unlimited, it's either play to their tune or walk away (increasingly difficult in these days of constant contact required or else).

            1. Jimmy2Cows Silver badge

              Re: A suggestion for all telcos everywhere

              And yet you feel compelled to qualify it as "limited unlimited", an obvious contradiction in terms.

              Unlimited means without limits of any kind. Adding a qualifier indicates it's not unlimited, therefore it's blatant fraud to try marketing it as such.

              1. Charles 9 Silver badge

                Re: A suggestion for all telcos everywhere

                "Unlimited means without limits of any kind. Adding a qualifier indicates it's not unlimited, therefore it's blatant fraud to try marketing it as such."

                No it's not. It's called "I reject your reality and substitute my own." It's all the rage in governments these days.

  7. Henry Wertz 1 Gold badge

    the carriers here didn't all do this

    "Why are you still an AT&T customer? I mean really. When you contract is up, switch providers."

    But it's a *2 year* contract. Which they locked people into via fraud. So, I'm sure these people largely did switch providers, but this is no way means AT&T should not be punished for this type of behavior.

    In case your wondering, this is NOT the kind of thing all providers in the US do. Verizon Wireless, Sprint, T-Mobile, US Cellular, they do not get these kinds of fines. Verizon Wireless for instance STILL has some people on old grandfathered unlimited data plans with no limits whatsoever; AT&T was getting complaints at the time (which is I think what they're finally being fined for now.) The other carriers said their plans said "unlimited", not "unlimited*"...*not really", when they started throttles and deprioritizations, they set up new plans with them and clearly disclosed them. In the present day, AT&T has joined the other carriers in just listing any deprioritization and throttles right in the plan description (not even in the fine print, right on the main page.)

  8. Steven Guenther

    CEO in Jail

    If I defrauded someone out of $60 million, I would be in jail. Put the CEO and Board of directors behind bars for a similar time.

    Stop having companies pay, and make the guys who make the BIG money pay.

    Jail time gets their attention more than just a few bucks from their deep deep pocket.

    1. Jimmy2Cows Silver badge

      Re: CEO in Jail

      I agree, but I suspect allowing the get-out clause of settling without admitting liability/guilt enables the US gov to make some money with minimal risk.

      Putting the CEO and board in jail means an expensive trial which gov might lose, opening them to litigation costs and counter-suits.

      The current state of play means gov gets some cash, has the appearance of taking punitive action, and the companies still make profit as the settlement is less than profit made from the infraction.

      So everybody wins. Except the consumer, who is continually shafted. And this is why things are unlikely to change.

      1. teacake

        Re: CEO in Jail

        It helps to put everything in its proper context to think of the fine as the government taking its cut of the proceeds of the scam.

  9. Claverhouse Silver badge

    In a statement [PDF], Chopra called AT&T’s actions a “scam,” “scandal,” and “massive fraud,” and noted he “would have liked to see AT&T pay more,” but recognized “the risks and resources associated with litigation.” He concluded: “The bottom line is that AT&T fleeced its customers to enrich its executives and its investors.”

    With such excoriating words as a verdict, it seems utterly impossible to believe no-one will be serving time as did Horatio Bottomley, the Enron guys, and the misfortunate Madoff.

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