FCC shows it means business on net neutrality with AT&T $100m fine

The FCC slams AT&T with a $100 million fine, a move many are calling a victory for net neutrality. Also in Searchlight: The FBI probes Cardinals for hacking Astros; a changing of the guard at Microsoft.

Score one for net neutrality. The Federal Communications Commission (FCC) said on Wednesday that it will fine AT&T Mobility $100 million for knowingly deceiving customers about its unlimited mobile data plans. The action, hailed as victory by advocates of net neutrality, is the first time the FCC has enforced the transparency rule laid out in 2010 and reinforced by the new Open Internet rules that went into effect last week.

The FCC claims that AT&T practiced "throttling," the slowdown of data transfer rates after a certain amount of data has been used. In this case the throttling was inflicted on AT&T unlimited-plan subscribers after they had used 5 GB of data within a billing cycle. The mobile operator decreased data speeds down to 20 times slower than normal network speeds for these customers, severely hampering their ability to access the Internet or use mobile apps. According to the FCC, AT&T did this without giving customers adequately detailed notice, thus violating the transparency rule that was passed along with the FCC's Open Internet Order.

"Consumers deserve to get what they pay for," FCC chairman Tom Wheeler said in a statement. "The FCC will not stand idly by while consumers are deceived by … insufficient disclosure."

Holding ISPs accountable

Ted Schadler, vice president and principal analyst at Forrester Research, said that the FCC's decision is a sign that the commission is taking its role as net neutrality regulator seriously by making sure Internet service providers (ISPs), which are "essentially owners of scarce bandwidth," are held accountable.

Greater accountability is key if ISPs are to get on board with an open Internet and net neutrality is to succeed. Right now, ISPs still have a long way to go in terms of greater transparency, said a CIO at an employee benefits provider, whom I talked to on Twitter. He added: "Transparency would be nice, but accountability and ownership are paramount for net neutrality to succeed and become adopted."

Another tweeter, head of mobility at a pharmaceutical company, agreed: "I personally think [the fine is] a good thing. When you say something, you must be held to it."

Tom WheelerFCC Chairman
Tom Wheeler

Indeed, since the net neutrality rules have been in effect, it appears broadband providers are taking the FCC's stance on net neutrality more seriously. The mobile expert I talked to earlier said that he thinks T-Mobile, for example, has become more transparent with its customers. And Sprint, which had previously practiced throttling, stopped after the rules went into effect.

The FCC indicated that it intends to keep up the heat on providers who might be fuzzy on the meaning of "unlimited." On a conference call Wednesday, senior FCC officials said that more ISPs could be penalized if they advertised unlimited data plans but restricted the amount of data consumers could use at full speed.

"The FCC [is willing] to tune in to the technical details of violations over the availability and use of bandwidth -- a critical part of what will keep the Internet open, fairly priced and accessible to all," said Forrester's Schadler.

Bottom line? The FCC's high-profile enforcement of a free and open Internet is being viewed as a net neutrality victory, particularly for customers. But enterprise CIOs should also be cheering the development, according to Schadler.

"CIOs definitely care about an open, competitive wireless market. So this should matter to that degree," he said.

The benefits-provider CIO I tweeted at agreed.

"In order to deliver consistent service, CIOs need consistent and reliable Internet speeds," he said.

CIO news roundup for week of June 15

Here are more technology headlines from the week:

  • Microsoft's leadership gets a makeover: The company announced this week that four of its senior executives are signing off. CEO Satya Nadella said in an email that three of the departures are related to his decision to reorganize the company's engineering teams into fewer groups.
  • The FBI is investigating front-office staffers of the St. Louis Cardinals for hacking into the internal network of the Houston Astros in what appears to be a vengeful act, according to The New York Times. What makes the hack stand out? It's the first known act of cyberespionage by a sports team breaking into the network of another. The "cyberespionage" label might be giving the culprits too much credit, says one Deadspin writer.
  • It was a good week for workers. Disney abruptly canceled the layoffs of 35 tech employees, a few weeks after informing them that on top of getting laid off, they would have to train immigrants to do their jobs. And in a landmark decision, an Uber driver was ruled an employee, not a contractor. Classifying drivers as employees could mean Uber will have to offer benefits for its drivers.
  • On Wednesday, Twitter said it acquired Whetlab, a machine-learning startup. It didn't say why, but Business Insider guesses it's to better organize tweets or target ads. This comes shortly after the company's CEO announced he's stepping down -- a job Snoop Dogg is volunteering for.
  • Some Australian universities have banned smartwatches in the exam room -- not an unreasonable demand. As these smart devices start looking more like traditional watches, however, it may only be a matter of time before all timepieces are banned in the exam room, mused Wired Campus.

Check out our previous Searchlight roundups on Apple's dive into mobile deep linking and its stand for consumer privacy.

Next Steps

Check out previous Searchlight coverage on net neutrality, including the protests sparked by the FCC proposal and why the rules are good for CIOs. Then, get Wellesley CIO and "Netizen" Ravi Ravishanker's take on net neutrality.

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