AT&T has redefined the term “unlimited” and the Federal Trade Commission has called them out on it.

For years, AT&T sold plans that included unlimited data but later came to the realization that allowing users to access as much data as they want could put too much strain on its network. So, in 2010 they stopped offering those plans to new customers and in 2011 “Ma Bell” (as it was known when it was the monopoly phone company) started throttling, or slowing down, users who went above a certain limit. At first AT&T said it would be the top 5 percent of data users on its network, and later set the limit at 3 gigabytes a month.

On Tuesday, the FTC filed a complaint against AT&T charging that “the company has misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds, in some cases by nearly 90 percent.”

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”

As the FTC states in the complaint, AT&T never warned customers about throttling when they signed up for their unlimited plans and the agency further stated “even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.

The FTC is accusing AT&T of changing the terms of customers’ contracts while they were still under a contract.

My daughter has been an iPhone user with an unlimited data plan for years and was a bit shocked when she got a letter from AT&T a couple of years ago telling her that she was a heavy user and that they would slow down her usage for the remainder of that billing period. Katherine uses her phone to watch video when she exercises, which put her over the limit.

The history of this issue began in 2007 when AT&T became the exclusive U.S. carrier for the iPhone. At that time, they promoted their unlimited data plans for $20 a month and in 2008 raised it to $30 a month.

As I recall in those early iPhone years, a lot of customers complained about slow data and poor phone reception, which was widely believed to be a result of the AT&T network being inadequate to meet the demands of data-hungry iPhone customers. To deal with that, AT&T started introducing tiered plans where customers purchase a bucket of data and pay extra if they exceed that amount.

These days, most AT&T customers have tiered plans. To be affected by the FTC action, a user would have to have signed up for an unlimited plan years ago and remain “grandfathered” into that plan. Still a promise is a promise, and if someone signed up expecting unlimited data, it’s an unwelcome surprise to find out that AT&T has redefined unlimited to mean all the data you want at speeds that are too slow to be really useful.

Email Larry Magid at larry@larrymagid.com.