Pedestrians walk by an AT&T store on 5th Avenue in New York City on May 19, 2014. AT&T said Sunday that it had agreed to acquire America's biggest satellite television provider, DirecTV, in a deal worth almost 50 billion dollars. UPI/John Angelillo | License Photo

WASHINGTON, Oct. 29 (UPI) -- AT&T is under fire from federal regulators again, accused of misleading customers with a data speed bait-and-switch.

The Federal Trade Commission filed a complaint in federal court Tuesday, accusing the mobile company of charging convincing customers to swap to more expensive "unlimited" data plans, then reducing data speeds by up to 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. "The issue here is simple: 'unlimited' means unlimited."

Specifically, the complaint accuses AT&T of failing to notify customers that their data speeds will be throttled if they reach a certain threshold of data usage within a billing cycle.

"Even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program," the FTC said. "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's complaint also accuses AT&T of essentially changing the terms of customers' plans without adequately notifying them of the change.

AT&T denied the charges.

"The FTC's allegations are baseless and have nothing to do with the substance of our network management program," Wayne Watts, AT&T senior executive vice president and general counsel, said in a statement.

"It's baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts," he said.

Watts said the data program affects only about the top 3 percent of data uses, and that the company explained their process in 2011, when it said it would limit customers who exceed 5 GB of data in a billing cycle.

The FTC says this amounts to 3.5 million users who have seen their data throttled more than 25 million times.

AT&T, along with Verizon, claim that unlimited data users cause congestion their networks aren't prepared to handle. But both have very few customers left with unlimited data plans, and most of those are grandfathered in from before 2010, when the companies began phasing out the plans' availability in favor of tiered data plans.

Earlier this month, AT&T agreed to a $105 million settlement with the FTC for "cramming" third-party charges into customers' bills.

FTC vs. AT&T Mobility