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T-Mobile US (TMUS) Faces FCC Fine for Deceiving Customers
T-Mobile US Inc.(TMUS - Free Report) has been fined by the Federal Communications Commission for providing inadequate information to customers related to its unlimited data plans. The FCC stated that the carrier used to throttle Internet speeds of customers after they exceeded a monthly data limit. This data capping policy wasn’t disclosed to subscribers. Notably, similar charges have been leveled against AT&T Inc. (T - Free Report) by the FCC last year.
Settlement
While AT&T is still voicing protest against the FCC fine, T-Mobile is said to have reached a settlement worth $48 million. This includes $7.5 million of a fine and $35.5 million worth of discounted data or other services to customers.
Transparency Issues
The 2010 Open Internet transparency rules require Internet providers to issue accurate and sufficient information to customers or prospective customers relating to their services. However, lack of transparency in the wireless industry is not new. Notably, Verizon Communications Inc. (VZ - Free Report) was fined in May for unethically tracking data of customers using ‘supercookies’. Similarly, in 2015, Sprint Corp. (S - Free Report) faced FCC charges for its fraudulent billing practices.
The Bottom Line
T-MobileUS is currently the third largest wireless carrier in the U.S. which has been gaining a large number of customers of late, courtesy of reasonably priced data and other promotional plans. However, manipulating customer policies can result in reputation loss which will eventually affect T-Mobile US’ position in the market.
T-MobileUScurrently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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