US telecoms company AT&T faces a $100m (£63m) fine for slowing down the internet speeds of millions of customers on unlimited data plans without informing them. It is the largest fine ever levied by the Federal Communications Commission.
AT&T is accused of misleading customers, although it denies any wrongdoing.
Meanwhile, wireless operator Sprint announced that it would end its practice of throttling traffic.
AT&T is accused of offering a significantly slower service to customers on unlimited data packages after they had used a certain amount of data each month. According to the FCC, this affected customers' ability to do things such as stream video or use Global Positioning System (GPS) mapping services. "Consumers deserve to get what they pay for," FCC chairman Tom Wheeler said. "Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure."
AT&T began offering unlimited data plans in 2007, allowing customers to use unrestricted amounts of data. Although the company no longer offers such plans to new customers, it allows existing customer to renew their contracts for data plans that continue to be labelled as unlimited.
New stricter rules around net neutrality came into force this week, although AT&T was found to be in breach of earlier rules adopted in the 2010 Open Internet Order. The order's transparency rule requires fixed and mobile broadband providers to publicly disclose sufficient and accurate information about their network management practices.
AT&T said that major carriers had been slowing speeds for years as a way to manage network resources. "The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers, and has known for years that all of the major carriers use it," AT&T said in a statement. "We have been fully transparent with our customers, providing notice in multiple ways," the wireless carrier added, pointing to a notice posted on its website.
The new rules around net neutrality - which prevent broadband providers and mobile operators from slowing down or blocking specific net traffic - came into force this week. They also seem to be having an immediate effect.
Sprint, the US's third largest wireless carrier, announced that it had ended its practice of dropping data speeds for heavy net users at times when its network was very busy. It said that it did not believe that it was contravening the new rules but ended the practice to be sure. "Sprint doesn't expect users to notice any significant difference in their services now that we no longer engage in the process," a Sprint spokesman said.