Faced with regulatory pressure, AT&T now says it won't throttle subscribers with unlimited-data plans until they have consumed at least 22 GB of data in a month, up from the previous limit of 5 GB.
The company's move comes three months after the Federal Communications Commission proposed fining AT&T $100 million for its prior practices.
"Speed reductions will occur only when the customer is using his or her device at times and in areas where there is network congestion and only for the remainder of the current billing cycle," the company announced on its site. AT&T adds that it will notify consumers when they've used 16.5 GB of data, "so they can adjust their usage to avoid network management practices that may result in slower data speeds."
In June, regulators at the FCC accused the telecom of violating a net neutrality rule by failing to adequately disclose its throttling policies.
The allegations stemmed from AT&T's 2011 decision to stop offering unlimited data plans to new customers. Instead, the company required new users to purchase a "tiered" plan, which ties pricing to the amount of data people can consume.
AT&T said that longtime users who previously had unlimited plans would be able to avoid pay-per-byte billing, but would experience slowdowns after hitting a cap of between 3 and 5 GB a month, depending on their phones. In some cases, AT&T allegedly cut consumers' speeds down to 512 Kbps -- which is too slow for features like video streaming, mapping applications and video chat apps.
Earlier this year, the company stopped automatically throttling unlimited customers after they exceed the cap. Now, the company throttles those users only when the network is congested.
In addition to the FCC action, AT&T also faces a lawsuit by the Federal Trade Commission, which alleges that the company deceived consumers by offering them “unlimited” data, and then throttling them when they consumed more than a set amount
AT&T has argued that it's no longer subject to the FTC's jurisdiction, because that agency isn't empowered to bring enforcement actions against providers of common carrier services. The FCC reclassified mobile broadband as a common carrier service earlier this year.
The 9th Circuit Court of Appeals recently agreed to decide whether the FTC can proceed with its case.