At issue is whether the mobile provider misled customers by labeling plans as unlimited and then slowing speeds after a certain amount of data was used in a monthly cycle.
FCC commissioners voting in favor of the fine alleged AT&T violated a transparency rule in its 2010 Open Internet Order. The agency also alleged AT&T failed to sufficiently inform subscribers of the maximum speed they would receive.
After the proposed fine was passed this week with a split 3-2 vote, AT&T now has 30 days to respond to the FCC -- but the nation's No. 2 mobile carrier has vowed to fight the charges on grounds the FCC was aware of a network management policy of providing "more bandwidth to subscribers that have used the network less over some preceding period of time than to heavier users" as a solution to reducing congestion.
"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," an AT&T spokesperson told ABC News in an email. "We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."
FCC Commissioner Michael O'Rielly wrote in a dissenting statement he believed AT&T met the requirements of the 2010 Open Internet Order, which he said does not require exact speeds to be disclosed when it comes to network management policies.
AT&T's website disclosure that subscribers may notice slower speeds when streaming video but would otherwise "still have a good experience surfing the Web, accessing email, and continuing to use an unlimited amount of data each month without incurring overage charges" appears to meet this requirement, O'Rielly wrote.
In a statement issued Wednesday, FCC Chairman Tom Wheeler said "consumers deserve to get what they pay for."
"Broadband providers must be upfront and transparent about the services they provide," he said. "The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure."
Wayne Watts, senior executive vice president and general counsel for AT&T, told ABC News last year the lawsuit, which is still ongoing, is "baseless."
He said the mobile carrier has been forthcoming with customers from the start about how it planned to handle the increased demand for wireless.
A news release dated July 29, 2011, on the company's website warns that subscribers with unlimited data plans may experience reduced wireless speeds when their usage exceeds a certain threshold in a billing cycle "that puts them among the top 5 percent of heaviest data users."