Verizon Wireless, the second-largest mobile phone provider in the United States, has agreed to return $1 million US to customers for advertising "unlimited" data plans that weren't really unlimited.

New York's attorney general, Andrew Cuomo, said on Wednesday that the company has agreed to refund customers whose accounts were wrongfully terminated after they surpassed download limits on their mobile devices. The limits were never disclosed.

The company, which is co-owned by Verizon Communications Inc. and Vodafone Group PLC, also agreed to pay $150,000 in penalties and change its marketing practices on wireless internet services. Verizon had marketed plans that were unlimited, without disclosing that activities such as downloading movies and playing games were not allowed, Cuomo's office said.

Between 2004 and April of this year, Verizon cut off 13,000 customers for excessive use.

Bell Canada Inc. launched a wireless data plan last month that offers "unlimited" internet and e-mail use for $75 a month. However, under the plan's fine print, customers are not allowed to use "excessive network capacity in Bell's reasonable opinion" that would cause its network, or its ability to provide services to others, to be "adversely affected."

Customers are also not allowed to use "multi-media streaming, voice over internet protocol or any other application which uses excessive network capacity that is not made available to you by Bell."

Critics claim that Bell's unlimited plan is not truly unlimited.

"In other words, you pay for unlimited bandwidth, yet can't use many of the services that make affordable unlimited bandwidth such a necessity in Canada," University of Ottawa law professor Michael Geist wrote on his blog last month.

Mark Langton, a spokesman for Bell, said the company's plan does not place limits on data usage by business or consumer clients.

"We do indeed reserve the right to prohibit usage that represents excessive use or abuse of our network, but these limitations are highly unlikely to impact the typical business or consumer user in any way," he said. "Similar limitations to manage excessive use or abuse are common with carriers worldwide offering unlimited data programs."

Langton said uses such as video streaming and voice over internet protocol were examples that Bell would deem excessive, but no one has yet been affected by the limitations.