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User Successfully Sues AT&T For Throttling iPhone Data

An anonymous reader writes "Matt Spaccarelli has won a judgement of $850 from AT&T for data throttling. From the article: 'Nadel's ruling could pave the way for others to follow suit. AT&T has some 17 million customers with "unlimited data" plans that can be subject to throttling, representing just under half of the company's smartphone users. AT&T stopped signing up new customers for those plans in 2010, and warned last year that it would start slowing speeds for people who consume the most data. In the last few months, subscribers have been surprised by how little data use it takes for throttling to kick in —often less than AT&T provides to those on limited or "tiered" plans. Spaccarelli said his phone is being throttled after he's used 1.5 gigabytes to 2 gigabytes of data within a new billing cycle. Meanwhile, AT&T provides 3 gigabytes of data to subscribers on a tiered plan that costs the same — $30 per month.'"

27 of 166 comments (clear)

  1. "We can change this anytime" EULA didn't work? by elrous0 · · Score: 5, Insightful

    It would be nice to think that rulings like this might have some effect on the traditional corporate practice of making new users sign "contracts" that basically give one party the right to change the terms any damn time they want and in any damn way they want, while giving the other party the right to pay their money and shut up. It would also be nice to think we may live in a country some day where consumer protection laws will actually be geared towards protecting *consumers* and not just the corporations who write all our the laws in the U.S., making these kind of rulings unnecessary in the first place.

    Of course, while I'm dreaming, I had may as well wish for a threeway with Katee Sackhoff and Natalie Portman in my new Ferrari.

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
    1. Re:"We can change this anytime" EULA didn't work? by Huge_UID · · Score: 5, Funny

      Don't hurt your back. And watch out for the gearshift.

    2. Re:"We can change this anytime" EULA didn't work? by g0bshiTe · · Score: 5, Insightful

      If that's the case, perhaps there should be an "opt-out", where in the event the contract does change the consumer has the right to terminate the contract without fees if they so choose.

      --
      I am Bennett Haselton! I am Bennett Haselton!
    3. Re:"We can change this anytime" EULA didn't work? by Anonymous Coward · · Score: 4, Funny

      "the gearshift" is .. okay, look, we'll have this conversation when you're older.

    4. Re:"We can change this anytime" EULA didn't work? by GrumpySteen · · Score: 4, Informative

      That already exists (at least in the US). Any time your provider changes the contract, read the fine print of the contract. You'll find you have a certain time period (usually 14 or 30 days) in which you can discontinue your service without any early termination fee. The person you talk to to try to end the service will generally lie and say that the clause doesn't apply to you, but ultimately the company is bound by the terms of the original contract until such time as you agree to the new contract by paying your next payment.

    5. Re:"We can change this anytime" EULA didn't work? by forkfail · · Score: 4, Informative

      They don't change the contract. t-mobile and AT&T just redefine "unlimited data" to mean "all the data you can get, but at 5% of the maximum speed that your 4G device can deliver it".

      Which may keep them in the letter of the law and contract, but absolutely not in the spirit. Especially if you take into account the inherent and explicit promises of their advertisements.

      --
      Check your premises.
    6. Re:"We can change this anytime" EULA didn't work? by Mister+Whirly · · Score: 4, Informative

      This has been successfully done many times. The law states if one party changes a contract the other party does not have to agree to the terms and may chose to cancel the original contract. Of course with cell phones that means you may not get to keep your original number which can be a deal breaker for some.

      --
      "But this one goes to 11!"
    7. Re:"We can change this anytime" EULA didn't work? by HapSlappy_2222 · · Score: 3, Informative

      I don't like this either, actually. It would be a better solution than being stuck in the contract, surely, but I'm still inconvenienced by the changed contract. In other contractual situations (divorce, building a home, buying a car, whatever) a party that changes the contract is typically responsible for providing a damn good reason for why the change is happening in the first place, and in cases where the contract is no longer tenable, the offending party pays up. As in:

      "If either party fails, without reasonable cause, to comply with the terms of this Agreement, then the other party may give written notice requiring the default to be ended. If the default continues for 7 days after receipt of the notice then the employment of the Building Contractor may be terminated upon receipt by the defaulting party of a further written notice stating that the employment of the Building Contractor is terminated forthwith. The Building Contractor will then be entitled to payment for work carried out that is reasonable in all the circumstances of the determination, provided that the Householder may deduct reasonable expenses incurred in obtaining a new Contractor if the Building Contractor was the only defaulting party."

      Note that last line? In legalese, the "Householder" gets to take the money for a new contractor right outta the original contractor's pocket (within reason, of course).

      These "contracts" we all sign for our phones aren't really contracts, at all; that would mean that a thing of mutual benefit or interest to 2 or more parties is being officially agreed upon. If they were, AT&T, Verizon, Sprint, or whoever would owe ME money for every dropped call, EULA change, or asshole customer service rep, the fucks. But I guess there's no real reason to supply a reasonably reliable service at an agreed upon rate with a friendly smile these days. Bah.

      On the other hand, I wonder if I can start charging my print shop's customers for the bandwidth I use to send their images to my printers. It's just ripe for the picking. Hmm.

    8. Re:"We can change this anytime" EULA didn't work? by sjames · · Score: 3, Insightful

      No, it' not impossible. There exist natural limits on the connection unrelated to any imposed limitation. An honest company wishing to offer 'unlimited' service will make sure their offer is profitable at that natural limit. Meanwhile, provision is getting cheaper over time, not more expensive.

      They offered 'unlimited' with secret limits so they could take customers away from providers offering what was actually a better deal but were honest about the actual limits. They had no interest in that honesty thing.

      At this point, they should just fess up and take their lumps, but they're trying to avoid even that by driving their customers (who did nothing wrong) to 'voluntarily' abandon the unlimited plan.

    9. Re:"We can change this anytime" EULA didn't work? by trawg · · Score: 4, Interesting

      We went through this same shit years ago in Australia.

      ISPs started selling Unlimited* data, and hiding what the asterisk meant in T&Cs under what they called an "Acceptable Use Policy". The Acceptable Use Policy usually said something like, "you can use unlimited data up to this particular limit at which point you will be charged X/throttled/something else".

      Our consumer watchdog group, the ACCC (which IMHO is a truly excellent example of well done government regulation that works for the people) took exception to this after user complaints. I can't remember the exact details (and am too lazy to search) but the gist of it was that this was not transparent enough and not clear enough for the end users.

      The end result is that every ISP was forced to stop selling these bullshit "unlimited*" plans and required to label them accurately and concisely.

      We have quite low monthly download quotas compared to the rest of the world (I work in broadband content and regularly talk to people that struggle on 12-20GB a month because it is all that is available for them), but the plans are clearly labelled and generally very transparent and easy to understand - and while many people are still pretty pissed about the low quotas and sometimes high overage charges (especially on mobile)... the problem of getting bullshitted into an "unlimited" plan only to find out that it is not at all unlimited has all but vanished.

      I am not sure what the US equivalent of our ACCC is (FTC?) but I find it staggering that this has not brought their attention yet. Does the FTC have no teeth (seems unlikely from previous readings) or is the government just completely in the pocket of these giant telcos, or is it just user apathy/ignorance...?

  2. Can't change contract without compensation by Russ1642 · · Score: 4, Informative

    They claimed they needed to limit usage on their network, so they throttled users. What they forgot was the part where they're supposed to compensate the affected users for this.

    1. Re:Can't change contract without compensation by slapout · · Score: 5, Insightful

      If the network is so limited, they should be trying to upgrade the network.

      --
      Coder's Stone: The programming language quick ref for iPad
    2. Re:Can't change contract without compensation by Russ1642 · · Score: 4, Insightful

      Upgrading the network doesn't happen overnight. Throttling is their way of delaying the upgrade, which is acceptable if only they hadn't screwed over their customers. They should have sent out an email stating that they were throttling the connections, and they'd also have to suspend any early termination fees. To keep customers at that point they'd probably have had to reduce rates as well. I'm not saying that throttling is ok with me, just that they could have held up in court if they hadn't been greedy dicks.

    3. Re:Can't change contract without compensation by forkfail · · Score: 5, Insightful

      If the network is so limited, they should stop selling "unlimited data" and then saying that bandwidth is not the same as data (which is their core argument).

      t-mobile does the same thing, and it is absolutely false advertising. The level of deceit is amazing - they have showboat aps on their front webpage for streaming video and TV, they show ads with people watching the game in a restaurant, but if you do these things, you're going to get throttled to the point that your smartphone becomes useless.

      It's like going to an all you can eat buffet, and getting your first plate of food with no problem, but each subsequent bite of food has to be acquired spoonful by spoonful after waiting in line each time.

      Maybe instead of spending all their money on tricking customers and attempted mergers, they should, oh, I don't know, build out their infrastructure to meet the level of use that is to be expected with the products they sell?

      --
      Check your premises.
    4. Re:Can't change contract without compensation by camperslo · · Score: 4, Interesting

      They should innovate their way out of this. There are other ways to shift traffic, incentives to use or support a WiFi traffic path for others, and some advancing picking of video/music so it can be downloaded during traffic dips or via WiFi etc.
      It's simple, cheap to do, and customers can be compensated in some way for doing something. Then it's a win for all involved.

      If regulatory agencies wont help, some should sue AT&T over the continuing unjustified price bumps even for slower grade DSL. It looks like a conspiracy to make it less viable for customers to get video programming from other providers. And at the same time, the shift away from reliable copper phone services may leave some areas very vulnerable if an extended emergency hits. Boxes around town with batteries (powering optical to copper converters), and techs hundreds of miles away, can mean serious widespread downtime over a large area in an extended disaster.

    5. Re:Can't change contract without compensation by Sancho · · Score: 5, Insightful

      False advertising--and indeed most law--involves what a reasonable person would expect. A reasonable person seeing particular speeds advertised right next to an unlimited plan does not expect the unlimited plan to be throttled. A reasonable person who signed up for an unlimited plan at a certain speed isn't going to expect that speed to suddenly decrease while other people with a limited plan are seeing the original speeds.

      Most of meatspace isn't highly technical or bound by discrete laws, and judges (particularly in small claims court) tend to favor the little guy who doesn't get paid to know the law inside-and-out. They rule based upon common when there's any wriggle room. Contract law also favors the weaker party any time there is lack of specificity.

      This is honestly not that surprising.

      That said, AT&T can almost certainly cancel this guy's service, and should do so. You don't want customers who are going to sue you.

    6. Re:Can't change contract without compensation by gl4ss · · Score: 4, Insightful

      natural throttling happens on the network without extra effort when it's transferring near it's limits.

      at&t's throttling is throttling just for the sake of being dicks, regardless of the network congestion. it's not qossing, it's just making it unfeasible for you to actually use the network to create data transfer bills for them.. you know, running torrents during the night or whatever it is that normal internet connections are used for.

      it should be noted that at&t has plenty of moolah in bank to upgrade the network, but why bother when american sheeple are happy with paying for more?(and they can use not upgrading the backbone as an excuse for mergers to get more air bandwidth).

      --
      world was created 5 seconds before this post as it is.
  3. If this was a car rental by Anonymous Coward · · Score: 5, Insightful

    Can you imagine if you went to rent a car that advertised unlimited mileage that had the same contractual caveats that unlimited data plans have. Your conversation with the agent might go something like this.

    "Yes you do get unlimited mileage but if you drive too much then the car will slow down and only go 5 MPH."
    "Well how much is too much?"
    "There is no set amount, it varies by how much other people are driving. It is only the top 5%"
    "Then how am I supposed to know if I am driving to much?"
    "Well there is really know way to know, just try to drive as little as possible and you should be fine."

    I don't think anyone would stand for that kind of car rental contract.

    1. Re:If this was a car rental by forkfail · · Score: 5, Insightful

      Good analogy; I like the "all you can eat buffet one" myself. The first plate is fine, but after that, you have to go to the back of a long line, and are only allowed to take a single spoonful of food back to your table. And no eating in line.

      And while you're doing this, you have to look at the posters on the walls proclaiming how yummy the food is, how much better your life is because you're eating it, and how filling it is.

      --
      Check your premises.
  4. $850 vs. $10,000 -- WTF, Judge! by PatPending · · Score: 3, Informative

    The customer contract specifies that those who win an award from the company in arbitration will get at least $10,000. Spaccarelli picked the same amount for his claim. Judge Nadel instead awarded him $85 for each of the 10 months left on his contract.

    Er, what part of contract law does this Judge not understand?

    --
    What one fool can do, another can. (Ancient Simian Proverb)
    1. Re:$850 vs. $10,000 -- WTF, Judge! by MickyTheIdiot · · Score: 5, Insightful

      The part every judge doesn't understand anymore: that people and corporations are supposed to be treated equally in court.

    2. Re:$850 vs. $10,000 -- WTF, Judge! by Russ1642 · · Score: 4, Insightful

      Going before a judge isn't third party arbitration. Is it?

    3. Re:$850 vs. $10,000 -- WTF, Judge! by Anonymous Coward · · Score: 4, Informative

      The Judge understood fine. Spaccarelli didn't go to arbitration, so why should the clause that pertains to damage awards in arbitration apply in court?

  5. A big oops for AT&T by MobileTatsu-NJG · · Score: 4, Interesting

    I have an unlimited plan on my phone and so far I have not been throttled. I also have a 2 gig plan for my iPad. Last week I subscribed to Clear, now I have a mobile wifi hotspot. In my area the coverage is pretty good and I can hook up to 8 devices up to it. As a result I am canceling my iPad data plan. In short, even though I wasn't directly affected, I am dropping their service.

    I wouldn't have even looked into Clear if they hadn't started messing with their customers.

    --

    "I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)

  6. Re:One of two things is happening here. by forkfail · · Score: 5, Insightful

    So, do you understand what the definition of bandwidth is? It's real simple: bandwidth = data / time

    If they lower bandwidth, they have to be either lowering data (meaning not unlimited within the constraints of 3G or 4G), or they are increasing time (which obviously is impossible).

    Furthermore, the throttling was not in the older contracts; those got changed without grandfathering. And the text concerning the redefinition of unlimited, while present, is buried pretty deep in the contract.

    Ice this cake with the sort of advertisements shown, the aps show cased (streaming video, watching the game wherever you are, etc) along with the whole push of fastest network capabilities and such, and absolutely a false picture is generated.

    You wouldn't accept an all you can eat buffet that you can only remove food from one teaspoon at a time, unless it was made abundantly clear to you before hand that this was the case. And even then, you'd look askance at anyone offering such a deal with a name like "unlimited food" or "all you can eat".

    --
    Check your premises.
  7. Re:"We can change this anytime" and Sprint DOES! by neurocutie · · Score: 3, Informative

    VERY naive... witness what Sprint has done this past year... MULTIPLE changes that affect the bottomline, i.e. what the customer actually has to pay or what the customer actually gets in the way of services, discounts or equipment upgrades. HOWEVER, Sprint merely says "these changes are not "material"". They are not changes to the contract, and therefore not grounds for leaving ETF-free. Furthermore Sprint says, "if you disagree, tough. You CANNOT sue us as a class action. Your ONLY recourse is arbitration or small claims court." and the kicker "We INVITE litigation". Oh and about arbitration, Sprint change the rules as to how the arbiter is chosen: Sprint gets to choose and it chose a pro-corporate arbiter that it pays (can we say "conflict of interest")...

  8. Re:"We can change this anytime" and Sprint DOES! by GrumpySteen · · Score: 4, Informative

    I used to have a Sprint phone under contract. They upped the monthly cost less than six months after I signed the contract and I told them to piss off. They said the change wasn't material and charged the early termination fee to my credit card. I explained the situation to my credit card company and they reversed the charge and told Sprint to piss off. Sprint pissed off and never bothered me again.

    There's nothing naive about my post. I simply refused to take "it's immaterial" as an acceptable response and I know how to deal with companies that do shit like that.