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AT&T Iphone Networking The Courts Apple

User Successfully Sues AT&T For Throttling iPhone Data 166

Posted by Soulskill
from the jig-is-up dept.
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.'"
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User Successfully Sues AT&T For Throttling iPhone Data

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  • by elrous0 (869638) * on Friday February 24, 2012 @04:58PM (#39152401)

    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.

    • by Huge_UID (1089143) on Friday February 24, 2012 @05:06PM (#39152573)
      Don't hurt your back. And watch out for the gearshift.
    • by g0bshiTe (596213) on Friday February 24, 2012 @05:12PM (#39152691)
      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.
      • 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.

        If you have the 'Unlimited' data plan your initial contract has already 'expired', but you'll lose the 'unlimited' part of it if you opt-out of your existing contract. O think it's better that AT&T have to be worried about these small, annoying lawsuits. It probably cost them more than the $850 settlement in legal fees.

      • by GrumpySteen (1250194) on Friday February 24, 2012 @05:30PM (#39152993)

        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.

        • by neurocutie (677249) on Friday February 24, 2012 @07:15PM (#39154079)
          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")...
          • by GrumpySteen (1250194) on Friday February 24, 2012 @07:58PM (#39154507)

            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.

          • The only thing is, as a Sprint Customer, I can say these changes they've made do not apply in California as California has already ruled on the state level that an ETF is ilegal and tantamount to "Adhesion". As to class action status and the requirement to go to arbitration, that also is not legal in California as you can never give up your right to pursue legal remedies. That aribtration clause has been thrown out of our contracts as a requirement though they can insist on it as it reduces the case load up

            • The only thing is, as a Sprint Customer, I can say these changes they've made do not apply in California as California has already ruled on the state level that an ETF is ilegal and tantamount to "Adhesion".

              The decision was for the specific contract signed by the people who took part in the class action suit. Sprint has corrected their contract since. Sprint even made the ETF prorated (the ETF amount depends on how long you have been with Sprint), after this law suit.

              So, if you signed up for sprint after they had corrected the contract wording, they can still collect ETF. The concept of ETF is still valid in California. Just use you imagination, how do you think people would reach if they can buy a phone cheap

          • by chrismcb (983081)

            Your ONLY recourse is arbitration or small claims court." and the kicker "We INVITE litigation".

            Then take them to small claims court. No lawyers, no lawyer fees, and more likely to side on your side.

        • by s73v3r (963317)

          The person you talk to to try to end the service will generally lie and say that the clause doesn't apply to you

          That should be flat out illegal, and punishable by HUGE fucking fines, both on the part of the agent and the company.

      • by Mister Whirly (964219) on Friday February 24, 2012 @05:32PM (#39153023) Homepage
        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.
      • by HapSlappy_2222 (1089149) on Friday February 24, 2012 @06:32PM (#39153715)
        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.
      • How about we keep contracts contracts and hold them to the contract you signed up under. If they want to do something else, then they can do that for new contracts, but the existing contracts have to stay intact until terminated. If they breach the contract with stuff like intentionally not delivering the service they are contractually bound to deliver, then you sue their pants off but the contract is breached and done with. No more of this insane "sign here but we can change it on you at any time just b
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      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.

      I don't disagree with the sentiment, but the law of unintended consequences applies as well. Suppose the law changes, making it illegal to modify a contract without active two party consent (i.e. none of this 'if you used it after we change the contract, you implicitly agree to the new rules' crap). The logical conclusion of businesses trying to make money by providing a service would be to limit contract lengths. Now, you get to sign up for a year of service (more likely 6 months) at agreed upon rates,

    • by fred911 (83970)

      Additionally suprising is how this user got a court to hear the case. Most EULAs have a clause that forces a litigant to binding arbitration.

      It will be a long time and real costly before he sees a dime from this judgement, if ever.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        I hate this sort of rubbish. People always think "binding arbitration" clause, with disregard that it's illegal to have "binding arbitration" as it circumvents several laws.

        Arbitration is NEVER binding. You ALWAYS have the right say you disagree with the arbitration. You will be required to go through the motions of arbitration, but that doesn't mean you have to live with the outcome. With a house I'd contracted to be built, the company declared bankruptcy while building it, I felt this was breech of co

        • by gnick (1211984)

          You ALWAYS have the right say you disagree with the arbitration. You will be required to go through the motions of arbitration, but that doesn't mean you have to live with the outcome.

          Right - Hire a lawyer, take a dozen man-hours off of work, travel to wherever the "motions" are taking place, listen to non-sense, and then hope that you get your $850 back to recover part of your costs. It's noble, but only makes sense for the big game, not for the small rip-offs where the fat cats make their money.

      • by chrismcb (983081)

        Most EULAs have a clause that forces a litigant to binding arbitration.

        So you are disputing the EULA... But in order to dispute the EULA you have to abide my the EULA? Yeah I don't think it works that way. Take them to court.

    • 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.

      I'm thinking that even if you made your own cell carrier, that you'd still be upset with the service you provided yourself.

      Guaranteeing "unlimited use" forever, in spite of how the market and usage patterns change, is just impossible. It's like your Natalie Portman dream plus hot grits. If you want to argue that AT&T should have never made such bogus claims in the first place, then I could agree with you. If you think you are justified to take 30% of the bandwidth of your tower just so you can run a N

      • by sjames (1099) on Friday February 24, 2012 @06:49PM (#39153883) Homepage

        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.

        • I would just like them to explain how data caps help them. As I understand it, the problem is that there are a couple of peak usage times every day where congestion is a problem. Throttling heavy users will only help this situation if their heavy usage coincides with the periods of congestion. If, instead, the heavy users are using the bits watching Netflix late at night, throttling them won't help.

          Somebody who saturates their network connection from midnight to 6 am every day is less of a burden on the net

          • by sjames (1099)

            There seems to be a general trend towards using data transfer as a proxy for peak rates even though it is only poorly correlated.

            OF course they could just be greedy and making the same bad assumption that all demand is perfectly inelastic like the *AA does.

  • by Russ1642 (1087959) on Friday February 24, 2012 @05:07PM (#39152587)
    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.
    • by slapout (93640) on Friday February 24, 2012 @05:08PM (#39152617)

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

      • by Russ1642 (1087959) on Friday February 24, 2012 @05:18PM (#39152785)
        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.
        • In addition, they could also have published clear specifications on when this throttling would occur and relaxed just how limited it was.

        • by gl4ss (559668) on Friday February 24, 2012 @06:05PM (#39153473) Homepage Journal

          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).

        • Neither does a study in future usage projections, but they should have done that 10 years ago, too.
        • by gman003 (1693318)

          Here's my modest proposal:

          (Deliberate) throttling is a result of not having enough resources to allow all your customers to use your product/service fully. It is sometimes necessary, in the case of truly explosive growth in usage.

          But, adding more users to an already overused service is tantamount to false advertising. If you say "25mbps", people expect to be able to use that fully.

          Therefore, I would allow companies to engage in throttling, but forbid them to add any new subscribers while the throttling is i

      • by forkfail (228161) on Friday February 24, 2012 @05:26PM (#39152937)

        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?

        • 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.

          The perfect slashdoter analogy.

          Much better than car analogies. Long live restaurant buffet analogies!

          • by gnick (1211984)

            The perfect slashdoter analogy.

            Much better than car analogies. Long live restaurant buffet analogies!

            Agreed - This sounds exactly like a chain-restaurant all-you-can-eat crab night. "You'd like more? I'll be back in 30 minutes w/ 2 more legs and 30 minutes after that to ask you if you'd like another 2."

            Let's try cars: How about "A full tank of gas for as long as you can drive - With a free sheet to use as a sail for any miles after that!"

      • by camperslo (704715) on Friday February 24, 2012 @05:31PM (#39153003)

        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.

      • by ackthpt (218170)

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

        Building your infrastructure does nothing good for short-term profit, which is what Wall Street and Electronic Trading are all about.

        Great for long-term, but it's all about leaving that for the next CEO to wheedle out of banks and assauge fears of robo-investors to raise capital for investment. Us landlubbers are mostly still on copper because it costs money to upgrade to glass. And why upgrade when you can make the same money on the same old crap?

        Now, if there were real competition in the market, AT&T

      • by jamstar7 (694492)
        Far easier and cheaper to just throttle everybody. Every data network in the US is oversold for capacity. If everybody used the full capacity 24/7 that 'they pay for', they'd need hundreds of times the network that they have in place right now.
      • by wernst (536414)

        If the network is so limited, they shouldn't be selling devices where network access is marketed as the primary feature.

  • by g0bshiTe (596213) on Friday February 24, 2012 @05:16PM (#39152767)
    FTFA

    Companies with as many potentially aggrieved customers as AT&T usually brace themselves for a class-action lawsuit. But in its subscriber contract, the Dallas-based company prohibits customers from taking their complaints to class actions or jury trials. The agreement specifies that customers must go to arbitration or small claims court instead. The Supreme Court upheld that clause last year.

    Is AT&T now an LLC? How can that clause hold up?

  • by Anonymous Coward on Friday February 24, 2012 @05:19PM (#39152791)

    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.

    • by forkfail (228161) on Friday February 24, 2012 @05:46PM (#39153253)

      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.

      • by idontgno (624372)

        I always thought I could set up an outstanding and wildly profitable "All you can eat" place. Suckers ^w Customers would get their first plateful, and then I'd throw them out, telling them "That's all you can eat. Beat it."

        And if they get uppity, I'd prove that they are no longer capable of eating by breaking their jaws.

        But, alas, you can't do things like that in the real world. Just services and software.

    • Re: (Score:2, Informative)

      by eth1 (94901)

      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.

      Well... that IS in fact what happens when everyone is driving too much... The rental agency is happy to rent you a Corvette for lots of money that can do almost 200MPH, in spite of the fact that most roads are "throttled" to 30-70MPH. And if there are too many people driving, you might only get 5MPH.

      • by Mitreya (579078)

        The rental agency is happy to rent you a Corvette for lots of money that can do almost 200MPH, in spite of the fact that most roads are "throttled" to 30-70MPH. And if there are too many people driving, you might only get 5MPH.

        Sorry, how is this "informative"? No one is complaining that they got throttled because of network overload or state-based network link regulation (your analogy). People are complaining of being throttled after using up 3Gigs of data (or so). In your analogy it'd be after your first three hours of driving the Corvette, regardless of speed limits or road congestion.

  • by PatPending (953482) on Friday February 24, 2012 @05:20PM (#39152817)

    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?

    • by MickyTheIdiot (1032226) on Friday February 24, 2012 @05:24PM (#39152877) Homepage Journal

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

      • by jd2112 (1535857)

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

        They are, Show up to court with a legal department the size of AT&T and you will be treated the same.

    • by Russ1642 (1087959) on Friday February 24, 2012 @05:24PM (#39152883)
      Going before a judge isn't third party arbitration. Is it?
    • by Anonymous Coward on Friday February 24, 2012 @05:25PM (#39152905)

      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?

      • Good point. IANAL; my understanding is: in small claims court one can't sue for punitive damages, just actual damages, so this is apparently how the judge arrived at the amount. Then again, isn't $85 greater than what he was paying per month anyway, so he must be getting some "extra" money above and beyond his actual damages, right?
        • Good point. IANAL; my understanding is: in small claims court one can't sue for punitive damages, just actual damages, so this is apparently how the judge arrived at the amount. Then again, isn't $85 greater than what he was paying per month anyway, so he must be getting some "extra" money above and beyond his actual damages, right?

          The contract probably was $85 a month. AT&T never sold $30 unlimited Internet for mobile phones. It was sold on top of a plan.

      • by gl4ss (559668)

        if he had gone to arbitration, he wouldn't have won, so the judge should also have made this a case about that and award him the ten grand he would have gotten in arbitration(...IF he had won there..).

    • by X0563511 (793323)

      So you're saying a contract can override a decision by a judge? That doesn't seem right.

    • by guspasho (941623)

      Talk about a double standard. When the RIAA or MPAA sues their customers, huge - HUGE - punitive damages are involved. But when a customer sues a big corporation like AT&T, there's no punitive damages, and the required award is even disregarded in favor of something resembling actual damages? Where's the disincentive that's supposed to keep AT&T honest?

    • by scorp1us (235526)

      It was during the New Deal that the judicial modification of contracts was hotly debated. The jurisprudence was created that judges can indeed alter contracts with a stroke of their pen. "Pray [they] do not alter it any further"

    • by Jaytan (1163393)

      Small claims court isn't arbitration.

  • My ISP did not upgrade my dsl speed to what a new user would get. I noticed one day while looking at their data plans that I was not getting the 3mbits I was supposed too, far from it in fact 700kbits. I had to call them and have them and tell them to increase it. I think that says a lot about the industry.
  • I get 5GB per month plus free Wifi HotSpot tether for only $30 a month. They may not have iPhones, but who cares if it's going to cost a fortune to use it.
    • by fred911 (83970)

      So buy an Iphone or an Android or whatever device you want. Sounds like a decent price on the bandwidth. Does it matter what device you use?

      btw, I have unlimited, unthrottled 3.5g service for the equivalent price of $23, in SA. I absolutly abuse the service, torrenting, tethering, running an ap, using voip even swapping the sim to another device and I dont use any voice services they sell. All on a prepaid sim. I've never had a problem.

  • A big oops for AT&T (Score:5, Interesting)

    by MobileTatsu-NJG (946591) on Friday February 24, 2012 @05:31PM (#39153001)

    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.

  • Bout fucking time.

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