Data throttling brings AT&T to court, challenges practice

By Patrick Lambert March 14, 2012

Data throttling is becoming a common occurrence, with major cellphone providers slowing access to their customers when they use too much bandwidth. News headlines have featured AT&T for that reason, as they send messages to many users who’ve subscribed to so-called "unlimited" plans, yet still surpass the company's unspoken soft limit.

Last month news surfaced that a single man, Matthew Spaccarelli, managed the unthinkable in small-claims court against AT&T, winning $850 against the company. The judge found an unlimited service contract shouldn't then be subject to such limits; AT&T is now trying to settle the case in a hurry, and in silence.

According to a letter the Associated Press received, the company is trying to silence Matthew and have him settle. The source explained the firm threatened to shut off his iPhone service unless he agrees to start talking settlement, while AT&T asked him not to disclose anything. Instead, he forwarded the letter to the AP, saying that winning in court was most important.

Most settlements include non-disclosure agreements which would then bare either party from talking publicly about the case, which AT&T most likely wish was the case here. By refusing to settle, however, he can stay in the news and incite awareness of his case, along with AT&T's throttling practices.

This one judgment may have been for a single user, but the same situation applies to thousands, perhaps millions of AT&T customers who were throttled at one point or another. AT&T could quickly find itself having to defend against numerous court cases, in which users nationwide follow Matthew's precedent and bring the cellphone giant to court.

The company recently said it would stop throttling the top 5% of users, and instead would apply the slowdown to all users after 3 GB of data used. In a way, this practice is more fair, since it doesn't penalize a group of users against others, but it's still limits imposed on a supposed unlimited option. It's unknown whether this would stand in court or not. But one thing is clear: AT&T doesn't want to find out, and risk paying a lot more to disgruntled customers.

Cellphone prices and data transmission have always been a touchy subject in the US. There's no question that many countries around the world get better bandwidth at a lower price. The companies here have long claimed that a lack of infrastructure and spectrum space prevented them from putting forward more competitive services, but many think that they are happy to keep the status quo and make more profits.

Edited by Braden Becker

TechZone360 Contributing Writer

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