AT&T offers iPhone user a settlement in throttling case in exchange for silence

“AT&T is offering to discuss a settlement to an iPhone user who won a small-claims case that alleged the company was slowing down his ‘unlimited’ data service,” Peter Svensson reports for The Associated Press.

“Last week AT&T sent a letter to Matthew Spaccarelli, a 39 year-old truck driver from Simi Valley, Calif., who sued AT&T and won his small claims case against the company last month,” Reardon reports. “In a letter dated Friday, a law firm retained by AT&T Inc. is threatening to shut off Matthew Spaccarelli’s phone service if he doesn’t sit down to talk. The phone company doesn’t say if the settlement would involve money beyond the $850 award the Simi Valley, Calif., resident won from the company in small claims court on Feb. 24.”

Reardon reports, “AT&T has about 17 million smartphone customers on ‘unlimited’ plans, and has started slowing down service for users who hit certain traffic thresholds. Spaccarelli maintained at his Feb. 24 small-claims hearing that AT&T broke its promise to provide ‘unlimited’ service, and the judge agreed. Spaccarelli has posted online the documents he used to argue his case and encourages other AT&T customers copy his suit. Legal settlements usually include non-disclosure agreements that would force Spaccarelli to take down the documents.”

Svensson reports, “In its letter, AT&T asked Spaccarelli to be quiet about the settlement talks, including the fact that it offered to start them, another common stipulation. Spaccarelli said he was not interested in settling, and forwarded the letter to The Associated Press.”

Read more in the full article here.

MacDailyNews Take: LOL! What we wrote on March 1:

AT&T is banking that those with “unlimited” data plans won’t take them to the only court our contracts allow (small claims court) where, as the related article below indicates, you have a reasonable chance of winning. According to The Associated Press, AT&T has about 17 million “unlimited” smartphone subscribers, most of whom use iPhones. $850 times 17 million equals $14.45 billion.

Make ’em pay.

And, in response to a comment by a reader – “17 million x 5% throttled and can actually prove damages = 850,000 people, $722,500,000 in damages” – we wrote:

Yes. And we’d like to see AT&T hire 850,000 lawyers to defend themselves.

Wonder how much that would cost? Or would AT&T representatives simply not show up?

Hey, guess who wins in small claims court when only one party shows up?

Sometimes, basic logistics can win the day.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related article:
AT&T customer wins $850 in iPhone ‘throttling’ case – February 24, 2012

24 Comments

  1. Oh man I am going to
    Court this whole throttling has made me sick as I have no access to wifi and no high speed Internet at work or home my iPhone was my only way to enjoy good speeds WAS!!! Now I get good speeds for a week or two then a nice shiny iPod touch … AT&T should be ashamed of themes elves to treat the ones who stood by them in the beginning this way !!! Another year and a half the good bye and hello Verizon or sprint !!!

  2. haha.. awesome.

    my settlement terms will be- unlimited data and free tethering.

    same price, and in return i’ll ignore the fact i need a microcell for the phone to work in my house, the countless call failures at the most inopportune times ever, and pathetic SF coverage for the last 5 years (although it’s a lot better in the last year).

    how about them apples, att?

      1. If the other carriers had the bandwidth and the ability to talk and use data at the same time (a feature I use too often), I’d seriously consider switching. But AT&T is the only carrier that has the bandwidth to provide fast unlimited service per my grandfathered agreement. They should honor that.

  3. Screw the customer long enough and…

    A new name will enter the competition…I think I hear the sound already…

    Apple’s planning department looking at the options to create the ABand wireless service.

  4. In a recent Town Hall meeting, an Apple employee complained to Tim Cook about AT&T’s txt msg and other rates increase. Although I don’t recall Tim Cook’s exact words but it’s something like “… there are other options and you should vote with your wallet…”

  5. The cell phone industry is begging for some company to come along and be disruptive by figuring out a way to provide phone service with something like international satellite wifi.

    Where could we find a company with big pockets, big cajones and big disruptive tendencies?

  6. First you have to prove throttling before you can win in court. This is something I have yet to experience and therefore unlimited or not, I have no leg to stand on, and nothing to complain about.

    17 million times $850, is a pipe dream. If it were that bad, Congress would step in. It’s more like, 10K $850.. a drop in the bucket. I suspect it’s not even that bad.

    I know someone who was throttled at 800M d/l. We discussed this and can’t figure out what triggered it. He tweeted his experience and – nothing. My friend would be a good case to take to small claims.

  7. IANAL, however whoever made the statement that only the users throttled could sue don’t understand the situation or the law. (or both)

    By threatening to throttle an arbitrary group of users (the top X%) with no hard threshold, AT&T has created a situation where a reasonable person might limit their use of their “unlimited” plat so as not to be int the top X% of AT&T’s users and therefor be throttled (which would make using the phone difficult to use for something like navigation (where maps load dynamically))

    By “threatening to throttle” AT&T has caused harm (denied use) of the network that users had a contract with AT&T to use.

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