March 20, 2012 at 11:55 AM ET
AT&T has sent a letter offering a settlement to an iPhone user who beat them and was awarded $850 in a small claims court with his arguments against the throttling -- slowing down -- of his "unlimited" data plan.
The wireless goliath sent Matt Spaccarelli a letter on Friday proposing talks to settle the matter -- and also threatened to shut down his service if he didn't agree to do so, according to The Associated Press, which was sent the letter by Spaccarelli. (The company said Spaccarelli violated his contract by using his iPhone to tether devices for Internet access.) Spaccarelli has not agreed to the non-disclosure provisions of the letter and has instead declared he has no interest in a settlement.
Update (Tuesday, 12 p.m. ET): AT&T clarifies that with its offer of negotiation, it included a voluntary non-disclosure agreement which is part of its standard procedure. If Spaccarelli agreed to the talks, and signed the NDA, and then broke the agreement, that is when his service would have been shut off, but only if he agreed to the terms of the NDA and then broke them. As it happened, he did not agree to non-disclosure.
Spaccarelli, who lives in a rural area in Simi Valley, Calif., won the $850 award on Feb. 24 in small claims court after sending a subpoena to AT&T requesting information on the tower closest to his house and the average speed of users on that tower. He argued that AT&T promises unlimited data but buries stipulations about slowing down data speeds and charges in user contracts.
He has posted documents related to his winning arguments online, including a 196-page FCC report about network management and reducing speeds and the notes he used to make his statement to the judge.
Here's the gist of his outrage:
Stop advertising that you are the fastest wireless company. Everywhere you look there are ads claiming that AT&T is the fastest, and they are until they ﬂip their switch and slow you down. Imagine you buy a Ferrari with a published speed of over 200mph. You spend a year or two going real fast. Then you take it in for an oil change and when you get it back it won't go over 45mph. And they claim that you might have an accident because you have been driving to fast (based on the computer in the car) so just in case you might crash they limit your speed. AT&T has not and cannot show that my usage has ever caused damage to their network or caused other people to slow down.
For Spaccarelli, the throttling really affected streaming capabilities:
Let me break it down in simple terms. If you get 2 Gigs and you like watching Netﬂix or Hulu, 2 gigs will get you 13 minutes a day before the unlimited plan gets slowed down. That is based on AT&T's claim that Netﬂix uses 5.1 megabytes per minute. 200 minutes is 1 gig 400 minutes is 2 gigs. 400 minutes divided by 30 days gets you 13.3 minutes. Seems real low to me.
AT&T has appealed the decision, but also took the step of trying to remedy the situation away from the courts, a tactic that has not worked with Spaccarelli, who urges others to follow suit.
A PublikDemand page urges others to support Spaccerelli and keep up the pressure against AT&T to end its throttling practices and has picked up more than a thousand direct supporters, which could extend indirectly to a network of nearly 240,000 people.
A few weeks ago, AT&T revisited the controversy over its unlimited plans to make it clear "customers with a 3G or 4G smartphone -- who also still have [AT&T's] unlimited data plan -- will see speeds reduced if they use 3GB (gigabytes) of data or more in a billing cycle."
AT&T will also reduce data speeds for those who have a 4G LTE smartphone and are also on those plans "if usage is 5GB (gigabytes) or more in a billing cycle."
In both cases, "speeds will return to normal at the start of the next billing cycle."
Unlimited data plans have met with consternation from many customers at other carriers, who have found they're not so limitless after all. Last year, Sprint stopped offering unlimited 4G to its customers who used its data service for tablets, netbooks, USB cards or mobile hotspot devices. And T-Mobile has also imposed speed bumps on its unlimited plans for those who go over certain increments, so that it may technically be unlimited data, but not at full speed.
But for the most part, you probably don't use as much data as you might think you do.
A study released last year found "60 percent of wireless data customers used less than AT&T’s and T-Mobile's minimum 200-megabyte data bracket" — use that also rang true with those who signed up with unlimited plans at carriers such as Sprint.