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Service Outage, More Lawsuits for AOL

Besieged online service faces four more class-action filings as router goes down during maintenance.

By Glenn McDonald, PCWorld   

In the midst of scrambling to respond to a class-action suit filed by five California users this week, AOL experienced a system outage yesterday that shut out many users for about four hours. AOL traced the outage to a failed router.

If that wasn%squott bad enough, two more class-action suits were filed in New York. Together with a third New York suit, another in Illinois and Monday%squots California filing , AOL faces five lawsuits.

The class-action suits hinge on the allegation that AOL is unable to provide the %dquotunlimited usage%dquot promised by its $19.95/month flat-rate pricing plan, implemented in December. The California suit accuses AOL of fraudulent misrepresentation, claiming AOL didn%squott have the equipment to handle the increased usage at the time it rolled out its flat-rate program.

AOL expects to prevail in the lawsuit. %dquotAlthough we understand the frustration some members are experiencing at not being able to obtain immediate local access during peak periods, the average AOL member gets more value under unlimited pricing than ever before,%dquot said a company spokesperson in a written statement.

AOL says that yesterday%squots outage had nothing to do with the increased usage rates due to the flat-rate plan. Though outages come and go, the class-action suits could become a lingering headache for AOL.

%dquotThis could take quite a while,%dquot said Chris Wolf, an attorney who specializes in technology law with the firm Proskauer, Rose, Goetz, and Mendelsohn in Washington, D.C. %dquotIt will wend its way through the system.%dquot

Wolf, who expects still more lawsuits to be filed against AOL on this issue, said the charge of fraudulent misrepresentation will be difficult to prove in the California case. The amount specified in damages -- reportly more than $20 million -- seems high, a typical tactic in a class-action case, he added.

AOL%squots flat-rate plan created a huge surge in both new subscribers and the amount of time users spend online. AOL says that it is currently spending $250 million in an effort to boost network capacity.