AT&T Won’t Appeal Decision in Throttling Suit

AT&T won’t appeal after all a data throttling case it lost in small claims court to a customer, one of a growing number of lawsuits against companies for reneging on marketing claims.

The wireless carrier agreed Friday to pay $850 in damages and $85 in court costs awarded to wireless customer Matthew Spaccarelli by a small claims court in California in February, according to The Associated Press.

Following Spaccarelli’s victory, AT&T threatened to appeal the award if the disgruntled customer didn’t agree to a gag order in the case. Requiring the signing of non-disclosure agreements in damage award cases is a common practice by companies to prevent the people they’re paying off from talking about a case after it’s settled.

But AT&T wasn’t able to muzzle Spaccarelli, and the company is throwing in the towel anyways. AT&T isn’t giving any reasons for its change of heart, AP reported.

Free to talk about the case, Spaccarelli has created a website with information for the carrier’s customers who may want to file their own small claims against the company.

Spaccarelli, who has a contract with AT&T for “unlimited” data, took the company to court after it began throttling his data usage in accordance with a policy it implemented after he signed his unlimited data contract. That policy called for choking the data flow to customers with unlimited plans when they were in the top five percent of data users.

While the new data policy probably irritated many of AT&T’s customers with unlimited data contracts, a clause in those contracts prevents the customers from banding together to take the company to court.

To settle a dispute with the carrier, customers must enter binding arbitration or sue in small claims court. Spaccarelli chose the small claims route because it didn’t involve hiring a lawyer. It also doesn’t require parties in the proceeding to keep their mouths shut after a decision is rendered, as arbitration does.

Before the court, Spaccarelli claimed his phone was being throttled after reaching 1.5 to 2.0 gigabytes of data during a billing cycle. While voice calls and text messaging were relatively unaffected by the throttling, he conceded, Web browsing was painfully slow and streaming video nonexistent.

During the small claims session, AT&T argued that its actions were justified because Spaccarelli violated the terms of his contract with the carrier by “tethering” other devices to his smartphone. Tethering allowed those devices to connect to the Internet through his phone, which would increase Spaccarelli’s data consumption.

AT&T’s arguments didn’t sway Judge Russell Nadel. He ruled the carrier’s actions unfair and ordered AT&T to pay Spaccarelli for his estimated data usage for the remainder of his contract — $85 a month for ten months — plus court costs.

Lawsuits like Spaccarelli’s are becoming more common.

For example, a Los Angeles court awarded a Honda hybrid auto owner $9,867 because it said the company misled her about the gas economy of the vehicle.

A lawsuit has been filed against Apple, too, for the Siri technology in its iPhone 4S not living up to expectations.

Follow freelance technology writer John P. Mello Jr. and Today@PCWorld on Twitter.