The U.S. District Court in Northern California recently handed AT&T a win against a group of consumers seeking to pursue a class-action lawsuit against the carrier for its practice of throttling the data on supposedly “unlimited” plans.
Though the customers argued the arbitration clause in their AT&T contracts violated their First Amendment right to petition the court for redress of grievances and said individual arbitration in small claims court would not provide an “adequate forum” for their complaints, Judge Edward Chen sided with AT&T in a ruling that cited the Supreme Court’s 2011 decision to uphold AT&T’s arbitration provision.
“Because there is no state action in the instant case, Plaintiffs lack a viable First Amendment challenge to the arbitration agreements,” Chen wrote in court documents posted by ArsTechnica. “As Plaintiffs have not challenged the arbitration agreements on any other bases, the Court grants AT&T’s motion to compel arbitration.”
But while Chen’s decision may send the disgruntled AT&T consumers back to the drawing board – or, at least, small claims court – AT&T still faces challenges to its throttling practices brought by the U.S. Federal Trade Commission (FTC) and Federal Communications Commission (FCC).
In October 2014, the FTC lodged a formal complaint against the carrier, alleging AT&T “misled” customers in charging for “unlimited” data while slowing user data speeds by up to 90 percent.
The FTC has alleged that starting in 2011, AT&T began throttling the data of unlimited plan customers after they used as little as 2 GB of data and collected Early Termination Fees (ETF) from customers who canceled their subscriptions after their unlimited data was throttled to 2G speeds.
The FTC said it wants to stop AT&T from “deceiving” customers about its use of throttling on unlimited data plans and is seeking refunds for customers who were charged ETFs.
As with the consumer complaint, the FTC case was filed with the U.S. District Court for the Northern District of California.
AT&T’s General Counsel at the time called the accusations “baseless.”
For its part, the FCC is seeking to impose a $100 million fine on AT&T, also alleging the carrier misled consumers about its unlimited data plans and throttling policies. The FCC has alleged the carrier “failed to adequately notify its customers that they could receive speeds slower than the normal network speeds AT&T advertised.”
The FCC’s Enforcement Bureau found that millions of AT&T customers were affected by data speed throttling and that data speeds were slowed on average 12 days out of every billing cycle.
By capping customer data at speeds much lower than normal, the FCC said AT&T violated the 2010 Open Internet Transparency Rule.
AT&T has said it will “vigorously dispute the FCC’s assertions” and argued it has been “fully transparent” with its customers.
Filed Under: Industry regulations