AT&T Will Not Face Class Action Lawsuit For Misleading Customers Regarding Data Throttling

United States District Court Judge Edward Chen of the Northern California District Court has issued a ruling that AT&T will not be facing a class action lawsuit for allegedly misleading its subscribers regarding its promised unlimited data that turned out to be throttled when users go over 3 gigabytes of data in a given month. According to the judge, all subscribers that were affected had signed agreements that allowed the second biggest wireless carrier in the United States to send disputes (like this one) to individual arbitration. 

For those who can not keep up with the legalese, the bottom line is that those affected customers, after signing contracts with AT&T, basically can not sue the wireless carrier. The affected customers can still technically proceed with individual arbitrations, but doing so would be very, very costly. 

For the benefit of those with short memories, all the controversy began when AT&T decided in 2011 to start throttling its subscribers who signed up under the wireless carrier’s unlimited smartphone data plan. Intriguingly, this move is also the basis of another lawsuit brought by the Federal Trade Commission (FTC) against the mobile service network provider, which as of now is still currently pending in federal court.

As alleged by the FTC, from the years spanning 2011 to 2015, AT&T had throttled over 3.5 million of its subscribers who went beyond their monthly allowances of 3 gigabytes of data or 5 gigabytes of data (it varies depending on the customers’ mobile devices). As reasoned by the wireless carrier, it decided to implement its policy after a significant increase in mobile broadband use brought about the introduction of the iPhone device by Apple. It might be worth mentioning that recently, AT&T has changed its throttling practices and now only slows down subscribers who go beyond 22 gigabytes in a given month. Also, the wireless carrier now only throttles those subscribers when experiencing network congestion.

AT&T has argued that the FTC has no jurisdiction because broadband is now considered a common carrier service, and the agency has no authority over common carrier services. But Judge Chen has rejected AT&T’s argument, ultimately ruling that broadband was not considered a common carrier service until the Federal Communications Commission (FCC) enacted its net neutrality rules last year. The wireless carrier has appealed this decision by Judge Chen to the 9th Circuit Court of Appeals, which should conduct a hearing about the matter in June later this year.