AT&T offers iPhone user a settlement in throttling case

AT&T has offered a settlement to the iPhone user who took the wireless giant to small claims court over its throttling practices for unlimited data users.

Last week AT&T sent a letter to Matthew Spaccarelli, a 39 year-old truck driver from Simi Valley, Calif., who sued AT&T and won his small claims case against the company last month. In the letter, AT&T didn't say whether it would offer him more money. But the company threatened to shut off his service if he didn't sit down and talk with them. The company reminded him that he had violated the company's terms of use by using his iPhone to tether his iPad. AT&T asked Spaccarelli to sign a confidentiality agreement before terms of the deal could be discussed further.

The news was first reported by the Associated Press.

In a statement sent to CNET, AT&T said it had contacted Spaccarelli after he had first reached out to AT&T.

"Mr. Spaccarelli reached out to us to initiate a discussion, and naturally, we responded to him to hear what was on his mind and discuss his data usage," AT&T said in a statement. "Mr. Spaccarelli has said he tethers a second device to his smartphone, which is something that our unlimited data plans don't allow. For customers who tether, we have plans that allow them to do just that."

In a phone interview with CNET, Spaccarelli said he had contacted AT&T to find out how he could get the $850 that the judge had awarded him in damages. He said he was not seeking a settlement with the company. And he was surprised that AT&T wanted to talk to him, given that the company had already lost the case and has not yet filed an appeal. After consulting with an attorney, he decided not to sign the confidentiality agreement that had been sent to him.

"This isn't really about the $850," he said. "I guess they could offer me more money. But I don't really care about that. I just want to get the service that I've been paying for and that service is supposed to include unlimited data."

Spaccarelli effectively argued in court that AT&T purposely slowed down the data speed for his iPhone, despite the fact that he was subscribed to an "unlimited data" plan. The service was slowed after he had used between 1.5GB and 2GB of data during a single billing cycle.

AT&T, which now offers new customers a tiered data service that offers 3GB of data per month for the same price as the unlimited service, has been slowing down what it calls heavy data users since last year. The company changed its policy when it noticed that a disproportionate number of customers were using most of the data on its network.

So the company instituted a new policy. It continued to allow people to keep their unlimited data plans, but it slowed down the top 5 percent of data users each month. Customers were outraged at the change. And rightfully so. AT&T's policy was vague and didn't offer insight into how it calculated the top 5 percent of users.

Just last week, AT&T changed the policy once again. It now slows down users when they go over 3GB of data in a given month until the next billing cycle begins.

Spaccarelli said he doesn't want to terminate his AT&T service, since AT&T is the only wireless service that operates reliably where he lives. He admitted that he has tethered his iPad in the past. But he said he hasn't done it in several months.

AT&T has until the end of the month to file its appeal.