AT&T pays $935 to settle iPhone throttling judgment

In a case that has become a public relations nightmare for it, AT&T Mobility (NYSE:T) has paid $935 to Matt Spaccarelli, the irate iPhone customer who won a small claims lawsuit in which he successfully argued that AT&T had broken its promise to provide him with "unlimited" mobile data service.

AT&T initially said it would appeal the February judgment from a California court, which awarded Spaccarelli $850 plus $85 in court costs. The company had also sought to negotiate a quiet settlement, with AT&T legal representatives Eagan Avenatti LLP sending a letter to Spaccarelli in which the company proposed a discussion but only if the talks remained private.

After bearing the brunt of considerable consumer criticism, the operator apparently had a change of heart, and on March 16 Spaccarelli, whose Twitter handle is @matthewspacc, tweeted a photo of the AT&T check he had received late that afternoon.

Spaccarelli filed his suit against AT&T because he noticed data speeds on his Apple (NASDAQ:AAPL) iPhone were being slowed after he had used 1.5GB to 2GB of data during his monthly billing cycle.

The settlement is the latest in a series of developments around AT&T's throttling practices. AT&T this month tweaked its throttling approach and now will throttle data speeds for unlimited HSPA users after 3 GB of usage and LTE users after 5 GB of usage, with subscribers' speeds remaining slowed throughout the rest of their monthly billing cycle. AT&T says it throttles some 5 percent of its smartphone customer base after they become guilty of excessive data usage.

Accoding to an article on Mashable, Spaccarelli reported that despite the payout, AT&T is still throttling his service, resulting in a 0.31 Mbps download speed on Saturday. Mashable wrote that Spaccarelli intends to use the AT&T settlement money to cancel his cell phone service before his contract is up and to attend the AT&T stockholders meeting next month in Salt Lake City.

Despite its desire to move customers from unlimited to tiered data plans, AT&T has been confirming that owners of the original iPad with 3G service who were on its unlimited data plans will be allowed to carry those plans over if they upgrade to the new iPad with LTE. Of course, their service will be throttled if they consume 5 GB of LTE data in a month. It's unclear how many iPad users still have AT&T's unlimited service plan.

For more:
- see this Mashable article
- see this article
- see this WebProNews article

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