AT&T Seeks Quiet Settlement in Data Limiting Case

AT&T found guilty of limiting data on iPhone, asks for quiet settlement.

ByABC News
March 15, 2012, 12:47 PM

March 15, 2012— -- It's an unlimited buffet. Just don't take more than one plate. That's what a Simi, Calif., man who sued his iPhone carrier AT&T says is the situation he faces as a heavy user of wireless data services.

Matthew Spaccarelli took the company to small claims court in California in January, alleging that AT&T had slowed his data capacity while he continued to pay for the unlimited data plan. AT&T slows or "throttles" their data capacity for top data users in some geographic regions.

Following the court judgment on March 2, which awarded him $850, Spaccarelli received a letter from AT&T scolding him for tethering his iPhone to another device and offering a settlement to resolve their dispute, so long as Spaccarelli was willing to keep quiet about it.

Spaccarelli has been very public and vocal about the lawsuit with AT&T and has encouraged others to sue the company as well.

He set up a website,, where he posted all of his court documents and advice to help others who might want to pursue their own lawsuits against AT&T. And then he worked with the website PublikDemand, which allows consumers to band together to complain about a company's policies, to set up a page about his lawsuit there. Spaccarelli's how-to guide for suing AT&T is now posted on that website, too.

"AT&T customers using as little as 1.5 gigabytes per month have been subject to throttling—creating painfully slow access to Web browsing and causing video streaming to not work at all," Spaccarelli wrote on PublikDemand. "It's not fair for AT&T to make a promise of 'unlimited' data to customers when they buy the phone while burying terms in their contracts that give the company the right to cut down data speeds and charge additional fees for increased usage."

Spaccarelli said he was not interested in a settlement.

"You settle before court," Spaccarelli said. "They sent a letter that has all this talk about settlement, but I had no interest. I just want to know, what is your next step, are you going to file an appeal, can they give me a head's up?"

Spaccarelli said he expects AT&T to file an appeal, which would allow the case to be heard in front of a judge with attorneys present.

"I'm just a dumb trucker, and there are going to be all these attorneys and I just got a personal injury attorney. But I think I could go up against any of them, because it makes sense to me and it made sense to one judge already," Spaccarelli said.

AT&T, however, told ABC News that Spaccarelli initiated the discussion and the company politely responded.

"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 spokesman Mark Spiegel wrote in an email to ABC News. "We typically enter into non-disclosure agreements when people want to discuss the settlement of pending disputes."

The company also threatened to end his phone service if Spaccarelli did not agree to the settlement discussions. Spaccarelli admitted to violating an AT&T user agreement when he tethered his iPhone with other devices.

"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," Spiegel said.

"It really is as simple as this," Spaccarelli said. "Number one: lacking any controls. And number two: boundless or infinite. Merriam-Websters dictionary definition of "unlimited." It's been around for so long I don't know why they don't know what it means. That really says it all," Spaccarelli said.

Both AT&T and Verizon, two major mobile carriers, implement throttling on heavy-data users. The policy slows down the amount of data users' phones can access at one time. AT&T has said recently that said "unlimited" users who exceeded 3GB per month would be throttled because they are in the top 5 percent of data users in our network, according to PC Mag.