Class Action: AT&T Caps Data Speeds for Unlimited Data Plans

AT&T was hit with a class action lawsuit Monday, alleging that the company intentionally slows down the data speeds for customers who have unlimited data plans once they consume a certain amount of data.

The AT&T class action lawsuit comes on the heels of a $100 million fine the Federal Communications Commission (FCC) hit AT&T with last week over the alleged practice.

Plaintiff Shannon Lilienthal of Alabama said that she pays for AT&T’s unlimited data plan to use with her Apple iPhone, and she started to notice that toward the end of each billing cycle that her data speeds started to slow down.

However, she says that she didn’t know why this happened until she learned about the FCC fine that AT&T was hit with over allegedly deceiving customers and reducing the speed for customers with unlimited data plans.

In the course of its investigation, the FCC learned that AT&T allegedly “capped data speeds for those subscribers after they used a certain level of gigabytes of data within a billing cycle.”

According to the AT&T class action lawsuit, “AT&T did this, in disregard of its contract with Ms. Lilienthal, for the simple purpose of making more money. Ms. Lilienthal brings this action representing not only herself, but also consumers across the country to compel AT&T to live up to the promises it made to its customers.”

After the FCC investigated AT&T, it found that the mobile phone provider was not abiding by the Open Internet Transparency Rule that the federal agency adopted in 2010, “which mandates that broadband access providers, such as AT&T, disclose accurate information sufficient to enable consumers to make informed choices regarding their use of broadband Internet services and to ensure they are not misled or surprised by the quality or cost of the services they actually receive.”

The FCC released the findings of its investigation on June 17, in which it found that “AT&T apparently willfully and repeatedly violated the Commission’s Transparency Rule by: (1) using the misleading and inaccurate term ‘unlimited’ to label a data plan that was in fact subject to prolonged speed reductions after a customer used a set amount of data; and (2) failing to disclose the express speed reductions that it applied to ‘unlimited’ data plan customers once they hit a specified data threshold.”

AT&T began offering unlimited data plans to customers in June 2007. In June 2010, the company stopped offering these plans to new customers, but to this day allows customers who already had unlimited data plans the option to renew these plans.

According to the AT&T class action lawsuit, “in 2011, AT&T implemented its Maximum Bit Rate (MBR) policy, under which AT&T capped the maximum speed throughput that unlimited data plan customers experienced once they used a set amount of data in a billing cycle.”

The MBR was applied to “4G LTE customers once they used five gigabytes of data during a billing cycle and to 3G and other 4G customers once they used three gigabytes of data during a billing cycle.”

Lilienthal wants to represent a class of Alabama AT&T customers “who, since 2011 when AT&T allegedly began throttling mobile data speeds, entered into or renewed their contract with AT&T for a mobile use plan that included an unlimited wireless broadband data plan.”

The AT&T class action lawsuit is charging the cellphone carrier with breach of contract, negligent misrepresentation, and unjust enrichment.

Lilienthal is represented by D. Anthony Mastando and Eric J. Artrip of Mastando & Artrip LLC, and Douglas C. Martinson II of Martinson & Beason PC.

Counsel information for AT&T is not yet available.

The AT&T Unlimited Data Plan Class Action Lawsuit is Lilienthal v. AT&T Corp. et al., Case No. 5:15-cv-01045, in U.S. District Court for the Northern District of Alabama.

UPDATE: According to court documents, this case was dismissed on August 28, 2015, and went into arbitration as dictated by the AT&T contract that consumers signed, which requires them to arbitrate claims individually.