Mobile phone service providers are reeling in the face of a new boldness from their consumers as to the extent they can be held accountable for the contracts they enter into with their customers. More and more customers are quietly being let out of mobile broadband and data contracts to avoid a new legal aggressiveness that people are feeling when being told that they must adhere to contracts that the companies themselves can’t or don’t keep. Consumers can thank AT&T for opening the flood gates on legal recourse even though individuals had already been getting satisfaction by making a lot of noise.
In October of 2011 Sprint ended their unlimited 4G data plans for their mobile broadband customers, and in the process joined the fray. it's no incidents that right before Sprint's decision to end unlimited mobile broadband data, they committed to buying $15 billion worth of hardware from Apple. As you might imagine, they didn't end unlimited data for their phone customers. The amount of people that on the unlimited data plans went above 5%. Sprint decided to make the big, business friendly decision to end the unlimited data plans in favor of graduated increases in fees for increases in use. Now they face the unpleasant consumer relations issue of having contracts with customers that they no longer plan to honor.
This is especially upsetting to Sprint mobile hotspot and broadband customers that signed up with Sprint specifically for the unlimited 4G plans. These plans were about all that Sprint had to stand above the crowd, in other words the unique selling proposition. The limiting of the data is applied to things like iPads/Tablets, Wireless Data Modems and the portable 4G Mobile Hotspots, Notebooks and portable routers. Even so, the truth remains they’re not honoring previously signed contracts.
Customers are already threatening to take the company to court, not to mention abandoning their plans. Of course mobile providers are in the precarious position of trying to collect their fees, and keep disgruntled customers from getting confrontational. Those paying attention to the issue know that they are not totally without recourse in their quest to get Sprint to keep the terms of the contract.
AT&T recently did the exact same thing, with a different twist. They stopped offering their unlimited 3G plans to legacy customers who had signed contracts clearly indicating "unlimited data", and when the grandfathered subscriber’s data use started getting high they started “throttling" those users. AT&T claims that they did not eliminate unlimited data, but nearly reduced speeds of access when excessive amounts of unlimited data were consumed. Will this may make sense when looking at the argument from a legal standpoint, since they are not technically "Limiting Service" - but for users who have encountered the throttling, most can tell you that the throttling is so severe that it makes using most modern parts of the Internet nearly impossible to enjoy.
According to some investigative research, the AT&T formula for the throttling seems to actually be quite simple. Speeds are simply reduced to that of 2G (EDGE) networks, or about 0.15 Mbps, or about 90% slower than their marginally fast 3G service. 2G networks simply cannot stream most video or higher-quality audio at all. 2G networks were developed around 9 years ago, a time when the content on the Internet was vastly different than it is today. Many 3G networks still struggle to keep up with modern high-bandwidth, interactive Web experiences, so you can imagine how awful to 2G works in a similar setting.
Some AT&T customers who were grandfathered into unlimited data plans have not taken this action lying down. For one user this was enough to take AT&T to court. A Federal judge decided that it was wrong to slow down the service when the contract said unlimited, and agreed with the plaintiffs that AT&T did indeed "materially alter" the terms of his contract. Fed up AT&T customers like Matt Spaccarelli won $850.00, an amount that is not even a grain of sand on "Beach AT&T", but is more than enough to cover any contract cancellation fees AT&T would have billed him.
This has an ominous overtone for the wireless provider's interest because some of the contractual language of the contracts that was meant to limit customers ability to sue has an unforeseen side effect. Almost all mobile service contract take away the option of class action suit or jury trials in the effort to cut out huge compensatory or punitive damages and only allowing for basically lost service and documented personal loss.
However AT&T’s 15-17 million users on the unlimited 4G plan now have precedence and the flood gates are wide open for small claims cases. These are by far a cheaper option for the customers when it comes to legal fees. It seems that legal contract writers for the companies out smarted themselves.
This remedy exists for consumers that know of it. And not a whole lot of people are looking. Indeed if you’re just looking to get out of an unwanted contract or to get a reimbursement for errant charges you might do might do well do pester the customer service office into caving. As I said, the climate is pretty allowing right now. If even a fraction of the customers that have been jilted by both AT&T and Sprint on their unlimited 4G plans will chose the option of going to small claims court, then they’re in for a legal budget buster.
Now if you are of a mind to challenge your contract, keep in mind that in most states, contract law favors contracts. And if they’re going to have to take on consumers one on one then they are going to make sure that their contracts are paid when their solid.
So as with all things, make a good effort to pick the service you want. This is no guarantee that you won’t have the terms of the contract changed on you half way through. If this happens, then you should with diligence be able to bust a bad contract.
Soon all the old contracts for unlimited 3G and 4G will be for all practical purposes expired, and the unlimited data sales pitch will be a thing of the past. If you’ve been able to take advantage of unlimited 4G, then you are really one of the few that actually made out. With the onset of all the portable devices and more apps coming out data capacity will get a pretty premium and we can count of big mobile service providers to take advantage of every method they have to squeeze you for cash.
The lasting benefit is that the veil of invulnerability is now tarnished and beaten. The mobile companies contract systems are not as lock solid they once were.