How low can AT&T go? Customers retaining “unlimited data plans” that were discontinued in 2010 were throttled to as little as 127 kbps after using just 2 GB a month.

AT&T’s lawyers are asking a judge to accept media coverage exposing the company’s allegedly “secret” speed throttling policy for some of its wireless customers as a valid defense in a 2015 class action case that seeks to compensate some AT&T customers for misrepresenting its “unlimited data plan.”

AT&T last month asked the judge to have the long-running case thrown out, claiming AT&T well publicized its new speed throttling policy it imposed on a legacy unlimited data plan the wireless company stopped selling in 2010, but allowed existing customers to keep. By 2011, some customers still subscribed to the grandfathered unlimited plan started noticing data speeds plummeting to near dial-up if they used a lot of data. At first, AT&T appeared to impose a speed throttle on customers using over 10 GB of data per month, but by 2012, AT&T was accused of speed throttling unlimited customers after they used as little as 2 GB of data during a billing period.

The resulting class action lawsuit, filed in California, alleged that AT&T misrepresented its unlimited data plan as ‘unlimited,’ when in fact in practical terms it was not. The plaintiffs are seeking damages from AT&T to discourage the company from engaging in false advertising in the future, and to compensate customers that paid for an unlimited data plan that eventually became almost useless after customers used just over 2 GB a month.

AT&T’s defense partly relies on the company’s claim it extensively publicized changes to its legacy unlimited data plan as early as 2011, and the plaintiffs should have been aware of it. The Federal Communications Commission was aware of AT&T’s actions and just a month before the class action case was filed, the regulatory agency issued a notice of apparent liability to AT&T proposing a $100 million fine for unwarranted speed throttling.

AT&T’s attorneys have worked hard to stop the lawsuit over the last five years. In addition to claiming customers were notified of their excessive data usage through text messages and billing notices, AT&T last month sought to introduce a dozen media reports covering its speed throttling policy into the court record to convince U.S. District Judge Edward Milton Chen the plaintiffs don’t have a case and to get the lawsuit dismissed.

One of the news articles cited in AT&T’s May 14 filing was written by former DSL Reports’ author Karl Bode, who has been roundly critical of AT&T’s data caps for over a decade. Ironically, AT&T’s defense team is arguing Bode’s report, “AT&T Wages Quiet War on Grandfathered Unlimited Users” offers proof AT&T was not keeping its speed throttling policy “secret,” as at least one plaintiff claimed. Bode suggested AT&T had engineered its speed throttling plan to push grandfathered unlimited data plan customers off the plan in favor of more profitable plans offering a specified data allowance and overlimit fees.

Bode

“In other words, pay $30 for “unlimited” service where you’re actually only getting 2 GB of data before your phone becomes useless, or sign up for a 3 GB tier for the same price so you’re in line to get socked with the usage overages of tomorrow,” Bode wrote at the time.

His views have not changed in 2020.

“For nearly a decade AT&T has tap danced around the fact it misleadingly sold an ‘unlimited’ data plan packed with confusing limits. No amount of legal maneuvering can hide the fact that AT&T lied repeatedly to its customers about the kind of connection they were buying,” Bode told Stop the Cap! “Instead of owning its mistake, learning from it, and moving forward, AT&T’s now trying to point to critical news coverage from the era to falsely suggest consumers should have known better. It’s utterly nonsensical and speaks volumes about the lack of ethical leadership at a company that routinely sees some of the lowest customer satisfaction ratings in American industry.”

AT&T’s lawyers are not prepared to concede, however. Since the lawsuit was filed, AT&T’s legal team attempted to force the case into arbitration in 2016. That effort was successful until a 2017 California Supreme Court decision in another case gave the plaintiffs ammunition to claim that it was against California law to force consumers into arbitration. The Ninth Circuit court agreed, and the case reverted to district court, where AT&T immediately began efforts to have the case dismissed outright.

AT&T is not alone throttling so-called “heavy users” that have either legacy or current unlimited data plans. All major cellular companies enforce fine print policies that allow speed throttling after customers consume as little as 20 GB of wireless data during a billing cycle. The fact companies still advertise such plans as “unlimited” irks Bode.

“An unlimited data connection should come with no limits. If giant wireless carriers can’t respect the dictionary, they should stop using the word entirely,” Bode told us.

A federal judge has blocked an effort to force Altice USA (doing business as Cablevision/Optimum) to issue pro-rated refunds to New Jersey consumers that cancel cable service in the middle of a billing period.

U.S. District Judge Brian Martinotti found in favor of Altice, blocking an order by the New Jersey Board of Public Utilities (BPU) demanding Altice stop its practice of not issuing partial refunds to departing customers and issue refunds to those that have already canceled service under the new “no refunds” policy.

Altice adopted its “no refunds” policy shortly after closing on its acquisition of Cablevision and Suddenlink, impacting customers in 21 states:

Cablevision: Effective October 10, 2016, service cancellations become effective on the last day of the then-current billing period. Optimum services remain available to you for the full billing period and there are no partial credits or refunds of monthly charges already billed.

Suddenlink: Your monthly subscription begins either on or the first day following your installation date and automatically renews thereafter on a monthly basis beginning on the first day of the next billing period assigned to you until cancelled by you. The monthly service charge(s) will be billed at the beginning of your assigned billing period and each month thereafter unless and until you cancel your Service(s). PAYMENTS ARE NONREFUNDABLE AND THERE ARE NO REFUNDS OR CREDITS FOR PARTIALLY USED SUBSCRIPTION PERIODS.

Judge Martinotti

The controversial policy met with immediate objections from subscribers, some who complained to New Jersey’s telecommunications regulator and others that filed a class action lawsuit against the company in New York. In December 2018, the BPU found that Altice violated New Jersey state law by not offering prorated refunds for customers. It ordered Altice to cease the practice and issue suitable refunds to customers impacted by the new policy.

Altice argued that federal law specifically prohibits state regulators from getting involved in regulating cable service or pricing where effective competition exists and claimed it would cost at least $5 million to modify its billing software to automatically issue refunds.

Judge Martinotti was persuaded by Altice’s arguments, noting the BPU had previously granted Cablevision’s old owners a waiver for pro-rating in 2011 and that Cablevision customers in New Jersey have other competitive options, which strips the BPU of its regulatory authority over Altice’s rates.

“BPU’s order requiring Altice to prorate customer bills based on the exact dates of service constitutes rate regulation,” the judge’s order said. “Accordingly, the Cable Act preempts BPU’s order and Altice possesses a reasonable probability of success in the eventual litigation.”

The BPU had no immediate comment on how it plans to proceed in response to the judge’s ruling.

As AT&T bleeds satellite and streaming TV customers, a new class action case is planned on behalf of investors who feel ripped off after buying AT&T stock on assurances from top executives that the company was aggressively seeking a leadership role for its DirecTV Now streaming service.

According a complaint from the Schall Law Firm, AT&T made false and misleading statements to the market and caused some investors to lose more than $100,000 from the declining value of AT&T stock.

DirecTV Now entered the streaming business with a generous package of TV channels and a significantly lower price than some of its competitors. It also offered high value promotions including free equipment, and for some AT&T wireless customers, free service. By October 2018, DirecTV Now grew to a peak of 1.85 million customers.

But several weeks later, AT&T CEO Randall Stephenson announced the service was cutting back on promotions and planned to raise prices and cut back on the number of channels to boost profits.

“This resulted in existing customers leaving the service when their discount expired, and new customers avoiding the service altogether based on high prices,” the Schall Law Firm said in a press release. “Based on these facts, the company’s public statements were false and materially misleading. When the market learned the truth about AT&T, investors suffered damages.”

Publicly traded companies cannot lie or deceive investors in public statements about the company or its performance, according to securities laws. Shareholders are entitled to prompt and forthcoming disclosures about materially adverse events that could significantly impact on the performance of a company. AT&T has already lost over 500,000 TV customers in the first quarter of 2019. Stephenson this month told investors at a J.P. Morgan Conference he now expects more customer losses for the rest of 2019, including more than a half-million more anticipated cancellations during the second quarter of this year. Stephenson called it a “customer cleanup” that will purge “low value” subscribers.

Investors with significant losses were encouraged to reach out to the law firm before May 31, 2019.

Comcast and an independent contractor the cable giant relied on to perform repairs and installations in northern California and Washington have agreed to settle a class action lawsuit on behalf of 4,500 technicians who claimed they were forced to lie about meal breaks they could not actually take and were underpaid $8.7 million dollars.

O.C. Communications of Elk Grove, Calif. and Comcast have jointly agreed to settle the lawsuit with a settlement payment of $7.5 million to provide restitution to thousands of contract technicians who were ordered to lie about their work hours and mandatory break times.

The plaintiffs claimed the contracting firm repeatedly ordered workers to claim meal breaks they were rarely allowed to actually take — forced to continue working at job sites to fulfill an unreasonable work schedule. The plaintiffs also submitted evidence that workers’ time cards were forged or manipulated to undercount work hours and paperwork showing reasonable work-related expenses went unreimbursed.

The plaintiffs claimed they were well on their way to proving O.C. Communications, hired by Comcast, flagrantly violated the U.S. Fair Labor Standards Act and state laws governing wages and labor conditions in California and Washington.

“The gross settlement amount of $7,500,000 […] represents more than 86% of the approximate $8.7 million that we calculated in unpaid wages that would have been owed to all class members if each class member had been able to prove that he or she worked 2.5 hours off the clock in every workweek during the relevant time period,” the plaintiffs said.

The lawsuit was dispensed with through an elaborate mediation process involving both O.C. Communications and Comcast.

Comcast is being sued for deceptively advertising cable packages at a low price, but actually charging much more because of compulsory “junk fees” that customers cannot avoid.

Plaintiffs’ lawyers Dan M. Hattis of Bellevue, Wash., and Jason Skaggs of Palo Alto, Calif., jointly brought the class action case against the cable company, asking a judge to force Comcast to stop charging the fees and return all of its “unjust profits” to impacted subscribers.

“Comcast promises to charge customers a fixed monthly price for the service plans, but in fact Comcast charges a much higher rate for those plans via concealed and deceptive ‘fees’ which Comcast intentionally disguises in both its advertising and in its customer bills,” the attorneys complain. “These illegal and deceptive fees, which Comcast calls the Broadcast TV Fee and the Regional Sports Fee, earn Comcast over $1 billion each year, accounting for approximately 15% of Comcast’s annual profits.”

But in fact Comcast’s bill padding goes well beyond its TV and sports programming surcharges. No other cable company has mastered the art of the surcharge and fee better than America’s largest cable operator. Consumer advocates in California complain those fees can now cost an average subscriber in that state more than $40 a month.

“Although Charter Communications and Cox — California’s other major cable operators — also charge many of these fees, Comcast pioneered most of them and charges more than any other cable operator,” claimed Geoff Nawasaki, a San Mateo resident that has filed complaints against Comcast for several years. “A class action lawsuit is long overdue.”

Once Comcast establishes a new fee or surcharge, the company often boosts those fees dramatically over a very short time. Vaughn Aubuchon has been tracking Comcast’s rates in the Monterey Bay area of central California since 2010 and has documented Comcast routinely increasing its junk fees by as much as 1,000%. But most regulators and members of Congress may not realize how much customer bills are increasing, because the rate card Comcast shares with Washington and the general public doesn’t typically include the extra fees.

Aubuchon has documented significant spikes in Comcast’s prices, even though the company is still promoting packages costing $79-89 a month for new customers. But once those customers open their first bill, the advertised price no longer matters.

Hattis and Skaggs’ 2016 lawsuit documents Comcast’s online order system making no mention of its mandatory surcharges and fees. In fact, even Comcast’s fine print fails to mention the exact amount customers will pay in surcharges. According to Comcast, you have to already be a Comcast customer to review your local rates.

Aubuchon’s rate tracking shows just how lucrative Comcast’s billing tactics have become to the cable operator, especially since 2014:

• XFINITY TV cost $80.94 in 2010. As of August, the rate is now $102.98 — more than $20 a month more.
• XFINITY INTERNET cost $47.95 including the $5 modem rental fee in 2010. Today, that price is $68.95 a month, and the modem rental fee has doubled. That’s another $20 more a month.
• Comcast now charges Aubuchon $6 a month for its Broadcast TV Surcharge and $5 a month for sports programming — an extra $11 month that wasn’t there in 2010.
• After adding up all the fees and surcharges, Aubuchon’s bill went from $135.58 in 2010 to $196.65 today — $62.23 more a month.

Aubuchon

Some of the biggest recent hidden rate hikes have come from Comcast’s Broadcast TV Fee and Regional Sports Fee.

“In the Sacramento area in July 2016, Comcast increased the Broadcast TV Fee by 54% from $3.25 to $5.00, and tripled the Regional Sports Fee from $1.00 to $3.00,” the lawsuit notes. “Then, just three months later in October 2016 Comcast increased the fees yet again to $6.50 for the Broadcast TV Fee and $4.50 for the Regional Sports Fee.”

“Comcast has admitted these invented fees are actually just price increases for broadcast channels and sports channels in its cable television packages,” the lawsuit claims. “But Comcast intentionally does not include the cost of these fees in its advertised or quoted rates for those channel packages, in order to mislead customers into thinking that they will pay less than Comcast will actually charge them.”

The plaintiffs also argue Comcast is intentionally deceptive to customers questioning the ballooning fees on their cable bills.

“Comcast staff and agents explicitly lie by stating that the Broadcast TV Fee and the Regional Sports Fee are government-related fees or taxes over which Comcast has no control.”

A Guide to Comcast’s Junk Bill-Padding Fees

• Broadcast TV Fee (up to $7.50): Ostensibly the cost of retransmission consent fees required to carry free, over the air stations on Comcast’s lineup. The amount varies depending on the fees paid in each local market, with a significant likelihood Comcast rounds those amounts up in ‘friendlier’ $0.25 increments. Introduced in 2014.
• Digital Adapter ($3.99): Originally $1.99/mo when introduced in 2014, the fee covers the rental of a basic set-top box to continue receiving Comcast’s encrypted digital cable TV service on older “cable-ready” analog televisions that did not require a cable box in the past.
• Gateway Rental ($10): This is the monthly rental fee for your cable modem, “gateway,” or Wi-Fi enabled router. You can buy your own equipment and avoid this fee. Recently, Comcast has offered customers a waiver of equipment charges if they upgrade to an X1 set-top box. But in practice the rental fees are stopped for your existing equipment only because Comcast has started charging rental fees for the new equipment it bundles with the upgrade.
• HD/DVR Rental Fees (up to $10 a month for equipment you cannot buy outright yourself).
• HD Technology Fee ($9.95): for viewing HD content on a set-top box you already pay up to $10 a month to use.
• Service Protection Plan ($5.99): Was $1.45 (or less) per month for years until Comcast started hiking the price five years ago. Went from $1.99 in early 2012 to $5.99 in August 2017. Many customers sign up out of fear they will be charged between $36.50-$70 for a home visit from a Comcast technician dealing with a service problem. In reality, all the Service Protection Plan covers for certain is inside wiring that does not travel within a wall and protection from in-home service call fees.
• Regional Sports Fee (up to $5): A way to pass on sports programming costs to every subscriber without boosting the published rate for cable television.

Comcast’s Service Protection Plan = “Service Call Extortion Insurance”

Comcast’s $5.99/month Service Protection Plan has been called “extortion insurance” by some customers who buy the plan to avoid Comcast’s notorious service charges for in-home service calls. Unlike many other cable companies, Comcast charges customers to visit their homes for any reason other than a true, company-caused service outage. A 2016 lawsuit in Washington alleged Comcast’s process for determining whether a service call is charged or free is subjective and frequently at the whim of the technician, who enters “fix codes” at the end of a service call. Some “fix codes” are free, others trigger service call visit fees. The lawsuit claims, “Comcast does not formally train the technicians on what each fix code means.”

Comcast customers that have faced the sting of an unwarranted service call charge often readily agree to Comcast’s sales push for its Service Protection Plan, which normally waives those fees. It doesn’t take much to trigger those fees. The Washington lawsuit noted that if a Comcast technician talks to the customer about how to use their DVR, program a remote control, reset their cable modem, or use Wi-Fi, it is considered “customer education,” which results in a service call charge.

“Thus, if a technician fixes a broken Comcast cable box but also provides ‘customer education’ during the service call, the customer will be charged for the service call if the technician applies the customer education code because customer education fix codes are chargeable,” the lawsuit said. “This occurred 2,078 times between 17 June 2014 and June 2016 [in Washington State].”

Customer education fees are waived for those who pay for Comcast’s Service Protection Plan.