The 3rd U.S. Circuit Court of Appeals in Philadelphia has ruled that Verizon customers who take issue with “fraudulent” cell phone charges must arbitrate individually with the carrier instead of filing a class-action lawsuit in court, Reuters recently reported. A group of current and former Verizon Wireless customers originally filed a class-action lawsuit arguing that it was “unconscionable” for Verizon Wireless to require customers to arbitrate any unfair charges in their contracts. According to Reuters, arbitration can often be viewed as favorable for a large company because it can be more expensive for consumers to file charges in courts individually instead of as a group. In October of last year, the Federal Communications Commission’s Enforcement Bureau ordered Verizon Wireless to pay $52.8 million to 15 million customers due to fraudulent data charges. More →
A handful of AT&T’s customers are now fighting against its planned acquisition of T-Mobile. Law firm Bursor & Fisher filed lawsuits against AT&T on behalf of 11 AT&T subscribers in an effort to block the merger, AllThingsD reported on Friday. The lawyers have created a pitch site titled FightTheMerger.com and argue that The Clayton Antitrust Act gives “anyone who may be affected by a proposed merger” the power to sue in a federal court. “Government enforcement is an important part of the antitrust laws, but the Clayton Act also permits private parties who may be adversely affected to challenge a proposed merger,” one of the lawyers, Scott Bursor, said. “That means any AT&T cellphone, data or iPad customer who will suffer higher prices and diminished service because of this merger can sue to stop it from happening.” Reportedly, the AT&T customer agreement contract blocks customers from filing class-action lawsuits against the carrier. Bursor & Fisher says subscribers can instead file arbitration suits and argues that section 2.2 of AT&T’s customer agreement says customers could win a $10,000 payment. On Wednesday, Senate Antitrust Subcommittee chairman Herb Kohl asked the FCC and the Justice Department to block the merger. AT&T responded immediately and reaffirmed in its second-quarter earnings that the merger is on schedule for closure during the first quarter of 2011. More →
FierceWireless is reporting that U.S. wireless carrier Sprint and its WiMAX-network partner Clearwire have entered arbitration over the monthly rate the latter company charges for WiMAX enabled smartphones on its network. Currently, around 810,000 Epic and Evo handset owners use their device in areas where Clearwire’s service is unavailable. Despite this fact, the WiMAX network provider continues to charge Sprint a monthly fee for the devices existence.
According to the report, Sprint filed for arbitration on October 29th of this year to resolve the dispute. As most Sprint, WiMAX-enable handset owners know, the wireless company charges a $10 monthly premium for its 4G handsets whether the service is available or not; there is no information available that indicates the $10 tariff could be reduced or dropped if the arbitration were to favor Sprint. Allegedly, Sprint pays Clearwire $4.46 per 4G-handset user.
“If we are unable to reach a satisfactory resolution of these issues, we end up agreeing to an amount less than what we expected, or the arbitration process is not resolved in our favor, we could end up receiving substantially less in future wholesale revenues than we expect or for which we have planned,” said Clearwire.
“We do have an agreement between the parties,” added Clearwire Chief Commercial Officer Mike Sievert. “What we have right now is a difference in the interpretation of it.”
The news comes on the heels of a dismal Q3 earnings call where the company announced a 15% reduction in work-force to help “raise short-term funding.”
It will be interesting to see how this one pans out and how, if at all, it affects the monthly charge Sprint passes on to its 4G handset owners.
We’ve received a flurry of emails over the past few weeks questioning whether or not AT&T will let people out of contracts ETF-free due to substantial changes to its terms and conditions. First it was a series of changes to permissable data service usage and more recently AT&T has amended its arbitration clause to limit a customer’s right to sue, in theory at least. Common sense might suggest that changes these drastic would result in a window of opportunity, during which time customers may sever ties without a penalty, but since when has common sense applied to carriers? In short, no, these changes will not result in an ETF-free departure from AT&T. The CTIA’s current policy states that carriers will give customers an opportunity to cancel contracts without penalty in the event of material changes to the carrier’s TOS. How does AT&T define a “material change”? As PhoneNews.com recently ascertained in a conversation with Mark Siegel, Director of Media Relations at AT&T:
Under [AT&T’s] terms of service, there are only two situations in which we would allow you to terminate your agreement because of a change in TOS without having to pay the ETF: If we increase the price of the service, or if we materially decrease the geographical area in which your airtime rate applies.
So what can you do if you disagree with this position? Filing a complaint with the FCC is surely a good start but you certainly shouldn’t expect this policy to change during the lifetime of your current contract. The bottom line is we’re all at the mercy of our carriers — at least until enough class action suits are filed that it becomes cheaper for carriers to change their policies than continue to pay out settlements…