AT&T Claims Forced Arbitration Isn't Forced... Because You Can Choose Not To Have Broadband

from the heads-I-win,-tails-you-lose dept

For years, AT&T worked tirelessly to erode its customers' legal rights, using mouse print in its terms of service preventing consumers from participating in lawsuits against the company. Instead, customers were forced into binding arbitration, where arbitrators employed by the companies under fire unsurprisingly rule in their employer's favor a huge percentage of the time. Initially, the lower courts derided this anti-consumer behavior for what it was, critics highlighting that however brutally-flawed the class action system can be, binding arbitration in many ways made things worse.

But these lower court roadblocks quickly evaporated when the Supreme Court ruled in 2011 (Mobility v. Concepcion) that what AT&T was doing was perfectly OK. While lower courts saw this as an "unconscionable" abuse of consumer rights and the law, the Supreme Court bought into the ongoing myth that binding arbitration is a hyper-efficient, modern alternative to class actions. The Supreme Court reiterated its position in 2015, and now, thanks to AT&T, most companies employ similar language in their terms of service fine print.

This year, CBS News launched an investigation into AT&T and DirecTV's business practices and found a huge number of customers that were being systematically over-charged by the company, facing significantly higher rates after they'd signed up for what they thought would be a fixed, advertised rate. In response, a number of Senators fired off a letter to AT&T, urging it to explain itself and noting that binding arbitration appears to have removed a layer of accountability at the company, allowing problems like this to only get worse:"

Forced arbitration provisions in telecommunications contracts erode Americans' ability to seek justice in the courts by forcing them into a privatized system that is inherently biased in favor of providers and which offers virtually no way to challenge a biased outcome. Forced arbitration requires consumers to sign away their constitutional right to hold providers accountable in court just to access modern-day essentials like mobile phone, Internet, and pay-TV services.

AT&T's response? To deny that they use forced arbitration at all, despite the last decade of debate on the subject and AT&T's obvious legal win. According to AT&T you see, it can't be "forced" arbitration, because consumers have the freedom not to subscribe to TV or broadband service:

"At the outset, no AT&T customer is ever 'forced' to agree to arbitration," AT&T Executive VP Tim McKone wrote in a letter to US senators today. "Customers accept their contracts with AT&T freely and voluntarily; no one 'forces' them to obtain AT&T wireless service, DirecTV programming, or other products and services."

Except FCC data indicates that two-thirds of households only have access to one ISP at "next-generation" (25 Mbps) broadband speeds, meaning if many people want to be connected, it has to be via AT&T. Even if you happened to have alternative broadband options, those companies would also employ binding arbitration thanks to AT&T's win. It's a lose-lose scenario for consumers, and one that's not getting resolved any time soon given the current dysfunction in Congress, and the downright hostility toward consumers at the current FCC.

And yes, again, it's very true that the class action system is a broken mess that all-too-often results in lawyers getting far more than the people they're supposed to be representing. But in telecom, class actions do have a history of forcing change (remember when wireless providers used to extend your long-term contract every time you made a minor billing change?). And replacing that broken system with an even worse system that minimizes accountability, erodes consumer legal rights and reduces already dwindling incentive to behave certainly didn't do American consumers any favors.


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  • icon
    Vidiot (profile), 6 Jul 2017 @ 5:42am

    "...consumers have the freedom not to subscribe to ...broadband service..."

    The fact that we all find that so ludicrous points right back to that notion the Pai/neocon bunch can't grasp: data network access should clearly be recognized as a public utility under Title 2. For the vast majority (with some off-grid exceptions), living unconnected is no more of a choice than opting out of connecting to municipal water and sewerage systems.

    reply to this | link to this | view in chronology ]

    • identicon
      Pa Bell, 6 Jul 2017 @ 8:20am

      Re: Solutions ?

      ____________________


      "...Supreme Court bought into the ongoing myth that binding arbitration is a hyper-efficient, modern alternative to class actions" ...

      "the class action system is a broken mess"

      ___________________

      So Bode doesn't like the government court system output... nor that of private arbitration --- what other alternative does he want ??

      I strongly dislike AT&T, but its VP Tim McKone is entirely correct that no AT&T customer is ever 'forced' to agree to arbitration. Private businesses of any type are not required to exist at all -- but certainly have the legal right to offer their services/products under contract terms to their liking. Customers can take it or leave it, or attempt to negotiate better terms.

      No one has a right to ISP service, nor is anyone born with an obligation to provide it to them.

      The lack of ISP competition is a separate but related issue... entirely the fault of the government.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Jul 2017 @ 8:48am

        Re: Re: Solutions ?

        "or attempt to negotiate better terms"

        Except that for an individual, the negotiating positions are highly lopsided in favor of the ISP. ATT can afford to forego a single customer, or even several thousand customers, but individuals cannot forego using that particular ISP in many cases. So really, there is no negotiation to be had. It's a take it or leave it where leave it isn't a real option.

        So, the only other effective way for individuals to negotiate is to get legislation passed to protect the consumer's interests. In some sense, the federal government is a union of the people.

        "entirely the fault of the government"

        Not entirely. The ISP's are also to blame for pushing for all the legislation that they got. If they didn't want to be regulated so heavily, maybe they shouldn't have pushed so hard to create monopolies through law and through merger.

        Every ISP gets the government it deserves? Or something?

        reply to this | link to this | view in chronology ]

      • icon
        klarg (profile), 6 Jul 2017 @ 8:52am

        Re: Re: Solutions ?

        Yes, the mean old government is preventing the oligopoly of ISPs from competing.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Jul 2017 @ 9:04am

        Re: Re: Solutions ?

        Church!

        Network connectivity is not a vital necessity, like clean water, food, and shelter. Strip 'birth suit naked' and take off all of your 'smart' devices...now check your pulse. Are you still alive? Alright then.

        What we need is local ISP competition.
        Boycott or bend over (or start local municipal fiber networks).

        reply to this | link to this | view in chronology ]

    • identicon
      Whoever, 6 Jul 2017 @ 11:07am

      Re:

      The fact that we all find that so ludicrous points right back to that notion the Pai/neocon bunch can't grasp: data network access should clearly be recognized as a public utility under Title 2.

      Oh, they grasp it all right. They just don't care. This is about money and maximizing revenue of telecoms companies.

      This is a case where Hanlon's razor doesn't apply.

      reply to this | link to this | view in chronology ]

    • icon
      Derek Kerton (profile), 6 Jul 2017 @ 11:46am

      Re:

      Right.

      And count me as one person who has a well for his own water, has a septic system for waste, and that's OK.

      But if I didn't have Internet access on this land, I would move. Prior to buying any property, of course I checked the range of internet options (not hard to do, since it's 2-3 calls).

      I'm the same with hotels. Don't tell me about your plush pillows or mattresses and three restaurants, I barely care - just tell me how fast your Internet is.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 6:50am

    AT&T's own commercial: "Food. Water. Internet. We need it to live."

    https://www.youtube.com/watch?v=OqdahzSUNL4
    Sorry for linking an AT&T ad.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 6 Jul 2017 @ 6:57am

    If they had to compete with many other ISPs these forced arbitration clauses would be meaningless simply because the ISPs that provided bad customer service or product and made use of these instruments would quickly get the result of their bad reputations into their pockets. So while the tool is bad enough it all goes back to the lack of competition.

    Separate the providers from the infra-structure while regulating this system properly and you'll see how fast things will normalize. Look at the electric sector and other utilities if you are the average anti-regulation dummy.

    reply to this | link to this | view in chronology ]

    • identicon
      Thad, 6 Jul 2017 @ 11:39am

      Re:

      If they had to compete with many other ISPs these forced arbitration clauses would be meaningless simply because the ISPs that provided bad customer service or product and made use of these instruments would quickly get the result of their bad reputations into their pockets. So while the tool is bad enough it all goes back to the lack of competition.

      There'd still be the failure mode where every ISP has bad customer service and an arbitration clause. But yeah, I definitely favor more ISP competition, just like everybody else who doesn't own a major ISP.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Jul 2017 @ 3:02pm

      Re:

      Unfortunately, market competition doesn't make arbitration clauses go away. They're common in other sectors where there is competition - car dealerships, car finance companies, nursing homes, employers...

      Most people don't know or care about arbitration clauses until it's too late. They assume that some boilerplate contract can't take away such a fundamental right as the right to a trial.

      reply to this | link to this | view in chronology ]

      • identicon
        Thad, 6 Jul 2017 @ 5:06pm

        Re: Re:

        Back when I was working as a temp, I had more than one temp agency give me a contract with an arbitration clause. One of them (Robert Half) let me opt out of it. The others not only wouldn't let me opt out, but got really indignant when I asked. The old "Why would you care unless you're planning on breaking the law?" routine. (To which I responded with the politest variant of "Why would you care unless you're planning on falsely accusing me?" I could muster.)

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Jul 2017 @ 6:57am

    As a parent, I don't force my children to eat the dinner I make. They have options: take it or leave it.

    What do you mean you are going to call the Department of Social Services about my starving children...

    reply to this | link to this | view in chronology ]

  • icon
    TheResidentSkeptic (profile), 6 Jul 2017 @ 7:06am

    I don't have "broadband"

    Since it was defined as 25MB+, and the best I can get is 20MB bonded DSL.

    reply to this | link to this | view in chronology ]

  • icon
    Anon E. Mous (profile), 6 Jul 2017 @ 7:37am

    Got AT&T is so full of shit. No if you are lucky enough to have a choice of a second provider in your area, then yes AT&T is right, you dont have to use their service.

    However if you are like a lot of folks where AT&T is the only option then you have to use their service and you are automatically agreed to their arbitration, you can't opt out there is no "choice" to do that with AT&T.

    The fact that AT&T's "spin team" wants to dance around the fact that their customers are forced into arbitration when they use their service and act like the consumer has a choice is laughable and just shows how the deck is stacked against the consumer.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Jul 2017 @ 10:44am

      Re:

      However if you are like a lot of folks where AT&T is the only option then you have to use their service

      You have the option to not use the internet, or to use it for free at a library or coffee shop, or to move... preferably far away from AT&T. Internet service is not like food or water, despite what people like AT&T are saying.

      if you are lucky enough to have a choice of a second provider in your area

      Pretty much everyone has a second provider available: dial-up internet (unless you have no POTS line). I'm sure AT&T will call it an option, anyway.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Jul 2017 @ 11:42am

        Re: Re:

        You also have the option to walk to work, or to not have a home. But I don't see that many people would consider those real options if there were only one place to buy cars or houses from and that company started dictating arbitration clauses in every sale.

        reply to this | link to this | view in chronology ]

  • identicon
    Annonymouse, 6 Jul 2017 @ 8:22am

    The question nit asked

    Why is everyone assuming that the Supreme Court was not bought in some way?
    They are the reason this mess. Despite numerous liwer courts ruling otherwise they have squarely decided in favor of the corporate world despite all the evidence.
    Time to follow the money and the vacations etc to see just how much they got for this traitorous ruling.

    reply to this | link to this | view in chronology ]

    • icon
      ShadowNinja (profile), 6 Jul 2017 @ 8:36am

      Re: The question nit asked

      And our chances of un-buying it were ruined with the GOP stealing the vacant SCOTUS seat and putting another justice on the court sure to be against consumers.

      Garland would have been much more likely to review the Mobility v. Concepcion decision (which was 5 to 4) and strike it down.

      reply to this | link to this | view in chronology ]

    • identicon
      Thad, 6 Jul 2017 @ 11:45am

      Re: The question nit asked

      Why is everyone assuming that the Supreme Court was not bought in some way?

      Because it's entirely consistent with the lifelong views of the conservative majority.

      Those guys are true believers; no bribes required.

      reply to this | link to this | view in chronology ]

  • identicon
    David, 6 Jul 2017 @ 8:43am

    Definitely not forced.

    Nobody forces you to hand over your wallet to a robber either. You have the option to let him pick it off your corpse.

    reply to this | link to this | view in chronology ]

  • icon
    Roger Strong (profile), 6 Jul 2017 @ 9:17am

    Time to update the You Will commercials

    "Have you ever watched the movie you wanted to, when you wanted to?"

    "Have you ever kept an eye on your home when you're not at home?"

    "Have you ever had the advantages of a free market?"

    "Have you ever had the protection of the courts?"

    "YOU WON'T."

    "And the company that'll keep it from you is AT&T."

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Champion, 6 Jul 2017 @ 9:28am

    so not games ( they all online)

    no games , not tv , no phone ....no security devices....
    these companies shold get a tratitor label...

    capitalism is consumers and companies NOT companies only


    yea cause today you can totally get buy ..perhaps people should just all boycott them for a few mnths and let them see why they should not be JERKS

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 6 Jul 2017 @ 10:40am

    And?

    we have the right to competition??
    To have an internet comparable to compare, in the same area..

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 6 Jul 2017 @ 3:07pm

    I'm so glad that Congress has made sure we have a robust free market. Some customers actually have a choice between ATT and the winner of the shittiest customer service in america repeat champion.

    It is nice that for a few cheap donations we all got sold out to be raked over the coals for some of the worst service in the world, we hand them more billions to wire more of the country (they don't), and keep anyone from offering a service that somehow is available cheaper for so much more.

    reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 7 Jul 2017 @ 8:45am

    "It's not being forced on you because you can always choose not to use it." Why does that argument sound so familiar?

    Oh yeah! People around here pull it out all the time to defend the indefensible. DRM comes to mind, as do Facebook's myriad abuses...

    reply to this | link to this | view in chronology ]

  • icon
    Spaceman Spiff (profile), 10 Jul 2017 @ 1:40pm

    The real meaning of AT&T

    AT&T - American Thieves and Thugs, Inc.

    reply to this | link to this | view in chronology ]


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