New attention is being paid to a class action lawsuit against AT&T. The lawsuit alleges that the company’s billing system records usage data three times the actual usage, including “phantom” charges that occur when the phone is not in use. AT&T says the issue is a misunderstanding about how we use data and money.
The case was originally filed in late January in the US District Court in Northern California, but received renewed attention this week when one of the lead attorneys, Barry Davis, appeared on Today on Thursday. The arm was then reproduction on MSNBC’s morning joe.
The complaint points to an independent study that tested how data is charged after some iPhone users noticed charges exceeding AT&T’s 200MB limit of $15 per month data plan. In addition to data usage exceeding expectations, some users also notice data charges recorded in the idle hours of the night when the phone is not in active use.
Independent tests were conducted with multiple devices over a four-month period, and it was alleged that AT&T’s billing system often recorded data usage that exceeded actual usage by 7-14 percent, on average. In some cases, AT&T reported data usage recorded as 300 percent of actual usage.
To confirm the “phantom” data charges, a computer engineer hired by law firms involved in the case took a new iPhone, turned off all push notifications and location services, did not set up any email accounts, and make sure that no applications are running. After 10 days of sitting idle, AT&T recorded 35 instances of data usage totaling over 2MB.
The lawsuit also claims that AT&T’s billing system does not record the exact date and time the data is used. This can result in data usage showing up on the wrong billing system, and if an extra megabyte tacked on the wrong month costs you over your monthly quota, you could end up paying an extra $10-15. Incorrect time stamps can also make it difficult to accurately track data usage to ensure you stay under your limit.
The attorneys compared the practice to a gas station that uses a “sloppy gas tank” that pumps out a gallon of gas for nine percent of what it actually supplies. Customers may not notice an extra kilobyte recorded here or there, but in general it can lead to extra costs on your bill. Multiply that by millions of customers, and AT&T could be unfairly “inflating its revenues,” according to the lawsuit.
AT&T, for its part, said the allegations are “without merit.”
“Unfortunately, there have been inaccurate claims about our data usage billing practices,” spokesman Seth Bloom told Ars. “We charge efficiently for all the data our customers send and receive, including data processing that runs in the background on smartphones and other data-intensive devices.”
AT&T says that every activity, including checking email, browsing the web, and streaming music, uses data. But so do many mobile applications, such as weather apps and market indicators, which are updated using data from the network. Games connect to networks such as Game Center, and voicemail services download data from the network. The company also says that data can be transmitted or collected by background processes that users are simply unaware of.
Regarding “phantom” charges, AT&T notes that devices don’t always transmit information about data usage to its billing system in real time. “AT&T records your data activity overnight to create a billing record in our systems,” Bloom said. the reason is a connection to (the billing system), not the time you send or receive data.”
Some carriers round data usage to the nearest kilobyte. If you send small chunks of data, say 3.2KB, the billing system may round that to 4KB—a 25 percent difference. Bloom could not confirm whether Ars or AT&T’s system works on such a basis.
How is the test done
We contacted Davis to verify the process used by the independent consulting firm whose tests revealed the billing irregularities.
It explains how tests can determine that AT&T’s system is recording more data usage than expected. A computer engineer retained by Davis’ firm set up a special web server configured to log the amount of data sent or received from a particular device, using timestamps and IP addresses. The engineer then bought several devices, including an iPhone and iPad, and used the devices to view websites and download files on the server.
Server logs are then compared to a detailed list of data transfers that are included in AT&T customers’ bills. Those comparisons allegedly found that AT&T’s system recorded discrepancies in the amount of data used, and in some cases counted the data on the wrong billing system.
Davis confirmed to Ars that no analysis has been done to determine what, if anyone, behind the OS was responsible for the “Phantom data.” Other devices, including BlackBerrys and Android smartphones, also show some unknown usage data, while others show none.
AT&T’s statement that background processes are responsible for “phantom” data may well be true, but Davis still doesn’t believe it’s fair to customers who can’t control those background processes.
“If AT&T is going to collect users’ data, they should only pay for the data they actually request,” Davis told Ars.