AT&T has offered to settle with a customer who successfully took them to court over allegations of slowing his data speeds. In February Matthew Spaccarelli won a small claims court case against the carrier for throttling his data speeds once he used between 1.5GB and 2GB a month, despite having an "unlimited" plan. In a letter dated last Friday, AT&T threatened to cut off Spaccarelli's service if he didn't sit down to discuss the settlement. (See below for update.) AT&T says that the fact that Spaccarelli has tethered his iPhone to his iPad means that the carrier has the right to end his service, though Spaccarelli claims he hasn't done so in several months and the issues are unrelated.

Spaccarelli won $850 in court, and expressed confusion over why the company wanted to settle without appealing. AT&T says that Spaccarelli "reached out to [the company] to initiate a discussion," but he says he only contacted the carrier to find out how he could get his $850. In an interview with CNET, he said:

"This isn't really about the $850. I guess they could offer me more money. But I don't really care about that. I just want to get the service that I've been paying for and that service is supposed to include unlimited data."

The controversy comes two weeks after AT&T upped the throttling threshold to 3GB on its unlimited data plan. While it seems unlikely this will satisfy Spaccarelli, the company says that as customers will be able to surf the web and use email with the reduced speeds, the plan qualifies as "unlimited."

Update: The Verge has now viewed the letter in question, and it's a little less direct than was initially reported elsewhere. While AT&T did remind Spaccarelli that his tethering put him in breach of contract, the company did not threaten to cut him off if he wouldn't negotiate a settlement. AT&T expressed its desire to settle subject to the terms of a non-disclosure agreement that Spaccarelli decided not to sign. That agreement, if violated, would have resulted in Spaccarelli's service being terminated, but for now it looks like he's free to hit the company's new 3GB cap.