• by Wendy Davis  @wendyndavis, January 26, 2011

In order to settle a class-action lawsuit on behalf of broadband subscribers, satellite provider HughesNet has agreed that it will prominently disclose that connection speeds won't always be as fast as advertised. The company also agreed to charge pro-rated early termination fees rather than a flat $400 when subscribers cancel their service before the end of their two-year contracts.

The deal, if approved by U.S. District Court Judge Samuel Conti in the Northern District of California, will resolve a lawsuit filed in May of 2009 by two HughesNet subscribers in rural California -- Tina Walter of Yorville and Christopher Bayless of Three Rivers. Both consumers alleged that HughesNet promised broadband speeds of between 1 and 3 Mpbs, but actually offered speeds far slower.

Walter and Bayless, who live in rural areas where broadband service is notoriously hard to obtain, also alleged that HughesNet imposes low-bandwidth caps and throttles users who exceed the limits -- in some cases preventing them from getting online for days at a time.

Walter says she paid $59.99 a month for a HughesNet plan that offered maximum download speeds of 700 kbps to 1.5 Mbps. After the company allegedly slowed down her connection for exceeding caps, she upgraded to a $119.99 plan.

Bayless says he initially subscribed to a plan providing 1.2 Mbps and upgraded to a plan that offered up to 1.6 Mbps downstream speeds for $79.99 a month. Like Walter, he alleges that HughesNet slowed down his connection for allegedly exceeding the bandwidth cap. He then upgraded to a $179-a-month plan that promised minimum speeds of 1.2 Mbps, but his actual speed only averaged less than half of that, according to the complaint.

HughesNet argued that average users' speeds were higher than the plaintiffs', and that it now uses new satellites that it anticipates will improve the network's performance.

HughesNet also recently made changes to its bandwidth caps program. The company still throttles users who have exceeded a daily cap, but also now allows such subscribers to reset their download amounts once per month and restore their former speeds.