AT&T’s Battle Versus the FTC
AT&T’s years-long quest to avoid punishment for throttling unlimited data plans suffered a blow today when a court said that AT&T cannot escape the jurisdiction of the Federal Trade Commission. The FTC sued AT&T in October 2014 in US District Court in Northern California, alleging that AT&T promised unlimited data to wireless customers and then throttled its speeds by as much as 90 percent. To escape punishment, AT&T claimed that the FTC has no jurisdiction over the company because the FTC is barred from regulating common carriers.
The ruling of the full-panel Ninth Circuit appeals court backs the FTC’s original argument, which says that because the services in question weren’t part of the those that fall under AT&T’s common carrier status, its lawsuit is valid. While it no longer appears to be, at one point, this was a two-pronged assault. In 2015, the Federal Communications Commission (FCC) announced that it would be slapping the company with a $100 million for its deceptive practices — a move that AT&T challenged.
That fine, however, was never collected and it probably never will be. When the FTC appealed the Ninth Circuit court’s decision last year, the FCC filed an amicus brief in support of the FTC. In it, referring to the FCC’s original decision to issue a “Notice of Apparent Liability” against AT&T for the throttling, the agency said, “A majority of the FCC’s current commissioners dissented from the decision to issue the NAL and no further action has been taken on it.”
This case has been watched closely since the Federal Communications Commission rolled back its Obama-era net-neutrality dukes. The rollback meant that the FTC would be the lead agency on any future policing of companies slowing down internet traffic. But the FTC could have been without power to act against large service providers if AT&T’s arguments had prevailed in the Ninth Circuit case.
The FTC alleged that AT&T over a three-year period throttled data speeds that affected 3.5 million customers. The company had said it had implemented reasonable network management practices that slowed speeds only to the very heaviest users whose data consumption harmed the company’s network. Neither the FTC not AT&T immediately responded to requests for comment.