AT&T Opposes FTC Bid To Revive Fight Over Broadband Slowdowns
by Wendy Davis@wendyndavis, November 9, 2016
AT&T is asking an appellate court to let stand its previous decision dismissing the Federal Trade Commission’s lawsuit over mobile data slowdowns.
“At the end of the day, the FTC cannot dispute that, in the 102-year history of the FTC Act, it has never been permitted to press a case against a common carrier,” AT&T says in papers filed Tuesday with the 9th Circuit Court of Appeals. “A decision of this court re-affirming that age-old result is not one of exceptional importance warranting … review.”
The dispute between AT&T and FTC stems from the telecom’s prior practice of throttling consumers with “unlimited” data. The FTC alleged in October of 2014 that AT&T duped more than 3.5 million wireless consumers by selling them unlimited data plans, but slowing their broadband connections after they exceeded monthly allotments. (Last year, AT&T revised its practices; the company no longer automatically slows down customers with unlimited data who exceed their caps, but still throttles them when the network is congested.)
AT&T argued that the case should be thrown out on the grounds that the FTC lacks authority to bring an enforcement action against common carriers. Mobile broadband is now considered a common carrier service, but the FTC’s allegations center on events that occurred when mobile broadband was still considered an “information” service.
U.S. District Court Judge Edward Chen in the Northern District of California ruled against AT&T, noting that the FTC filed suit before mobile data was reclassified as a common carrier service.
AT&T then appealed to the 9th Circuit, which reversed Chen’s decision in August. A three-judge appellate said in a sweeping ruling that the FTC lacks authority to bring enforcement actions against common carriers like AT&T — even when the enforcement action concerns a non-common carrier service.
Several weeks ago, the FTC sought a new hearing in front of at least 11 of the 9th Circuit’s judges. The FTC says the August ruling is so broad that it could leave the agency unable to police threats to consumers posed by a host of companies, including cable carriers and email service providers.
The agency argued that many businesses — including tech companies like Google — offer a mix of common carrier services (like Fiber) and non-common carrier services (like its search engine). If the August decision stands, those businesses could all fall outside of the FTC’s jurisdiction, the agency says.
A host of policymakers and advocates, including Sen. Richard Blumenthal (D-Connecticut), are backing the FTC’s request. Blumenthal argued in a friend-of-the-court brief that the ruling creates “a wide hole in FTC jurisdiction,” and could “greatly limit the government’s ability to police unfair and deceptive practices in fields that Congress has long considered within the FTC’s authority,” the lawmaker adds.
AT&T disputes that interpretation of the August decision. “The panel decision’s impact on national regulatory jurisdiction is narrow, despite the sky-is-falling rhetoric of the FTC,” the telecom argues in its new court papers.
AT&T also argues that the August ruling still allows the FTC to sue a “separate subsidiary” to a common carrier, even if both the subsidiary and common carrier are part of the same corporation.
“The panel did not hold that a separate subsidiary, itself not a common carrier, would be outside the FTC’s jurisdiction,” AT&T contends. “To the extent a conglomerate, like Google, owns one or more common-carrier subsidiaries, nothing in the panel decision suggests that members of the corporate family other than the common-carrier subsidiaries are exempted from FTC authority.”
In addition to the legal battle with the FTC, AT&T also is fighting a proposed $100 million Federal Communications Commission fine. That agency alleged that AT&T violated a 2010 regulation by failing to explain its throttling policies to consumers.
MediaPost.com: Search Marketing Daily
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