A federal appeals court has dismissed a case brought by the Federal Trade Commission against AT&T for throttling, or slowing data speeds, on millions of customers with unlimited smartphone data plans.
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A federal appeals court in California today dismissed FTC’s lawsuit against AT&T, siding with the company’s logic that AT&T didn’t technically qualify as a “common carrier” under the FTC Act at the time of the throttling offenses.
AT&T still faces a potential $100 million fine, proposed by the Federal Communications Commission in June 2015, saying the company misled consumers.
The FTC filed the complaint in October 2014 charging that the nation’s second-largest wireless carrier failed to adequately unlimited-data customers that their data speeds are reduced, or throttled, if they use too much data in a given billing cycle. “This is just another unintended effect of the FCC’s 2015 reclassification of broadband.[T] he FCC assured everyone that it would work with the FTC to coordinate the two agencies’ approaches, assuming that the FTC would continue to be able to police the non-common carrier activities of broadband providers”.
Although the FTC has broad authority to police unfair and deceptive commercial practices, it doesn’t have authority over “common carrier” phone services such as the landline services traditionally offered by AT&T. The company is contesting the case in proceedings before the FCC. “We are disappointed with the ruling and are considering our options for moving forward”, FTC spokesman Jay Mayfield wrote in an emailed comment.
The ruling further solidifies the FTC’s diminishing authority in the telecommunications space. Those rules imposed common-carrier obligations on broadband services, including wireless.
AT&T’s current unlimited data plan – which is available to DirecTV and U-verse subscribers – caps high speed data for heavy users at 22 GB. But the agency isn’t authorized to bring enforcement actions against common carriers. But AT&T isn’t alone in offering an unlimited plan with limits.
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-John McKinnon contributed to this article.
