AT&T has won the lawsuit filed by the Federal Trade Commission (FTC) regarding its data throttling plans.
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“We conclude, based on the language and structure of the FTC Act, that the common-carrier exception is a status-based exemption and that AT&T, as a common carrier, is not covered by section 5″, federal judge Richard Clifton of the Ninth Circuit wrote in the opinion. In some cases, data speeds were slowed by almost 90 percent, the lawsuit said. The FTC asserted that AT&T’s imposition of the data speed restrictions was an “unfair act or practice”, and that AT&T’s failure to adequately disclose the policy was a “deceptive act or practice”. AT&T argued that the case should be dismissed for several reasons, including that it’s a common carrier.
Ars Technica explained some of the complicating elements in the case, pointing out the Ninth Circuit determined that at the time the FTC sued AT&T in October 2014, the commission could not hold the company liable for the alleged violations. The FTC is “considering” its options and may well try to appeal this decision.
Chen rejected AT&T’s argument, noting that the FTC’s complaint dealt with activity that occurred before the FCC reclassified mobile broadband. The FTC noted AT&T Mobility’s move in 2011 to begin throttling data speeds for unlimited data customers once they hit 2 gigabytes of usage per month, “often resulting in speed reductions of 80% to 90% for affected users”. But AT&T isn’t alone in offering an unlimited plan with limits.
The Federal Communications Commission fined AT&T $100 million for the practice previous year. The Ninth Circuit’s decision will likely reinforce the FCC’s view that it must intervene to impose new data security and privacy regulations on common carriers as proposed in its recent NPRM, which would create expansive rules to govern the activities of entities like ISPs that are no longer subject to the FTC’s authority. Instead, the appellate court found that the statute completely exempts common carriers based on their legal status.
It also opens up some ambiguity over whether a company has common carrier status or not: at what point do companies like Verizon or Google – which offer a plethora of services that are both common carrier and not common carrier – gain that status?
The FTC’s common-carrier exemption was never meant to lead to this result, said David Vladeck, a law professor at Georgetown University who led the agency’s consumer protection bureau from 2009 to 2012. “Does AOL share Verizon Wireless” “common carrier status?'”
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The Ninth Circuit sided with AT&T, and remanded the case for an entry of an order for dismissal. “It also owns other wireline common carrier services”.
