A federal judge on Tuesday threw out an ironic defense by AT&T against a Federal Trade Commission lawsuit over the company’s throttling of unlimited data plans.
The telecommunications provider — long opposed to the Federal Communications Commission’s net neutrality proposal to regulate Internet service providers as public utilities — recently argued in a California federal court that the FCC’s new rules take it out of the FTC’s jurisdiction.
Last year, the FTC sued AT&T for allegedly deceiving customers of its unlimited mobile data service, which the company has since phased out for new customers. According to the FTC, AT&T misled existing unlimited customers by telling them they could keep their plans, but then throttled their data download speeds after 5GB in a given month, reportedly by as much as 90 percent in some cases.
FCC Commissioner Ajit Pai argued in a recent op-ed that the FCC’s new rules, adopted via vote earlier this year, usurp the FTC’s authority to protect consumer interests in regard to Internet service providers. The FTC is legally barred from regulating common carriers. Under the FCC’s new rules, AT&T, Verizon, Sprint and others fall under that definition. (RELATED: FCC/FTC Commissioners: ‘The Internet Isn’t Broken, And We Don’t Need The President’s Plan To ‘Fix’ It’)
AT&T argued that as a common carrier under the FCC’s new regulatory authority, AT&T’s services fall under FCC purview instead of the FTC’s. As such, AT&T argued that the case should be thrown out.
United States District Court for Northern California Judge Edward Chen dismissed the company’s defense Tuesday evening, saying that not only have the FCC’s new rules not gone into effect, AT&T was still under the authority of the FTC when it throttled customer data.
“Contrary to what AT&T argues, the common carrier exception applies only where the entity has the status of common carrier and is actually engaging in common carrier activity,” Chen wrote.
“When this suit was filed, AT&T’s mobile data service was not regulated as common carrier activity by the Federal Communications Commission,” Tuesday’s court filing states, according to The Verge. “Once the Reclassification Order of the Federal Communications Commission (which now treats mobile data serve as common carrier activity) goes into effect, that will not deprive the FTC of any jurisdiction over past alleged misconduct as asserted in this pending action.”
The FCC’s net neutrality rules likely won’t take effect until June. A spokesman for AT&T said the company plans to appeal the decision “as soon as possible.”
AT&T previously argued it alerted customers to throttling via email and notices posted to its website. The FTC argues that AT&T should take further steps to alert customers, especially when their contracts come up for renewal.
