FTC Urges Court To Let Throttling Lawsuit Proceed Against AT&T

The Federal Trade Commission is asking a federal judge to uphold the agency's authority to bring an enforcement action against AT&T for allegedly slowing down the broadband connections of some unlimited data users.

The commission is specifically asking U.S. District Court Judge Edward Chen to reject AT&T's claim that it's a common carrier, and therefore not subject to FTC jurisdiction. “AT&T’s 'status-based' position runs counter to the text, structure, and intent of the FTC Act,” the agency argues in papers quietly filed earlier this month with the federal district court in San Francisco.

“The Communications Act ... unambiguously states that an entity may be treated as a common carrier only to the extent that it provides a common carrier service,” the FTC adds. “Mobile data is not a common carrier service.”

(The Federal Communications Commission is poised to pass new rules that reportedly will treat mobile broadband data as a common carrier service, but hasn't yet done so.)



The legal battle between AT&T and the FTC dates to October, when the agency alleged that AT&T's practice of slowing the broadband speeds of mobile users who pay for unlimited data is unfair and deceptive.

The charges grow out of AT&T's 2011 throttling policy, which allows the company to slow down the mobile broadband speeds of “unlimited” customers who exceed a data cap. Since implementing the policy, the company has slowed down more than 3.5 million customers, according to the FTC.

AT&T began throttling unlimited users soon after introducing “tiered” billing plans, which require customers to pay for a monthly allotment of data. The wireless provider still allows longtime users who previously had unlimited plans to avoid pay-per-byte billing, but reserves the right to slow them down after they hit a cap. Currently, that cap comes to 3GB a month for customers on the 3G and HSPA+ networks, and 5 GB a month for people using the LTE network.

Last month, AT&T asked Chen to dismiss the lawsuit on the grounds that the FTC lacks authority over common carriers. “The fact that AT&T's mobile data services are not regulated as common-carrier services under the Communications Act is irrelevant,” the telecom argued in its court papers. AT&T also argued that it started throttling users in order “to preserve a high quality experience for all of its customers, by preventing heavy users of data from overwhelming the mobile network and degrading service for all.”

But the FTC counters that it retains authority over companies that engage in activities that aren't subject to common-carrier treatment -- even if other portions of their business are governed by common-carrier rules.

“AT&T’s reading of the common carrier exemption would open a giant loophole that would threaten to swallow the FTC Act,” the agency argues. “ For example, Internet giants that introduce a small measure of common carrier business would be shielded from the FTC’s active privacy and data security enforcement because of their 'status' as a common carrier.”

The FTC adds that this scenario isn't “merely hypothetical,” noting that Google reportedly wants to become a wireless carrier.

AT&T isn't the only company to come under scrutiny for its throttling policies. Last summer, FCC Chairman Tom Wheeler publicly criticized Verizon for a traffic-management plan that called for it to slow down some people who pay for unlimited data. Verizon later retreated from that plan, which would have subjected heavy data users -- meaning people who use more data than 95% of other subscribers -- to slowdowns during times of congestion.
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