FTC Slams AT&T's 'Illogical And Absurd' Argument In Battle Over Throttling

Firing back at AT&T, the Federal Trade Commission argues in new court papers that it retains authority to sue the telecom for throttling subscribers with “unlimited” data plans.

AT&T says that the new net neutrality rules protect it from enforcement actions by the FTC, which lacks authority over common-carrier services. Those rules, approved last month by the Federal Communications Commission, reclassify broadband as a common-carrier service.

The FTC counters that AT&T's interpretation of the law “would lead to illogical and absurd results.”

“AT&T wrongly argues ... that the FTC loses all authority to continue its lawsuit the moment that reclassification goes into effect,” the agency says in papers filed with U.S. District Court Judged Edward Chen in the Northern District of California. “In fact, the FTC remains 'empowered' to seek the court’s full panoply of equitable relief for AT&T’s pre-reclassification conduct.”



The agency adds that accepting AT&T's argument could lead to “untenable” results. “Suppose a company reaped millions of dollars with an inadequately disclosed continuity program, services related to selling goods on eBay... Then, upon learning of a potential FTC enforcement action, the company ceased its practices and instead used its technical expertise and infrastructure to become a small ISP,” the FTC writes. “At that moment, according to AT&T’s reasoning, the FTC would be unable to continue its suit.”

The battle between the telecom and regulators dates to October, when the FTC alleged that AT&T's practice of throttling mobile users who pay for unlimited data is unfair and deceptive. Since 2011, AT&T has been slowing the mobile broadband speeds of “unlimited” customers who exceed a data cap. To date, 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 slows some of them down after they hit a cap of either 3GB a month for customers on the 3G and HSPA+ networks, or 5 GB a month for people using the LTE network.

In January -- one month before the FCC reclassified broadband service -- the telecom asked Chen to dismiss the lawsuit on the grounds that the FTC lacks authority over common carriers. The FTC urged Chen to reject AT&T's position on the grounds that mobile data wasn't at the time a common-carrier service

The following month, immediately after the FCC voted to reclassify broadband, the FTC and AT&T said they wanted to submit new arguments. Last week, the FTC said that it was “inconceivable” that the new net neutrality rules could deprive the agency of jurisdiction retroactively.

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