Appeals Court To Decide Whether FTC Can Sue AT&T Over Throttling Policy

A federal appellate court could soon decide whether the Federal Trade Commission can sue AT&T for throttling wireless users who pay for "unlimited" data.

In an order issued on Monday, 9th Circuit judges Michael Hawkins and Andrew Hurwitz said the court would agree to hear AT&T's appeal of a ruling that allowed the FTC to proceed with an enforcement action.

The FTC alleged in a lawsuit filed last October that AT&T deceived consumers by offering them unlimited data, but slowing down their broadband connections if they exceeded a cap. From 2011 until earlier this year, AT&T allegedly throttled more than 3.5 million customers who exceeded monthly allotments of 3GB or 5GB, depending on their phones. (AT&T recently revised its throttling practices and no longer automatically slows down customers with unlimited data who exceed their caps, but still throttles them when the network is congested.)

AT&T contends that the FTC lacks authority to bring an enforcement action against common carriers. In February, the Federal Communications Commission reclassified mobile broadband as a common carrier service.

U.S. District Court Judge Edward Chen in the Northern District of California rejected AT&T's argument, noting that the FTC filed suit against AT&T before mobile data was reclassified as a common carrier service. He said that the FCC's net neutrality order doesn't "deprive the FTC of any jurisdiction over past alleged misconduct."

In addition to the FTC's lawsuit, AT&T also is facing a potential $100 million FCC fine for allegedly violating a 2010 rule by failing to adequately explain its throttling policies to consumers.

AT&T recently urged the FCC to drop its request. The company says that it provided customers with "extensive, numerous, and complete disclosures" of its throttling policy.

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