FTC Presses For Power To Sue Internet Service Providers

The Federal Trade Commission is urging lawmakers to empower the agency to hold Internet service providers accountable for duping consumers.

Currently, the agency is tasked with protecting consumers from deceptive business practices generally, but isn't authorized to bring cases against common carriers like Verizon and AT&T.

That carve-out "no longer makes sense in today’s deregulated environment where the lines between telecommunications and other services are increasingly becoming blurred," the FTC said in comments submitted to the Senate Commerce Committee, which held an oversight hearing this week.

Commissioner Maureen Ohlhausen expanded on that idea in her testimony to lawmakers. She told a Senate panel yesterday that common carriers shouldn't get a pass when it comes to consumer protection laws.

"Although the FTC has nearly a century of experience protecting consumers across many industries, the exemption from our jurisdiction for common carriers frustrates effective consumer protection with respect to a wide array of activities, including fraud and billing practices in the crucially important telecommunications and Internet industries," she said.

Ohlhausen argued that repeal is especially critical given a recent and much criticized decision that appears to block the FTC from suing common carriers for a host of questionable practices. She says the agency could now have a harder time taking action regarding practices like cramming, deceptive marketing and violations of the Children's Online Privacy Protection Act, thanks to that decision.

Ohlhausen was referring to the 9th Circuit Court of Appeals ruling in favor of AT&T in a matter centering on its former data-throttling practices. From 2011 until last year, AT&T allegedly offered consumers the opportunity to purchase "unlimited" data plans, but throttled them after they exceeded an arbitrary cap.

The FTC filed a complaint against AT&T in 2014, alleging that the telecom duped consumers by advertising its plans as unlimited. Last month, the 9th Circuit threw out the FTC's case, ruling that the agency can't sue common carriers.

The court said in a broadly worded opinion that the FTC lacks authority to bring cases against AT&T for any activity -- not just common carrier activity, like transmitting phone calls or providing broadband service.

FTC Chairwoman Edith Ramirez said the agency intends to ask the 9th Circuit to reconsider that decision. For now, though, the decision appears to curb the FTC's ability to take action against broadband carriers.

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