AT&T Must Respond To FTC's Bid To Revive Throttling Battle

Federal appellate judges have directed AT&T to respond to the Federal Trade Commission's request for a new hearing in a battle over mobile slowdowns.

The FTC recently filed papers asking the 9th Circuit Court of Appeals to reconsider its recent ruling that the agency lacked authority to sue AT&T for duping customers who purchased "unlimited" data. The three U.S. Circuit judges who issued that ruling -- Richard Clifton, Sandra Ikuta and William Hayes -- ordered the telecom to file a response by Nov. 8.

The FTC argued in papers filed last week that the panel's earlier ruling could leave the agency unable to police "high-tech threats" to consumers, including privacy threats posed by cable companies, email providers and cloud storage services.

The legal dispute dates to October 2014, when the FTC alleged in a lawsuit that AT&T duped more than 3.5 million people by selling them unlimited data plans, but slowing their connections after they exceeded monthly allotments. (Last year, AT&T revised its practices; the company no longer automatically slows down customers with unlimited data who exceed their caps, but still throttles them when the network is congested.)

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AT&T countered that the FTC lacks authority to bring an enforcement action against common carriers. Mobile broadband has been a common carrier service since 2015, but the FTC's allegations center on events that occurred when mobile broadband was still considered an "information" service.

An appellate panel made up of judges Clifton, Ikuta and Hayes agreed with AT&T. The judges wrote that the FTC lacks authority to bring enforcement actions against common carriers like AT&T -- even when the enforcement action concerns a non-common carrier service. Last week, the FTC sought a new hearing in front of at least 11 of the 9th Circuit's judges.

AT&T isn't the only wireless carrier to come under fire for throttling people with "unlimited" data. On Wednesday, the Federal Communications Commission said T-Mobile will pay $48 million for slowing broadband connections of some unlimited-data subscribers who consumed more than 17 GB of data in a month.

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