• by Wendy Davis  @wendyndavis, May 9, 2017

A federal appellate court has agreed to reconsider its earlier ruling that the Federal Trade Commission lacks authority to prosecute AT&T for allegedly throttling customers with unlimited wireless data.

The move comes eight months after a three-judge panel of the 9th Circuit Court of Appeals dismissed the FTC's lawsuit against AT&T. The judges said at the time that the FTC can't sue common carriers like AT&T -- even when the complaint centers on a non-common carrier service.

The dispute between the FTC and AT&T dates to October 2014, when the FTC alleged that the wireless carrier duped more than 3.5 million people by selling them unlimited data plans, but slowing their connections after they exceeded monthly allotments ranging from 3 GB to 5 GB.

AT&T argued that the lawsuit should be dismissed on the grounds that the FTC lacks authority to bring an enforcement action against common carriers.

A trial judge rejected AT&T's argument, noting that mobile broadband wasn't considered a common carrier service until 2015, when the FCC issued its net neutrality order.

But last year a three-judge panel of the 9th Circuit reversed that ruling. Those judges suggested in their opinion that the FTC lacks authority over AT&T for all purposes, due to AT&T's longstanding role as a telephone carrier. Many observers interpreted that ruling as effectively depriving the FTC of authority to police the privacy practices of broadband providers.

After the panel's decision came out, the FTC asked for a new hearing in front of at least 11 of the 9th Circuit's 29 judges. Consumer advocates, some lawmakers and other policymakers including the FCC backed that request. As recently as late April, the FCC filed new papers arguing that the three judges who issued the original opinion incorrectly interpreted the law.

FCC Chairman Ajit Pai stated Tuesday that the 9th Circuit's decision to reconsider the case "is a big win for American consumers."

He added that the court's move will make it "easier for the FTC to protect consumers’ online privacy."