Commentary

FCC Unlikely To Fine AT&T For Throttling Wireless Customers

Two years ago, the Federal Communications Commission proposed fining AT&T $100 million for failing to tell customers with supposedly unlimited data that they would find themselves slowed to a crawl after hitting an arbitrary monthly cap.

Since then, the agency has not proceeded with a case against AT&T -- and doesn't appear likely to do so in the near future. This week, the FCC pointed out in court papers that its two Republican commissioners dissented from the initial 2015 decision to issue the "Notice of Apparent Liability" -- which set out the ways AT&T allegedly violated its duty to disclose the terms and conditions of service to customers.

"A majority of the FCC’s current commissioners dissented from the decision to issue the NAL ... and no further action has been taken on it," the FCC said in court papers filed Tuesday with the 9th Circuit Court of Appeals.

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The agency's statement comes in a friend-of-the-court brief asking the 9th Circuit to restore the ability of a different agency -- the Federal Trade Commission -- to police AT&T.

The FTC sued AT&T in October 2014 for allegedly duping more than 3.5 million customers 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 FTC's lawsuit should be dismissed on the grounds that the agency can't bring enforcement actions against common carriers. A trial judge rejected AT&T's position, noting that mobile broadband wasn't considered a common carrier service until the FCC passed net neutrality rules in 2015 -- after the FTC had filed suit.

Last year a three-judge panel of the 9th Circuit reversed the trial judge's decision. The appellate judges suggested that the FTC lacks authority over AT&T for all purposes, due to AT&T's longstanding role as a telephone company. Many observers interpreted that ruling as effectively depriving the FTC of authority to police the privacy practices of broadband providers.

Earlier this month, the 9th Circuit agreed to reconsider whether the FTC can proceed against AT&T. On Tuesday, the FCC filed a friend-of-the-court brief supporting the FTC's position.

The FCC noted in its newest papers that even if it follows through with Chairman Ajit Pai's controversial plan to classify broadband as an "information" service -- meaning it would no longer be regulated as a common carrier service -- the prior 9th Circuit decision still deprives the FTC of authority over AT&T.

"The FCC’s proposed regulatory changes, if adopted, would not resolve the issue in this appeal, because ... AT&T also provides traditional wireline and wireless voice telephone service," the agency writes.

In other words, the FCC is acknowledging even if it guts the net neutrality rules broadband providers will be exempt from FTC oversight, unless the 9th Circuit reverses its earlier ruling.

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