AT&T Reverses Course, Won't Ask Supreme Court To Strip FTC Of Broadband Authority

Changing course, AT&T has decided against asking the Supreme Court to strip the Federal Trade Commission of authority over broadband providers, the telecom said in court papers.

The company's statement came in a status report submitted Wednesday to U.S. District Court Judge Edward Chen in the Northern District of California, who is presiding over a lawsuit filed against the company by the FTC. That dispute started over the telecom's "unlimited" data plan, but escalated into a battle over something much bigger -- the FTC's ability to police Internet service providers.

The FTC sued AT&T in 2014 for allegedly deceiving millions of wireless customers by promising unlimited data but throttling their speeds after they hit a monthly data cap. (AT&T previously throttled its "unlimited" subscribers after they exceeded monthly allotments ranging from 3 GB to 5 GB; the company has since revised that practice.)

AT&T responded by arguing that the lawsuit should be dismissed on the grounds that the FTC lacks authority over common carriers. Mobile broadband wasn't considered a common carrier service when the FTC filed suit, but AT&T argued that was irrelevant due to the company's longstanding role providing telephone service.

Chen sided with the FTC, but a three-judge panel of the 9th Circuit agreed with AT&T and ruled that the FTC couldn't prosecute the company. That decision stunned many industry observers, who said it effectively stripped the FTC of the ability to police a host of activity by broadband providers -- including their net neutrality and privacy practices.

The FTC then appealed to a larger, 11-judge panel of the 9th Circuit. Those judges unanimously ruled that the FTC may proceed with its case against AT&T, because the FTC's charges center on a non-common carrier service.

AT&T said in early May that it planned to appeal to the Supreme Court. Had AT&T won at the Supreme Court, the FTC may have been foreclosed from bringing any enforcement actions against internet service providers. 

It's not clear why the company decided not to pursue that appeal. An AT&T spokesperson said only, "We have decided not to seek review by the Supreme Court, to focus instead on negotiating a fair resolution of the case with the Federal Trade Commission."

Regardless of AT&T's reason, its new decision leaves the FTC free to continue to prosecute broadband providers that dupe consumers.

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