• by Wendy Davis  @wendyndavis, July 31, 2024

Earlier this year, the Federal Communications Commission ordered Verizon, AT&T and T-Mobile to pay nearly $200 million total for sharing customers' location data.

The companies, which paid the fines under protest, now want appellate courts to reverse the FCC's ruling.

“The Commission’s forfeiture order is unconstitutional, inconsistent with the limitations of the Communications Act, and arbitrary and capricious,” AT&T writes in papers filed this week with the 6th Circuit Court of Appeals.

The FCC fined AT&T around $57 million, Verizon around $47 million, and T-Mobile $92 million (including $12 million for Sprint, which merged with T-Mobile in 2020).

The agency handed outthe fines more than four years after alleging in a “notice of apparent liability” that the carriers sold access to geolocation data to aggregators that resold the information to outside companies. The FCC issued the notice around one year after Vice Media's Motherboard reported that a journalist had been able to pay a “bounty hunter” $300 to track a phone's location to a neighborhood in Queens, New York.

The major U.S. carriers have said they no longer sell location data.

An AT&T spokesperson said earlier this year that the FCC had "unfairly" held the company responsible for a third-party's violation of a contractual requirement to obtain consumers' consent to disclose location data.

The fine "ignores the immediate steps we took to address that company’s failures, and perversely punishes us for supporting life-saving location services like emergency medical alerts and roadside assistance that the FCC itself previously encouraged,” the spokesperson stated.

AT&T argues in its appeal that the fines should be vacated for numerous reasons, including that the FCC imposed the fines without either conducting an in-house hearing or proving the allegations in court.

The company also says the agency lacked authority to issue the fines because the location data at issue wasn't tied solely to voice services, like telephone calls. Instead, the location information was tied to non-voice location-based services such as the Life Alert program, which sends medical help to people, or roadside assistance company AAA, the telecom argues.

“Location-based services can be used by data-plan customers who do not even have voice services with AT&T, like many tablet or smartwatch customers,” AT&T argues.

“Notably, the location information AT&T provided was not call location information, i.e., records of 'the customer’s location while making or receiving a voice call,'” the company adds.

AT&T says the distinction between “call information” and location information not tied to phone calls is critical, arguing that the FCC is only authorized to police the confidentiality of “call information.”

Verizon is appealing separately to the 2nd Circuit, and T-Mobile is appealing to the District of Columbia Circuit.

T-Mobile indicated in court papers filed this week that it plans to make arguments similar to AT&T's.

Verizon said in its petition seeking review that the FCC's order is “arbitrary, capricious, and an abuse of discretion,” and is also “contrary to law and unsupported by substantial evidence.”

The FCC imposed the fines by a 3-2 vote, with Republican Commissioners Brendan Carr and Nathan Simington dissenting.

Carr stated in his dissent that he believes the FCC lacked authority to impose the fines. 

“Given the nature of the services at issue, the Federal Trade Commission, not the FCC, would have been the right entity to take a final enforcement action, to the extent the FTC determined that one was warranted,” he said in a written dissent.

Simington said in a separate dissent that the FCC could have worked with the carriers “to issue consent decrees to promote best practices to develop further safeguards around location-based and aggregation services.”