Recently, the judges in the Ninth Circuit Court of Appeals questioned lawyers of AT&T® and Federal Trade Communications (FTC) regarding whether FTC has the right to prosecute the Telco for “allegedly throttling the subscribers with unlimited wireless data” without sending due notice. AT&T® told the judges the lawsuit is invalid and that FTC cannot enforce a fine since the Telco does not fall under the jurisdiction of FTC.
FTC has appealed a ruling in favor of AT&T® by the Ninth Circuit Court of Appeals last year, and a year on, the lawsuits still remains wide open. The Ninth Circuit Court of Appeals is yet to give a ruling on the present lawsuit as yet. Similar lawsuits have occurred before between AT&T® and FTC.
In 2014, for instance, FTC alleged the Telco had throttled download speed when the subscribers exceeded monthly data caps by 3 to 5 GB. AT&T® dismissed the lawsuit stating that FTC has no authority to prosecute “common carriers”. In fact, Federal Communications Commission’s Net Neutrality rules classify internet providers as “common carriers,” something which FTC failed to dismiss in 2014. As a lawsuit settlement, FTC refunded more than 2.7 million AT&T® subscribers in 2016.
Joel Marcus, Deputy General Counsel for Litigation, and acting lawyer of FTC has said that FTC’s interest in the lawsuit with AT&T® strictly applies to data security. “At this point, the FTC is the only game in town in data security,” Marcus said. “But even beyond that you have the problem of the common carrier who sells dietary supplements or used cars or any of the other things the FTC ordinarily gets involved in.”
Marcus also pointed out that it was not the case until earlier this year, when President Donald Trump overhauled the Net Neutrality rule, which FCC passed in 2015. The Net Neutrality rule was enforced under the Obama Administration to correct the loopholes in privacy and data security that existed due to FTC’s “common carrier” exemption.
However, the judges say that the Republican Senate is now working on reversing the 2015 Net Neutrality rules. The reversal may reclassify internet providers as “common carriers”, and if passed, the changes will put some of the best internet providers namely AT&T®, Verizon®, Comcast®, Charter Communications®, and Cox® under the jurisdiction of FTC.