Federal Judge Rejects AT&T Dismissal Request for FTC's Throttling Lawsuit
U.S. District Court Judge Edward Chen rejected AT&T’s claim that the FTC couldn’t sue the wireless carrier to stop its throttling of unlimited data plans, ruling in San Francisco Tuesday that he would allow the FTC’s lawsuit to move forward.…
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The FTC filed suit against AT&T Oct. 28, claiming AT&T throttled data transmissions more than 25 million times since October 2011 for 3.5 million of its customers subscribed to unlimited data plans. The FTC is seeking injunctive relief against AT&T and restitution for affected customers (see 1410280047). AT&T argued in January that the FTC couldn’t sue the carrier over throttling because it held common carrier status and was therefore outside the FTC’s jurisdiction. The FTC Act does exempt common carriers from the FTC’s jurisdiction, but the mobile data services at issue in the lawsuit weren’t considered a common carrier service when the FTC filed the suit, Chen said in his ruling. The FCC reclassified wireline broadband and mobile broadband as Communications Act Title II services Feb. 26 in its new net neutrality rules, with reclassification set to happen after the net neutrality order appears in the Federal Register (see 1502260043">1502260043). Once the order “goes into effect, that will not deprive the FTC of any jurisdiction over past alleged misconduct as asserted in this pending action,” Chen said in his ruling. AT&T has also misinterpreted the common carrier exemption in the FTC Act to mean the FCC and FTC can’t overlap on common carrier regulations, when in fact “it appears that the more precise purpose was to prevent overlap between common carrier regulations,” Chen said. “Indeed, it is not uncommon for any particular activity of a business to be subject to multiple sets of regulations.” FTC Commissioners Terrell McSweeny and Joshua Wright expressed concerns in late March about Title II reclassification endangering the FTC’s jurisdiction over broadband providers (see 1503250059). The FTC looks “forward to proving that AT&T's marketing of its ‘unlimited’ data plans was unfair and deceptive and returning money to the millions of consumers who were harmed by AT&T's action,” Chairwoman Edith Ramirez said in a statement. AT&T said in a statement that “we’re obviously disappointed in, and disagree with, the decision and will seek to appeal it as soon as possible.”