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FTC Wins Major Ruling Over AT&T

By George Khoury, Esq. on February 27, 2018 3:33 PM

The FTC may have lost the legislative battle to the big corporate interests, but the Ninth Circuit recently handed the agency a big win in its second appeal against AT&T. The case started back in 2014 with the FTC filing a lawsuit related to AT&T's throttling of mobile data for certain customers.

Interestingly, in 2015, the FCC ruled that providers of mobile data/internet service were in fact common carriers. Notably, the common carrier distinction removed AT&T from the regulatory purview of the FTC. However, with the anticipated repeal of the net neutrality rules, mobile data providers will no longer be considered common carriers for providing mobile data services.

What's Data Throttling?

Data throttling is the practice of internet service providers slowing down data speeds. AT&T and other mobile phone carriers found themselves in hot water when customers discovered the companies would slow down the biggest data users after a certain point.

In response to the FTC's lawsuit, AT&T filed a motion to dismiss, and lost. It appealed to the Ninth Circuit, and won before a panel of three judges, who reversed the district court's decision and ordered the matter dismissed. Then, the FTC requested a rehearing en banc, which reversed the panel decision and reaffirmed the lower district court's overruling of the motion to dismiss.

Status of the FTC v. AT&T Case

The actual case still needs to be litigated before the district court; however, the recent Ninth Circuit ruling is rather significant. The court held that the FTC could hold AT&T to answer for the data throttling that occurred both before the 2015 rule change, as well as what may come after the net neutrality repeal takes effect.

AT&T is likely exploring whether appealing the Ninth Circuit's decision to SCOTUS makes sense, particularly given how clearly the court laid out the rationale for affirming the district court's decision.

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