Judge rejects AT&T claim that FTC can’t stop unlimited data throttling

Judge Edward Chen of US District Court in Northern California has rejected AT&T's claim that it can't be sued by the Federal Trade Commission, which is trying to put a stop to the carrier's throttling of unlimited data plans. The FTC sued AT&T in October 2014, saying the company deceived customers by offering unlimited data plans and then throttling data speeds once customers hit certain usage thresholds, such as 3GB or 5GB in a month. AT&T claimed in January that because it is a common carrier, it isn't subject to FTC jurisdiction.

It's true that the FTC Act exempts common carriers from the commission's oversight. But while AT&T is a common carrier for landline telephone and mobile voice service, the mobile data services at issue were not classified as common carriage at the time the lawsuit was filed. AT&T argued that it is exempt from FTC oversight "even when it is providing services other than common carriage services," Chen wrote. "Contrary to what AT&T argues, the common carrier exception applies only where the entity has the status of common carrier and is actually engaging in common carrier activity," Chen wrote.

The Federal Communications Commission ultimately did reclassify mobile data as a common carrier service in February, a decision that takes effect 60 days after publication in the Federal Register, which hasn't happened yet. AT&T argued that this decision also strips the FTC of jurisdiction over AT&T, even for violations that occurred before the reclassification, an argument Chen rejected. "When this suit was filed, AT&T’s mobile data service was not regulated as common carrier activity by the Federal Communications Commission," Chen wrote. "Once the Reclassification Order of the Federal Communications Commission (which now treats mobile data serve as common carrier activity) goes into effect, that will not deprive the FTC of any jurisdiction over past alleged misconduct as asserted in this pending action."