September 2016

[Commentary] In a decision that could significantly impact the scope of the Federal Trade Commission’s consumer protection authority under Section 5 of the FTC Act, the US Court of Appeals for the Ninth Circuit ruled on August 29, 2016, that common carriers are entirely exempt from the FTC’s jurisdiction, even when engaged in “non-common carrier” activities. The court’s decision in FTC v. AT&T Mobility LLC reflects a major rebuke of the FTC’s prior interpretation of its authority under Section 5, under which the agency regulated the non-common carrier activities and services of companies otherwise classified as common carriers. Unless reversed or modified, the decision will result in a dismissal of the FTC’s current action alleging that AT&T’s inadequate notice to its customers regarding data “throttling” practices was an unfair practice under Section 5. The decision also raises a host of new questions regarding who falls within (or outside of) the FTC’s jurisdiction.

If this is the outcome, is there any federal agency (as opposed to the 50 states) with jurisdiction to enforce consumer protection issues? Could the Federal Communications Commission rely on other sections of the Communications Act to bring enforcement actions against Google? Stay tuned to the Privacy and Security Law Blog for answers to these questions as we provide updates on this decision, the FTC’s response, and the pending FCC proceeding.

AT&T has declined to make its new low-cost Internet program available to many thousands of eligible households who have the bad luck to live at an address where the company's maximum download speed for new residential accounts is below 3 mbps. Here’s the story. “Access From AT&T” is a low-cost broadband service that was a Federal Communications Commission condition of AT&T's merger with DirectTV. Launched in most AT&T markets in April, the program is supposed to enable any user of the Federal Supplemental Nutrition Assistance Program (SNAP) to purchase AT&T high speed home Internet service for either $10 or $5 a month, depending on the download speed “technically available” at the user's address – 10 Mbps for $10/mo, 5 Mbps for $10/mo or 3 Mbps for $5 (plus tax).

As some National Digital Inclusion Alliance affiliates in AT&T's service area geared up to help SNAP participants apply for Access in May and June, they found that a significant number were being told the program was unavailable at their addresses. Some of those households had recent histories of AT&T Internet service or had next door neighbors with current accounts. So, why were they being told AT&T did not serve their addresses? The problem: The threshold for Access From AT&T is a download speed of 3 Mbps. If the fastest speed available at a particular address is less than 3 mbps, an otherwise eligible SNAP recipient at that address can't sign up for Access – though they can pay full price for lower speeds.

The parent company of Fox News said that it had settled a lawsuit with its former anchor Gretchen Carlson, who said that Roger Ailes had sexually harassed her when he was chairman of the network. A 21st Century Fox Corporation news release did not specify a settlement amount, but a person briefed on the settlement said that it amounted to $20 million, and that Ailes was responsible for a portion of the payment. The person also said Fox News was in settlement talks with other women at the network. The company apologized for the behavior, saying, “We sincerely regret and apologize for the fact that Gretchen was not treated with the respect and dignity that she and all of our colleagues deserve.”