You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday; to get your own copy, subscribe at www.benton.org/user/register
The Federal Trade Commission is drawing support in its battle with AT&T from other policymakers, including Sen Richard Blumenthal (D-CT) and the Federal Communications Commission, as well as privacy experts and advocacy groups. Sen Blumenthal, the FCC and others are asking the 9th Circuit Court of Appeals to reconsider a recent decision dismissing an enforcement action against AT&T. The FTC alleged in an October 2014 complaint that AT&T duped more than 3.5 million people by selling them unlimited data plans, but slowing their connections after they exceeded monthly allotments ranging from 3 GB to 5 GB. AT&T countered that the FTC lacks authority to bring an enforcement action against common carriers. A three-judge panel of the 9th Circuit recently sided with AT&T, ruling that the FTC can't sue common carriers -- even when the lawsuit centers on a non-common carrier service. (Mobile broadband wasn't considered a common carrier service when the FTC brought the case.)
Earlier in Oct, the FTC sought a new hearing in front of at least 11 of the 9th Circuit's judges. Sen Blumenthal argues in a proposed friend-of-the-court brief that the panel's ruling creates "a wide hole in FTC jurisdiction that undermines the agency’s ability to remedy deceptive acts committed by the growing range of companies that engage in common-carrier activity as well as non-common-carrier activity."
The Federal Communications Commission is expected Oct 27 to vote on new rules on how Internet service providers (ISPs) can use customer data. Consumer privacy over ISPs' broadband networks came under the purview of the FCC after the agency's adoption in 2015 of network neutrality or Open Internet rules. More than nine out of 10 adults (91%) agree or strongly agree consumers have lost control of their personal data and its use, according to a Pew Research Center report out in Sept. But its updating of Internet consumer privacy rules has vast repercussions when it comes to the accumulation of consumer data profiles and their possible use in advertising and marketing. Companies such as AT&T, Comcast, Google and Verizon have argued the FCC's rules should dovetail with those of the Federal Trade Commission, which handles consumer privacy on Web sites, in apps and any other Net destination.
Presidential politics are casting a shadow over the biggest media acquisition of 2016. The outcome of the White House race could help determine the fate of the proposed $85 billion sale of Time Warner to telecommunications behemoth AT&T, an unusual situation for a massive sale. “It’s such an interesting thing about this deal, is the fact that it was announced when it was announced,” said Craig Aaron, president of Free Press, which argues the deal would be bad for consumers. “I think this would be a highly controversial deal whenever it happened, but the fact that it’s happening two weeks out from the election and will be decided by … appointees who nobody knows who they are yet, makes this a much more political fight than maybe it would have been if it had happened at another time.” Neither of the presidential hopefuls has spoken kindly of the proposal.
[Commentary] It is far too early to predict with certainty which issues will be the focal point of regulatory scrutiny of the AT&T/Time Warner merger. But based on the issues flagged in the Comcast/NBC proceeding, one can expect that regulators will at least ask about the following topics:
Nondiscriminatory access to programming: Many of the conditions placed on the NBC transaction involved Comcast’s commitment to allow rival cable operators and potential online video distributors access to Comcast-owned content. One can imagine regulators will discuss similar conditions to assure that AT&T’s library of content post-transaction will not remain the exclusive prerogative of AT&T customers. It’s important to note that, independently of any merger conditions, the Federal Communications Commission’s program access rules give the agency jurisdiction to investigate such conduct if a cable company complains.
Management of Hulu: Although the transaction is primarily vertical, there is one potential anticompetitive wrinkle. Time Warner has a 10 percent stake in Hulu, which potentially competes with AT&T U-Verse, DirecTV, and the company’s proposed DirecTV Now virtual cable offering. In the NBC case, regulators required Comcast to be a silent partner with regard to its 33 percent stake in Hulu, out of fear that Comcast would steer Hulu in ways that limited competition. The Justice Department is likely to ask similar questions with regard to AT&T’s exercise of its shares as well.
Zero-rating of Time Warner content: The FCC conditioned its approval of the Charter-Time Warner Cable merger on the company’s commitment to avoid usage-based pricing. Given the heat and light about this issue, one might anticipate regulators to explore whether AT&T would be permitted to exempt Time Warner content from monthly wireless data caps. Such agreements might raise anticompetitive concerns, although I have written before that these concerns are probably overblown, particularly in today’s competitive wireless marketplace. Nonetheless, regulators are likely to consider this issue as part of their overall regulatory approval.
[Daniel Lyons is an associate professor at Boston College Law School]
© 1994-2025 Benton Institute for Broadband & Society. All Rights Reserved.
