FCC to Court: FTC Common Carrier Exemption Is Activity Based

The Federal Communications Commission is standing with the Federal Trade Commission when it comes to a federal court decision that leaves a potential regulatory gap for broadband regulation, in the process taking a shot at AT&T. The US Court of Appeals for the Ninth Circuit in May agreed to an en banc (full court) review of its three-judge panel decision that left the Federal Trade Commission's authority to oversee edge-provider's protections of privacy in some circumstances very much in doubt. The court also said that in the interim that panel decision was not to be cited as precedent of the Ninth Circuit.

Such en banc review is unusual, but the decision had prompted a lot of attention given that potential online privacy impact. The three-judge panel, in overturning the FTC's action against AT&T for throttling the speeds of unlimited data customers, last August ruled that the regulatory exemption that prevents the FTC from regulating common carriers is not "activity-based," confined to common carrier "activity" by an entity that has the status of a common carrier, but is status-based, extending to noncommon carrier activity by that entity as well. That meant that if Verizon, a common carrier, bought Yahoo!, an edge provider, the FTC could not enforce Yahoo! privacy policies, and the FCC could not either because it does not regulate edge providers, leaving a potential privacy gap.