FTC appeals ruling in throttling case against AT&T

The Federal Trade Commission appealed its case against AT&T’s throttling practices, saying a previous ruling would allow technology companies that also offer phone or broadband services to circumvent enforcement of consumer-protection laws.

The FTC’s suit, which was initially brought two years ago, alleges that the nation’s second-largest carrier misled as many as 3.5 million customers with legacy unlimited data plans by throttling their data speeds and changing the terms of their plans. AT&T argued that the FTC lacks the authority to bring enforcement actions against providers of common-carrier services.

The FCC voted last year to approve its net neutrality rules, reclassifying broadband -- including mobile broadband -- as a common carrier telecommunications service under Title II of the Telecommunications Act.

A three-judge panel sided with AT&T in August, overturning the FTC’s action against the operator.

The heart of the FTC's complaint is that AT&T failed to adequately disclose its throttling policy. AT&T said it has been "completely transparent" with customers since it started throttling unlimited data plan customers in 2011. However, there have been changes to AT&T's throttling policies since then.

Bloomberg reported that the FTC filed its appeal Thursday night in the U.S. Court of Appeals for the Ninth Circuit in San Francisco, saying that an edge provider such as Google or Facebook would simply need to offer broadband services to avoid the FTC’s purview. Those companies could launch their own services, or could merge with an existing carrier to potentially skirt consumer-protection laws.

“The panel’s ruling creates an enforcement gap that would leave no federal agency able to protect millions of consumers across the country from unfair or deceptive practices or obtain redress on their behalf,” the FTC said in the filing, according to Bloomberg.