Appeals court to review decision in FTC v. AT&T case over throttling

A federal appeals court will review a decision that threw out a lawsuit over AT&T's former throttling practices

A federal appeals court will review a decision that threw out a lawsuit from the U.S. over AT&T’s former practices for data throttling.

The suit, which was initially brought two years ago by the Federal Trade Commission, alleged 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 Federal Communications Commission voted in 2015 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 FTC appealed its case against AT&T’s throttling practices last month, saying a previous ruling would allow technology companies that also offer phone or broadband services to circumvent enforcement of consumer-protection laws.

AT&T asked an appellate court in November to let the previous decision stand, but the U.S. Court of Appeals for the Ninth Circuit agreed late Tuesday to review the panel’s decision.

“The three-judge panel disposition in this case shall not be cited as precedent by or to any court of the Ninth Circuit,” the court said in a brief statement.

The heart of the FTC's complaint is that AT&T failed to adequately disclose its throttling policy. AT&T has 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.

FCC Chairman Ajit Pai, who recently outlined plans to reclassify broadband as a Title I information service rather than a Title II common carrier service, applauded the decision.

“Today’s action by the Ninth Circuit is a big win for American consumers,” Pai said in a prepared statement. “Now that the court’s prior decision is no longer effective, it will be easier for the FTC to protect consumers’ online privacy.”