AT&T keeps fighting to get FTC lawsuit over its data throttling thrown out

AT&T Mobility (NYSE: T) asked a federal appeals court to decide whether the Federal Trade Commission can move ahead with a lawsuit that targeted the carrier's data throttling policies.

In a filing with the 9th Circuit Court of Appeals, based in a San Francisco, AT&T said the court should hear the case now in order to avoid costly litigation for both sides, according to MediaPost. "If this Court waits to review until after a trial, the parties could waste enormous amounts of time and money litigating this case to completion," AT&T argued in its filing seeking an immediate appeal. The FTC isn't opposing AT&T's request, according to documents AT&T filed on Tuesday.

In a late March decision, Judge Edward Chen of U.S. District Court in Northern California refused to dismiss the lawsuit, which the FTC first brought last fall. The FTC alleged that the 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 has said the lawsuit does not have any merit.

AT&T has argued that the lawsuit should be dismissed because the FTC lacks the authority to bring enforcement actions against providers of common-carrier services. In February, when the FCC voted to approve its net neutrality rules, it reclassified broadband, including mobile broadband, as a common carrier telecommunications service under Title II of the Telecommunications Act.

However, according to MediaPost, the FTC has said the FCC's decision isn't retroactive, and that when the suit was first filed AT&T's wireless data service was still classified as an information service not subject to common-carrier regulations. Chen agreed with that line of argument, and AT&T wants the appeals court to overturn that decision.

"Whether retroactivity analysis is warranted at all in this context is a complex issue that the Ninth Circuit has not had occasion to decide. It is thus an apt candidate for immediate review," AT&T wrote.

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.

Most recently, earlier this month AT&T changed its policy and said it will throttle the data speeds of customers on legacy unlimited data plans only when they are connected to congested cell sites, regardless of the kind of smartphone they have.

Previously, customers who had 3G or HSPA+ phones as well as legacy unlimited data plans were throttled for the remainder of their billing period after they exceeded 3 GB of data in a month, but only "at times and in areas that are experiencing network congestion." However, while LTE customers with grandfathered unlimited plans did not see their speeds throttled until they reached 5 GB of data usage in a month, their speeds were slowed down for the remainder of their billing cycle at all times--regardless of whether the network was congested. That discrepancy is now no longer the case.

There are not many customers who still have legacy unlimited data plans from AT&T. The carrier said that at the end of the first quarter around 87 percent of its postpaid smartphone subscribers were on usage-based data plans (tiered data plans, Mobile Share and other plans).

For more:
- see this MediaPost article
- see this Ars Technica article

Related Articles:
AT&T changes data throttling policy for customers on unlimited plans, will only throttle when network is congested
AT&T may be fined by FCC over throttling practices
AT&T to make throttling policy the same for LTE, HSPA+ subs with unlimited plans
T-Mobile agrees to disclose more info about actual speeds when customers are throttled
FTC sues AT&T over data throttling policies, says 3.5M customers have been throttled 25M times

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