AT&T seeks dismissal of FTC lawsuit over data throttling

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AT&T asked an appellate court to let a previous decision stand that threw out a lawsuit from the federal government over its former practices for data throttling.

The suit, which was initially brought two years ago by the Federal Trade Commission, 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 Federal Communications Commission 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 Federal Trade Commission 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.

MediaPost reported that the operator filed papers in the 9th Circuit Court of Appeals urging that the previous dismissal be upheld. "At the end of the day, the FTC cannot dispute that, in the 102-year history of the FTC Act, it has never been permitted to press a case against a common carrier," AT&T lobbied, according to MediaPost. "A decision of this court re-affirming that age-old result is not one of exceptional importance warranting ... review."

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.

AT&T last month put another legal battle with the FTC and the FCC to bed when it agreed to pay $105 million to settle claims that it allowed third-party companies to bill its customers for unauthorized charges. Regulators had alleged that until early this year the carrier billed subscribers for “hundreds of millions of dollars” from partners for ringtones and other offerings, with AT&T keeping at least 35 percent of the take, Recode reported.