Net Neutrality Rules Don't Protect AT&T In Battle Over Throttling, FTC Argues

The Federal Trade Commission says in new court papers that it is entitled to continue pursuing a lawsuit against AT&T, despite the new net neutrality rules.

The agency argues in court papers filed on Monday that the net neutrality rules, which were passed last week by the Federal Communications Commission, don’t “relieve AT&T of liability for its unfair and deceptive throttling program.”

The FTC’s papers come less than one week after a different agency — the FCC — voted to reclassify broadband as a common-carrier service, which is regulated under Title II of the Telecommunications Act. That decision enabled the FCC to prohibit broadband providers from discriminating among content providers — such as by creating fast lanes. At the same time, it also appears to strip the FTC of the power to bring enforcement actions, because the FTC lacks authority over common carriers.

But the FTC argues in its new court papers that even if the net neutrality regulations prevent it from bringing future enforcement actions against AT&T, the rules don’t apply retroactively.

“AT&T’s unlawful throttling program began in 2011 and continues to this day,” the FTC says in papers filed with U.S. District Court Judged Edward Chen in the Northern District of California. “As such, for more than three years (and running), AT&T has engaged in unfair and deceptive conduct in the provision of mobile data.”

The legal battle between AT&T and the FTC dates to October, when the agency alleged that AT&T’s practice of slowing the broadband speeds of mobile users who pay for unlimited data is unfair and deceptive. The charges stem from AT&T’s 2011 throttling policy, which allows the company to slow the mobile broadband speeds of “unlimited” customers who exceed a data cap. Since implementing the policy, the company has slowed down more than 3.5 million customers, according to the FTC.

AT&T began throttling unlimited users soon after introducing “tiered” billing plans, which require customers to pay for a monthly allotment of data. The wireless provider still allows longtime users who previously had unlimited plans to avoid pay-per-byte billing, but slows some of them down after they hit a cap of either 3GB a month for customers on the 3G and HSPA+ networks, or 5 GB a month for people using the LTE network.

In January — one month before the FCC reclassified broadband service — the telecom asked Chen to dismiss the lawsuit on the grounds that the FTC lacks authority over common carriers. The FTC countered that it retained the ability to sue telecoms for engaging in activities that aren’t subject to common-carrier treatment — even if other portions of their businesses are governed by common-carrier rules.

Last week, immediately after the FCC voted to reclassify broadband, the FTC and AT&T said they wanted to submit new arguments.

The FTC says in its latest papers that it’s “inconceivable” that the net neutrality order applies retroactively. The agency adds that applying the rules retroactively would “effectively extinguish the monetary claims of millions of unlimited customers injured by AT&T’s unfair and deceptive conduct.”

AT&T is expected to file its next round of arguments on Friday.

This post was syndicated from MediaPost’s OMMA Today.