Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: AT&T Mobility seeks dismissal of FTC ‘throttling” suit, (Jan 6, 2015)

By Linda O’Brien, J.D., LL.M.

AT&T Mobility is a common carrier under the Communications Act regulated by the Federal Communications Commission (FCC) and is therefore exempt from the FTC’s enforcement authority under the FTC Act, according to a motion filed by AT&T Mobility in the federal district court in San Francisco on January 5 (FTC v. AT&T Mobility LLC, Case3:14-cv-04785-EMC).

In October 2014, the FTC filed a complaint against AT&T, alleging that the company failed to adequately disclose to customers on unlimited data plants that, if they reached a certain amount of data use in a given billing cycle, AT&T would reduce or “throttle” their data speeds, in some cases up to 90 percent. The suit charged that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

According to the motion to dismiss, AT&T Mobility is a retailer provider of mobile telephone services and has been subject to regulation by the FCC, the agency created by the Communications Act. The Communications Act contains provisions specifically to “common carriers.” Because AT&T is a “commercial mobile service provider,” the Communications Act treats AT&T as a “common carrier.”

The fact that AT&T’s mobile data services are not regulated as common carrier services under the Communications Act is irrelevant. Such services are still subject to FCC authority under the Telecommunications Act. The FTC Act defines the jurisdiction of the FTC in terms of specific entities, such as persons, partnerships, or corporations. Certain entities, such as common carriers, are exempt from the Act’s coverage. The exemption by its terms, exempts the entities, not just the activities engaged by those entities from the coverage of the FTC Act. Moreover, the exemption is designed to ensure that the entities, which are already subject to another agency’s regulatory authority, will not fact potentially inconsistent regulation under the more general terms of the FTC Act, the motion states.

Furthermore, in the 100 years of the FTC’s existence, no court has authorized the FTC to assert jurisdiction over a common carrier. The FTC Act specifically withholds authority to regulate AT&T and other common carriers and the FTC cannot use its defined authority to expand its own jurisdiction and invade the jurisdiction of other regulatory agencies. Thus, the FTC complaint should be dismissed for lack of jurisdiction, the motion concludes.

Attorneys: Michael K. Kellogg and Mark C. Hansen (Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C.) and Douglas W. Sullivan (Crowell & Moring LLP) for AT&T Mobility, LLC.

Companies: AT&T Mobility, LLC

News: Advertising ConsumerProtection FederalTradeCommissionNews