AT&T wants to settle with FTC to avoid unlimited data throttling lawsuit

AT&T has given up its years-long quest to cripple the Federal Trade Commission’s authority to regulate broadband providers.

Just weeks ago, AT&T said it intended to appeal its loss in the case to the US Supreme Court before a deadline of May 29. But today, AT&T informed court officials that it has decided not to file a petition to the Supreme Court and did not ask for a deadline extension.

AT&T had been trying to limit the FTC’s authority since October 2014, when the FTC sued AT&T for promising unlimited data to wireless customers and then throttling their speeds by as much as 90 percent.

With AT&T having ruled out a Supreme Court appeal, the FTC can finally pursue its case against AT&T and try to secure refunds for affected customers. AT&T’s decision also means that traditional phone companies will have to face some net neutrality oversight from the FTC after the Federal Communications Commission finalizes its net neutrality repeal.

AT&T said it will try to settle the case with the FTC instead of going to trial. AT&T’s decision might indicate that it is already having settlement talks with the agency.

“We have decided not to seek review by the Supreme Court, to focus instead on negotiating a fair resolution of the case with the Federal Trade Commission,” AT&T said in a statement to Ars.

The FTC is barred from regulating common carriers, and AT&T has long been a common carrier for its mobile voice and landline phone services. AT&T previously argued that the FTC can’t regulate any product offered by AT&T, whether it is or isn’t a common carrier service.

Though ultimately unsuccessful, AT&T’s attempt to deny the FTC’s authority to regulate any aspect of its business has delayed the throttling case for years.

FTC and net neutrality

The other upshot here is that the FTC will be able to regulate broadband providers in general after the Federal Communications Commission’s repeal of net neutrality rules is finalized on June 11.

The net neutrality repeal will also eliminate the FCC’s 2015 classification of broadband providers as common carriers. But AT&T’s decision to drop its appeal means that the FTC will be able to regulate broadband services sold by companies that also offer common carrier phone service.

A preliminary AT&T victory in the throttling case in August 2016 put the FTC’s regulatory authority in doubt. But the FTC triumphed in February 2018 in a ruling from an session of the US Court of Appeals for the 9th Circuit.

Until changing course today, AT&T planned to appeal that 9th Circuit decision to the Supreme Court.

FTC authority still limited

Even though the FTC’s authority has been preserved, there will still be fewer consumer protections for broadband customers after June 11. The FCC is eliminating its rules against blocking, throttling, and paid prioritization, along with numerous other consumer protections.

The FTC can’t impose strict net neutrality rules on ISPs. Instead, the FTC can only try to punish ISPs if they make net neutrality promises and fail to keep them.

To avoid FTC-enforced restrictions, ISPs can simply change their promises—as Comcast did last year when it removed a pledge that it won’t charge websites or other online applications for “fast lanes.”

Democratic attorneys general from more than 20 states are suing the FCC to reverse the net neutrality repeal. Democratic members of Congress are also trying to prevent the repeal, and several state governments (including California’s) are pursuing their own net neutrality rules.

Broadband providers aren’t done pursuing lawsuits to avoid net neutrality rules. USTelecom, which represents AT&T and other telcos, has said it will “aggressively” sue states that impose net neutrality regulations.

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