Court rules in AT&T's favor on data 'throttling'

Court rules in AT&T's favor on data 'throttling'
© Getty Images

AT&T won an early victory in its two-part battle with the Federal Trade Commision and Federal Communications Commision on Monday when a federal appeals court dismissed a case alleging that the company used deceptive practices regarding its “unlimited” data plan.

The FTC claims that AT&T was significantly slowing down data of customers who had unlimited plans — also referred to as “throttling.” The wireless carrier reportedly didn’t inform customers of this practice.

The 9th Circuit Court of Appeals dismissed the FTC’s case, siding with AT&T’s argument that the FTC Act granted an exception for “common carriers.”

Though the court sided with AT&T’s argument that it was exempt from FTC regulation, it did not back AT&T’s other contention: that throttling its customers was necessary to preserve its network. 

“AT&T’s throttling program is not actually tethered to real-time network congestion,” Judge Richard Clifton wrote in the court’s opinion. “Instead, customers are subject to throttling even if AT&T’s network is capable of carrying the customers’ data.”

When asked for comment, an AT&T spokesperson told The Hill, "We're pleased with the decision."

AT&T is still facing another legal battle over a similar issue with the FCC. That agency intends to fine the telecommunication company $100 million for the practice of throttling data plans for “unlimited” users.

The company rejects the FCC’s claims on the grounds that it had already identified AT&T’s throttling practices as legitimate.

“We will vigorously dispute the FCC’s assertions,” AT&T spokesman Michael Balmoris said. “The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers and has known for years that all of the major carriers use it. We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC’s disclosure requirements.”

According to the agency’s own investigation, customers were not given sufficient notification on the throttling rules.

The FCC had previously asked the court to dismiss the FTC case, which it felt was in its jurisdiction. The court denied this.