Court to rehear case on FTC's authority

Court to rehear case on FTC's authority
© Getty Images

A federal court will rehear a case brought by AT&T against the Federal Trade Commission, after it ruled last year that the agency does not have authority over telecommunications companies.

The Ninth Circuit Court of Appeals for the Northern District of California said it will rehear the case before a full panel of judges.


The court ruled last year that the FTC had no jurisdiction over common carriers — a designation for companies that offer phone services.

In the case, the FTC had sought action against AT&T, accusing it of unfairly throttling or lowering data speeds for customers. But AT&T challenged the agency's jurisdiction over it, and won.

“We have reviewed the court’s order, and we look forward to participating in the en banc review,” said AT&T spokesman Michael Balmoris on Tuesday.

If the initial ruling stands, the decision could have a major impact on Republican efforts to repeal the Federal Communications Commission's net neutrality rules.

The FCC reclassified broadband companies as common carriers in 2015 and took over jurisidiction, imposing net neutrality protections that required the companies to treat all web traffic equally.

Republicans opposed the move because it opened up the industry to tougher regulations.

FCC Chairman Ajit Pai has started the process to repeal the rules in order to return broadband companies to the FTC’s “light-touch” regulatory framework. Republicans have also repealed FCC internet privacy rules.

Pai said in a statement that the decision was a win for net neutrality opponents.

“Today’s action by the Ninth Circuit is a big win for American consumers. Now that the court’s prior decision is no longer effective, it will be easier for the FTC to protect consumers’ online privacy," he said.

“The court’s action also strengthens the case for the FCC to reverse its 2015 Title II Order and restore the FTC’s jurisdiction over broadband providers’ privacy and data security practices.

But if the Ninth Circuit decision is upheld after the court rehears the case, repealing the net neutrality rules won’t be enough to restore the FTC’s authority over broadband companies. That would likely require an act of Congress.