AT&T's Title II Tap Dance Fails To Derail FTC Throttling Lawsuit

from the Schrodinger's-carrier dept

Back in 2010, AT&T eliminated the company’s unlimited data plans and began offering users only plans with usage caps and overage fees. While AT&T did “grandfather” existing unlimited wireless users at the time, it has been waging a not-so-subtle war on those users ever since in the attempt to get them to switch to more expensive plans. That has included at one point blocking video services from working unless users switched to metered plans (one of several examples worth remembering the next time someone tells you net neutrality is a “solution in search of a problem”).

AT&T also switched some unlimited users to its metered plans without user consent, something the carrier received a whopping $700,000 FCC fine for in 2012. But the telco’s primary weapon against these users has been to throttle these users to speeds of 128 to 528 kilobits per second should they use more than a few gigabytes of data in the hopes they’d switch to metered but unthrottled plans. AT&T was sued for the practice by the FTC in October of last year, the agency claiming 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.”

As we noted previously, AT&T tried a rather amusing defense to try and tap dance away from the lawsuit. It claimed that because the FCC was now classifying ISPs as common carriers under Title II, the FTC no longer had the authority to police AT&T actions under the FTC Act. In other words, AT&T hates Title II — except when it allows them to skirt lawsuits for bad behavior. In a twenty-three page ruling (pdf), Judge Edward Chen says the law is “unambiguously clear” that only AT&T wireless voice, not wireless data, was classified as common carrier when the lawsuit was filed last fall:

“Contrary to what AT&T argues, the common carrier exception applies only where the entity has the status of common carrier and is actually engaging in common carrier activity.”

In other words, no, AT&T can’t have its cake (claim to loathe Title II with every shred of its being) and eat it too (run to Title II and common carrier protections when it suits it).

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Comments on “AT&T's Title II Tap Dance Fails To Derail FTC Throttling Lawsuit”

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Anonymous Coward says:

Question: FCC or FTC

Remaining truly “anonymous” (usually use a non-logged-in handle) for this one. Have a question.

Walmart has a new phone plan through T-mobile. Unlimited everything for $40. There’s small text (but no *) that it’s only 3G for a Gig or 2. No mention of 2G. Basically, they’re offering Unlimited 2G, w/ a temp bump up to 3G, without saying it’s really Unlimited 2G* (* being limited G3). They just say it’s Unlimited.

Should I report this to the FCC, FTC or both? It’s clearly deceptive. & may or may not be (depending on how you look at it) a case of throttling. It’s definitely a bait & switch.

Chronno S. Trigger (profile) says:

Re: Question: FCC or FTC

I don’t think that qualifies as an FCC or FTC violation, definitely not in the same way as AT&T. The fine print is there before you sign the contract. Hell, their sales people seem perfectly willing to tell people about this limitation. Probably because they offer “Truly Unlimited” for more than twice the price.

AT&T got in trouble by changing the fine print after the contract was signed and without letting the other party know.

Anonymous Coward says:

Re: Question: FCC or FTC

As a tmo customer – all the official TMobile ads I’ve seen are pretty clear that you get “1GB data” (or whatever you sign up for), and after that it is throttled.

They also have some plans that are indeed limited to 1GB or 2GB and stop (with no overages).

I don’t think I’ve ever seen them say it’s “unlimited” without also making it clear that once you hit your “cap” it does throttle down.

John Fenderson (profile) says:

Re: Question: FCC or FTC

I agree with the other commenters that this doesn’t seem to rise to the level of illegality, but thought I’d chime in with a rule of thumb: if your complaint is product misrepresentation or false advertising, the agency you want is the FTC.

The FCC is more concerned with the actual operation of communications systems than they are with problems related to sales & marketing.

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