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In a ruling with implications for both net neutrality and privacy, the Ninth Circuit ruled en banc today that the common carrier exemption in Section 5 of the FTC Act is activity-based, reversing a 2016 panel ruling that the exemption was status-based.  Today’s decision bolsters the FTC’s authority to bring consumer protection (including privacy) and competition actions against providers of Internet access service, which the FCC has ruled is not a common carrier service in connection with that agency’s repeal of net neutrality rules.

This appeal arises from the FTC’s lawsuit against AT&T alleging that AT&T’s practice of throttling the speed of customers with unlimited data plans once they reached a certain data usage threshold violated Section 5 of the FTC Act.  AT&T had challenged the FTC’s authority to bring the case, arguing that the company was immune from FTC oversight because it also offers common carrier (e.g., voice telephone) service.  Although the district court sided with the FTC on this question, a 2016 Ninth Circuit panel went the other way and, in doing so, created what the FTC and FCC agreed was a potential ‘gap’ in authority in which neither agency would have the right to police many actions by telecommunications companies. …
Continue Reading Ninth Circuit Decision Provides Critical Win to FTC in its Authority over Internet Service Providers

FCC Chairman Ajit Pai announced today that at its December 14 open meeting, the FCC will vote on an overhaul of the net neutrality framework adopted by the prior Administration in 2015.  The full text of the draft order will be released tomorrow, but Chairman Pai has made certain key details known today.  The order envisions an expanded role in oversight of Internet Service Providers (“ISPs”) by the Federal Trade Commission—a move which Acting FTC Chairman Maureen Ohlhausen welcomed.

First, as anticipated, Internet Service Providers (“ISPs”) will again be classified as providers of “information services” under Title I of the Communications Act, rather than “telecommunications services” under Title II.  In many ways, in recent years the net neutrality debate in the U.S. has been as much—or some would say, more—about this statutory classification question than it has been about specific net neutrality rules.  …
Continue Reading FCC Poised to Release Draft Order on Net Neutrality Overhaul

The FCC has released the Notice of Proposed Rulemaking (“NPRM”) on “Restoring Internet Freedom” that was adopted by a 2-1 vote at the Commission’s open meeting on May 18.  The NPRM is substantively very similar to the draft released by Chairman Pai on April 27, and the comment deadlines remain the same: July 17 for initial comments and August 16 for reply comments.

Of possible relevance from a privacy perspective, the NPRM now asks about the jurisdictional effects of finding broadband to be an interstate information service.  As he explained in his statement approving adoption of the NPRM, Commissioner O’Rielly had asked that this question be added to the NPRM, and he expressed the view that this finding should foreclose states and localities from regulating the privacy practices of ISPs (among other matters).  Whether the FCC would attempt to make such a broad preemption finding remains to be seen.   …
Continue Reading FCC Releases NPRM on Broadband ISPs and Net Neutrality Rules

In a widely anticipated step, FCC Chairman Ajit Pai has released a draft Notice of Proposed Rulemaking (“NPRM”) on the legal framework that governs broadband providers and related net neutrality questions.

Most notably from a privacy perspective, the draft NPRM proposes to find that broadband Internet access service is an “information service” under the Communications Act, reversing the 2015 “telecommunications service” classification that had brought broadband providers under the statutory privacy requirements of Title II of that Act.

The draft NPRM states that the 2015 reclassification “stripped FTC authority over Internet service providers,” in light of the common carrier exemption in Section 5 of the FTC Act.  By reversing the FCC’s prior finding that broadband is a common carrier service, the draft NPRM proposes to “return jurisdiction over Internet service providers’ privacy practices to the FTC, with its decades of experience and expertise in this area.”…
Continue Reading FCC Chairman Pai Proposes New Regulatory Framework for Broadband ISPs, Seeks Comment on Net Neutrality Rules

In a consent decree adopted yesterday by the Federal Communications Commission, two telecommunications carriers — TerraCom, Inc., and YourTel America, Inc. — agreed to pay a $3.5 million civil penalty and adhere to a three-year compliance program to settle allegations that the carriers violated the federal Communications Act by failing to adequately protect “proprietary information” the carriers collected from consumers applying for federally subsidized phone service under the Lifeline program.  The consent decree reiterates the FCC’s interpretation of Sections 201 and 222 of the federal Communications Act — first articulated in a October 2014 decision proposing to fine TerraCom and YourTel $10 million — broadening telecommunications carriers’ privacy and data security obligations.  The consent decree also settles allegations that YourTel failed to de-enroll certain subscribers after being instructed to do so by the Universal Service Administrative Company, which administers Lifeline.
Continue Reading Carriers Agree to $3.5 Million FCC Fine For Alleged Privacy Violations

A federal judge in the Northern District of California recently certified his denial of AT&T’s Motion to Dismiss the Federal Trade Commission’s (FTC’s) complaint alleging that AT&T misled consumers by limiting its “unlimited” data plan for mobile customers. This means that AT&T will now be able to appeal that decision to the Ninth Circuit.
Continue Reading FTC’s Throttling Case Against AT&T to be Heard by Ninth Circuit

As we previously reported, in January AT&T filed a Motion to Dismiss the Federal Trade Commission’s (FTC’s) complaint alleging that AT&T engaged in unfair and deceptive conduct in violation of Section 5 of the FTC Act when it “throttled” mobile broadband subscribers who were “grandfathered” into the company’s unlimited mobile data plan.  AT&T moved…

Following Mark Zuckerberg’s opening keynote at Mobile World Congress on Monday, Federal Communications Commission (“FCC”) Chairman Tom Wheeler took the stage yesterday.  As Wheeler’s first public appearance at an industry event since the FCC’s landmark vote last week to enforce net neutrality, the keynote was expected to be closely followed by global counterparts, and InsidePrivacy had a front-row seat from Barcelona.

Wheeler’s conversation with Director General of the GSMA Anne Bouverot covered a range of topics, including net neutrality, spectrum auctions, and more widely, the role of regulation as it relates to investment and innovation.  Of primary interest, of course, was the topic of regulation as it pertains to Open Internet rules.  On this subject, Wheeler began by reframing the notion that last week’s 3-2 vote was a close one, stating, “We had 50% more votes than they did, is the way I look at it.”  This year’s Mobile World Congress, therefore, was a victory lap as some have termed it — or sales pitch — allowing Wheeler to explain and defend the FCC’s new net neutrality rules.
Continue Reading FCC Chairman Speaks at Industry Event for First Time Since Net Neutrality Vote

As we previously reported, in October 2014 the Federal Trade Commission (FTC) filed a complaint against AT&T in federal court alleging that AT&T’s “throttling” practices for mobile broadband subscribers who were “grandfathered” into the company’s unlimited mobile data plan were unfair and deceptive in violation of Section 5 of the FTC Act.  On Monday, AT&T filed a Motion to Dismiss this lawsuit on the basis that it is a common carrier subject to the Communications Act and thus exempt from Section 5 of the FTC Act.
Continue Reading AT&T Challenges FTC Jurisdiction Over Non-Common Carrier Activities of Common Carriers

Yesterday, the Federal Trade Commission (FTC) filed a complaint against AT&T alleging that the company misled consumers by limiting its “unlimited” data plan for mobile customers.

The FTC’s two-count complaint, which was filed in the U.S. District Court for the Northern District of California, alleges that AT&T violated Section 5 of the FTC Act, which prohibits “unfair or deceptive” trade practices, by imposing significant data speed restrictions on unlimited data plan customers and failing to disclose this practice to customers.…

Continue Reading FTC Says AT&T Fails to Deliver on ‘Unlimited’ Data Promises