FTC Chairwoman Edith Ramirez on Tuesday said the Commission is seeking a re-hearing on a recent appeals court decision that allowed AT&T to wriggle free of regulation of its data throttling practices.
In comments delivered before the Senate Commerce Committee, Ramirez said the FTC is challenging the Ninth Circuit Court of Appeals’ conclusion that the common carrier exception is a status-based rather than activities-based exemption. According to Ramirez, the decision would leave an enforcement gap between the FTC and FCC’s jurisdiction if it is left to stand.
“The FCC’s authority over common carriers is limited to the provision of services for or in connection with common carriage,” Ramirez said. “If common carriers are providing non-common carrier products or services, one outcome might be that neither the FCC nor the FTC would have jurisdiction to respond to practices that harm consumers. And even in cases where the FCC can respond, it lacks authority to seek consumer redress.”
Ramirez said this loophole could potentially allow any company that has or acquires common carrier status to argue immunity from FTC action against any of its businesses. In a best case scenario, she said, the AT&T decision could result in similar services and products from two different companies – one with common carrier “status” and one without – being subject to unequal regulation.
In its 2014 lawsuit against AT&T, the FTC alleged AT&T failed to adequately explain its data throttling practices to consumers, and thus engaged in a practice that was barred under Section 5 of the FTC Act. AT&T, however, claimed it was exempt from liability under that section due to its status as a “common carrier.” At the heart of the opposing arguments was the decision on whether the common carrier exemption should be a blanket status-based exemption or one that applies only to common carrier activities.
The court in its decision upheld AT&T’s argument that the exemption should be status based.
Ramirez on Tuesday said she would be in favor of removing the exemption from the FTC Act altogether as it “no longer makes sense” in a world where the line between telecommunications and other services has become blurred..
“Removing the exception from the FTC Act would enable the FTC to bring its extensive law enforcement experience to bear in protecting consumers of common carriage services (and non-common-carriage services offered by common carriers) against unfair and deceptive practices in the same way that it can protect against unfair and deceptive practices for other services,” she said. “Removing the exception is the simplest, cleanest way to ensure continued consumer protection.”
Filed Under: Industry regulations