US regulator's 'throttling' lawsuit against AT&T to be reheard: court

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The court ruled a year ago that the FTC had no jurisdiction over common carriers - a designation for companies that offer phone services. The federal agency originally sued the second-largest wireless carrier in the country over its data throttling practices, alleging that the company deceived consumers paying for unlimited data plans by reducing their mobile data speeds after they've spent a certain amount of data during a single billing cycle.

AT&T made a motion to dismiss the FTC's lawsuit - which was denied by a district court before being granted by a three-judge panel of the Ninth Circuit Court in August. The FCC passed its own privacy rules last fall, but Congressional Republicans and the Trump administration repealed those rules in April as they imposed higher standards on internet providers than edge providers like Facebook.

FCC chairman Ajit Pai has suggested that en banc review paves the way for the FCC to restore broadband privacy authority, including rolling back the common carrier reclassification of ISPs, which returns broadband access privacy enforcement to the FTC.

FCC chair Ajit Pai controversially chose to scrap the new data privacy rules just days before they were due to take effect - a decision that was then later reflected and enforced by Congress. Both the FTC and the FCC were legally prevented from ensuring that companies like AT&T and Verizon - as well as companies like Google - were not abusing the vast quantities of user data they possess.

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Congress bars the FTC from regulating common carriers, but the agency continued to regulate "non-common carrier" services provided by such companies. The FTC appealed the dismissal to the full Ninth Circuit Court, arguing the decision would create an "enforcement gap" and leave millions of consumers defenseless against "unfair or deceptive practices". And on Tuesday, the two regulators were rewarded by the Ninth Circuit agreeing to rehear the case with the full court.

"Upon the vote of a majority of nonrecused active judges, it is ordered that this case be reheard en banc", Chief Circuit Judge Sidney R. Thomas wrote Tuesday. That would effectively shift federal regulation from being based on status (whether you are a common carrier or not) and move authority to issues based on activity - ie, whether you misused data.

Pai wants to strip back a number of rules which he has labelled as a serious mistake, including the 2015 Title II Order.

Before 2015, the FTC regulated internet service providers (ISPs) like AT&T and Verizon, but the Federal Communications Commission (FCC) in 2015 ruled that ISPs qualify as common carriers under Title II of the 1934 Communications Act.

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