Decades-Old Suit Over Who Can Claim “Common Carrier” Status is Reviewed

Policymakers have been struggling with the potential implications of a legal case involving the FTC versus AT&T that overturned decades worth of legal precedent; analysts say the outcome may open a loophole that other carriers might want to use, reports

The 9th U.S. Circuit Court of Appeals agreed to rehear an FTC appeal. The agency’s case alleged AT&T Mobility inadequately informed customers of its data-throttling program.

A new decision could be different than the previous one. Last August, a federal appeals court said the FTC should not regulate a company if a portion of that firm’s business is also regulated by the FCC as a common carrier. “It was huge because it was totally unexpected,” said Harold Feld, a senior vice president of consumer group Public Knowledge.  

The decision means theoretically a company in any industry seeking “light-touch” regulation could try to claim common carrier status to shield the rest of its business from both the FTC and FCC. “Facebook could buy some dinky little telephone company and then become totally exempt” from the FTC, Feld explained to

The loophole is closed now that the federal appeals Court for the DC Circuit has agreed to rehear the case. But analysts say that gap could reopen if this court reaches the same decision as the previous one.

AT&T stated it looks forward to taking part in the proceedings; The outcome may give firepower to FCC Chairman Ajit Pai’s plan to roll back Net Neutrality rules and restore the FTC’s jurisdiction over broadband providers’ privacy and data security practices. The Commission plans to vote his week to open a rulemaking to start that process.

May 15, 2017      


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