FCC $57M Fine Against AT&T is Vacated

AT&T (NYSE: T) successfully petitioned the Fifth Circuit Court of Appeals to vacate a $57 million fine from the FCC, according to Courthouse News Service. The agency determined last year the wireless carrier failed to protect the privacy of its customers’ location data, Inside Towers reported. In the forfeiture order, the FCC concluded that AT&T violated section 222 of the Communications Act by disclosing its customers’ location information without their consent and without taking reasonable measures to protect that information against unauthorized disclosure.  

“While nothing is wrong in principle with providing location-based services, the Commission took issue with how AT&T protected its customers’ location data. To implement location-based services, AT&T contracted with ‘location aggregators,’” who collected the data, the appeals court said in its verdict. The aggregators then sold the data to providers like Life Alert of AAA. AT&T reviewed the service provider’s “use case,” where the provider described why it needed the data and how it obtained customers’ consent to use it. 

In its verdict, the court said AT&T reviewed providers’ consent records daily, but did not verify customer consent before providing access to the location data. News articles reported problems with AT&T’s (and other carriers’) location-based services programs. The carrier promptly terminated those providers’ access to the data. By March 2019, it stopped providing access to location data to all aggregators.

AT&T said it acted reasonably and told the FCC the $57 million fine, levied in 2020, was arbitrary and capricious. The agency rejected AT&T’s arguments and reaffirmed the penalty in April 2024.

The appeals court said the FCC’s in-house civil forfeiture process violated AT&T’s right to a jury trial under the Seventh Amendment. In other words, the FCC improperly “acted as prosecutor, jury, and judge,” the appeals court ruled.

The court granted AT&T’s petition and vacated the forfeiture order. 

By Leslie Stimson, Inside Towers Washington Bureau Chief