Feds notch procedural win in AT&T fight over ‘unlimited’ data

A judge is rejecting AT&T’s attempt to toss out a lawsuit from federal regulators accusing it of lying about its “unlimited” data plans.

District Court Judge Edward Chen on Tuesday evening ruled against AT&T’s efforts to toss out the Federal Trade Commission’s (FTC) suit on the grounds that, as a “common carrier” service, it is exempt from the agency’s laws.

{mosads}“Contrary to what AT&T argues, the common carrier exception applies only where the entity has the status of common carrier and is actually engaging in common carrier activity,” Chen wrote in his decision.

Last year, the FTC filed a massive suit against AT&T, accusing it of misleading millions of people with promised “unlimited” data plans that actually came with limits. In some cases, people’s Web surfing speeds were slowed by as much as 90 percent after they reached a certain limit, but customers were never given fair notice that that could happen. 

AT&T has pushed back against the charges. It claims that it has merely been managing its network by allocating its airwaves as fairly as possible and has provided fair notice.

Recently, it has said that the FTC does not have the authority to take action against AT&T because it is a common carrier — or a utility.

The company’s voice service is considered a common carrier and its data offerings — which allow users to browse the Internet — will also be considered a common carrier service under the Federal Communications Commission’s (FCC) new net neutrality rules. By law, the FTC cannot police common carrier services.

But Chen, the district court judge, tossed that argument out. AT&T’s data services were not classified as a common carrier when the case was filed, he said, and the FCC action in no way prevents the FTC from filing charges over past misconduct.

In a statement, FTC Chairwoman Edith Ramirez said the commission was “gratified” that the court ruled it still had authority.

“We look forward to proving that AT&T’s marketing of its ‘unlimited’ data plans was unfair and deceptive and returning money to the millions of consumers who were harmed by AT&T’s action,” she said. 

An AT&T spokesman said the decision would not be the last word.

“We’re obviously disappointed in, and disagree with, the decision and will seek to appeal it as soon as possible,” Michael Balmoris said.