FTC v. AT&T Mobility LLC

FTC v. AT&T Mobility LLC

Opinion

 [*850]  McKEOWN, Circuit Judge:

Although this case began as an effort by the Federal Trade Commission [**5]  ("FTC") to address AT&T Mobility's "data throttling"—a practice by which the company reduced customers' broadband data speed without regard to actual network congestion—the central issue is one of agency jurisdiction and statutory construction.

Section 5 of the Federal Trade Commission Act ("FTC Act"), which gives the agency enforcement authority over "unfair or deceptive acts or practices," exempts, among others, "common carriers subject to the Acts to regulate commerce." 15 U.S.C. § 45(a)(1), (2). The question is whether the common-carrier exemption is activity-based, meaning that a common carrier is exempt from FTC jurisdiction only with respect to its common-carrier activities, or status-based, such that an entity engaged in common-carrier activities is entirely exempt from FTC jurisdiction.

We affirm the district court's denial of AT&T's motion to dismiss. Looking to the FTC Act's text, the meaning of "common carrier" according to the courts around the time the statute was passed in 1914, decades of judicial interpretation, the expertise of the FTC and Federal Communications Commission ("FCC"), and legislative history, we conclude that the exemption is activity-based. The phrase "common carriers subject to the [**6]  Acts to regulate commerce" thus provides immunity from FTC regulation only to the extent that a common carrier is engaging in common-carrier services.

This statutory interpretation also accords with common sense. The FTC is the  [*851]  leading federal consumer protection agency and, for many decades, has been the chief federal agency on privacy policy and enforcement. Permitting the FTC to oversee unfair and deceptive non-common-carriage practices of telecommunications companies has practical ramifications. New technologies have spawned new regulatory challenges. A phone company is no longer just a phone company. The transformation of information services and the ubiquity of digital technology mean that telecommunications operators have expanded into website operation, video distribution, news and entertainment production, interactive entertainment services and devices, home security and more. Reaffirming FTC jurisdiction over activities that fall outside of common-carrier services avoids regulatory gaps and provides consistency and predictability in regulatory enforcement.

Background and Procedural History³

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.