The U.S. Federal Trade Commission (FTC) filed a lawsuit against AT&T to stop the cell service provider from throttling download speeds for its customers who still have unlimited wireless data plans. AT&T argues the FTC doesn't have any jurisdiction over its wireless data services, and as such isn't in a position to stop it from throttling download speeds for customers it thinks are using too much of their unlimited data.
AT&T offered wireless data plans without any caps to help draw customers to Apple's first iPhone. Over time, the company started using tactics to push customers into contracts that offered a limited amount of data each month, and the FTC says that amounts to deceptive business practices.
The FTC claims that by offering customers an unlimited wireless data plan, but then throttling the speed of that connection if users go over a certain threshold, AT&T is misleading consumers and isn't really offering unlimited data. AT&T isn't addressing that claim directly, but instead is saying the FTC doesn't have the authority to regulate how wireless data services are delivered.
AT&T argued that the FTC is stepping outside its jurisdiction because, as a mobile cell service provider, it's classified as a Title II common carrier. If the court agrees, then the FTC's case against AT&T will come to an abrupt end.
There is some delicious irony in AT&T's argument because it has been working hard to keep the FCC from classifying it as a Title II common carrier. The FCC has been looking at doing just that, and President Obama is on board with the idea, too. The classification would give the FCC the power to enforce Net Neutrality and block AT&T, Verizon, and other companies from creating "Internet fast lanes" where content providers are forced to pay fees to avoid throttled bandwidth and dropped media streams.
In other words, AT&T is trying to get the best of both worlds: it's a Title II common carrier, except when it isn't.
AT&T went so far as to stop its high speed fiber rollout for Internet services over the possibility of FCC reclassification under Title II. Company CEO Randall Stephenson said, "We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed."
That concern feels a bit like a thinly veiled threat to limit broadband options should the FTC move forward with its Net Neutrality plans. Verizon isn't excited about the prospect, either, and has threatened to sue the Commission should Title II reclassification happen.
The big question in the throttling lawsuit is whether or not the FTC really does have jurisdiction over AT&T's wireless data practices. Because the company does offer voice services, there's a chance the court will agree, bringing an end to the FTC's case.
If so, AT&T will have succeeded in telling one government agency it's a Title II business while fighting to convince another it isn't.
[Thanks to Ars Technica for the heads up]