Acting on a petition filed by the Federal Trade Commission (FTC), the U.S. Court of Appeals for the Ninth Circuit agreed Tuesday to conduct an en banc rehearing of the court’s ruling last year that the FTC, pursuant to the “common carrier exemption,” lacked authority to pursue claims that AT&T misled wireless subscribers by “throttling” or slowing the data transmission speeds of customers who purchased unlimited data plans.
In a unanimous decision handed down last August, a three-judge Ninth Circuit panel agreed with AT&T’s claim that the common carrier exemption—which prohibits the FTC from regulating the activities of common carriers because they fall under FCC jurisdiction—is a status-based exemption that also extends to the non-common carrier activities of common carriers. The case at hand originated in 2014, a year before the FCC reclassified fixed and wireless broadband access services as common carrier telecommunications services under Title II of the 1934 Communications Act. Targeting AT&T’s practice of throttling customers who had purchased unlimited data plans, the FTC filed suit against the company, claiming that non-common carrier broadband network services provided by common carriers such as AT&T are not subject to the common carrier exemption. Although the U.S. District Court for the Northern District of California ruled initially in the FTC’s favor in concluding that the common carrier exemption applies “only where the entity has the status of a common carrier and is actually engaging in common carrier activity,” the three-judge Ninth Circuit panel overturned that decision at the behest of AT&T, reasoning: “the plain language of the common carrier exemption casts the exemption in terms of status, contrary to the FTC’s position.”
On behalf of the court’s full appellate panel, Ninth Circuit Chief Judge Sidney Thomas issued an order for rehearing based on “the vote of a majority of non-recused active judges,” adding that the August 2016 ruling “shall not be cited as precedent by or to any court of the Ninth Circuit.” Oral arguments before the en banc panel are scheduled to begin during the week of September 18. Confirming receipt of the court’s order,” an AT&T spokesman said, “we look forward to participating in the en banc review.”