FTC is everyone’s broadband cop, but don’t expect a fast response

by Steve Blum • , , , ,

The Federal Trade Commission can apply consumer protection laws to broadband service, even when a telephone company is delivering it. A federal appeals court in San Francisco made that clear on Monday when it rejected AT&T’s argument that the FTC’s authority doesn’t extend to telephone companies or other providers that have “common carrier” status.

An earlier ruling, made last year, would have barred the FTC from any oversight role regarding companies with common carrier status, even when the business line involved wasn’t a common carrier service. At the time, it seemed like a nonsensical decision, and the appellate judges agreed

The FTC is the 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.

The case came about because AT&T began throttling broadband speeds on iPhones with unlimited mobile data plans. The FTC sued AT&T, saying it was an “unfair and deceptive” practice. It’s the kind of enforcement action that the Federal Communications Commission assumed the FTC would take when it scrapped network neutrality rules and declared that broadband is not a common carrier service.

It’s good news to the extent that telephone companies will have to follow the same consumer protection rules as other ISPs. But the case also highlight a major problem with giving the enforcement job to the FTC. Unlike the FCC, the FTC doesn’t directly enforce anything – it has to rely on federal courts, which takes a lot of time. The sin AT&T is accused of committing happened in 2011 and the FTC didn’t sue until 2014. It’s now 2018, with no end in sight.