FTC challenges common carrier exception ruling

By:
Bill Boyle
Published on:

The Federal Trade Commission (FTC) will challenge a federal appeals court decision that the common carrier exception to its jurisdiction is status-based and not activities-based

The Federal Trade Commission (FTC) will challenge a federal appeals court decision that the common carrier exception to its jurisdiction is status-based and not activities based. FTC Chairwoman Edith Ramirez, testifying before a Senate Commerce Committee oversight hearing panel, the court's decision has "significant ramifications for our jurisdiction," adding that they are seeking a re-hearing.

The Ninth Circuit Court of Appeals has overturned the FTC's action against AT&T for ‘throttling’ the speeds of unlimited data customers. It ruled that the exemption is not confined to common carrier "activity" by an entity that has the status of a common carrier, but to noncommon carrier activity by that entity as well.

That suggests that an edge provider could avoid privacy regs by merging with a common carrier - Yahoo - for example, because the FCC's reclassification of ISPs as common carriers triggered that exemption, while the FCC says it does not have authority over edge providers.

The FTC had claimed that the exemption was activity-based and therefore only applied to common carrier activities undertaken by common carriers. That left the FTC potentially free to regulate AT&T’s mobile broadband, which at the time of the action was classified as a non-common carrier service.

In refusing AT&T's request that the FTC case against it is dismissed, the District Court concluded that the exemption applied “only where the entity has the status of common carrier and is engaging in common carrier" activity. Ramirez pointed out that the FTC supports getting rid of the exemption altogether, calling it "utterly outdated."