California appeals court revives U.S. FTC's case against AT&T

WASHINGTON (Reuters) - A full panel of a California appeals court ruled on Monday that the Federal Trade Commission may push forward with a lawsuit alleging that AT&T Inc was deceptive in slowing internet speeds to customers with unlimited plans.

The FTC sued AT&T in 2014 on the grounds that the No. 2 U.S. wireless carrier failed to inform consumers it would slow, or “throttle,” the speeds of heavy data users on unlimited plans. In some cases, data speeds were slowed by nearly 90 percent, the FTC said.

AT&T had argued that it was exempt from FTC regulation because it is a common carrier. A three-member appeals court agreed, and the FTC appealed to a full panel of the U.S. Court of Appeals for the Ninth Circuit. That larger court ruled for the agency and revived the lawsuit.

The lawsuit has been closely watched because critics warned that the prior ruling could leave internet service providers without a U.S. regulator. The Federal Communications Commission in December voted 3-2 to end the net neutrality rules that were designed to ensure a free and open internet and transfer oversight of ISPs to the FTC.

“Today’s decision on jurisdiction does not address the merits of the case. We are reviewing the opinion and continue to believe we ultimately will prevail,” AT&T spokesman Marty Richter said.

Both FTC Chair Maureen Ohlhausen and FCC Chairman Ajit Pai praised the decision.

Ohlhausen called it “good news for consumers.”

“It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anticompetitive market behavior,” she said in a statement.