AT&T Loses Battle to Cripple FTC Authority, Details Plans for Paid Prioritization

With net neutrality nearly dead in the United States, AT&T is making its own plans for a new wave of paid prioritization in the United States. It’s not all bad news, however — the ISP recently lost its legal bid to escape any form of regulation whatsoever.

We’ll hit the good news first. Back in 2014, the FTC sued AT&T alleging that the company had abused users of its unlimited data plan by throttling them when they used more than 5GB of data in the name of network management, while not throttling users who used more than 5GB of data if they had a per-GB payment plan. The FTC wrote:

The speed reductions and service restrictions in effect under Defendant’s throttling program are not determined by real-time network congestion at a particular cell tower. Throttled customers are subject to this reduced speed even if they use their smartphone at a time when Defendant’s network has ample capacity to carry the customer’s data, or the use occurs in an area where the network is not congested … since October 2011, Defendant has throttled its customers more than 25 million times, affecting more than 3.5 million unique customers.

AT&T’s counter-argument was that it couldn’t be sued by the FTC because it’s a common carrier, and the FTC doesn’t have the authority to regulate common carriers. If the district court had accepted this argument, AT&T would’ve put itself effectively beyond the reach of any regulation whatsoever. With the FCC abandoning net neutrality and the FTC theoretically banned from regulating its practices, AT&T would’ve been free to operate independently from any government oversight.

Fortunately, the court rejected that option and freed the FTC to go after AT&T for damages owed to customers who were unfairly impacted by the throttling..

AT&T Details Plans for Paid Prioritization

In a blog post, AT&T’s Senior Executive Vice President Bob Quinn begins by praising the idea of a consumer bill of rights that would protect net neutrality and claims AT&T stands for those rights, which include: “don’t block websites; censor online content; or throttle, degrade or discriminate in network performance based on content; and disclose to consumers how you manage your network to make that happen.”

This framing somewhat clouds the issue. Blocking websites or censoring content would transform ISPs from neutral providers of a service into an organization that manages what its customers can access over the internet. The safe harbor protections afforded to ISPs by the DMCA would likely vanish as a result. We’re not saying these protections aren’t important, but they aren’t necessarily a component of net neutrality, as such.

But Quinn’s next words on paid prioritization belie the earlier niceties. After saying “AT&T is not interested in creating fast lanes and slow lanes on anyone’s internet,” he then says:

What we do care about is enabling innovative new technologies like autonomous cars, remote surgery, enhanced first responder communications and virtual reality services, which are real-time interactive services that require end-to-end management in order to make those services work for consumers and public safety… I think we can all agree that the packets directing autonomous cars, robotic surgeries or public safety communications must not drop. Ever. So, let’s address concerns around paid prioritization without impacting those innovations.

In other words, AT&T wants to ban fast lanes and slow lanes while enacting fast lanes and slow lanes. Quinn goes on to note that while the 2015 Open Internet order establishing net neutrality actually carved out permission for paid prioritization in certain areas, AT&T dislikes it because it required AT&T to seek permission to create such services rather than allowing it unilateral control.

Enacting paid prioritization and giving the ISP unilateral control of how it’s used and applied is the very essence of creating fast lanes and slow lanes. Given that the existing net neutrality laws already carved out exceptions for exactly the kind of services AT&T mentions here, it’s nothing but a transparent attempt to paint net neutrality as a villain, while giving AT&T unquestioned authority to create any kind of paid prioritization plan it wants to wring more money out of providers, all while claiming to oppose such services. It brings to mind the old days, when ISPs would make false claims about how Netflix was choking bandwidth, while simultaneously creating bandwidth congestion they could then blame on a third-party. It’s no accident that these incidents declined sharply once net neutrality went into effect. With its imminent departure, look forward to them rising once again.

The original net neutrality order was far from perfect, but it at least established some clear guidelines for what ISPs were not allowed to do in specific areas. The single largest reason we oppose its repeal is because we already know what the market looked like before net neutrality became law. It looked like Verizon arbitrarily throttling Netflix even after Netflix paid it additional money. It looked like using a VPN to improve Netflix performance even on an ISP the video provider wasn’t fighting with. And we absolutely know that even in spite of these rules, ISPs generally take every chance they get to screw their own users.

In some situations, there’s absolutely a case to be made for outdated regulations stifling well-run companies with a longstanding tradition of excellent customer service. There’s literally nothing in the historical record of the past decade to suggest ISPs deserve such consideration.

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