Ninth Circuit deals setback to ISPs hoping to fully exploit Net Neutrality repeal

The Ninth Circuit Court of Appeals this week affirmed (.pdf). that the Federal Trade Commission (FTC) has authority to protect consumers against “deception” by broadband providers and wireless carriers, which could impact Net Neutrality. Last week the Federal Communications Commission (FCC) published rules that will effectively end Net Neutrality on April 23 unless Congress, the courts or the states counter the action.

During the repeal process current FCC Chairman (and former Verizon lawyer) Ajit Pai said that consumers and internet advocates don’t need to worry because if ISPs engage in bad behavior, the FTC can address it. Though he may well have been insincere at the time, he might (unwittingly) have been correct.

The case before the Ninth Circuit was called FCC vs. AT&T Mobility. The decision supports the proposition that the FTC has authority to bring enforcement actions in federal court against ISPs and carriers that engage in “unfair and deceptive” practices against consumers. AT&T was engaged in data-throttling “without regard to actual network congestion” and was sued by the FTC accordingly.

AT&T countered that the FTC had no oversight authority over the carrier. Rather, the carrier argued, it was the FCC that was the appropriate regulatory body. (The FCC has now effectively abdicated that role.) AT&T had filed a motion to dismiss the case. The Ninth Circuit ruled against AT&T and affirmed the FTC’s authority, sending the case back to the federal district court to be further litigated.

Given the FCC’s repeal of Net Neutrality, a decision in favor of AT&T would have given ISPs a free hand to do whatever they wanted without fear of regulatory intervention or punishment — at least until a political change in Washington. Net Neutrality advocates praised the decision but cautioned that this isn’t a substitute for FCC regulation and enforcement.

Still, it gives the FTC some ability to police ISPs and carriers, now that the regulatory strictures have been removed and they’re free to undertake a range of anti-consumer actions. However, there are still many legal battles ahead in the effort to restore Net Neutrality principles to the internet.