Congress May Act if 9th Circuit Nixes Rehearing in 'AT&T v. FTC' as Trump Election Complicates Things
If the 9th U.S. Circuit Court of Appeals denies the FTC's request for an en banc rehearing in its consumer protection fight with AT&T Mobility, Congress may act to provide the commission with the necessary authority, experts said in interviews last week. That's gotten more complicated with the election of Donald Trump, whose views about privacy, consumer protection and telecom aren't really known (see 1611090016). Some have predicted Trump-appointed commissioners would roll back FCC ISP privacy rules (see 1611090034).
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Julie O'Neill, a privacy and consumer protection attorney with Morrison & Foerster, emailed that the FTC, to no avail, has asked Congress for years to repeal the common carrier exemption that says the FTC can't regulate telecom companies. "This case may change the view of those in Congress because, as it stands, it leaves many companies completely outside of the FTC’s consumer protection jurisdiction (especially since the FCC’s 2015 network neutrality order," she said. The FCC's authority over certain consumer protection issues within the FTC’s scope is limited, said O'Neill. "Case law suggests that the FCC cannot police purely non-common carrier activities. And, for the conduct it can regulate, it is limited to conduct going back just one year, and it is not authorized to seek consumer refunds."
Experts have said that it's more than likely the 9th Circuit will grant a rehearing (see 1611020031) to the FTC, which filed a complaint that AT&T inadequately informed customers of its data-throttling program. Markham Erickson, communications lawyer at Steptoe & Johnson, thinks the FTC has a strong case but would expect Congress to act if the petition is denied. A 9th Circuit panel threw out the case in August (see 1608290032), which the FTC, FCC and others have said could create an enforcement gap for telco and tech companies that engage in common carrier activities. In a filing last week, AT&T, which asked the court not to grant a rehearing, said "no such gap exists legally or practically" since it's regulated by the FCC.
Center for Digital Democracy Executive Director Jeff Chester is confident the FTC will get a rehearing. "The FTC has a long history of operating on a bipartisan basis and that bodes well for how Congress treats it in the next Administration," he emailed. "Many companies, of course, are constantly fanning the flames on the Hill as part of an ongoing attack on the agency. But the FTC’s role is vital, especially if US companies want to maintain digital trade with the EU. President[-elect] Trump hasn’t said he will also build a digital data wall around the US. I would assume he values the important role consumer privacy protection must play -- in the US and with our allies and trading partners."
Free State Foundation President Randolph May also expected the new Congress most likely to be more receptive to removing the FTC's common-carrier exemption. "And, in the process, [it could] make it clear that all privacy enforcement in the internet ecosystem, including for the ISPs, ought to be under the jurisdiction of the FTC rather than the FCC," he told us. May can't say how a Trump administration would weigh in. "I doubt if President-elect Trump has any view at all on this matter," said May, who expected Trump to turn to experts. May added that Trump ought to nominate FCC and FTC members "who take a less intrusive regulatory approach" and weigh costs and benefits.
Free Press Policy Director Matt Wood said in an interview that "anyone who thinks they know what's going to happen is fooling themselves a little bit." With Trump, Wood said it's unclear how his "irresponsible deregulatory urges" coupled with a populist tone plays out on these issues. "In this case, amending the FTC Act is not easy, so I think the case is still important but rehearings are rare," and there are so many different unknowns and variables, he said. There's concern among some in Congress about Google's power more than about AT&T and Comcast and how that plays out is unclear, said Wood.
Daniel Solove, professor at George Washington University Law School, wasn't so sanguine. "Congress can certainly act, as the jurisdiction of both agencies is defined by federal statutes," he emailed, adding that the 9th Circuit was just interpreting statutes. "But with the current state of Congress, 535 people can't even change a lightbulb, so I doubt Congress would do anything."
Santa Clara University School of Law professor Eric Goldman offered a different take. He views it as "a little bit of a broad turf battle between the FTC and the FCC." While they "played nicely together for a while ... they keep bumping up with each other here and there," Goldman said in an interview. The power balance between them needs to be adjusted either through Congress or through a "greater understanding" between the agencies, he said. "I look at the lawsuit in the 9th Circuit as exposing more fracture lines in that uneasy balance of power between the FTC and FCC."