T AT&T Inc

By Brent Kendall 

A federal appeals court on Monday ruled the Federal Trade Commission can move forward with its lawsuit alleging AT&T Inc. misled wireless subscribers by reducing data speeds for several million customers who thought they had purchased unlimited plans.

The ruling by the Ninth U.S. Circuit Court of Appeals is a notable win for the FTC because it restores the agency's regulatory authority over large internet service providers.

The case has been watched closely since the Federal Communications Commission rolled back its Obama-era net-neutrality rules. The rollback meant that the FTC would be the lead agency on any future policing of companies slowing down internet traffic. But the FTC could have been without power to act against large service providers if AT&T's arguments had prevailed in the Ninth Circuit case.

In 2016, a three-judge panel on the Ninth Circuit had thrown out the FTC's case, ruling the commission didn't have the authority to bring a case against AT&T because of the company's status as a common carrier.

But the appeals court withdrew that opinion and, with a larger roster of judges participating, issued a new decision Monday that sided with the government. The court agreed with the FTC's argument that the lawsuit was valid because the commission was challenging AT&T for providing mobile data services that were not part of its status as a common carrier of traditional phone services.

The FTC's case, dating back to 2014, sought refunds for consumers.

The FTC alleged that AT&T over a three-year period throttled data speeds that affected 3.5 million customers. The company had said it had implemented reasonable network management practices that slowed speeds only to the very heaviest users whose data consumption harmed the company's network.

Neither the FTC not AT&T immediately responded to requests for comment.

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

February 26, 2018 13:46 ET (18:46 GMT)

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