FTC's data-throttling suit against AT&T dismissed

The wireless carrier prevails in court but could still face a $100 million fine from another agency, the FCC.

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An FTC suit against AT&T over its practices surrounding data throttling has been dismissed.

Roberto Machado Noa, LightRocket via Getty Images

A US appeals court on Monday dismissed the FTC's suit against AT&T that charged the company deceived its unlimited-data customers when it slowed their connection speeds.

The Federal Trade Commission had accused the company of failing to deliver on its promise of "unlimited data," saying it violated the FTC Act. "The issue here is simple: 'unlimited' means unlimited," FTC Chairwoman Edith Ramirez said when the suit was filed in 2014.

The practice of slowing down speeds once wireless customers reach a certain usage level is known as throttling. The agency said then that AT&T had throttled at least 3.5 million customers, and that the practice resulted in slowing network speeds 80 percent to 90 percent.

The appeals court said the FTC lacked authority because wireless broadband is a so-called Title II service, which would fall under the jurisdiction of the FCC. Wireless data became a Title II service when the FCC reclassified broadband as part of its 2015 Open Internet order.

"We're pleased with the decision," an AT&T spokesman said.

The FTC did not immediately respond to a request for comment.

AT&T still could face a $100 million fine from the Federal Communications Commission, which found the carrier misled customers about its unlimited data plans. The FCC said the company violated the 2010 Open Internet Transparency Rule and didn't make it clear to customers that their network speeds could be slowed.