FTC Complaint Against AT&T Shows Why Transparency Matters

Today, the FTC filed a complaint against AT&T under its Section 5 authority, claiming that AT&T throttled the mobile broadband connections of certain users with unlimited data plans. The complaint quotes frustrated consumers who thought that “unlimited means without restriction,” but then learned that this was not exactly what the term meant. The FTC complaint is especially interesting because it was not filed about the practice of slowing down consumers’ connections, but rather because the FTC believes that AT&T did not adequately inform its users of this network management practice. AT&T disagrees with the allegations, noting that it informed its unlimited data plan subscribers via billing notices, a national press release, and text messages to affected customers.

Regardless, transparency clearly matters and the complaint shows that the FTC has a role to play in maintaining transparency in relationships between Internet service providers (ISPs) and their subscribers.

If transparency means anything, it means this: when ISPs manage their networks in ways that are inconsistent with subscribers’ expectations, subscribers have a right to know.

If transparency means anything, it means this: when ISPs manage their networks in ways that are inconsistent with subscribers’ expectations, subscribers have a right to know. Although FTC Commissioner Joshua Wright expressed his view that the FTC’s approach to protecting that expectation is superior to the FCC’s, this is not a binary choice. The FCC’s transparency rule survived the D.C. Circuit Court’s decision striking down other parts of the Open Internet Order and the FCC has made clear that transparency will be an essential component of the rules being crafted to replace those the court struck down. Chairman Wheeler has already demonstrated the Commission’s willingness to scrutinize practices such as throttling. Earlier this month, Verizon shelved plans to implement a practice similar to that described in the FTC complaint after Chairman Wheeler and others voiced concerns.

The FTC has a powerful role to play in protecting consumers and the FCC should account for that role as it crafts new open Internet rules. Transparency is both a net neutrality principle and a baseline of consumer protection. Internet users expect their ISPs to provide access to the content and services of a user’s choice, without intentional degradation or interference by the ISP. The “virtuous circle” of innovation and investment by edge providers and broadband providers depends on users’ confidence in that access. At a bare minimum, ISPs must be completely transparent about their network management practices and clear with consumers about the services they are buying.

[Updates on October 29 at 11:45 a.m.]