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Judge says net neutrality rules can't shield AT&T from FTC 'unlimited data' lawsuit

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Unless it can win an appeal, AT&T will have to face the Federal Trade Commission's lawsuit over the carrier's phasing out of unlimited data. And the carrier won't be able to use the FCC's new net neutrality rules to escape it. Last year, the FTC sued AT&T, accusing the carrier of deceiving its customers and badly mishandling the move away from all-you-can-eat data. When the company did away with unlimited plans a few years ago, it promised that existing subscribers would be able to hold onto them. So far, that's been true; but AT&T also began throttling data speeds for users who tax its network most heavily, something the FTC hasn't been a fan of.

AT&T insists it's never deceived anyone

AT&T maintains it's been up front about the changes, alerting customers to its throttling policies (which take effect once your LTE smartphone passes 5GB in a given month) via email notifications and explanations posted on its website. But the FTC still thinks the carrier can do more — like making the slowdowns clearer when subscribers renew their contract, for example. Even AT&T plainly says that it may not always offer text message warnings every time you approach the limit. "The next time you exceed that usage level, your speeds may be reduced without another text message reminder," the carrier's website says.

Obviously the two sides disagree about what qualifies as deception, but AT&T took an interesting route in trying to fend off the case: it recently argued that the FCC's new net neutrality framework will place it (and other mobile carriers) outside the FTC's jurisdiction — even for past conduct. Since mobile networks will soon be seen as common carrier utilities, the carrier claimed that Tom Wheeler has essentially placed AT&T, Verizon, Sprint, and other companies completely outside the FTC's purview. Not so fast, ruled a California federal judge on Tuesday.

Unlimited data isn't suddenly coming back

"When this suit was filed, AT&T’s mobile data service was not regulated as common carrier activity by the Federal Communications Commission," the court filing reads. "Once the Reclassification Order of the Federal Communications Commission (which now treats mobile data serve as common carrier activity) goes into effect, that will not deprive the FTC of any jurisdiction over past alleged misconduct as asserted in this pending action."

So it's game on for the lawsuit, but don't expect unlimited data to be resurrected from the dead for AT&T's more recent customers. That was never going to happen. Again, this is more about the FTC slapping AT&T on the wrist for botching the transition. Impacted customers may one day see a settlement, but they'll always need to keep watching their data usage. AT&T has already said it plans to quickly appeal Tuesday's decision.