Could US appeals court save us all from 10 years of net neutrality yelling?

California judges agree to rehear critical data privacy case – with huge implications


The US Court of Appeals for the Ninth Circuit has agreed to rehear a critical case on data privacy – one that may reset how Uncle Sam treats phone companies and internet giants, and may even prevent another ten years of fights over net neutrality.

If the decision is reversed, it would provide clarity over which federal regulator is in charge of ensuring that communications companies don't abuse their user data, and would fill a dangerous gap created by the recent Congressional decision to scrap new privacy rules.

Back in August 2016, the appeals court ruled in favor of AT&T Mobility and said that the Federal Trade Commission (FTC) did not have the authority to fine the phone giant $100m for failing to tell customers that their "unlimited" data plans would be throttled once they reached a certain threshold.

The logic of the court was that the FTC was constrained by the fact that AT&T was legally designated a "common carrier" and so therefore stood outside the regulator's jurisdiction. The FTC appealed that decision in October and asked for the case to be heard by the full Ninth Circuit – an en banc review – rather than just a three-judge subset of the court.

Since the original appeals court decision however, the case became much more complicated due to the actions of sister regulator the Federal Communications Commission (FCC) – which does have the authority to act against common carriers.

Quick history

Back in 2015, as part of net neutrality rules, the FCC designated broadband providers as also being common carriers, pulling them under the FCC's jurisdiction. Due to that decision, the FCC was obliged to draw up new data privacy regulations to deal with ISPs – and it chose to approve stricter rules than were in place at the FTC, arguing that ISPs have unique access to large quantities of very personal data due to being people's internet provider.

However, both those actions – the reclassification of broadband providers as common carriers and the new data privacy rules – are now being pulled out by the new FCC administration following the election of President Trump.

FCC chair Ajit Pai controversially decided to scrap the new data privacy rules just days before they were due to take effect – a decision that was then later reflected and enforced by Congress.

Combined with Pai's decision to reopen net neutrality rules, and specifically the classification of broadband providers as common carriers, that meant that a huge gap in data privacy opened up.

Thanks to the Ninth Circuit decision and Pai's actions, suddenly there was no one to enforce data privacy rules at all. Both the FTC and the FCC were legally prevented from ensuring that companies like AT&T and Verizon – as well as companies like Google – were not abusing the vast quantities of user data they possess.

Soon after the FCC scrapped its own data privacy rules, the heads of both the FTC and FCC co-wrote a blog post arguing that the FTC was the right place for data privacy issues to be heard (which is, in all fairness, a good point).

AT&T was happy with the original decision and opposed being put under regulatory oversight. But the FCC wrote a legal submission supporting the FTC's argument for a full rehearing of the Ninth Circuit's original decision. And on Tuesday, the two regulators were rewarded by the Ninth Circuit agreeing to rehear the case with the full court.

Slice of Pai

It was a significant victory for Pai personally, who had taken a significant gamble in scrapping the rules and so put millions of US consumers in privacy legal limbo.

He tweeted that the decision was "an important win for consumers by making it easier for FTC to protect online privacy" – which somewhat overstates the situation since it is far from certain that the Ninth Circuit will actually reverse its own decision.

However, just as the appeals court in Washington DC decided not to hear a case against net neutrality en banc because of the decision by the FCC to revisit the rules, the Ninth Circuit appears to have been swayed by actions on the ground in the opposite direction.

Given that en banc hearings are rare, it points to a significant likelihood that the court will bend to accommodate new realities and decide to reverse its earlier decision. That would effectively shift federal regulation from being based on status (whether you are a common carrier or not) and move authority to issues based on activity – ie, whether you misused data.

If that happens, it would be a significant shift in how the US government and courts decide how to view the actions of the companies that handle citizens' everyday communications.

Thinking most positively, it could also cause a much-needed shift in how the law functions in the internet era. It could even effectively kill off the furious back-and-forth over net neutrality rules and in particular the argument over "Title II" classification.

A new deal?

If we put on our rose-tinted glasses, it could even open a door for bi-partisan legislation to update the Telecommunications Acts of 1934 and 1996, since it would remove many of the current stumbling blocks to Congressional action.

That perfect scenario would put FCC chair Pai in a position to come across as a telco visionary rather than the partisan populist he has shown himself to be in recent weeks, which may explain his euphoria.

Of course, it could all swing the other way, with the Ninth Circuit deciding not to embrace the vision of a brave new world and reasserting its understanding of the law.

In that case, the entire population of the United States would lose critical data privacy protections thanks to Pai's rash actions, and we will be on a path for another ten years of fighting thanks to classifications that were devised decades before the internet even existed.

No pressure, Ninth Circuit. ®

Broader topics

Narrower topics


Other stories you might like

  • FCC: Applications for funds to replace Chinese comms kit lack evidence
    Well you told us to rip and ... hang on, we're not getting any money?

    The saga of the US government's plan to rip and replace China-made communications kit from the country's networks has a new twist: following reports that applications for funding far outstripped the cash set aside, it appears two-thirds of such applications lack adequate cost estimates or sufficient supporting evidence.

    The US Federal Communications Commission (FCC) informed Congress that it had found deficiencies in 122 of the 181 of the applications filed with it by US carriers for funding to reimburse them for replacing telecoms equipment sourced from Chinese companies.

    The FCC voted nearly a year ago to reimburse medium and small carriers in the US for removing and replacing all network equipment provided by companies such as Huawei and ZTE. The telecoms operators were required to do this in the interests of national security under the terms of the Secure and Trusted Communications Networks Act.

    Continue reading
  • US senators seek ban on sale of health location data
    With Supreme Court set to overturn Roe v Wade, privacy is key

    A group of senators wants to make it illegal for data brokers to sell sensitive location and health information of individuals' medical treatment.

    A bill filed this week by five senators, led by Senator Elizabeth Warren (D-MA), comes in anticipation the Supreme Court's upcoming ruling that could overturn the 49-year-old Roe v. Wade ruling legalizing access to abortion for women in the US.

    The worry is that if the Supreme Court strikes down Roe v. Wade – as is anticipated following the leak in May of a majority draft ruling authored by Justice Samuel Alito – such sensitive data can be used against women.

    Continue reading
  • SpaceX: 5G expansion could kill US Starlink broadband
    It would be easier to take this complaint seriously if Elon wasn't so Elon

    If the proposed addition of the 12GHz spectrum to 5G goes forward, Starlink broadband terminals across America could be crippled, or so SpaceX has complained. 

    The Elon Musk biz made the claim [PDF] this week in a filing to the FCC, which is considering allowing Dish to operate a 5G service in the 12GHz band (12.2-12.7GHz). This frequency range is also used by Starlink and others to provide over-the-air satellite internet connectivity.

    SpaceX said its own in-house study, conducted in Las Vegas, showed "harmful interference from terrestrial mobile service to SpaceX's Starlink terminals … more than 77 percent of the time, resulting in full outages 74 percent of the time." It also claimed the interference will extend to a minimum of 13 miles from base stations. In other words, if Dish gets to use these frequencies in the US, it'll render nearby Starlink terminals useless through wireless interference, it was claimed.

    Continue reading

Biting the hand that feeds IT © 1998–2022