Emerging Markets Law

FTC May Not Regulate Common Carrier Bandwidth Advertising for Fairness

A federal court ruling this week contributes to the confused state of which US agencies may regulate behavior of ISPs relating to the Internet. The Ninth Circuit has held that the Federal Trade Commission (FTC)—the nation's fair advertising watchdog—may not police ISP performance claims put forth by AT&T. The reason? AT&T is a "common carrier," a public utility historically regulated by the Federal Communications Commission (FCC) rather than the FTC. The rub, though, is that the two agencies generally have split jurisdiction, with ad claims falling squarely to the FTC regardless what industry produced the ad in question.

This ruling appears to signal that common carrier ads, i.e. those of any FCC-regulated communications utility, cannot be challenged by the FTC. That opens up a lot of fights about who is a common carrier and which aspects of their business, operations versus advertising, may be policed by which agency. Such uncertainty is unwelcome for companies playing in the fast-moving Internet field: not knowing whose standards apply and how is a real business challenge. It also makes it hard to know where consumers should go with a complaint. 

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