AT&T’s recent legal victory against the FCC has stirred mixed reactions, especially for customers and competitors alike. The FCC had initially slapped AT&T, T-Mobile, and Verizon with significant fines for allegedly selling customer location information without consent. Following their decision to contest these penalties, AT&T successfully overturned a $57 million fine imposed by the FCC.
The company argued before the Fifth Circuit that the data in question did not constitute customer proprietary network information (CPNI) under Section 222 of the Communications Act. AT&T also claimed that the FCC had exceeded its authority and highlighted that the fine exceeded the maximum allowable limit of $2 million. Furthermore, AT&T contended that it was denied its constitutional right to a jury trial.
On Friday, the Fifth Circuit panel sided with AT&T and issued a ruling that dismissed the $57 million fine, referencing the Supreme Court’s ruling in SEC v. Jarkesy, which emphasized the importance of a fair trial before imposing civil penalties. The FCC’s position that AT&T could have refused to pay the fine was deemed insufficient. The court determined that AT&T’s rights were violated by being coerced into either paying the fine or risking additional penalties without the opportunity to contest the FCC’s reasoning.
While this court decision is advantageous for AT&T and potentially for rivals like T-Mobile and Verizon, it leaves a sense of disappointment among customers who were hoping for accountability in handling personal data. The cancellation of the fine does not exonerate AT&T, but rather questions the FCC’s approach in this case. The possibility of a new trial remains, ensuring this issue will continue to develop.