I’m Not Buying the Plausible Deniability Gambit of AT&T Wireless

             AT&T Wireless has appealed the FCC’s $57 million fine for monetizing up to the minute subscriber location data that the company had no legal right to release, absent “opt in authorization from subscribers https://www.law360.com/articles/1835513/attachments/0.  The company’s primary defense relies on the deliberate strategy of ignoring the actual uses of the data by third parties of the two location information aggregators with which it sold the data.

             If even a few of the 300+ million wireless subscribers in the U.S. (see https://www.ctia.org/the-wireless-industry/infographics-library; https://datareportal.com/reports/digital-2024-united-states-of-america) fully understand how extensive their location data has been exploited, the court of public opinion would lash out vigorously against the wireless carriers.  This probably will not happen, because no one, other than the carriers and their information broker customers, will know the total revenues accrued and the extensiveness of the data exploitation.   

            Consider the efficacy of non-disclosure agreements, the lack of full evidence gathering by the FCC and reviewing courts, and attorney client privileges that block disclosure of how extensive the data selling was. AT&T is banking on the premise that because no one will ever know the breadth and value of the location data, no one can refute the company’s assertion that the FCC has overreacted to one minor incident that the company resolved years ago. AT&T wants us to believe that only one bad actor existed, the one identified by reporters of New York Times.  See  https://www.nytimes.com/interactive/2019/12/19/opinion/location-tracking-cell-phone.html.  

            Arguably (in its most expansive context), we should accept AT&T’s premise that everybody else, including the massive number of third-party data location brokers and users, absolutely complied with any and all non-disclosure and anonymization requirements.  

            AT&T deliberately structured its disclosure of subscriber locations in a manner that insulated the company from knowing how the data was used by customers of the “Location-Based Services” the company provided two location information aggregators: LocationSmart and Zumigo.  See https://docs.fcc.gov/public/attachments/FCC-24-40A1.pdf. In legal terms, AT&T had direct, “privity of contract” with only two commercial ventures.  AT&T had every reason to insulate itself from knowing what its direct contractors did with the data, how much money they made, and how many location disclosure deals the two ventures cut with third parties.  

            No one should buy AT&T’s plausible deniability rationale that it’s possible that the thousands of the information aggregator clients did nothing wrong.

AT&T Wireless Risks Having to Pay $100 Million in Tuition on Contract Law

          The FCC has issued a Notice of Apparent Liability to AT&T Wireless with a $100 million “forfeiture” for throttling service to subscribers still having “unlimited” service plans.  See http://www.wsj.com/articles/fcc-to-fine-at-t-100-million-for-capping-unlimited-data-plans-1434557988; https://www.fcc.gov/document/att-mobility-faces-100m-fine-misleading-consumers-0.

           The FCC applies the transparency requirements contained in its 2010 and 2015 Open Internet Orders that passed muster with appellate court review. 

            Ironically, AT&T could have avoided the fine if it strategically blended service contracts with FCC filed tariffs.  Historically, tariff filing requirements have been vilified as harmful to competition, innovation and carrier flexibility.  The FCC has mandated detariffing of many services including wireline and wireless long distance services on the assumption that carriers will self-regulate in a competitive market.

           Apparently even in competitive markets, carriers can risk a bait and switch gambit.

           If only AT&T had a tariff filing option.  It could have inserted language deep in the boilerplate of a tariff to accord it near total flexibility to throttle whenever it wanted.

           The campaign of AT&T and other incumbent carriers to eliminate tariffing has an impact AT&T apparently has failed to evaluate fully. By seeking to replace tariffs with contracts, AT&T now has to comply with issues such as fair notice, proper definition of words like unlimited and congestion, consumer protection and unfair trade practices.  A very old legal precedent, known as the Filed Rate Doctrine, allows common carriers to insert language in tariffs that subvert, conflict with and change the terms and conditions of a negotiated contract.  In effect AT&T could have baited and switched if it could still file a tariff. 

            The tariff would have trumped anything offered orally, or by written agreement. Even today, under certain circumstances, incumbent carriers still like what tariffs offer.  For example, Verizon still has a web page that seems to like tariffing.  The company states that: “Tariffs have historically served as the basis for creating binding rights and obligations between carriers and their customers for telecom services.” See http://www.verizonenterprise.com/us/publications/service_guide/detariffing_f_a_q/.

           But of course who wants a fair balance of rights and obligations between carriers and consumers?  With binding arbitration clauses and major limits of the certification of class action law suits, carriers increasingly can behave poorly, dare I say cheat customers, without penalty.  Occasionally the FCC and FTC step in, and the offending carrier pays a minor fine.

           Possibly a $100 million dollar fine will motivate AT&T to appeal the FCC’s order.  If so AT&T, as the author of a “take it or leave it” contract of adhesion, will bear the burden of proving that unlimited does not mean what people commonly assume the word to mean.