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The Ninth Circuit’s opinion begins with the text and history of Section 5, noting that it provides “limited guidance, albeit pointing to an activity-based interpretation.”  The court rejected AT&T’s arguments based on language in later amendments (or failed amendments) to the FTC Act that pointed to a status-based exemption because “the view of a later Congress cannot control the interpretation of an earlier enacted statute.”  Turning to the common-law meaning of “common carrier,” the court found that the “well-understood meaning” of the term reflected in judicial decisions both before and after the FTC Act’s 1914 passage is that entities may be considered common carriers for some purposes but not others.

The Ninth Circuit also relied on agency interpretation of the common-carrier exemption by both the FTC and the FCC, noting that both agencies have long supported an activity-based approach to the common carrier exemption.  Rejecting AT&T’s argument that telecommunications providers must be regulated solely by the FCC, the court found that concurrent jurisdiction is commonplace among federal agencies, citing for example the shared jurisdiction of the FTC and the Department of Justice with respect to antitrust matters.

Finally, the en banc court addressed the effect of the FCC’s 2015 reclassification of mobile broadband as a common-carriage service on the outcome of the appeal.  Relying on the strong presumption against retroactivity and explicitly prospective language in the 2015 order (and the 2018 order reversing the 2015 order), the Ninth Circuit held that the reclassification order “does not rob the FTC of its jurisdiction over conduct occurring before the order” and had no effect on the outcome of this appeal.
The Chairman of the FCC and Acting Chair of the FTC both welcomed the en banc panel’s decision.  In confirming that the FTC has authority over non-common carrier activities, the en banc panel’s decision removed at least one obstacle to a central thesis of the FCC’s decision repealing net neutrality rules: that the FTC, as a consumer protection and competition agency, should take the lead in overseeing the practices of Internet Service Providers.

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