T-Mobile: D.C. Circuit Should Reject FCC's Data Violation Fine
The FCC's 3-2 April decision (see 2404290044) fining T-Mobile for allegedly not safeguarding data on customers' real-time locations should be overturned, the carrier said in a brief filed Monday at the U.S. Court of Appeals for the D.C. Circuit. “The…
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FCC concluded that essentially the entire wireless industry had violated the law by continuing to operate location-based service (LBS) programs” based on actions by a “single, rogue actor” who “misused those programs,” T-Mobile said in docket 24-1224. T-Mobile was assessed the largest fine of the major carriers, more than $91 million, plus $12 million for Sprint's violations, which it subsequently acquired. Republican Commissioners Brendan Carr and Nathan Simington dissented, even though the FCC four years ago, under Republican Chair Ajit Pai, approved the initial notice of apparent liability. T-Mobile noted that it and Sprint ended their LBS programs months after reports of potential abuse surfaced. Moreover, it argued that the FCC lacks authority over LBS data under the Communications Act: “The FCC based its retroactive punishment on an utterly novel construction of the governing statute, holding, for the first time, that the mobile-device-location information used in those LBS programs was ‘customer proprietary network information" (CPNI). T-Mobile said the “FCC’s unilateral imposition of tens of millions of dollars in civil penalties violates the Companies’ jury-trial rights under the Seventh Amendment and Article III.” It cited the U.S. Supreme Court’s decision in SEC v. Jarkesy, which questioned administrative penalties handed down absent a jury trial (see 2406270063). The fines also violate principles of fair notice, the brief said. “The FCC adopted its broad view of CPNI for the first time in these enforcement proceedings, after the conduct had already occurred.” The FCC’s “hindsight-based liability findings” are also “arbitrary and capricious,” the provider said. “Among other safeguards, the Companies limited the number of entities with direct access to device-location information, ensured that LBS providers were vetted before allowing them to participate in the LBS programs, and required express customer consent before sharing device-location information.” The government is scheduled to respond Dec. 26. Verizon challenged the FCC’s fine in the 2nd Circuit, AT&T in the 5th Circuit (see 2411060008).