Verizon and AT&T Urge Courts to Toss April Data Fines

Verizon told the 2nd Circuit U.S. Court of Appeals the $47 million fine the FCC levied on it in April (see 2404290044) for allegedly not safeguarding data on customers' real-time locations is arbitrary and capricious and that the court should reject it. “The agency ignored the limits of its authority in these multiple ways, in an effort to show force against a large company that did nothing wrong,” the provider said. Verizon said it would appeal the fine at the time the FCC approved it 3-2, with Republican Commissioners Brendan Carr and Nathan Simington dissenting. The fine was approved four years after Republican Chairman Ajit Pai proposed it. Verizon’s location-based service (LBS) program “used device-location information, and device-location information is not” customer proprietary network information, Verizon said this week in a brief in docket 24-1733. By the time the FCC proposed the fine, “Verizon had shut down its LBS program nearly one year earlier, eliminating any potential current or going-forward liability,” it added. Verizon noted that the FCC got involved following a New York Times report that Securus “misused many carriers’ LBS programs and that a sheriff in Missouri took advantage of Securus’s actions to track wireless carriers’ customers without their consent.” But the agency found that the statute of limitations had expired in both cases, Verizon said. The FCC then “adopted a novel approach to generate an eye-popping penalty amount,” the brief said: The agency “punished Verizon for not terminating every other service provider from the LBS program on a faster timeline” imposing “a forfeiture penalty for each day -- starting 30 days after the New York Times article -- that each of the 63 service providers remained able to use the LBS program, despite not being involved in any wrongdoing.” Verizon also argued the order should be overturned given the U.S. Supreme Court’s June decision in SEC v. Jarkesy (see 2406270063). “The Constitution guarantees Verizon a jury trial -- not an administrative adjudication -- before it faces an order compelling it to pay a forfeiture.” AT&T, meanwhile, made similar arguments in its challenge filed in the 5th Circuit against the FCC’s $57 million fine, approved the same time as Verizon's. “The Commission itself has acknowledged that Securus’s misdeeds took place long before the statute-of-limitations period,” AT&T said: “The Commission cites no evidence that Securus ever unlawfully accessed a single AT&T customer’s location information.” AT&T said the FCC accused it of carelessness. “AT&T gave access only to providers with an approved use case; conducted daily audits of consent records and broader programmatic audits; and responded to Securus’s misdeeds promptly and prudently, weighing the costs and benefits at every turn,” AT&T said. “That is far more than the Commission can say for itself, having taken no action (failing even to inform the major wireless carriers) after learning of Securus’s malfeasance nearly a year before AT&T did.”