Diffusion of Deregulatory Policies Through Litigation: How U.S. Telecommunications Carriers are Eroding Consumer Protection Remedies, Generally

U.S. deregulatory policies have been eroding consumer protection remedies for telecommunications and broadband access services. However, most policymakers and telecommunications policy researchers are familiar with the erosion that has resulted from industry-specific actions by federal or state legislatures or regulatory agencies. This paper describes further erosion resulting from telecommunications’ carriers’ pursuit of deregulatory strategies through judicial litigation of cases involving bodies of law applicable to businesses generally.A prominent example of such strategic use of judicial litigation is the U.S. Supreme Court decision (5-4 vote) in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), which eliminated customers’ judicial remedies with respect to standardized contracts, known as contracts of adhesion, for the provision of mobile services. In this case, the U.S. Supreme Court expansively interpreted the Federal Arbitration Act of 1925 (FAA) to preempt state law remedies related to consumer contracts. The Court’s decision enforced AT&T Mobility’s mandatory arbitration clause and class action waiver in its consumer contracts, thereby barring consumers’ access to judicial remedies. Moreover, the Court’s interpretation is not confined to contracts for mobile telecommunications services, but is generally applicable to consumer contracts in other industries.Since AT&T Mobility v. Concepcion, the U.S. Supreme Court has declined to retrench from its radical interpretation of the FAA, notwithstanding assertions of policymakers and scholars that such interpretation is inconsistent with Congress’ legislative intent. Instead, the Court has reaffirmed its interpretation of the FAA in subsequent decisions, most recently in DirectTV, Inc. v. Imburgia (2015), 577 U.S. ___. This paper explains why the FCC’s Open Internet Order (2015), known as the network neutrality order, is insufficient to fully compensate for the loss of judicial remedies for consumers of telecommunications and broadband services resulting from AT&T Mobility v. Concepcion. In this regard, the U.S. Supreme Court’s interpretation of the FAA did not acknowledge the coexistence of industry-specific regulation under the Communications Act of 1934 – a critical oversight that needs to be corrected through legislation or potentially further judicial litigation.This paper also explains that, beyond its inconsistency with Congressional legislative intent, the Court’s interpretation of the FAA in AT&T Mobility v. Concepcion has created adverse systemic effects for political and economic governance by undermining the role of private enforcement mechanisms both generally under the American legal regime and specifically within the telecommunications sector. Illustratively, Margaret Radin (2013), a legal expert in U.S. contract law, asserts in Boilerplate: The Fine Print, Vanishing Rights, and The Rule of Law (Princeton University Press) that the resultant loss of consumer remedies related to contracts of adhesion constitutes normative degradation of the legal system and undermines the rule of law. It also deprives individuals of access to the constitutional right of jury trials. This paper concludes, stressing how this policy trajectory in the U.S. contrasts greatly with those in Canada and the European Union, which have significantly increased consumer rights, both generally and in the telecommunications sector. [This abstract is not being submitted for presentation in the poster session.]