# Telecom Providers Contest FCC Penalties Regarding Location Data Sales, Cite Right to Trial by Jury
In a significant legal confrontation, prominent U.S. telecommunications companies—Verizon, AT&T, and T-Mobile—are actively seeking to reverse penalties imposed by the Federal Communications Commission (FCC) for the unauthorized sale of customer location data. The carriers contend that the FCC exceeded its authority and infringed on their constitutional rights, notably their right to a jury trial as protected by the Seventh Amendment.
## Background: The FCC’s Penalties and the Location Data Controversy
The issue traces back to 2018, when revelations emerged that the top U.S. wireless providers had sold real-time location data of their customers to third-party data brokers. These brokers subsequently sold the information to various organizations, including law enforcement, without securing proper consent from customers. The controversy became public when it was reported that a sheriff in Missouri had utilized a location-tracking service provided by Securus, a communication service for correctional institutions, to locate individuals without authorization.
In retaliation, the FCC initiated an investigation and, by April 2024, imposed fines amounting to $196 million on the carriers. T-Mobile received a penalty of $80.1 million, AT&T was fined $57.3 million, Verizon faced a fine of $46.9 million, and Sprint (now under T-Mobile) was charged $12.2 million. The FCC accused the carriers of neglecting the protection of sensitive customer data and continuing to sell access to location information after recognizing the inherent risks.
## Carriers’ Legal Claims
Verizon, AT&T, and T-Mobile have launched lawsuits disputing the FCC’s penalties, with Verizon and AT&T filing comprehensive legal documents in November 2024. The carriers assert that the FCC does not possess the legal authority to enforce such penalties and that the fines infringe upon their constitutional rights.
### Seventh Amendment Right to a Jury Trial
A fundamental aspect of the argument presented by Verizon and AT&T is that the FCC’s penalties contravene their Seventh Amendment right to a jury trial. The Seventh Amendment ensures the entitlement to a jury trial in civil cases where governmental entities aim to impose penalties. The carriers assert that since the FCC is pursuing civil penalties, they should have the right for their cases to be decided by a jury in a federal court as opposed to being resolved by an administrative body like the FCC.
Verizon’s statement to the U.S. Court of Appeals for the 2nd Circuit indicated that the FCC’s actions “contravened both the Communications Act and the Constitution.” Similarly, AT&T made a related claim in its submission to the 5th Circuit, asserting that the FCC’s penalties are unconstitutional as they were issued without a jury trial.
### Location Data and the Communications Act
An additional significant issue is whether the location data at the center of the dispute qualifies as Customer Proprietary Network Information (CPNI) under the Communications Act. The FCC maintains that location data is classified as CPNI and is thus subject to stringent privacy protections. However, the carriers contest this interpretation.
For instance, AT&T argues that the location data was not exclusively obtained through its voice service provision, which is required for data to be designated as CPNI under the law. Rather, AT&T contends that the data was acquired as part of an encompassing suite of services, including both voice and data, thereby falling outside the FCC’s jurisdiction.
Verizon equally argued that the FCC’s interpretation of the law was excessively broad and that the agency did not afford “fair notice” that its regulations would pertain to the location data in question.
## The FCC’s Stance
The FCC has upheld its actions, asserting that the carriers neglected to secure proper consent from customers prior to selling access to their location data. The FCC contends that the carriers attempted to shift their obligation to acquire consent onto third-party data brokers, which led to numerous occurrences of invalid consent not being obtained.
In its April 2024 directive, the FCC highlighted that location data is exceptionally sensitive, and the carriers were responsible for safeguarding it. The agency also noted the carriers’ continued sale of location data access, even after recognizing the inadequacy of their protective measures.
The FCC has dismissed the carriers’ claims regarding the Seventh Amendment, invoking prior legal precedents that permit Congress to designate specific issues to administrative agencies, even if a jury trial would normally be warranted in federal court. Nonetheless, the carriers’ legal argument has gained momentum following a recent Supreme Court ruling.
## The Implications of the Supreme Court’s *Jarkesy* Decision
Both Verizon and AT&T have referenced the U.S. Supreme Court’s ruling in June 2024 on *Securities and Exchange Commission v. Jarkesy*, which determined that defendants facing civil penalties from the SEC are entitled to a jury trial under the Seventh Amendment. This ruling, which upheld a determination by the 5th Circuit Court of Appeals, carries substantial implications for
