AT&T will appeal to the Supreme Court in an attempt to avoid a government lawsuit over its throttling of unlimited data plans.

The Federal Trade Commission sued AT&T in October 2014 in US District Court in Northern California, alleging that AT&T promised unlimited data to wireless customers and then throttled their speeds by as much as 90 percent. In response, AT&T argues that the FTC has no jurisdiction over any aspect of AT&T's business because the FTC lacks authority to regulate common carriers.

AT&T won a key ruling in the case in August 2016, but the most recent federal appeals court decision went in favor of the FTC. That's why AT&T is headed to the nation's top court.

"AT&T intends to file a petition for certiorari in the Supreme Court" by the deadline of May 29, according to a joint case management update filed last week.

An AT&T victory could leave many ISPs in a regulation-free zone. The Federal Communications Commission in December 2017 voted to eliminate net neutrality rules and relinquish its authority to regulate ISPs as common carriers. One of the FCC's justifications for deregulating the broadband market was that the Federal Trade Commission can force ISPs to uphold their net neutrality promises.

But an AT&T court victory could eliminate the FTC's authority over the Internet services offered by AT&T, Verizon, and other traditional phone companies. Consumer advocacy groups last year urged FCC Chairman Ajit Pai to delay the anti-net neutrality vote until after the AT&T/FTC case is finished, but he refused to do so. Pai still hasn't finalized the net neutrality repeal, however.

Supreme Court turns down most cases

The FTC is confident that the Supreme Court won't take up the case, since it "hears about 80 cases per year out of as many as 8,000 petitions filed," the joint case management update said. The FTC wants to resume discovery in its lawsuit against AT&T without waiting for the Supreme Court to decide whether it will take the case.

But AT&T claims that its "petition has a strong chance of being granted" by the Supreme Court. "Two of the most important factors in the Supreme Court's decision on whether to review a case are whether there is a split among the circuits on the question presented and whether the issue is important. Both factors are present here," AT&T said.

The case is a bit convoluted. The FTC does not have authority from Congress to regulate companies classified as common carriers, and AT&T is a common carrier for its mobile and landline voice services. But the FTC's lawsuit relates to mobile broadband, which was not classified as a common carrier service at the time the lawsuit was filed.

AT&T argues for a status-based reading of the common carrier exemption. That would mean a company that has the status of being a common carrier could never face punishment from the FTC, even when it's offering non-common carrier services.

The FTC argues for an activity-based reading of the common carrier exemption. That would mean the FTC can regulate any non-common carrier service, even when it's offered by a company that is otherwise a common carrier.

If AT&T fails at the Supreme Court, it would have to face the FTC's lawsuit, which seeks refunds for customers.

AT&T has already relaxed its throttling polices, so the outcome of this case likely won't change AT&T's throttling policies going forward. But the case would have an impact on whether customers harmed by AT&T's previous policies will get refunds and on whether the FTC will have the authority to regulate broadband services offered by mobile phone operators or traditional landline phone companies.

The case wouldn't have any impact on the FTC's authority over Comcast and other cable companies, however. Unlike mobile voice and traditional landlines, the cable industry's VoIP phone systems haven't been classified as a common carrier service.