As the second session begins, the 115th Congress will pick up where it left off on some key telecommunications and technology issues. In this episode of Kelley Drye’s Full Spectrum podcast, Partner John Heitmann and Jennifer McCadney, Special Counsel in Kelley Drye’s Government Relations and Public Policy group, examine the current status of these issues and the implications for what is likely to occur in the coming months. The three categories of legislation they cover are (1) Mobile, 5G and Spectrum, (2) Rural Broadband Access, and (3) Internet, Privacy, Cybersecurity and Data Security. To listen to this episode, please click here.
On December 14, 2017, the FCC voted 3-2 to roll back the 2015 Open Internet Order, with all Republican commissioners voting in favor of the item and both Democratic commissioners strongly dissenting. As we discussed in an earlier blog post in anticipation of the vote, the Restoring Internet Freedom Order (1) reclassifies broadband Internet access service (BIAS) as an information service (and mobile BIAS as a “private mobile service”), (2) vacates the bright-line rules in the 2015 Open Internet Order, as well as the “general conduct standard,” (3) retains, but refactors, the open Internet transparency rule, and (4) returns consumer protection authority over broadband to the Federal Trade Commission (FTC).
So what happens now? The FCC has not yet published the text of the Restoring Internet Freedom Order, but we don’t expect any significant changes between the draft item and the final item. Once the item is released, the Office of Management and Budget (OMB) must review the item and publish it in the Federal Register, which will trigger implementation dates (60 days from publication, except for items requiring further OMB approval) and start the clock for parties to challenge the order through an appeal or petition for reconsideration. Based on news reports and the trade press, we expect the following things to happen:
- Several parties will appeal the Order. As has happened after each of the open Internet orders, we expect parties will file federal appeals, and we expect the cases will be consolidated in a single appeal in the U.S. Court of Appeals for the D.C. Circuit. Several parties, including Public Knowledge, Free Press, Incompas, the National Hispanic Media Coalition, and New York Attorney General Eric Schneiderman on behalf of a multi-state lawsuit, are expected to file suit in the near term. The deadline for appeal—for all practical purposes—is ten days after publication in the Federal Register. As we discussed in our earlier blog post on this issue, appellate courts give substantial deference to agency decisions, so long as the ultimate decision addresses the relevant facts and arguments and the outcome is within the zone of reasonable interpretations of the statute. It is possible, therefore, that the court of appeals will uphold the 2017 rollback of the Title II classification without finding that the 2015 ruling was unreasonable.
- Democrats in Congress are working to nullify the Order. Democrats in Congress have already begun the process of trying to nullify the Order through a Congressional Review Act (CRA) resolution. While CRA resolutions are a powerful tool in the hands of the majority—as we saw with the rollback of the Broadband Privacy Order earlier this year—as the minority party, the Democrats are at a significant disadvantage. We don’t expect the CRA resolution to pass, or for the President to sign it if it did.
- Republicans in Congress will attempt to pass net neutrality legislation. We expect Republicans and BIAS providers to push for a bill that enshrines the basic bright-line net neutrality protections (i.e., blocking and throttling) in law, formally classifies BIAS as an information service, and otherwise prohibits the FCC from expanding its net neutrality authority and preempts the states from passing their own net neutrality protections. House Communications Subcommittee Chairman Marsha Blackburn of Tennessee introduced just such a bill on Wednesday (The Open Internet Preservation Act), raising significant concerns from Democrats and representatives of edge providers, such as the Internet Association, that the bill failed to address important protections, including a ban on paid prioritization.
- States will attempt to introduce their own net neutrality protections. In the wake of the Restoring Internet Freedom Order, several states announced initiatives to impose their own net neutrality protections on ISPs operating within their jurisdiction. For example, legislators in Washington state and California have introduced bills to reinstate net neutrality protections, although federal law may preempt such laws. Gov. Inslee of Washington State also suggested using the states’ power as a large purchaser of BIAS and telecommunications services to make net neutrality a condition of state contracting.
- The Federal Trade Commission and Department of Justice will fill the enforcement gap using general consumer protection and antitrust laws. As mentioned above, the Restoring Internet Freedom Order cedes most net neutrality enforcement authority to the FTC. In response to last week’s vote, FTC Acting Chairman Maureen Ohlhausen stated that the agency looks forward to serving as “the cop on the broadband beat.” However, as we’ve discussed in detail in earlier posts, the scope of the FTC’s jurisdiction is still undergoing review in the Ninth Circuit, where the entire court is reviewing (en banc) an earlier decision by the court that the “common carrier exemption” of Section 5 of the FTC Act exempts all activities of common carriers—e.g., telecommunications providers—from FTC jurisdiction (known as a “status-based exemption”). If the Ninth Circuit upholds the earlier panel decision, it would leave many ISPs outside the jurisdictional reach of the FTC and FCC, and would create a “circuit split” between the Ninth Circuit and the Second Circuit (which interprets the common carrier exemption as limited to the common carrier activities of common carriers). Then it would be up to the Supreme Court to resolve the split, unless Congress clarifies or eliminates the exemption. Nevertheless, last week the FTC and FCC forged ahead with a Memorandum of Understanding to coordinate and cooperate on net neutrality enforcement activities and consumer education efforts. Further, in the wake of the vote, the Antitrust Division of the Department of Justice noted that it “stands ready to vigilantly protect American consumers and free markets” from activities of ISPs that violate the antitrust laws. The House Antitrust Subcommittee recently held a hearing to explore the role of antitrust law in protecting consumers from net neutrality harms, which we covered in a separate post.
Net neutrality remains a red hot issue in the public sphere, and we don’t expect it to die down soon, particularly as claims about fake comments and flawed process persist. As we begin to enter the 2018 midterm elections, there is a possibility that net neutrality will continue to play a prominent role in public debates. For that reason, while it’s unclear how this issue will shake out, it’s clear that we will have another active year in the net neutrality saga. We will follow up with a thorough analysis of the Order when it is released.
At its last open meeting in 2017, the five FCC Commissioners unanimously voted to adopt a Notice of Proposed Rulemaking (NPRM) and Order regarding the Commission’s Rural Health Care (RHC) Program, a 20-year old initiative aimed at improving rural health care provider access to first telecommunications services and later an array of communications services, including Internet access, dark fiber, and business data services. This item is part of FCC Chairman Ajit Pai’s overall initiative to close the “digital divide,” and proposes to increase the $400 million spending cap for the first time since 1997. The NPRM also proposes to change how the FCC handles demand beyond the cap, from general proration to prioritization based on rurality or remoteness. As such, all interested stakeholders should carefully monitor and consider participating in the rulemaking process. Comments will be due 30 days after publication of the item in the Federal Register (which usually takes a few weeks) and reply comments will be due 60 days after publication.
At the December Open Meeting of the Federal Communications Commission (“FCC”), the Commissioners approved a Report and Order (“Order”) that adopts a new form of emergency alerting, Blue Alerts, which would serve to inform the public of actionable threats to state or local law enforcement. Once the new alert is implemented, radio and TV broadcasters and a variety of other video providers will broadcast emergency alerts much as they do for weather and other emergencies. Wireless telephone providers also may transmit the alerts through their emergency notification system. The action was adopted less than six months after the rulemaking proposal was initiated, a significantly shorter time period than that in which the Commission typically acts.
Consistent with Chairman Pai’s focus on accelerating infrastructure deployment to enable next generation wireless services, the Federal Communications Commission (“FCC” or “Commission”) unanimously opened at its monthly meeting on December 14, 2017 a proceeding to exempt wireless communications equipment from historic preservation requirements under certain conditions. The FCC’s action is directed at enabling operations on so-called “Twilight Towers” – wireless towers constructed between 2001 and 2005 that are claimed to have languished due to regulatory uncertainty. The Commission describes this proposal as an action that would open up potentially thousands of existing towers for collocations without the need for either the collocation or the underlying tower to complete an individual historic preservation review.
This Thursday, December 14th, the FCC will vote on the Restoring Internet Freedom Order, after releasing a draft on November 22nd. The Draft Order would overturn the FCC’s earlier 2015 Open Internet Order. We don’t expect any bombshell revisions when the FCC acts, and as such we expect that the Order will: Continue Reading
On December 11, 2017, the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) released a draft Memorandum of Understanding (MOU) which will allocate oversight and enforcement authority related to broadband Internet access service (BIAS) between the two agencies. The new MOU was announced three days before the FCC’s scheduled vote to reclassify BIAS as an “information service,” and is expected to be finalized simultaneously with that vote. The MOU is part of an ongoing effort to address concerns that reversing the current “net neutrality” rules will adversely affect consumers, and provides a guide for Internet service providers (ISPs) and other stakeholders to understand which agency will be taking the lead on oversight and enforcement going forward. However, the extent to which the MOU takes effect will depend upon, among other things, the pending case interpreting section 5 of the FTC Act that is before the Ninth Circuit Court of Appeals.
In a document released the day before Thanksgiving, the FCC issued three orders and initiated yet another round of rulemaking in its Spectrum Frontiers proceeding aimed principally at making almost two gigahertz of additional millimeter wave (“mmW”) spectrum available for terrestrial commercial use while confirming other mmW frequencies for satellite use. Continuing its break-neck pace in the Spectrum Frontiers docket – a notice of inquiry, three notices of proposed rulemaking, two reports and orders, and a memorandum opinion and order in just over three years – the FCC underscored its “priority [in] making spectrum available quickly so that it can be utilized by potential users, technology developers, and innovators.” In numerous places throughout the recently released orders, the FCC opted against adopting regulations because they might have the adverse side effect of preventing new technologies and services being able to exploit the mmW bands.
The NY Chapter of the Federal Communications Bar Association (FCBA) held a “Meet and Greet” with FCC Commissioner Michael O’Rielly yesterday in Kelley Drye’s New York office. Jameson Dempsey, a Kelley Drye associate and co-chair of the NY FCBA Chapter, provided introductory remarks. John Heitmann, Chair of the Communications Practice group in Kelley Drye’s Washington D.C. office, led an armchair discussion with the Commissioner.
Discussion topics ranged from media ownership and net neutrality to spectrum policy and broadband deployment. The Commissioner also answered timely questions from the audience.
The video of the full discussion can be found here.
At the November Open Meeting of the Federal Communications Commission (“Commission” or “FCC”), Commissioners approved a Report and Order (“Order”) and Further Notice of Proposed Rulemaking (“FNPRM”) that targets a high-priority issue for Chairman Pai – curbing illegal telemarketing and other calls. Acting with unusual speed (at least, by the standards of past Commissions), the Order implements a number of proposals made in March 2017 (for more see our earlier post). With the Order, the FCC adopts rules that enable voice service providers to block calls from invalid, unallocated, and unassigned numbers before they ever reach a consumer’s phone, while the FNPRM seeks input on ways to make sure that blocking does not impact lawful calling practices. FNPRM comments are due by January 23, 2018 and reply comments by February 22, 2018.