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.

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 What to Expect from the FCC’s Restoring Internet Freedom Order

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.

Continue Reading On the Eve of the FCC’s Reclassification of Broadband Services, the FCC and FTC Release Memorandum of Understanding for Oversight of Broadband

On November 1, 2017 the House Antitrust Law Subcommittee held a hearing to discuss the role of federal agencies in preserving an open Internet.

The core question discussed at the hearing was whether current antitrust law is sufficient to ensure net neutrality absent FCC rules. The panelists—including FTC Acting Chairman Maureen Ohlhausen and Commissioner Terrell McSweeney; former FCC Commissioner Robert McDowell; and Michael Romano, NTCA Senior Vice President of Industry Affairs and Business Development—and committee members were generally divided down party lines, with Republicans arguing that FCC rules were both unnecessary and counterproductive and Democrats arguing that rules were necessary to ensure an open Internet, free expression, and innovation.   Continue Reading House Antitrust Subcommittee Explores the Role of Antitrust Law in Net Neutrality

Today the Office of Federal Register published a final rule from the Federal Communications Commission (FCC or Commission) that formally voids the rule changes in the Commission’s 2016 Privacy Order—which Congress invalidated in a 2017 Congressional Review Act (CRA) joint resolution earlier this year—and reinstates the voice-centric customer proprietary network information (CPNI) rules “in effect immediately prior to the effect date” of the FCC’s 2016 Privacy Order.

As the Commission notes in the summary of today’s action, “because the CRA does not include direction regarding the removal . . . of the voided language from the Code of Federal Regulations, the FCC must publish this document to effect the removal of the voided” rule’s text.  The Commission further explains that the publication of the previous rules is not an exercise of rulemaking authority, but rather simply effectuates what Congress had already done, and therefore today’s action is neither subject to public comment nor to judicial review.  The FCC’s action is effective today and does not substantively modify the CPNI rules in effect immediately prior to the issuance of the 2016 Privacy Order.

In June, the FCC issued an Order that formally recognized the CRA’s disapproval of the 2016 Privacy Order and dismissed eleven petitions for reconsideration of the new privacy rules.  The June Order noted that the reinstated rules would not apply to broadband service, which would be subject only to the text of Section 222 of the Communications Act, as amended. The June Order was met with a strong partial dissent from Commissioner Clyburn, who challenged the Commission’s decision not to place the item on public comment or to provide consumers with privacy rules beyond the “bare text of section 222” and “decade-old rules for legacy voice.”

For providers, today’s action formalizes what we’ve known for some time: the old CPNI rules are back in effect for non-broadband telecommunications carriers and providers of interconnected VoIP, and the statutory text of Section 222 continues to apply to broadband providers until further action.

 

 

On August 24, 2017, the Federal Communications Commission (“FCC” or “Commission”) published in the Federal Register its Further Notice of Proposed Rulemaking (“FNPRM”) that explores ways to improve the value of data, collected on FCC Form 477, regarding the availability of mobile and fixed broadband and other communications services, and to identify and eliminate unnecessary or overly-burdensome filing requirements.  The FNPRM proposes numerous changes to data collection for mobile and fixed services as well as ancillary logistical issues related to the Form 477 – for a more detailed overview of these proposals, see our previous blog post.  Federal Register publication starts the clock on the comment cycle for the item.  Initial comments on the FNPRM will be due on September 25, 2017, and reply comments will be due on October 10, 2017.

At its August Open Meeting, the Federal Communications Commission (“FCC” or “Commission”) voted unanimously in favor of a Further Notice of Proposed Rulemaking (“FNPRM”) that explores ways to improve the value of data, collected on FCC Form 477, regarding the availability of mobile and fixed broadband and other communications services, and to identify and eliminate unnecessary or overly-burdensome filing requirements.  The FNPRM proposes numerous changes to data collection for mobile and fixed services as well as ancillary logistical issues related to the Form 477.  Comments on the proposals set forth in the FNPRM will be due 30 days after the item is published in the Federal Register, and reply comments will be due 15 days after initial comments.  The FNPRM has not yet been published so the exact comment deadlines are not known at this time.

Continue Reading August 2017 FCC Meeting Recap: FCC Proposes Changes to Broadband Data Collection

At its August 2017 Open Meeting, the Federal Communications Commission (“FCC”) unanimously adopted an Order on Reconsideration and Second Report and Order (“Order”) outlining a process to challenge the FCC’s determinations of which areas will receive financial support in the upcoming second phase of the Mobility Fund.  The Mobility Fund provides financial support to wireless service providers to maintain and extend mobile broadband and voice services in rural and other underserved areas.  As we previously reported, the FCC plans to give out over $4.5 billion in Mobility Fund Phase II financial support over the next ten years to expand 4G LTE coverage across the country.  The Order generally mirrors the discussion draft released last month, except that parties now have more time to submit challenges.  While the FCC plans to provide additional details about the challenge process over the next year, carriers interested in participating in the Mobility Fund Phase II should review the Order carefully and consider their challenge strategies.

Continue Reading August 2017 FCC Meeting Recap: FCC Adopts Challenge Process for Billions in Mobility Fund Phase II Support

On July 18, 2017, the National Telecommunications and Information Administration (“NTIA”) hosted a virtual meeting of its multistakeholder process to address Internet of Things (“IoT”) patching and security upgrades.  The July 18th meeting represents the fourth gathering of multistakeholders in this process.

During the July 18th meeting, four working groups presented: (1) the Communicating Upgradability and Improving Transparency working group; (2) the Incentives, Barriers, and Adoption working group; (3) the Standards working group; and (4) the Technical Capabilities and Patching Expectations working group.

Continue Reading NTIA Holds Virtual Meeting of Multistakeholder Process on Internet of Things Security Upgradability and Patching

Pole-2On June 5, 2017, the United States Supreme Court granted cert in Carpenter v. United States, a case in the hotly contested area of mobile cellular location data privacy.  The question before the Court is whether law enforcement must obtain a warrant for historical cell-site location information.

The case stems from 2014, when Timothy Carpenter was sentenced for his alleged role in coordinating a series of armed robberies of smartphone vendors.  To support its case, law enforcement obtained access to 127 days’ worth of Mr. Carpenter’s cell-site location records through what is commonly referred to as a “D order” (after the subsection of the act under which the records were requested).  Whereas warrants require the government to show probable cause, under the Stored Communications Act, a D order merely requires that law enforcement present “specific and articulable facts showing that there are reasonable grounds to believe” that the records requested “are relevant and material to an ongoing criminal investigation.”  18 U.S.C. § 2703(d).  Continue Reading Carpenters, Carriers, and Cell-Sites (Oh My!): SCOTUS to Hear Mobile Locational Privacy Case