In a preview of the disclosure obligations required by the FCC’s controversial net neutrality rules, the Commission recently issued advisory guidance to broadband service providers for meeting the transparency requirements of the 2010 Open Internet Order. The guidelines present a number of options by which broadband providers will disclose information regarding their network management practices, performance standards, and commercial terms to potential customers. The advisory guidance comes in response to requests from the broadband industry and Internet watchdog groups calling for flexible reporting requirements and regulatory clarity in advance of any enforcement of the transparency rules. Significantly, the advisory was issued by the Commission’s Enforcement Bureau and Office of General Counsel, reinforcing the potential for compliance exposure and that implementation issues will potentially be addressed in enforcement and complaint proceedings. The advisory guidance focused on five key areas:
1. Point-of-Sale Disclosures
The FCC clarified that the transparency rules do not require the distribution of information in hard copy or extensive training of employees regarding disclosure procedures. Broadband providers can normally meet their disclosure requirement by directing prospective customers to a web address at which the required disclosures are clearly posted and updated. In the case of “brick-and-mortar” retail outlets, broadband providers relying on the web for their point-of sale disclosure will need to make available equipment “such as a computer, tablet, or smartphone, through which customers can access the disclosures.”
2. Service Description
The Open Internet Order established an FCC broadband performance measurement project to assess network metrics such as connection speeds which broadband providers will need to disclose. The service description requirements vary depending on whether the provider offers fixed or mobile broadband. For fixed broadband, any provider which participates in the Commission’s performance measurement project can present the project’s results to customers to satisfy their disclosure requirement. Fixed broadband providers opting not to participate in the project may provide actual performance data based on internal testing, consumer speed reports, or reliable third-party sources.
For mobile broadband, the FCC recognized the increased difficulties with obtaining accurate performance measurements. The guidance states that mobile providers “that have access to reliable information” may disclose the results of internal or third-party testing of mean upload and download speeds as well as mean roundtrip latency. The FCC will permit smaller mobile providers lacking advanced testing resources to provide a “typical speed range” experienced by most customers for each service tier offered along with a statement that the submitted data represents the provider’s best estimate of its service performance.
3. Extent of Required Disclosures
While acknowledging that the list of disclosure topics in the 2010 Open Internet Order “is not necessarily exhaustive,” the FCC asserted that broadband providers may satisfy their transparency requirements by providing basic information on their (i) network practices such as congestion management; (ii) performance standards such as access speed and latency; and (iii) commercial terms such as monthly service prices, privacy policies, and customer complaint procedures.
4. Content, Applications, Service, and Device Providers
In addition to consumer disclosure obligations, the transparency rules also require broadband providers to disclose information to certain “edge providers” like application and device suppliers. The FCC equated these two transparency requirements, finding that the disclosures required by broadband providers to consumers should also suffice for edge providers.
5. Security Measures
As broadband providers constantly monitor and assess new network threats, many providers argued that reporting and updating their security policies to customers represented an unreasonable and time consuming burden. The FCC replied that the transparency rules focus only on security disclosures that allow consumers to make informed choices regarding their use of the service, such as the deployment of an anti-virus program which prevents the customer from running a particular application.
The FCC emphasized the advisory nature of the guidelines, noting it may provide additional details in the future. How the broadband industry will react to the new rules remains an open question, as the Open Internet Order remains unpublished in the Federal Register while it awaits OMB approval. Commission observers estimate that the net neutrality rules will not become effective until October, at which time the pending legislative and court challenges to the net neutrality rules may further define how much information broadband service providers will be required to disclose and how these transparency measures will actually be implemented (if at all).