Legislative Activity

Senate Subcommittee Holds Hearing on FCC’s Proposed Broadband Privacy Rules

On May 11, the Subcommittee on Privacy, Technology and the Law of the Senate Committee on the Judiciary held a hearing titled “Examining the Proposed FCC Privacy Rules.” The hearing examined the substance and implications of the Federal Communications Commission’s (FCC’s) Notice of Proposed Rulemaking (NPRM) (previously discussed here) requesting comments on a proposed framework for the application of the privacy requirements of the Communications Act to broadband Internet access service to ensure that consumers have the necessary tools to determine how their data is used and when it may be shared by broadband providers. Witnesses at the hearing consisted of FCC Chairman Tom Wheeler, FCC Commissioner Ajit Pai, Federal Trade Commission (FTC) Chairwoman Edith Ramirez, and FTC Commissioner Maureen Ohlhausen.

During the hearing, Republican Senators questioned whether oversight of broadband providers’ privacy practices should be left to the FTC. In the alternative, some suggested that the FCC should follow the FTC’s framework for privacy enforcement to mitigate the possibility that consumers would be confused by differing standards applicable to broadband providers and other members of the Internet ecosystem, such as edge providers like Netflix. Commissioner Ajit Pai argued that the FCC’s proposal singles out broadband providers for stringent privacy regulation despite prior statements made by Chairman Wheeler that the FCC did not intend to regulate edge providers differently from broadband providers. Subcommittee Chairman Jeff Flake (R-AZ) also hinted at consumer confusion issues by stating he was “concerned that th[e] rules will only confuse consumers and give them a false sense of security.”

Procedural issues regarding the proposal also came to the fore. Sen. Mike Lee (R-UT) queried whether the FCC has failed to post comments from opponents of the proposal while Commissioner Pai stated that he did not think it “unreasonable” to give commenters extra time to weigh in. Chairman Wheeler stated in his written testimony that there has been “[a]mple time for stakeholders to weigh in.” Comments are currently due on May 27 and reply comments are due on June 27, and the FCC has not, at this time, chosen to extend the deadline.

A video of the hearing and copies of the witness testimony are available here.

This Week’s Hearings:

• Wednesday, May 18: The Senate Commerce, Science, & Transportation Committee will hold a hearing titled “The Telephone Consumer Protection Act at 25: Effects on Consumers and Business.” The following witnesses will testify: Monica Desai, Squire Patton Boggs (US) LLP, testifying on behalf of the American Bankers Association; Rich Lovich, Law Offices of Stephenson, Acquisto & Coleman, testifying on behalf of the American Association of Healthcare Administrative Management; Margot Saunders, National Consumer Law Center; Becca Wahlquist, Snell and Wilmer, testifying on behalf of the U.S. Chamber Institute of Legal Reform; and the Honorable Greg Zoeller, Indiana Attorney General.

Regulatory Activity

FCC Releases Order Approving Charter, Time Warner Cable, Bright House Merger

The FCC has released a Memorandum Opinion and Order (Order) approving, “subject to conditions,” the proposed merger of Charter Communications, Inc., Time Warner Cable, Inc., and Advance Newhouse Partnership’s Bright House Networks. The FCC announced in a May 6 Public Notice that it had approved the merger and that this Order was forthcoming. In the Order, the FCC states that it conducted a “rigorous analysis of the potential harms and benefits of the proposed transaction” and has concluded that, “with the adoption of certain conditions,” the merger “will serve the public interest.”

Among the potential harms of the merger, according to the FCC, are that: (1) the combined entity’s (“New Charter”) “increased broadband footprint and desire to protect its video profits will increase incentives to impose data caps and usage-based prices in order to make watching online video more expensive;” (2) New Charter will have increased incentive to “raise prices on companies – including online video distributors – that interconnect with New Charter’s network to deliver Internet traffic that consumers want;” and (3) “the transaction will likely increase New Charter’s incentive and ability to use its leverage over programmers to extract contractual terms that will frustrate the programmers’ abilities to license content for online distribution.” To address these perceived harms, the FCC imposes conditions on New Charter including: (1) prohibiting New Charter, for seven years, from “imposing data caps or charging usage-based pricing for its residential broadband service;” (2) implementing a “settlement-free interconnection commitment” whereby New Charter agrees to “interconnect with qualifying companies for free;” and (3) prohibiting, for seven years, New Charter from “entering or enforcing contractual terms that prevent or penalize programmers from distributing content online.”

FCC and FTC Investigating Mobile Device Security Updates

On May 9, the FCC and the FTC announced that the agencies will conduct a “separate, parallel inquiry” into the mobile device industry’s security update practices. The aim of the inquiry, according to an FCC Public Notice (PN), is to “better understand, and ultimately to improve, the security of mobile services.” To that end, the FCC’s Wireless Telecommunications Bureau Chief Jon Wilkins has sent a letter to mobile carriers with attached questions about “their processes for reviewing and releasing security updates for mobile devices,” according to the PN. The letter also expresses concern “that there are significant delays in delivering patches to actual devices – and that older devices may never be patched.”

At the same time, the FTC has issued orders to “eight mobile device manufacturers requiring them to provide the agency with information about how they issue security updates to address vulnerabilities in smartphones, tablets, and other mobile devices,” according to an FTC Press Release. Among the information sought by the FTC is: the factors that manufacturers consider in deciding whether to patch a vulnerability on a particular mobile device; detailed data on the specific mobile devices they have offered for sale to consumers since August 2013; the vulnerabilities that have affected those devices; and whether and when the company patched such vulnerabilities, according to the Press Release.

The FCC’s letters and FTC’s orders both request responses to the questions raised therein within 45 days.

NTIA Extends Comment Period to June 2 on “Benefits, Challenges, and Potential Roles for the Government” in Internet of Things

The National Telecommunications and Information Administration (NTIA) has extended to June 2 the agency’s deadline for submitting comments on “the current technological and policy landscape for the Internet of Things (IoT),” according to an NTIA news release. The NTIA issued its request for comment on April 6. The agency seeks comment on a variety of IoT related topics including: (1) general information, such as whether the “challenges and opportunities arising from IoT [are] similar to those governments and societies have previously addressed with existing technologies;” (2) technology, including whether and what “technological issues may hinder the development of IoT;” (3) infrastructure, such as how and what “demands [will IoT place] on existing infrastructure architectures;” (4) economy, such as what impact the IoT will have on the U.S. workforce and on industrial practices; (5) policy, including the “main policy issues that affect or are affected by IoT;” (6) international engagement, including what factors the Department of Commerce should “consider in its international engagement in … [s]tandards and specification organizations [or] [i]ndustry alliances;” and (7) additional issues, including what “role” the Department of Commerce should play “within the federal government in helping to address the challenges and opportunities of IoT.”

FCC Seeks Comment on Deployment of Small Cell and Distributed Antenna Systems

On May 12, the FCC’s Wireless Telecommunications Bureau released a Public Noticeseeking comment on a proposal intended to facilitate 5G development by supporting the further deployment of small cell facilities and Distributed Antenna Systems (DAS), which use components that are smaller in size than traditional cell tower deployments and can be used to expand wireless network capacity. The Public Notice seeks comment on the Amended Programmatic Agreement for the Collocation of Wireless Antennas, which contains the procedures for review of proposed collocations of wireless antennas and other related equipment under the National Historic Preservation Act (NHPA). The Public Notice proposes to streamline the review of proposed DAS and small cell deployments “by excluding deployments that have minimal potential for adverse effects on historic properties.”  FCC Commissioner Michael O’Rielly released a statement expressing his support for the proposal and urged the FCC to “conclude this issue by fall.” Comments on the proposal are due June 13, 2016.