Bureau releases tentative – and temporary – guide for compliance with transparency rules
When the FCC adopted network neutrality rules, back in December (full text of the Order is here), almost nobody was happy. Verizon immediately tried to challenge the rules in court, but was deemed premature. More challenges are sure to follow. And even some net neutrality supporters condemned the new rules as vague.
One particularly vague rule concerns transparency. A broadband Internet access provider must
publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.
Back in February, as required by the Paperwork Reduction Act (PRA), the FCC asked for comment on the burden this rule would impose. Broadband providers expressed concerns about difficulties in complying, particularly for smaller providers having limited resources. As we discussed then, the rule cannot take effect until the FCC and the Office of Management and Budget (OMB) complete a complicated procedural dance, which includes a finding that the rule complies with the PRA notwithstanding the providers’ comments. The Commission’s request for comments in February started that PRA dance; while the next step (i.e., sending the rules and comments over to OMB for its review) could have been taken as early as April, it hasn’t happened yet.
In the meantime, the FCC’s Enforcement Bureau and Office of General Counsel have tried to address the charges of vagueness with an “Advisory Guidance for Compliance With Open Internet Transparency Rule.” Some highlights:
1. Point-of-Sale Disclosures. The Order that adopted the transparency rule requires broadband providers to disclose network management practices, performance characteristics, and commercial terms “at the point of sale.” This does not require distribution of disclosure materials in hard copy, says the Advisory, or extensive training of sales employees to provide the disclosures themselves. Instead, providers can comply by directing prospective customers to a web address with the required information. At a brick-and-mortar outlet, a provider relying on a web page must have equipment that customers can use to access the disclosures.
2. Disclosure of Network Performance. The Order requires broadband providers to disclose accurate information on network performance. This is a difficult and potentially expensive requirement, as measurements could entail specialized modems and software at end users’ locations. Besides, there is little agreement on how the measurements should be done.
The FCC, in collaboration with the nation’s largest wireline broadband providers, has launched (but not yet completed) a project to develop key performance metrics. The Advisory suggests that participating broadband providers disclose data from the project, and that others use the methodology developed through the project, although that has not yet been released. Alternatively, a provider can disclose actual performance based on internal testing, consumer speed test data, or other data on network performance, including data from third-party sources. The Advisory warns, though, that all of this advice is temporary, as the FCC will provide additional guidance later. It does not say when. We can hear the broadband providers muttering their response to the FCC: “Thanks for nothing.”
Even less helpful are the Advisory’s suggestions regarding disclosure for mobile broadband services. Further guidance will be forthcoming, the Advisory says. In the meantime, mobile broadband providers having access to reliable information on network performance may disclose it. Or not.
3. Breadth of Required Disclosures. The Order states that its list of disclosure topics is neither necessarily exhaustive nor a safe harbor, leaving providers worried that they could be liable for failing to disclose additional data. The Advisory now clarifies that disclosure of the information specifically identified in Order will suffice for compliance “at this time,” but also warns that the requirements may change at some unspecified time in the future. Thanks, guys.
4. Disclosure to Edge Providers. The rule requires broadband providers to disclose accurate information sufficient for “content, application, service, and device [‘edge’] providers to develop, market, and maintain Internet offerings.” Providers wondered whether this calls for information beyond that provided to consumers, and if so, what. The Advisory “anticipates” that disclosures to consumers will be sufficiently detailed as to satisfy this requirement as well. That raises the question whether required disclosures to consumers may be more detailed than consumers need or want.
5. Disclosures on Security Measures. The Order stated that required disclosures will likely include information on network security and end-user security. This is a problem because providers use a variety of security measures and frequently update them, which makes keeping disclosures up to date a burdensome task. Worse, disclosures on security methods might be used to undermine security. In response, the Advisory suggests that broadband providers use “sound judgment” in deciding what to disclose, so long as consumers can make informed choices and developers can develop. We hope the FCC will not penalize the good faith efforts of providers that indeed use their sound judgment in withholding sensitive information.
Just how specific should the FCC’s transparency requirements be? Reasonable minds may differ. A rule that is too vague doesn’t do much good, because it leaves the broadband provider with little or no idea of what it is expected to do. On the other hand, a rule that is too detailed risks (a) imposing on providers burdensome or counter-productive requirements that ignore varying market realities, and (b) stripping providers of the flexibility necessary to best serve their customers.
The Advisory purports to provide helpful guidance. Unfortunately, whatever clarity the Advisory offers is likely to be temporary. The Advisory itself states that much of its advice will likely be superseded in the near future. The OMB review process may lead to revisions of the underlying transparency rule.
Ditto for the appeals process, which hasn’t even begun yet. (As the Verizon case mentioned above established, nobody can take the net neutrality rules to court until the FCC has published them in the Federal Register. Despite trade press reports last winter indicating that the Commission was planning on getting the rules into the Register back then, the rules still haven’t been published yet. More recent trade press reports have popped up to suggest that publication might be expected soon. It could happen any day – but that’s been true since last December.) When the rules finally do get to court, the result could substantially change them – if not trash them altogether.
And until the rules become effective – i.e., until they are approved by OMB and published in the Federal Register – by definition they’re, um, not effective. That means that it doesn’t matter just right now whether or not they’re vague, because just right now nobody has to comply with them.
Which leads us to wonder why the FCC went to the trouble of releasing the Advisory. One possibility: an attempt to convince OMB that the transparency rule is not so vague as to be impermissibly burdensome. To which we say, “Good luck!”