Broadband Law Advisor Blog : Broadband Lawyers & Attorneys : Davis Wright Tremaine Law Firm : National Broadband Plan Adoption & Infrastructure Updates

 On Dec. 23, 2010, the Federal Communications Commission (FCC) released its Report and Order (R&O), and the text of the net neutrality rules it adopted on Dec. 21, 2010. The rules are summarized in our prior advisory, but the R&O contains many important details and nuances. (For the full text of the order, see Report and Order).

Transparency

The R&O offers a detailed illustration of the wide ranging disclosure that wireline and wireless providers must provide of commercial terms, performance, and network management practices. The sample disclosure includes “typical frequency of congestion” for networks that manage congestion; how any specialized services may affect the last-mile capacity available for, and the performance of, broadband Internet access service; third-party device and application approval procedures for mobile broadband providers; security mechanisms; details on any inspection of network traffic, and the storage or transfer of such data; and practices for resolving end-user and edge provider complaints and questions. 

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This morning at its monthly open meeting, the Federal Communications Commission adopted net neutrality rules which largely adopt existing Internet traffic and management practices, impose new non-discrimination and transparency rules, but leave room for specialized or managed services and usage based billing. The order is notable for basing jurisdiction mostly on Title I and ancillary jurisdiction, rather than reclassifying broadband as a Title II common carrier service. (The order has not yet been released but we will include a link here once it is made available to the public, along with a DWT Advisory analyzing the order in more detail.  UPDATE: Fairly detailed press release is available on the FCC website, as well as the Commissioners' statements.)

As expected, the vote was adopted on a 3-2 partisan vote. Democratic Commissioners justified the order as a compromise necessary for maintaining the Internet as an open platform where innovation may occur without seeking permission, while providing certainty conducive to investment at the edge as well as in the broadband network core. In vigorous dissent, Republican Commissioners questioned any need for departing from the successful history of building and maintaining an open Internet by leaving it largely free of government regulation.
 

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On December 16, 2010, the Commerce Department released its own Privacy Report, suggesting a “revitalized” privacy framework that can protect consumer privacy, dynamic businesses and innovation, and promote better global data flow. Like the Federal Trade Commission’s counterpart Privacy Report of December 1, 2010, this “green paper” is a first step inviting comment, but it adopts a markedly more balanced approach. It invites more reliance on cooperative industry self-regulation, while proposing the creation of a Privacy Policy Office within the Commerce Department which could coordinate the Administration’s privacy policies here and represent the US abroad.

Premises. The Internet Policy Task Force (IPTF) that authored the report included participants from the National Telecommunications and Information Administration (NTIA), the Patent and Trademark Office (PTO), the National Institute of Standards and Technology (NIST), and the International Trade Administration (ITA). Like the FTC, it starts from the premise that consumers don’t understand privacy notices, and feel nervous that personal information is being collected and used in ways they do not understand. But it charts a different approach:

• Rather than endorsing a European style privacy directive covering all businesses, it sees strengths in US sectoral laws—such as being tailored to the unique characteristics of different industries.
• It recognizes the “gaps” that those laws leave for most of the Internet economy, but is less inclined to fill them with sweeping new prescriptive regulations, and prefers that industry, government, academics and other stakeholders collaborate to formulate a variety of specific voluntary privacy protections. It would not rely entirely on self-regulation: voluntary industry codes would need to be enforceable and meet an overarching set of Fair Information Practice Principles, and those companies that did not meet code would be subject to enforcement action. But it believes such self-regulatory safe harbors are far more likely to fit industries, and to keep up with changes in technology, business models, and consumer expectations than would standard rulemaking.

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Yesterday the FCC announced the membership of the two advisory committees mandated by the recent Twenty-First Century Communications and Video Accessibility Act of 2010, which requires the FCC to promulgate rules on accessibility of devices for use by the disabled, Internet closed-captioning and video description.

The FCC named 45 members to the Video Programming and Emergency Access Advisory Committee, the advisory committee in charge of developing recommendations on closed captioning of Internet programming; accessibility of devices capable of receiving Internet video programming; video description and emergency information over Internet or digital broadcast television; accessibility of user interfaces on video programming devices (remotes); and accessible programming guides and menus.  The members include representatives from video programmers (CBS, TBS, Disney-ABC), video/cable operators (Cox, Bright House, AT&T, DirecTV), technology companies (Microsoft, Google) and manufacturers (Sony, Motorola, LG), as well as industry associations (NCTA, NAB, MPAA).  The committee's first meeting will be held January 13, 2011, and is open to the public.  The committee must make its recommendations on Internet closed-captioning issues by July 13, 2011 (assuming the January 13 meeting is held as scheduled), and recommendations on the remaining issues (including video description) are due April 8, 2012.

The FCC also announced 32 members to the Emergency Access Advisory Committee, which is charged with determining the most effective and efficient technologies and methods to access Next Generation 911 emergency services.  Richard Ray of the City of Los Angeles Department on Disability, and David Dzumba of the Telecommunications Industry Association, were named co-chairs.  The committee's first meeting will be held January 14, 2011, and is open to the public.

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Late yesterday (December 2, 2010), Congress adopted the CALM Act, directing the Federal Communications Commission to adopt regulations controlling the volume of commercials on television broadcast stations, cable systems, satellite, and other multichannel video programming providers. Once signed by the President, the Federal Communications Commission will be required to adopt rules within one year, to become effective within one year after adoption. The rules are supposed to adopt parts of the ATSC A/85 standard, which seeks to target the volume of commercials in digital programming to the volume of dialogue (or other "anchor element") in the accompanying program.

Congressional estimates are that the costs of necessary equipment range from a few thousand dollars to $20,000 per device, for an aggregate industry cost of tens of millions of dollars. Congress anticipated that the costs may be burdensome for small operators and smaller market television broadcasters, and provided that waivers may be granted for financial hardship for one year renewable terms, and may also be granted under the FCC's general waiver rule.

Although the ATSC A/85 standard recommends techniques for handling program-to-interstitial transitions, commercials may still seem loud to viewers when compared to the quiet dialogue that might precede a commercial break. Congress has tried to insulate broadcasters and multichannel video programming providers from responsibility for how commercials sound subjectively by providing that commercially reasonable efforts to install, use, maintain, and repair the required equipment will be deemed compliance with the rule.

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On Tuesday, the FCC followed through on its earlier announcement by adopting three wireless spectrum items intended to facilitate wireless broadband deployments. The items were: 1) a broadcast spectrum reorganization NPRM; 2) an experimental licensing NPRM; and 3) a "dynamic" spectrum access NOI. While the first item seeks to make new spectrum available in the near term, the second and third items explore longer term solutions to the wireless broadband plan goals.

Broadcast Spectrum Reorganization NPRM

The first item advances the goal of freeing up 120 MHz of broadcast spectrum through voluntary repacking to allow for additional wireless broadband use. In this item, the FCC proposes three specific sets of rule changes intended to pave the way for broadcaster relocation so that the spectrum can be cleared for incentive auctions. First, the FCC proposes the formality of amending its spectrum allocation tables to create co-primary fixed and mobile wireless allocations along side all current broadcast television band allocations. Second, the FCC proposes rule changes to enable two or more broadcasters to share standard 6 MHz channels, which are typically used for single broadcasts today. Third, the FCC proposes new technical rules to enhance the reach of digital broadcasts in the VHF television bands (in the 54 to 216 MHz frequency range) in order to encourage broadcasters to relocate to VHF frequencies and abandon their operations in the UHF television bands (470 to 698 MHz).

Additional details about these proposed changes can be found in this summary on the Broadcast Law Blog by David Oxenford.

Experimental Licensing NPRM

This second item proposes several rule changes to the FCC’s experimental licensing regime. The most significant of these is a set of proposals to create three new classes of experimental licenses conferring substantial spectrum-use testing authority for three kinds of eligible entities: universities, private sector researchers, and medical centers. These authorizations would give qualified applicants wider authority to use the public airwaves for experimentation, and would eliminate the need to apply for new experimental licenses for each research project, for each new spectrum band used, and for each modification to an existing experiment. Licensees under this new regime would be given blanket rights to conduct experiments over large portions of the radio spectrum as long as experimental operations are conducted on a non-interference basis with existing licensed wireless operations.

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Earlier today the Federal Trade Commission released its long awaited Privacy Report. The Report proposes a "normative framework" for new privacy protections that would cover the use of personal and profiling information across all industries, on and offline, and recommends a "do not track" law to limit online behavioral advertising.  (Copy of the FTC's Report is available here.)  The Report is something of a hybrid. It is positioned as a preliminary staff report for comment, but voted on by the FTC Commissioners (over cautionary statements by the Republicans). It is partly a companion and complement to Bobby Rush’s privacy bill; partly a call for rulemaking comments (by January 31, 2011); partly a call for better industry self-regulation; and partly a warning of more aggressive enforcement activity to come under existing law.

Premises. The Report renews an FTC refrain that the current framework for privacy enforcement needs updating. Consumers don’t read or understand privacy notices, so cannot give informed consent. They have little or no idea that data profiles are assembled by parties with whom they have no direct relationship, and feel nervous that profiles are being used to deliver targeted advertising. Whether or not the profiles are “personally-identifiable” or de-identified, the “fear of being monitored” is harm in itself that should be addressed, and industry is not moving quickly enough. (These premises are questioned in the Republican concurring statements.)

Scope. Like the Rush bill, the Report proposes a framework for privacy that extends far beyond online advertising to all businesses that handle consumer data—online, offline, bricks and mortar—with to-be-defined exceptions for those that handle only small amounts.

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Earlier today, Chairman Genachowski held a press conference to deliver his remarks on his proposed Open Internet rules, which are scheduled for vote at the FCC's December 21 open meeting.  The Chairman prefaced his summary of the rules by noting that they are in principle rooted in policy statements of past "Republican" Chairmen Powell and Martin, is consistent with President Obama's goal of keeping the Internet "open and free", and builds upon the framework first developed by Rep. Waxman earlier this year. 

In summary, the Chairman outlined the basic concepts of his proposal that grants consumers and innovators the right to:

1. Transparency, including basic information about how networks are managed;
2. Send and receive lawful Internet traffic (ie, prohibit blocking), and use devices (that are not harmful to the network) of their own choosing; and
3. A level playing field, including a bar to unreasonable discrimination in content transmission;

The rules also recognize providers' right to "reasonable" network management that will give providers the flexibility to address congestion and "illegal" traffic, as well as maintain incentives to build-out and innovate broadband networks.

The Chairman made clear that the rules do not adopt the "reclassification" option that would have reclassified broadband as a Title II service.

Also, the Chairman's rules draw a distinction between mobile and fixed broadband services.  The Chairman acknowledged that mobile services are still at an early stage of development, but are rapidly evolving so that the FCC will be prepared to act in the event that anti-competitive or anti-consumer practices arise.

UPDATE: The FCC has just released a statement by Commissioner McDowell condemning the Chairman's proposal.  His brief statement is available here.

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Last night the FCC released its tentative agenda for its next open meeting to be held December 21.  Two items are scheduled for consideration, the first being an Order (not a rulemaking or inquiry) adopting Open Internet rules, also known as net neutrality.  The text summarizing the agenda item is as follows:

Open Internet Order: An Order adopting basic rules of the road to preserve the open Internet as a platform for innovation, investment, competition, and free expression. These rules would protect consumers’ and innovators’ right to know basic information about broadband service, right to send and receive lawful Internet traffic, and right to a level playing field, while providing broadband Internet access providers with the flexibility to reasonably manage their networks.

Chairman Genachowski also circulated his proposal to the other FCC Commissioners late last night In anticipation of the December meeting to vote on the Order. 

The FCC website indicates that the Chairman will deliver remarks on his proposal, which is expected to begin at 10:30 am today.  A live webcast is available on the FCC's website at http://reboot.fcc.gov/live/.

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