FCC Puts Pressure on ISPs to Follow Net Neutrality Transparency Rule

The FCC’s transparency requirement in the 2010 net neutrality order was the one part of the order that the U.S. Court of Appeals for the D.C. Circuit let stand in its Jan. 14 decision largely rejecting the agency’s rules (CD Jan 15 p1). The transparency rule applies to both mobile and fixed broadband. The FCC is examining whether to expand the scope of the transparency requirement in its net neutrality rulemaking.

"After today, no broadband provider can claim they didn’t know we were watching to see that they disclose accurate information about the services they provide,” Wheeler said (http://fcc.us/1x1Rcr2). The FCC’s transparency rule requires that “consumers get the information they need to make informed choices about the broadband services they purchase,” he said.

"The FCC monitors how well providers disclose the broadband speed they give consumers, and at what price, and is concerned about providers who make false, misleading or deceptive statements to consumers about the services they provide,” the commission said (http://bit.ly/1x1Qn1j).

"Sure, it’s helpful, if the FCC uses the tools that it has,” said Free Press Policy Director Matt Wood. “But these are by no means all of the tools the agency should have. They are all the tools that were left by the D.C. Circuit in January, and to put the blame where it really lies, by the FCC’s mistaken classification decisions."

The FCC is right in “flexing its muscles” on transparency, said Andrew Schwartzman, senior counselor at Georgetown Law’s Institute for Public Representation. “It is pretty clear that some ISPs have been very casual in their claims, and that their terms of service have not always matched their actual offerings,” he told us. “Transparency is important, but what really matters is what the FCC’s policies are. Absent effective network neutrality rules, ISPs can transparently operate networks that do not really provide full access to everything the Internet has to offer.”

What the policy statement focuses on “is already illegal,” said Berin Szoka, president of TechFreedom. The FTC already has authority to punish broadband providers for making deceptive statements, Szoka said. “As the policy statement notes, a deceptive statement in one place can’t be remedied by an accurate statement in another.” The FCC, unlike the FTC, can impose monetary penalties for first-time violations, he said. “The FCC’s rule requires companies to make certain disclosures, whereas the FTC can only punish the failure to make a disclosure if it is deemed a material omission, which is a relatively high bar.”

Randolph May, president of the Free State Foundation, questioned whether there’s a “widespread problem” with ISPs not complying with the transparency rule. “I supported the current transparency regulation when it was proposed in 2010, although my sense is that the proposed expansion of the existing transparency rule in the commission’s rulemaking notice may be unnecessary and overly burdensome,” he said.

Schwartzman, Wood and other industry officials also participated Wednesday in a Bloomberg BNA webcast on the FCC’s legal options on net neutrality.

The record suggests “anything the FCC does in this area is going to be litigated” regardless of whether the FCC decides to classify broadband as a Title II service, Schwartzman said. “Lawyers get paid by the hour and we should be happy about that.”

Reclassification guarantees a court fight, said Lawrence Spiwak, president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies. “The question is not could you, but should you,” he said. “The problem with Title II is it provides all this regulation. Your forbearance options are limited.” How does the FCC write a rule that doesn’t have unintended consequences? he asked. “That is the hard point. How do you provide a rule that doesn’t have arbitrage? I don’t know.”

Reclassification isn’t aimed at forcing ISPs to file tariffs, Wood said. “What we're after is keeping the pathways open and not letting the carrier interfere with what you or I can say to each other,” he said.

Spiwak said the increased politicization of the FCC is “not helpful.” His hope was Wheeler would “do a lot to rework the agency’s credibility,” Spiwak said. The FCC is not supposed to be political, he said. “That’s what Congress is for.”

Schwartzman disagreed, saying the law specifies that no more than three members can be from a particular party and the president picks a chairman. “The FCC is not supposed to be removed from politics,” Schwartzman said. While the FCC has to make decisions based on a record and to justify its decisions, “the FCC is not removed from how it actually impacts people,” he said. (hbuskirk@warren-news.com)