On March 31, 2016, a sharply divided Federal Communications Commission adopted a notice of proposed rulemaking (NPRM), soliciting comments on draft privacy guidelines for broadband Internet services providers (ISPs). These proposed guidelines spring from the Commission’s reclassification of broadband ISPs as common carriers under Title II of the Communications Act, which is currently under review in United States Telecom Association v. FCC in the Court of Appeals for the D.C. Circuit. If the Commission’s interpretation is upheld, the new guidelines would impose significant new transparency, consumer choice, and data security requirements under Section 222 of the Communications Act. Notably, these proposed rules will apply only to ISPs, leaving edge providers, such as web browsers, operating systems, and web sites, under the authority of the Federal Trade Commission.
Despite today’s approval and Chairman Tom Wheeler’s release of a factsheet on the subject, the text of the NPRM and the Commissioners’ separate statements have yet to be released. For further analysis of the Commission’s description of the NPRM’s contents, see FCC Proposes Privacy and Security Regulations for Internet Service Providers.
On March 10, FCC Chairman Tom Wheeler issued a “fact sheet” summarizing a sweeping proposal to regulate the privacy and data-security practices of Internet service providers. The proposal would subject ISPs to new stringent requirements that other participants in the Internet ecosystem do not face because they are subject only to the more elastic oversight of the Federal Trade Commission under that agency’s general “unfair or deceptive” standard.
*This post originally appeared in Law360 on January 7, 2016.
While 2015 was a big year in data, 2016 may prove to be even bigger. Many hot button and game changing topics are being debated in legislative bodies and campaign trails, regulators are focused, and privacy-related litigation continues to rise. Below, we count down the top ten cybersecurity, data protection and privacy issues to watch in 2016.
The Federal Trade Commission (FTC) and Federal Communications Commission (FCC) have been active in recent years in bringing consumer protection enforcement actions, with a particular focus on privacy and data security issues. Recent regulatory action from the FCC associated with “net neutrality,” however, has blurred the line as to where each agency’s jurisdiction begins and ends, particularly for companies offering broadband Internet access service. Recognizing this uncertainty, on November 16, 2015, the FTC and FCC announced that the agencies had signed a “Memorandum of Understanding on Consumer Protection.” The MoU set out that the agencies will work together to “coordinate on agency initiatives where one agency’s action will have a significant effect on the other agency’s authority or programs.”
On November 5, 2015, the Federal Communications Commission (“FCC” or “Commission”) issued its first ever privacy or data security enforcement order against a cable provider, Cox Communications, Inc. (“Cox”). The order adopted a consent decree entered into with the company, fining the company $595,000 for the breach. The order sets out that in August 2014, a hacker used social engineering tactics, or “pretexting,” to impersonate someone from Cox’s information technology department in a phishing scheme to successfully convince a Cox contractor to enter an account ID and password into a fake website which the hackers controlled. Without multi-factor authentication in place for the targeted systems, the hacker and an accomplice were able to use those captured credentials to obtain the personal information and /or Customer Proprietary Network Information (“CPNI”) of 54 current and seven former customers. Cox notified the FBI of the breach, but did not notify the FCC through the Commission’s breach-reporting portal.
An already active TCPA class action bar is sure to become even more active after a significant Declaratory Ruling and Order from the FCC that, among other points, broadened what technologies may be considered autodialers, gave further strength to class actions based on reassigned cell numbers, and muddied the waters for constructing compliance mechanisms to support consumer revocation of consent.
On July 10, 2015, the Federal Communications Commission issued a declaratory ruling to resolve various concerns raised by 21 petitions regarding the Commission’s implementation of the Telephone Consumer Protection Act, which carries a $500 penalty for each call or text in violation.
On February 26, 2015, the Federal Communications Commission (FCC) passed the Open Internet Order to reclassify “broadband Internet access service” as a telecommunication service under Title II of the Communications Act of 1934. In doing so, the FCC found that applying section 222 of the Communications Act to broadband Internet access services is in the public interest and necessary for the protection of customers. Section 222 imposes a duty on telecommunications carriers to protect the confidentiality of proprietary information obtained from their customers or other carriers, and imposes special rules for use and disclosure of information related to customers’ phone service and usage, known as customer proprietary network information (“CPNI”).
The FCC has issued a lengthy stay of an important aspect of its new restrictions on unsolicited faxes. On June 26, 2003, responding to complaints of “besieged” consumers, the FCC took action that greatly enhanced the existing statutory prohibition against unsolicited facsimiles contained in the Telephone Consumer Protection Act of 1991. In its Report and Order, the FCC reversed an important prior interpretation by eliminating a key exception for sending faxes to existing customers; instead, the FCC concluded that affirmative, opt-in consent to receive faxes would be required, even for existing customers. The new rule is merely one component of the rules regarding the TCPA, but it merits significant attention because of its impact on all businesses and associations that communicate with customers via facsimile.