Current Telecom Developments

October 7, 2016

Draft FCC Order on Broadband Privacy Would Incorporate FTC Approach

Yesterday, FCC Chairman Tom Wheeler began circulating a draft order among his fellow commissioners that revises the FCC’s initially proposed regulatory approach to broadband privacy to incorporate the “sensitivity” model used by the Federal Trade Commission (FTC) in its oversight of websites and other edge providers. Resembling consumer proprietary network information rules that the FCC has applied to telephone service providers, the rules first proposed by the FCC would have required broadband Internet service providers (ISPs) to obtain subscriber consent before collecting and sharing certain data with advertisers and other third-parties. The proposal would also have separated consumer data into three categories (inherent, opt-out, and opt-in) requiring different levels of consent.

As stated in a fact sheet issued yesterday, the FCC’s revised approach to broadband privacy “reflects extensive public comments received in response to the comprehensive proposal adopted by the Commission in March” which includes “input from the FTC.” Instead of classifying data according to how it is used, the draft order would require ISPs to obtain opt-in consent from consumers corresponding with the sensitivity of the data in question. Under this revised approach, ISPs would be thus required to obtain “opt-in” consent before using the following categories of sensitive information: (1) mobile geo-location data, (2) children’s information, (3) health information, (4) financial information, (5) social security numbers, (6) web browsing history, (7) app usage history, and (8) the content of communications. All other “individually identifiable” consumer data would be classified as non-sensitive although consumers would have the right to “opt-out” of sharing or other usage of that data.

Fixed and mobile broadband ISPs would also be required to inform customers about the collection, sharing and other usage of their personal data, specifying (1) what types of data are collected, (2) how and for what purposes data would be used or shared, and (3) the types of entities with which the ISP would share such data. In the event of security breaches, ISPs would be required to notify the FCC within seven days and affected customers within 30 days.

Despite the similarities between the draft FCC order and the regulatory approach used by the FTC, one cable industry executive lamented that the FCC’s plan to classify web browsing and app usage as sensitive would create a significant disparity between how the FTC governs edge providers and how the FCC would treat ISPs. A spokeswoman for the Center for Digital Democracy,

In This Issue:

Draft FCC Order On Broadband Privacy Would Incorporate FTC Approach more

Comments On Further Rulemaking Notice In 5G Proceeding Urge Greater Access To Licensed Spectrum, Protection For Satellite Services more

Thune Urges FCC To Issue Further Rulemaking Notice In Set-Top Box Proceeding more

State Attorneys General Lose Legal Bid To Stop IANA Transition more

©2016 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this brochure may be considered attorney advertising. Past representations are no guarantee of future outcomes.

Current Telecom Developments

2

however, welcomed the fact that ISPs “would have to obtain customer consent for the use of web browsing and app usage history for advertising purposes” as she lauded the draft order as one that “offers consumers . . . much needed safeguards and desired control over their own personal information.”

Comments on Further Rulemaking Notice in 5G Proceeding Urge Greater Access to Licensed Spectrum, Protection for Satellite Services

Wireless carriers filing comments late last week in the FCC’s fifth-generation (5G) “spectrum frontiers” proceeding recommended against further unlicensed allocation of millimeter wave spectrum as they called on the FCC to assign additional millimeter wave frequencies to the wireless industry on an exclusive, licensed basis. Players in the commercial satellite industry, meanwhile, stressed that any rules adopted by the FCC must ensure protection for both existing and future satellite operations in affected spectrum bands.

As part of a recent Report and Order which opened up nearly 11 GHz of spectrum in the 28 GHz, 37 GHz, 39 GHz and 64-71 GHz bands for licensed and unlicensed fifth-generation (5G) wireless services, the FCC sought comment on potential usage of certain 24 GHz, 32 GHz, 42 GHz, 47 GHz, 50 GHz and 70-80 GHz band channels that would expand the total 5G allocation to 28.7 GHz. Among other things, the further rulemaking notice (FNPRM) also solicited views on (1) the feasibility of allocating spectrum above 95 GHz for 5G use, (2) the establishment of performance requirements for machine-to-machine communications and other applications connected to the Internet of Things, and (3) mechanisms for implementing spectrum holdings policies that were adopted previously by the FCC for the 28 GHz, 37 GHz, and 39 GHz bands.

Reminding the FCC that it has “already repurposed a full seven gigahertz of spectrum for unlicensed uses in the 64-71 GHz band—compared to the 3.25 GHz of millimeter wave spectrum allocated for licensed, exclusive use—and earmarked another 600 MHz for experimental sharing,” wireless association CTIA stressed that the FCC “should make the bands discussed in the FNPRM available on a licensed, exclusive use basis.” To “encourage the innovation and investment necessary to elevate 5G systems to their full potential,” CTIA emphasized that “exclusive-use licensing policies in the bands being considered in the FNPRM is all the more important.” Along the same vein, the Competitive Carriers Association (CCA) agreed that, “while unlicensed services play an important role in the digital ecosystem, additional spectrum should not be made available for these services,” warning that “incorporating unlicensed use into newly-unleashed millimeter wave bands would devalue and discourage interest of use in this spectrum.” While Verizon recommended “proven licensing frameworks for the new millimeter wave bands” that “would maximize investment and innovation,” AT&T urged the FCC to reject the notion “that higher bands will never work for exclusively-licensed services.”

Meanwhile, as Lockheed Martin declared that the FCC’s rules “should maximize the spectrum available for satellite systems,” the Satellite Industry Association (SIA) highlighted the fact that many of the spectrum bands addressed in the NPRM “are current satellite service bands as well as near-term future growth bands.” As such, SIA told the agency that “any plan for these bands necessarily should include provisions for sufficient spectrum and geographic flexibility to enable satellite services to continue to grow and innovate.”

Current Telecom Developments

3

Thune Urges FCC to Issue Further Rulemaking Notice in Set-Top Box Proceeding

In the wake of the FCC’s decision to delay a vote on proposed rules that would replace cable set-top boxes with an apps-based solution to allow subscribers to access multichannel video program distributor (MVPD) programming on the devices of their choice, Senate Commerce Committee Chairman John Thune (R-SD) asked FCC Chairman Tom Wheeler last Friday to publish the text of the draft order as a further notice of proposed rulemaking (FNRPM) which would provide opportunities for public comment on the apps-based plan.

The FCC has yet to reschedule a vote on the draft order, which, reportedly, lacks support at this time from a majority of the agency’s commissioners. Noting that the apps-based plan offered by MVPDs “appears to differ significantly from the one publicly proposed by the Commission” in its corresponding rulemaking notice, Thune lamented that “consumers are not currently able to read this far-reaching new plan” which would replace the FCC’s original proposal to open set-top information streams to third-party device makers. As such, Thune called on Wheeler to open further rulemaking proceedings on the apps-based plan, declaring: “there is no need or urgency for the Commission to rush . . . to adopt a final order.”

Echoing Thune, the Multicultural Media, Telecom and Internet Council (MMTC) joined the National Urban League, the NAACP and various other organizations in urging the FCC to lift “sunshine” restrictions in the set-top box proceeding to allow additional opportunities for public comment. Asserting that the FCC’s postponement “validates our concerns” with the new apps-based plan, a spokeswoman for MMTC told reporters that the FCC should instead “ask the public for feedback on the current proposal to assist the commissioners in arriving at the best possible result for current and future television viewers, as well as content creators.”

State Attorneys General Lose Legal Bid to Stop IANA Transition

Last Friday, a federal district court in Texas denied the emergency motion of four state attorneys general to stop the impending transfer of governance of the Internet Assigned Numbers Authority (IANA) to a global, multi-stakeholder group. Since 1998, the U.S. Commerce Department has contracted the Internet Corporation for Assigned Names and Numbers (ICANN) to operate IANA, which is responsible for administering the global Internet domain name system. Responding in part to growing international concerns over the U.S. government’s role in managing the structure of the Internet, the National Telecommunications and Information Administration (NTIA) developed a plan two years ago for transitioning Commerce Department oversight over ICANN’s IANA-related functions to an international, multi-stakeholder group. In conformance with that plan, NTIA and the Commerce Department allowed their current contract with ICANN to expire last Friday, September 30.

Two days before the expiration of the ICANN contract, attorneys general for the States of Texas, Arizona, Oklahoma and Nevada petitioned the U.S. District Court for the Southern District of Texas for emergency injunctive relief, arguing that NTIA’s transference of IANA oversight violates the property clause of the U.S. Constitution by “giving away government property.” The attorneys general also warned that the states would “lose the predictability, certainty and protections that

Current Telecom Developments

4

currently flow from federal stewardship of the Internet.” Responding to these claims, NTIA charged that the plaintiffs were asking the government to extend a contract with a private entity on the eve of the contract’s expiration “despite being fully aware of the government’s plan to privatize the Internet domain system, a plan that has been in the making by the global Internet community and has been recently endorsed by Congress.”

In a briefly-worded order, the court dismissed the plaintiff’s request, thus allowing the Internet Governance Coalition—a multi-stakeholder group of U.S. and international industry players including AT&T, Telefonica of Spain, Disney, Cisco Systems, GoDaddy and the National Cable & Telecommunications Association—to assume immediate control over IANA. As a spokesman for the Computer & Communications Industry Association praised the court’s action as an “important step in preserving the stability and openness of the Internet,” Senator Brian Schatz (D-HI), the ranking member of the Senate Communications Subcommittee, proclaimed: “we can now keep our long-standing and public commitment to the global community to keep the Internet open and free.”

* * *

For information about any of these matters, please contact Patrick S. Campbell (e-mail: pcampbell@paulweiss.com) in the Paul, Weiss Washington office. To request e-mail delivery of this newsletter, please send your name and e-mail address to telecom@paulweiss.com.