The FCC released an Enforcement Advisory in connection with its Open Internet (Net Neutrality) rules. The Advisory reminds broadband providers of their responsibility under the Transparency Rule to provide consumers with accurate information about the services they offer. The FCC also released a companion Consumer Guide, and a statement by FCC Chair Tom Wheeler emphasizing that the FCC intends to enforce the Transparency Rule.
Adopted in 2011, the Transparency Rule is the only portion of the FCC’s Net Neutrality rules not overturned by the US Court of Appeals this past January. See our Blog FCC Announces Next Moves on Net Neutrality dated 2/19/14. The rule requires that every fixed and mobile broadband Internet access provider “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.” Fixed broadband Internet access providers include cable companies, landline telephone companies, and fixed wireless or satellite service providers; mobile broadband Internet access providers include mobile wireless providers that offer data plans for Internet access for smartphones.
The Enforcement Advisory emphasizes that “[a]ccuracy is the bedrock of the Transparency Rule,” whose purpose is to allow consumers to understand what they are purchasing. Thus consistency is important: “the Transparency Rule can achieve its purpose of sufficiently informing consumers only if advertisements and other public statements that broadband Internet access providers make about their services are accurate and consistent with any official disclosures that providers post on their websites or make available in stores or over the phone.” Accordingly, if a provider makes an inaccurate assertion about its service performance in an advertisement seen by consumers it will not be able to defend itself by pointing to an accurate, official disclosure in some other public place. “Thus, the Transparency Rule requires accuracy wherever statements regarding network management practices, performance, and commercial terms appear—in mailings, on the sides of buses, on website banner ads, or in retail stores.”
The Advisory also reminds providers that violation of the rule may subject them to FCC enforcement action, including monetary penalties under the Communications Act. (The Act provides for maximum forfeitures ranging from $16,000 to $1,575,000 for any single act or failure to act, depending on the nature of the violation and the entity involved.)
The companion Consumer Guide emphases that the Transparency Rule “empowers consumers to make informed choices about broadband services. The Rule requires that what providers tell you about their broadband service is sufficient for you to make informed choices – including choices about speed and price. The Rule also requires that providers’ information about their broadband service must be accurate and truthful.” The Guide explains that the rule covers disclosures about network management practices, performance, and commercial terms of service and applies to: service descriptions (including expected and actual broadband speed and latency); pricing (including monthly prices, usage-based fees, and any other additional fees); and a providers’ network management practices (such as congestion).
Consumers are advised that 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.” Consumers are directed to the complaint page of the FCC’s website to notify the FCC about potential violations of the Transparency Rule.
In the final document on this subject, the FCC released a Statement by Chairman Wheeler warning that “[a]fter 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…We expect providers to be fully transparent about the details of their services, and we will hold them accountable if they fall down on this obligation to consumers.”
Providers seeking to better understand the FCC’s expectations concerning the Transparency Rule may want to re-read the June 2011 Public Notice released by the FCC’s Enforcement Bureau and Office of General Counsel. TMI Regulatory Bulletin Service subscribers see Bulletin dated 7/11/11. This document provides guidance regarding specific disclosure practices that will be considered to comply with the Transparency Rule. The alternatives described in the Public Notice are examples of approaches providers can use to satisfy their disclosure obligations; the particular methods of compliance described there are not required or exclusive and broadband providers may comply with the rules in other ways.