open internet order webinar - davis wright tremaine · 2015 . open internet rules (fcc reclassifies...

Open Internet Order Webinar

June 11, 2015

Agenda

Overview & June 12 Highlights – Chris Savage

Court Activity – Peter Karanjia

Privacy Implications – Christin McMeley

Impact for Edge Providers – Bob Stankey

2 www.openinternetlaw.com

Logistics To Know

CLE is available

Ask questions anytime through the chat box •Any questions we don’t answer live, we’ll send an email

First of quarterly webinar series

Open Internet Law Advisor


OVERVIEW & JUNE 12 HIGHLIGHTS CHRIS SAVAGE


What Is “Network Neutrality”?

A somewhat amorphous concept that has evolved over time

It essentially means that a retail broadband network provider may not favor or disfavor particular content, applications, devices, or edge providers, except as needed to make the access service work

www.openinternetlaw.com

The FCC’S New Policy

The FCC: •Reversed more than a decade of precedent and declared that broadband Internet

access service is a “telecommunications service” rather than an “information service” •Established new rules imposing significant obligations on mass-market retail broadband

access providers •Extended its regulatory authority to include arrangements for Internet traffic exchange

The FCC’s new “Open

Internet” order was released in March 2015


The New Rules The following take effect on June 12:

No blocking (subject to reasonable network management) No throttling (subject to reasonable network management) No paid prioritization, period (subject, possibly, to waiver) No “unreasonable” interference with or “unreasonable” disadvantage to end users’ or edge providers’ ability to access/use content, services, applications, and devices of their choice (subject to reasonable network management) No separate, more lenient rules for wireless broadband

The rules only apply to retail, mass market broadband Internet access service – enterprise (big business) access service and most public Wi-Fi services (coffee shops, hotels) are not subject to them

Also – beefed up transparency/disclosure obligations, but those are awaiting OMB approval


Reasonable Network Management?

A network management practice is a practice that has a primarily technical network management justification, but does not include other business practices. A network management practice is reasonable if it is primarily used for and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service. – 47 C.F.R. §8.2(f)

The alternative is a “business purpose”

– FCC established a flat ban on paid prioritization because it views such an arrangement to be inherently a “business practice” and not a “network management” practice


New Rules Go Beyond Past Efforts:

FCC says it will consider disputes over terms of Internet traffic exchange between retail broadband providers and upstream networks (transit networks, CDNs)

•FCC had never expressly disavowed jurisdiction over Internet backbone transport, but this is still a big expansion

FCC expressly recognizes rights and interests of edge providers in the “general conduct” standard

•Prior efforts had focused nearly exclusively on rights and concerns of end users/consumers

Wireless broadband subject to the same rules as wired broadband

•Previously, FCC accepted wireless industry claims that special features of wireless networks meant that more lenient treatment was required


Title II versus Title I: History

FCC precedent said that broadband Internet access was an unregulated information service, not a telecommunications service: • 2002 Cable Modem ruling

• Sustained by a divided Supreme Court in Brand X case in 2005 • 2005 DSL ruling • 2006 Broadband over power lines • 2007 Wireless broadband ruling


Title II versus Title I: Problems

FCC struggled to establish enforceable rules while continuing to hold that network providers were not subject to Title II: 2005 Internet Policy Statement 2008 Comcast/BitTorrent order 2010 DC Circuit vacates Comcast/BitTorrent order (Title I alone doesn’t give enforcement authority) 2010 Open Internet rules (FCC relies on Section 706) 2014 DC Circuit order mostly vacates rules (Section 706 is fine but specific rules too much like common carrier regulation) 2015 Open Internet rules (FCC reclassifies broadband access service as telecommunications service)


Title II versus Title I: Rationale

Then: Broadband includes more than transport of end user requests for information and transport of data from edge providers. DNS (converting URLs to IP addresses), email, web hosting, data storage, and local caching of web content are (a) information services and (b) an inherent part of the broadband offering

Now: The service is providing access to the entire Internet Email, web hosting, etc. are separable functions, widely available from third parties Earlier rulings did not focus on the part of the definition of “information service” that carves out functions that manage a telecommunications network/service. DNS, local caching, and other functions (e.g., blocking harmful traffic) are now seen as part of the management of the transport service Internet access is now much more widely deployed and has become an essential element of the economic and social lives of a very large fraction of the population


Title II versus Title I: Impact

FCC had to forbear from most of Title II to avoid radical and unneeded regulation of Internet

access service

Substantial uncertainty over scope of regulatory

obligations on broadband providers

One big worry is whether the FCC or the courts will

entertain complaints that rates are

unreasonably high

Many other possible impacts – state/local taxes, franchise fees, pole attachment rates, privacy,

accessibility, etc.


Next Steps:

New rules take effect tomorrow, except for enhanced disclosure rules

• Peter will talk next about next steps in the litigation over the rules • Christen will talk about critical new privacy obligations • Bob will talk about how the new rules might apply, with a focus on

impacts on and opportunities for edge providers

New DWT Open Internet Law Advisor launches tomorrow

• http://www.openinternetlaw.com/ • Check in regularly to keep current on open Internet issues

DWT will be doing quarterly webinars on open Internet issues

• We’ll announce the webinars on the blog!


LEGAL CHALLENGES TO THE OPEN INTERNET ORDER PETER KARANJIA


Challenges Filed

•U.S. Telecom Association (D.C. Circuit) •Alamo Broadband (5th Circuit) •Judicial Lottery Consolidates Cases in the D.C. Circuit

Under Case No. 15-1063

March 23, 2015 11 days after

Order is released:

•U.S. Telecom Association, Alamo Broadband, NCTA, CTIA, AT&T, Inc., American Cable Association, CenturyLink, Wireless Internet Service Providers Association, & Daniel Berninger Each File Separate Petitions Challenging the Order

•D.C. Circuit Consolidates Challenges – Case No. 15-1063 •5th Circuit Transfers Second Alamo Broadband Petition to

D.C. Circuit to be consolidated with Case No. 15-1063

Beginning April 13, 2015 – The

day the Order is published in the Federal Register


Intervenors

24 Intervenors line up in support of the Commission:

AdHoc Telecommunications Users Committee, Akamai Technologies, Inc.,

COMPTEL, Center for Democracy & Technology, Cogent Communications, Inc., ColorOfChange.org, Credo Mobil, Inc., DISH

Network Corporation, Demand Progress, Etsy, Inc., Fight For The Future, Inc., Free Press,

Kickstarter, inc., Level 3 Communications, LLC, Meetup, Inc., NARUC, NASUCA, Netflix,

Inc., New America’s Open Technology Institute, Public Knowledge, Tumblr, Inc.,

Union Square Ventures, LLC, Vimeo, Inc., & Vonage Holdings Corporation

Independent Telephone & Telecommunications Alliance has Intervened in support of Petitioners

TechFreedom, CARI.net, Jeff Pulver, Scott Banister, Charles

Giancarlo, Wendell Brown, and David Frankel (collectively calling

themselves the “Internet Independence Intervenors”)


Meanwhile in the Third Circuit…

April 23, 2015 – A group of competitive telecommunications services providers and resellers filed a petition challenging the FCC, claiming the Order did not go far enough to regulate BIAS. – Full Service Network, TruConnect Mobile, Sage

Telecommunications LLC, & Telescape Communications, Inc.

– Transferred to the D.C. Circuit and consolidated with Case No. 15-1063.

May 26, 2015 – U.S. Telecom Association and its fellow petitioners (save Alamo Broadband) intervene on the FCC’s behalf for the limited purpose of opposing the Full Service Network group.


Stay Requests

May 8, 2015 – FCC Denied Petitioners’ Request to Stay the Order

May 13, 2015 – Petitioners File Joint Motion with the D.C. Circuit Seeking a Stay of the Order – or alternatively expedited consideration of the merits

May 22, 2015 – FCC & Intervenors File Oppositions to Motion for Stay – but agree to expedited treatment

May 28, 2015 – Petitioners File Reply In Support of Motion for Stay

June 11, 2015 – D.C. Circuit decision expected


Substance of the Stay Request

Stay petition focuses only on Title II reclassification and general Internet conduct standard

Merits arguments: – Petitioners assert that reclassification:

– Contravenes statutory language and FCC precedent; – Is arbitrary and capricious in violation of the APA; and – Was neither noticed in, nor a logical outgrowth of, the NPRM.

– The Commission responds that reclassification: – Is consistent with Brand X; – Reasonable & sufficiently explained; and – A logical outgrowth of the NPRM, and subject of significant

public comment. Absent a stay, the rules go into effect tomorrow and will

remain in effect at least until the D.C. Circuit decides the case.


What’s Next?

No Briefing Schedule Yet Possible Schedule Range If Expedited:

– Briefing: August 2015 – October 2015 – Argument: December 2015 – February 2016 – Decision: April 2016 – August 2016

Possible Schedule Range If NOT Expedited: – Briefing: September 2015 – December 2015 – Argument: Spring 2016 – Summer 2016 – Decision: Fall 2016 – Spring 2017

21


PRIVACY & INFORMATION SECURITY IMPLICATIONS CHRISTIN MCMELEY


§ 222 - Privacy of Customer Information

Duty to protect the confidentiality of its customer information

Restrictions on ability to use, disclose, or permit access to customer proprietary network information (CPNI) without customer approval

“Provides a more certain foundation for evaluating providers’ conduct and pursuing enforcement.”


FCC Rules Implementing § 222 Do Not Apply

Not well-suited to Internet

Do not address many of the types of sensitive information to which broadband Internet providers are likely to have access

Still apply to services previously within scope


Securing Customer “Proprietary Information”

§ 222(a): Must protect “proprietary information”

Rightly or wrongly, FCC construes broadly

Directs providers to “employ effective privacy protections in line with their privacy policies and core tenets of basic privacy protections.”


Recommended Security Practices

•Risk assessments •Information security program •Designated person(s) to

administer the program •Training •Testing & improvements •Appropriate due diligence

and oversight of service providers

Look to prior FCC and FTC

Guidance and

enforcement activities:


222 Limits on Use, Disclosure & Access

27

Outlines permissible uses of CPNI; Place limits on use disclosure, and access

What is Broadband CPNI?

Information about the use of a

telecommunications service that is made available solely by virtue of the carrier-

customer relationship

Does not include

subscriber list information or

aggregate information

The FCC rules set forth specific

requirements

Not applicable to broadband

New Rules? FCC Privacy

Workshop Upcoming

Rulemaking

FCC says: take “reasonable, good-

faith steps to comply with Section

222, rather than focusing on

technical details”


What Should You Do Now?

Assess your current

marketing activities

Revise your privacy

and CPNI policies

Update employee training

Participate in FCC

rulemaking


IMPACT FOR EDGE PROVIDERS BOB STANKEY


Edge providers

30

Defined as • Providers of content,

applications or services over the Internet

• Providers of a device used for accessing any of the above

Examples • Websites (Amazon,

Facebook) • Online content

services (Netflix, Hulu) • OTT applications

(Skype, WhatsApp)


Rules protecting access to Edge Providers

3 Bright-line rules

No blocking No throttling No paid prioritization

Catch-all rule No unreasonable interference/disadvantage


Bright-line Rules (I)

• Prohibits blocking of lawful content, applications, services or non-harmful devices

No blocking

• Prohibits impairment or degradation of lawful Internet traffic

No throttling

Applies to ISPs – retail b-band Internet access

Traffic management allowed


Bright-line Rules (II)

No paid prioritization • Prohibits favoring some traffic over other traffic

(through network management) • for money or other consideration, or • to benefit an affiliated entity

• FCC may grant waiver where • significant public interest benefit, and • no harm to open nature of the Internet

Applies to retail broadband Internet access

“Interconnection” excluded


Catch-All Rule

No unreasonable interference or disadvantage •Concern over “gatekeeper power” •No unreasonable interference with

ability to access or make available content, applications, services or devices

Traffic management allowed

Applies to retail broadband Internet access


Interconnection Disputes

Negotiating Access to ISP network •Edge providers seeking access to ISP

network to “exchange Internet traffic” •ISPs charge OTTs for higher capacity

connections to ISP’s network

“Just & reasonable” terms

FCC to hear complaints


Impact

Tiered service plans Mobile • Zero rating • Data caps

VoIP/Cable TV/Specialized Services

Peering/transit

CDNs M2M / devices


Edge deals under the new rules

Is “broadband Internet access” used?

Is an Internet-based service or app getting priority within the network, especially for payment?

Can it be considered an “unreasonable interference” with access to other services and apps?

Can the edge provider go to the FCC with a dispute over interconnection terms?


Thank you!

Any last questions?


Disclaimer

This presentation is a publication of Davis Wright Tremaine LLP. Our purpose in making this presentation is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations. Attorney advertising. Prior results do not guarantee a similar outcome. Davis Wright Tremaine, the D logo, and Defining Success Together are registered trademarks of Davis Wright Tremaine LLP. © 2015 Davis Wright Tremaine LLP.


open internet order webinar - davis wright tremaine · 2015 . open internet rules (fcc reclassifies...

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