As part of the 2015 Open Internet Order (“Order”), the FCC adopted rules enabling regulated entities to seek advisory opinions from the Enforcement Bureau regarding the application of the Open Internet rules to proposed future practices. Just before the holiday weekend, the Enforcement Bureau issued a Public Notice providing information about how providers may request such advisory opinions, the matters about which advisory opinions may be sought, and the effect of an advisory opinion being issued.
In the Order, the Commission stated its hope that an advisory opinion process would “enable companies to seek guidance on the propriety of certain open Internet practices before implementing them, enabling them to be proactive about compliance and avoid enforcement actions later.” While a laudable goal, both the Order and the Public Notice are clear that the ability to request an advisory opinion comes with strings attached, and that even obtaining a favorable advisory opinion is far from a regulatory panacea.
To start, providers may only seek an advisory opinion about prospective or proposed practices, not past or on-going practices, even if presented as a hypothetical. The Commission will not respond to “requests for opinions that relate to ongoing or prior conduct” or conduct that is the subject of an ongoing investigation, litigation, or rulemaking at the Commission. The Commission has also warned providers that the Enforcement Bureau may initiate an investigation into any past or current practices disclosed in an advisory opinion request that it believes may violate the Open Internet rules. Providers seeking advisory opinions must, therefore, choose their words carefully to ensure that requests for guidance on proposed practices do not open existing practices to unwanted scrutiny. But, being careful may still result in the Bureau requesting more information or a conference to discuss the materials.
The greatest benefit of seeking an advisory opinion from the Enforcement Bureau would seem to be the ability of the requesting provider to use the opinion to avoid (or, at least, delay) an enforcement action with respect to the subject practices. The Commission has, however, created a loophole to the use of advisory opinions as an enforcement shield. A request for an advisory opinion must contain “all material information” necessary for the Enforcement Bureau to make a determination about the practices proposed in the request, and providers may only rely on advisory opinions, “to the extent that the request fully and accurately contains all the material facts and representations necessary to issuance of the opinion . . . .” Accordingly, if the Enforcement Bureau issues an advisory opinion, and later decides that the request was not materially complete, the advisory opinion may lose its enforcement value – even if the Bureau does not formally rescind it. Further, such a determination could expose a provider to additional liability under the False Claims Act, since providers must certify that the information in their requests is true and accurate, and that they did not intentionally omit material information from the request.
Even the consideration of a fully detailed and accurate advisory opinion request has the potential to create complications for providers. For one thing, the Enforcement Bureau is not required to provide advisory opinions, and may respond to a provider’s request with notice that it will not do so. In that event, the provider may be left to wonder if it has exposed itself to risk by unnecessarily notifying the Enforcement Bureau that it is not certain that its planned practices comply with the Open Internet rules. On the other hand, if the Bureau does delve into a request, it may seek additional information as part of its evaluation, not just from the requesting provider, but from “other parties that may have information relevant to the request or that may be impacted by the proposed conduct . . . .” Submitting a request for an advisory opinion, therefore, could result in the Enforcement Bureau engaging third parties (e.g., competitors, edge providers, business partners, consumers) in a dialogue about the provider’s proposed plans and practices in an unintended and undesired manner.
Fundamentally, all advisory opinions will be issued without prejudice, meaning that the Enforcement Bureau could change its mind about whether particular practices comply with the Open Internet rules, and rescind its opinion. If it does so, the practices previously approved must be “discontinued upon notification of rescission or revocation of the Commission’s or the Bureau’s approval” to avoid a potential enforcement action. That provides little reassurance to providers that need to make costly decisions with respect to business plans and systems, and cannot remake the wheel each time it spins.
All advisory opinions will be publicly available, along with their underlying requests (though providers may request confidential treatment of appropriate information under the Commission’s rules). For this reason, the greatest benefit of the advisory opinion process to providers may ultimately have less to do with particular providers avoiding enforcement actions for certain practices, and more with the development of an industry-driven body of guidance on compliance with the Open Internet rules. In addition, asking the Enforcement Bureau to consider the practical business implications of its rules through such an informal process may yield benefits in the form of a more informed agency during formal proceedings. Nevertheless, because of the risks discussed above, and others apparent in the Order and the Public Notice, providers should proceed with caution, and first consider whether seeking the opinion of the Enforcement Bureau is the most beneficial way to resolve their compliance questions.