On June 22, 2015, the Federal Communications Commission’s (Commission) Consumer and Governmental Affairs Bureau (CGB) sought comments on the temporary small business exemption to the 2015 Open Internet Order’s Enhanced Transparency Rule.

Among other provisions, the Commission’s recent Open Internet Order includes an “enhanced transparency” rule that builds on the transparency requirements adopted in the 2010 Open Internet Order.  (The original rule was the only provision in the 2010 Order upheld by the D.C. Circuit in Verizon v. FCC.)  The Enhanced Transparency Rule requires approval by the Office of Management and Budget (OMB) before becoming effective, but the Rule will eventually require that broadband Internet access service (BIAS) providers make certain additional disclosures regarding network performance, commercial terms, and network management practices.  These disclosures are required to be in a consumer-friendly, accessible format.

Recognizing that the Enhanced Transparency Rule would heavily burden smaller BIAS providers, the Commission carved out a temporary exemption from the new rule for BIAS providers serving 100,000 or fewer customers. 

The Enhanced Transparency Rule requires fixed and mobile BIAS providers to disclose:

  • Commercial terms. A service’s full monthly cost, any promotional rates, including the duration of the promotional period, and cost of service once the promotional period ends.  Providers must also list any one time and/or recurring fees, including name, definition, and cost of each fee and disclose any data caps or allowances as well as the consequences of exceeding a cap or allowance.
  • Performance characteristics.  Providers must disclose packet loss and average network performance measured over a reasonable period of time.  Mobile providers will also be required to disclose the performance of each network technology they deploy (e.g., 3G and 4G).
  • Network practices.  This includes practices that affect traffic associated with a particular user or user group, including any application-agnostic degradation of service to a particular end user.

In its request, CGB seeks comment on:

  • Burden of enhanced disclosures. What is the burden of the enhanced disclosures to smaller providers as measured in financial and other resources, and how is the burden disproportionately experienced by smaller providers?
  • Disproportionate effects. Are rural customers likely to be disproportionally affected by exempting smaller providers from the enhanced disclosure requirements?
  • Consumer benefits. Will the reduction of compliance burdens for smaller providers benefit consumers in the areas served by those providers by, for example, facilitating broadband deployment, lower prices, or better quality services for consumers?

CGB will determine whether to retain the exemption and must make its decision by December 15, 2015.  If the Bureau fails to act by that date, the exemption will expire.  Comments and reply comments are due 30 days and 60 days, respectively, after publication in the Federal Register.

While OMB approval is pending, the 2010 transparency provision remains in effect for all fixed and mobile BIAS providers.  In the interim, we recommend that all BIAS providers review their marketing materials and online disclosures in preparation for the new rule.