Telecom Legislation And Regulation To Watch In 2016
Law360, Washington (December 24, 2015, 8:38 PM ET) — The ins and outs of the Internet will continue to occupy lawmakers and the Federal Communications Commission in 2016, with rulemaking and bills focusing on broadband deployment and regulating Internet privacy. There could also be movement on reforms related to universal service programs and how the FCC itself does business. Here is a rundown of telecom legislation and regulation to watch in 2016.
One consequence of the FCC’s decision in February 2015 to reclassify broadband Internet access service as a telecommunications service is the FCC’s new jurisdiction over broadband Internet privacy.
FCC Chairman Tom Wheeler initially said he wanted to begin public discussion of the agency’s privacy rules in fall 2015, but he has since moved the timetable to early 2016.
“I’m eager to see it get off the ground, but my suspicion is it’s taking a long time to actually get it written because of disagreement between commissioners,” said Kristine Devine, a partner at Harris Wiltshire & Grannis, who noted that the two Republican commissioners dissented from the agency’s net neutrality rules. “The Open Internet Order was not loved by all the commissioners, so I think there will be a fight even with getting the rulemaking issued.”
The FCC’s current common carrier privacy rules, Section 222 of the Communications Act, require protection of customer proprietary network information, or CPNI. That information relates to how customers use a service, so for telephone service it includes the numbers dialed and the duration of the call, among other things.
The commission chose not to apply the rules to broadband service when the Open Internet Order went into effect in June 2015, and instead issued an enforcement advisory until it determines how to regulate broadband privacy.
Linda McReynolds, of counsel with communications-focused Marashlian & Donahue, said she believes the FCC’s rulemaking and enforcement actions from the agency over privacy violations will occur simultaneously. She is advising clients to review what other carriers have agreed to in consent decrees to resolve allegations related to data security and privacy practices.
“For companies that are concerned about whether they are reasonable in their data security and privacy practices, they shouldn’t wait and see what the regulations are going to be,” McReynolds said. “It would behoove companies to go ahead and check. They need to do a risk assessment and implement data security policies.”
Lawmakers in the House and Senate both introduced bills that would tie roadwork to broadband deployment in 2015.
The idea, known as dig once, is a popular one, Devine said, but that doesn’t necessarily mean it will sail through the congressional process.
“If it can actually get done, dig once will be huge for telecom infrastructure deployment more broadly,” Devine said. “I think there are a lot of people in the industry that are pushing for it, but there are always hangups when you have several stakeholders — federal, state, municipalities, state departments of transportation.”
U.S. Sens. Amy Klobuchar, D-Minn., Steve Daines, R-Mont., and Cory Gardner, R-Colo., in October introduced S.2163, the Streamlining and Investing in Broadband Infrastructure Act, which they say will promote the simultaneous installation of underground broadband conduits during federal transportation projects. The legislation would ensure that states install the conduits as part of projects that involve constructing a new highway or adding an additional lane or shoulder.
The bill has been referred to the Senate Committee on Environment and Public Works.
In the House, Rep. Anna Eshoo, D-Calif., in October introduced H.R.3805, the Broadband Conduit Deployment Act of 2015, as part of a package of broadband infrastructure bills that received the backing of the House Communications and Technology Subcommittee following a markup session in December.
The infrastructure development package includes a variety of measures aimed at reducing barriers for telecommunications companies looking to develop broadband infrastructure.
The dig once legislation calls on the Department of Transportation and other agencies to evaluate whether to lay down broadband infrastructure during the federally funded highway construction process.
Very few people actually oppose the legislation, Devine said, but that means it can become a bargaining chip for other bills.
“The question is whether this bill becomes a pawn in the bigger game,” she said.
First Responder Network
The First Responder Network Authority, or FirstNet, will be looking to award up to $6.5 billion and 20 megahertz of spectrum to companies willing to help build a nationwide, public safety wireless broadband network.
FirstNet plans to release the request for proposal in early January, with a goal of awarding contracts in 2016 as well, a spokesman said. Congress created FirstNet through the the Middle Class Tax Relief and Job Creation Act of 2012 with the goal of the independent authority becoming a permanently self-funding enterprise with public safety customers.
The FirstNet board in December approved the RFP, which is based on objectives including cybersecurity, priority services and integration with existing systems.
“It’s billions of dollars in spectrum and it’s a huge government contract,” said Trey Hanbury, partner in Hogan Lovells‘ Washington, D.C., office and a member of the technology, media and telecom practice. “It’s a really important issue.”
FirstNet wants a nationwide bid, with multiple partners on the bid, to show how the companies will cover the entire nation. The organization bills the project as a way to get spectrum that’s much cheaper than an FCC auction, but Hanbury said the project also has the potential to go sideways.
“It’s a market moving event potentially, and it could also be a complete and utter disaster for whoever wins,” Hanbury said.
FCC Process Reform
The House of Representatives in November approved a bipartisan bill that calls for FCC process reform, which has already been an ongoing effort at the agency.
H.R. 2583, the Federal Communications Process Reform Act of 2015, was passed by the House in November. The bill directs the FCC to conduct a rulemaking to adopt rules that would allow time for public comment by eliminating the practice of placing large amounts of information into the record on the last day of the public comment period, a criticism stemming from the lead-up to the Open Internet Order. The rulemaking also would seek comment on requiring the publication of the text of proposed rules and on setting timelines for FCC action on certain types of proceedings.
“Should that ultimately become law, it will not solve every problem, but will be a useful first step,” said Jack Nadler, a partner in Squire Patton Boggs LLP’s global telecommunications group in Washington, D.C.
One of the key provisions of the bill is the relaxation of a rule that prohibits more than two commissioners meeting privately, Nadler said.
“There are important reasons for government transparency, but at the same time, when you have what is supposed to be a collegial decision-making body, the reality is sometimes it’s necessary for commissioners to hash some things out in private and those discussions often work a lot better if they can be face to face, rather than get carried on by commissioners’ legal advisers,” Nadler said.
Another part of the bill instructs the FCC to conduct an inquiry into reforms of commission review and voting procedures, and whether it is feasible to publish the final text of items to be adopted before the commission votes on them.
“While this bill is not a panacea, there are a lot of good, common sense reforms as well as instructions to the FCC to conduct further rulemaking,” Nadler said.
H.R. 2583 was introduced by Communications and Technology Subcommittee Chairman Greg Walden, R-Ore., and Rep. Adam Kinzinger, R-Ill., and was passed by a voice vote. The bill has been referred to the Senate Committee on Commerce, Science, and Transportation.
Universal Service Fund Reform
Attorneys say 2016 might be the year the FCC starts to tackle Universal Service Fund reform in a meaningful way.
The Universal Service Fund is made up of assessments on telecommunications providers’ revenues from interstate and international service. The money is used for programs that promote access to telecommunications services, such as the Connect America Fund or Lifeline phone subsidy program.
The contribution factor — which telecom providers pass on to consumers — just jumped past 18 percent for the start of 2016, prompting comment from FCC Commissioner Michael O’Rielly that “the entire situation is clearly unsustainable.”
“I think it’s going to be a hot topic in the next year because of the election coming up, and the Democratic-led administration and commission have broadened the scope of the disbursement to include broadband service,” said Jonathan Marashlian, managing partner of Marashlian & Donahue. “There’s going to need to be more money to come into the fund to flow out.”
The FCC released a Further Notice of Proposed Rulemaking in 2012 seeking comment on what services should be assessed for contributions to the fund, and how those contributions should be assessed.
The commission has addressed issues on an ad hoc basis, Marashlian said, but has yet to do a thorough reform.
The Open Internet Order’s reclassification of broadband Internet access service as a telecommunications service could prompt the commission to move toward assessing fees on broadband service as well, he said.
“There’s been a push for a while now to expand the contribution base to include broadband service because the added revenue from those services would drive down the contribution factor,” Marashlian said. “It would shave it in half instantly.”
Some movement will likely come after the D.C. Circuit rules on a challenge to the FCC’s Open Internet Order in the spring, Marashlian said, adding that the Federal State Joint Board on Universal Service will probably develop recommendations for contribution reform after the case is decided.
The recommendations will likely trigger a notice of proposed rulemaking, he said, but meaningful reform is unlikely to happen until after the election.
–Additional reporting by Daniel Wilson and Adam Sege. Editing by Sarah Golin and Rebecca Flanagan.