DataGuidance Features Partner John Heitmann on Broadband ISP Rules
November 3, 2016

Partner John Heitmann was quoted in the DataGuidance article “USA: FCC’s new rules “impose significant regulatory burden” on broadband providers.” The Federal Communications Commission (‘FCC’) recently published its rules governing the collection and use of consumer data by broadband Internet Service Providers (‘ISPs’) (‘the FCC’s Rules’). In particular, the FCC’s Rules require ISPs to obtain consumers’ consent before marketing their sensitive information. In addition to children’s, financial, health, precise geolocation, and social security number data, the FCC expanded the scope of data considered as sensitive by the Federal Trade Commission (‘FTC’) to also include web browsing and mobile application history. Mr. Heitmann noted that, “The new rules will impose a significant regulatory burden on broadband providers, which in some respects is greater than that imposed on edge providers. The opt-in consent requirement is broader and more prescriptive than prevailing practices that have evolved under the watchful eye of the FTC. The treatment of web browsing history as sensitive data requiring opt-in prior to sharing is going to create tremendous problems for broadband service providers in their efforts to compete with edge providers for advertising revenues.”

He went on to say that, “It is fair to say that the FCC’s action creates an uneven regulatory playing field to the detriment of broadband providers. However, the recent Ninth Circuit decision, in which the Court ruled that the FTC did not have jurisdiction over AT&T because it had common carrier status, may have the opposite effect. Regardless of what one thinks about whether the Court got it right or wrong, a status-based rather than activity-based approach to the common carrier exception to FTC jurisdiction does raise significant potential for regulatory gaps. We now have a state of considerable regulatory uncertainty, which typically does not benefit businesses or their customers. Appeals of the FCC’s Rules are virtually assured. And we will likely be talking about this for years to come.”