Are Your Disclosures Sufficient Under the “Enhanced” Transparency Rule?

Although not yet in effect, broadband providers should begin to consider how best to implement the FCC’s “enhanced” transparency (disclosure) requirements. As explained in our recent advisory, the Order retains the FCC’s 2010 transparency (disclosure) rule, but adopts “enhancements” which will require additional disclosures of broadband providers’ network management practices, network performance, and commercial terms of service.

Unlike other parts of the Order, the disclosure requirements will not become effective until approved by the OMB, which is reviewing the costs and burdens of the enhanced transparency rule under the Paperwork Reduction Act. Notice of the opportunity to comment on the proposed rules was published on May 20 in the Federal Register and the deadline for submitting comments to the OMB is July 20. OMB’s review of these enhanced transparency rules is likely to take several months. As such, these requirements may not be effective until late summer or early fall of this year.

In the meantime, providers should be reviewing the following key elements of the enhanced transparency rules to ensure their disclosures comply with these new requirements.

Who Needs To Comply?

Broadband providers serving 100,000 or more customers (as reported on your most recent Form 477 filings with the FCC) must comply with these new enhanced rules. There is a “temporary” exemption for broadband providers serving fewer than 100,000 customers. The FCC is reviewing whether to continue the temporary exemption past the end of the calendar year.

What Needs To Be Disclosed?

In addition to those disclosures already required under the existing transparency rule, broadband providers must also disclose information about network practices, performance, and commercial terms of their broadband service.

• Commercial Terms–monthly service charge; rates at the end of promotional periods; fees/surcharges; data caps and allowances.

• Network performance –
  • packet loss (but not packet corruption or jitter)
  • if disclosed, actual performance data should be “reasonably related” to region
  • average network performance over a reasonable time period and peak usage
  • mobile network performance for each technology - e.g. 3G and 4G
  • relationship between network practices and non-broadband internet access specialized services such as interconnected VoIP and IP video

• Network practices –
  • practices for traffic associated with specific users, user groups, applications.
  • purpose of practice; affected users; triggers for the practice, and types of traffic subject to the practice.

When And Where To Disclose

Broadband providers must prominently display this information on a publicly available website and provide disclosure at the point of sale, and update on a timely basis. In addition, broadband providers must implement a method for “directly notifying end users" if the user’s individual use of network will trigger a network practice likely to affect the end user’s use of the service.

Safe Harbors

The FCC has established two safe harbors so far.

• Measuring Broadband America (MBA) program— Providers participating in the MBA have a safe harbor.

• Voluntary consumer-focused disclosures – If you are voluntarily offering a "consumer focused" and standalone disclosure (separate from disclosures to edge providers), you have a safe harbor. The FCC has not mandated an exact consumer-focused disclosure yet, but it plans to consider specific formats in the future.

• The safe harbor does not protect a disclosure that is inaccurate, misleading or violates the law.