FCC Releases Open Internet Transparency/Disclosure Rule Safe Harbor in the Form of Broadband Service “Labels” for End User Customers

Broadband Disclosures Follow "Nutrition Label" Format as Previously Ordered by the FCC

The FCC has released its safe harbor disclosure framework under the Open Internet transparency requirements for end user customer disclosures, which take the form of a broadband "label" –not unlike the form of labels used by manufacturers of food products. There are two separate safe harbor labels: one for fixed broadband providers, and a second for mobile broadband providers. They provide a safe harbor format for fixed and mobile providers to disclose commercial terms, pricing, network performance, and network management practices to end user customers (but not to edge providers), that will be deemed compliant with the Open Internet transparency and disclosure requirements once approved by the OMB. Note, however, that the labels provide a safe harbor for format only; a provider could still be found to be in violation of the transparency rules if, for example, the content of a disclosure (e.g., prices or advertisement) is misleading or inaccurate.

The new broadband labels are organized in a simple table, and include fields to disclose key information required under the "enhanced" transparency disclosure requirements of the FCC's 2015 Open Internet Order, such as: promotional pricing; data usage fees; packet loss; application-specific network management practices; and network management practices that may be triggered by a subscriber's actions. Notably, each of these sections includes a field that permits the broadband provider to link to additional information about such practices. This framework raises several issues, including:

• Labels Serve as Limited Safe Harbor; Additional Disclosures to Edge Providers Still Necessary - As we previously explained, broadband providers may use these labels as a safe harbor form of disclosure only to end user customers. However, this alone does not satisfy all of a broadband provider's disclosure obligations under the Open Internet Order. Indeed, even if providers adopt this safe harbor disclosure they will still be expected to continue to provide more detailed disclosure statements for the benefit of edge providers.
• Multiple Labels May be Necessary – The disclosure template labels contemplate that broadband providers will release a disclosure for each service tier offered (i.e., one label for 5 Mbps service, a second label for 10 Mbps service, etc.). As a result, providers with multiple speed tiers offerings may be required to publish a separate disclosure label for each service. Obviously, this approach is duplicative and inefficient, and providers may find more efficient way to make appropriate disclosures for several tiers of service.
• Labels Will Likely Need to be Supplemented by Additional Written Policies – As noted above, each of the substantive disclosure fields on this label include a place to link to additional information on the specific issue. Providers may find it necessary to provide additional information in such links to ensure compliance with the FCC's enhanced "transparency" requirements.
• Network Performance Labels Open to Interpretation – When disclosing network performance metrics (speed, latency and packet loss) the FCC has previously explained that network performance would be measured in terms of "average" performance of a reasonable period, and that provider would disclose "expected and actual" speed and latency. However, the safe harbor labels adopted by the FCC require the disclosure of "typical" speed, latency and packet loss. The FCC did not explain its decision to move toward the use of this seemingly new criterion.

Note that the "enhanced" transparency rules promulgated in the 2015 Open Internet Order are not yet in effect, pending approval from the OMB. And, we remind readers that small providers (those with 100,000 or fewer broadband subscribers), have been temporarily exempted from these disclosure requirements, pending further decisions from the FCC.