[Federal Register Volume 81, Number 76 (Wednesday, April 20, 2016)]
[Proposed Rules]
[Pages 23360-23411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08458]
[[Page 23359]]
Vol. 81
Wednesday,
No. 76
April 20, 2016
Part II
Federal Communications Commission
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47 CFR Part 64
Protecting the Privacy of Customers of Broadband and Other
Telecommunications Services; Proposed Rule
Federal Register / Vol. 81 , No. 76 / Wednesday, April 20, 2016 /
Proposed Rules
[[Page 23360]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[WC Docket No. 16-106; FCC 16-39]
Protecting the Privacy of Customers of Broadband and Other
Telecommunications Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Federal Communications Commission initiates a rulemaking
seeking public comment on how to apply the privacy requirements of the
Communications Act to broadband Internet access service (BIAS). This
Notice of Proposed Rulemaking (NPRM) focuses on transparency, choice,
and data security, in a manner that is consistent with the Commission's
history of protecting privacy, the Federal Trade Commission's
leadership, and various sector-specific statutory approaches, tailored
to the particular circumstances that consumers face when they use
broadband networks and with an understanding of the particular nature
and technologies underlying those networks. The NPRM would recognize
that consumers cannot give their permission for the use of protected
data unless relevant broadband provider practices are transparent. The
NPRM proposes a framework to ensure that consumers; understand what
data the broadband provider is collecting and what it does with that
information; can decide how their information is used; and are
protected against the unauthorized disclosure of their information. The
NPRM also seeks comment on a number of closely-related questions.
DATES: Submit comments on or before May 27, 2016. Submit reply comments
on or before June 27, 2016. Written comments on the Paperwork Reduction
Act proposed information collection requirements must be submitted by
the public, Office of Management and Budget (OMB), and other interested
parties on or before June 20, 2016.
ADDRESSES: You may submit comments, identified by WC Docket No. 16-106,
by any of the following methods:
[ssquf] Federal Communications Commission's Web site: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
[ssquf] People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document. In addition to filing comments
with the Secretary, a copy of any comments on the Paperwork Reduction
Act information collection requirements contained herein should be
submitted to the Federal Communications Commission via email to
[email protected] and to Nicole Ongele, Federal Communications Commission,
via email to [email protected].
FOR FURTHER INFORMATION CONTACT: For further information about this
proceeding, please contact Sherwin Siy, FCC Wireline Competition
Bureau, Competition Policy Division, Room 5-C225, 445 12th St. SW.,
Washington, DC 20554, (202) 418-2783, [email protected]. For
additional information concerning the Paperwork Reduction Act
information collection requirements contained in this document, send an
email to [email protected] or contact Nicole Ongele at (202) 418-2991.
SUPPLEMENTARY INFORMATION: Pursuant to Sections 1.415 and 1.419 of the
Commission's rules, 47 CFR 1.415, 1.419, interested parties may file
comments and reply comments on or before the dates indicated on the
first page of this document. Comments may be filed using the
Commission's Electronic Comment Filing System (ECFS). See Electronic
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998),
http://www.fcc.gov/Bureaus/OGC/Orders/1998/fcc98056.pdf.
[ssquf] Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and one copy of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes and boxes must be disposed of
before entering the building.
[ssquf] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW., Washington, DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
Synopsis
In this Notice of Proposed Rulemaking (NPRM), we propose to apply
the privacy requirements of the Communications Act to broadband
Internet access service (BIAS) and seek comment on how best to protect
the privacy of the personal information of BIAS customers.
I. Introduction
1. The intersection of privacy and technology is not new. In 1890,
Samuel Warren and Louis Brandeis inaugurated the modern age of privacy
protection when they warned that ``numerous mechanical devices threaten
to make good the prediction that `what is whispered in the closet
should be proclaimed from the house-tops.' '' The new technology they
had in mind? The portable camera.
2. In this Notice of Proposed Rulemaking (NPRM or Notice), we
propose to apply the traditional privacy requirements of the
Communications Act to the most significant communications technology of
today: Broadband Internet access service (BIAS). This is important
because both consumers and Internet Service Providers (ISPs) would
benefit from additional, concrete guidance explaining the privacy
responsibilities created by the Communications Act. To that end, our
approach can be simply stated: First, consumers must be able to protect
their privacy, which requires transparency, choice, and data security.
Second, ISPs are the most important and extensive conduits of consumer
information and thus have access to very sensitive and very personal
information that could threaten a person's financial security, reveal
[[Page 23361]]
embarrassing or even harmful details of medical history, or disclose to
prying eyes the intimate details of interests, physical presence, or
fears. But, third, the current federal privacy regime, including the
important leadership of the Federal Trade Commission (FTC) and the
Administration efforts to protect consumer privacy, does not now
comprehensively apply the traditional principles of privacy protection
to these 21st Century telecommunications services provided by broadband
networks. That is a gap that must be closed, and this NPRM proposes a
way to do so by securing what Congress has commanded--the ability of
every telecommunications user to protect his or her privacy.
3. Privacy protects important personal interests. Not just freedom
from identity theft, financial loss, or other economic harms but also
from concerns that intimate, personal details could become grist for
the mills of public embarrassment or harassment or the basis for
opaque, but harmful judgments, including discrimination. The power of
modern broadband networks is that they allow consumers to reach from
their homes (or cars or sidewalks) to the whole wide world
instantaneously. The accompanying concern is that those broadband
networks can now follow the activities of every subscriber who surfs
the web, sends an email or text, or even walks down a street carrying a
mobile device. Absent legally-binding principles, those networks have
the commercial motivation to use and share extensive and personal
information about their customers. The protection of privacy thus both
protects individuals and encourages use of broadband networks, by
building trust.
4. Today, as the FTC has explained, ISPs are ``in a position to
develop highly detailed and comprehensive profiles of their customers--
and to do so in a manner that may be completely invisible.'' This is
particularly true because a consumer, once signed up for a broadband
service, simply cannot avoid that network in the same manner as a
consumer can instantaneously (and without penalty) switch search
engines (including to ones that provide extra privacy protections),
surf among competing Web sites, and select among diverse applications.
Indeed, the whole purpose of the customer-provider relationship is that
the network becomes an essential means of communications with
destinations chosen by the customer; which means that, absent use of
encryption, the broadband network has the technical capacity to monitor
traffic transmitted between the consumer and each destination,
including its content. Although the ability to monitor such traffic is
not limitless, it is ubiquitous. Even when traffic is encrypted, the
provider has access to, for example, what Web sites a customer has
visited, how long and during what hours of the day the customer visited
various Web sites, the customer's location, and what mobile device the
customer used to access those Web sites. Providers of BIAS (``broadband
providers'') thus have the ability to capture a breadth of data that an
individual streaming video provider, search engine or even e-commerce
site simply does not. And they have control of a great deal of data
that must be protected against data breaches. To those who say that
broadband providers and edge providers must be treated the same, this
NPRM proposes rules that recognize that broadband networks are not, in
fact, the same as edge providers in all relevant respects. But this
NPRM looks to learnings from the FTC and other privacy regimes to
provide complementary guidance.
5. The core privacy principles--transparency, choice, and
security--underlie the critical steps that the federal government has
taken to protect the privacy of many specific forms of data. Indeed,
these three principles are the heart of the internationally recognized
Fair Information Practices Principles (FIPPs) that have informed our
nation's thinking on privacy best practices while providing the
framework for most of our federal privacy statutes.
6. Today, the Commission is empowered to protect the private
information collected by telecommunications, cable, and satellite
companies in Sections 222, 631, and 338 of the Communications Act and
the Commission has recognized the importance of longstanding privacy
principles in adopting and refining its existing Section 222 rules and
enforcing privacy requirements. Thus, from the outset of its
implementation of Section 222, the Commission has focused on ensuring
that consumers have the tools to give their approval for the use and
sharing of protected information.
7. Meanwhile, as consumer use of the Internet exploded, the FTC,
using its authority to prohibit ``unfair or deceptive acts or practices
in or affecting commerce,'' entered into a series of precedent-setting
consent orders addressing privacy practices on the Internet. Taken
together, the FTC's online privacy cases focus on the importance of
transparency; honoring consumers' expectations about the use of their
personal information and the choices they have made about sharing that
information; and the obligation of companies that collect personal
information to adopt reasonable data security practices. Although the
application of Section 222 to BIAS has implications for the
jurisdiction of the FTC, that agency's leadership is critically
important in this sphere and the Commission is determined to continue
its close working relationship with the FTC. Most recently, the two
agencies entered into a consumer protection Memorandum of Understanding
(MOU). In the MOU each agency recognizes the others' expertise and we
each agreed to coordinate and consult on areas of mutual interest.
8. This NPRM supports the ability of broadband networks to be able
to provide personalized services, including advertising, to consumers--
while reaping the financial rewards therefrom. For example, many
consumers want targeted advertising that provides very useful
information in a timely (sometimes immediate) manner. Nothing in this
NPRM stops consumers from receiving targeted recommendations--or any
other form of content they wish to consume. But well-functioning
commercial marketplaces rest on informed consent. Permission is
required before purchasers can be said to agree to buy a product;
permission is needed before owners of property transfer their interests
in that property. This NPRM embraces the basic economic principle that
informed choice is necessary to protect the fundamental interest in
privacy. Thus, the consumer who possesses private information must
provide the broadband provider advanced approval for the use of that
data. In many instances, that approval is inherent in the use of the
broadband Internet access service (for example, the routing of
communications to or from the consumer), but where it is not, this NPRM
proposes that separate consent must be obtained. This is good for
consumers and it is good business, as the success of opt-in provisions
in other contexts demonstrates.
9. In the 2015 Open Internet Order, we concluded that Section 222
should be applied to the broadband connections consumers use to reach
the Internet, the newly-reclassified Title II service defined as
``Broadband Internet Access Service'' (BIAS). Section 222 is a sector-
specific statute that includes detailed requirements that Congress
requires be applied to the provision of telecommunications services,
but not to the provision of other services by broadband providers nor
to information providers at the edge of the network.
[[Page 23362]]
Thus, this NPRM applies existing statutory authority solely to the
existing class of services that Congress included within the scope of
Title II, namely the delivery of telecommunications services.
II. Ensuring Privacy Protections for Customers of Broadband Services
A. Defining Key Terms
10. To provide guidance to both broadband providers and customers
regarding the scope of the privacy protections we propose today, in
this section we propose to define the entities to which our rules apply
and the scope of information covered by such rules. We also propose to
define other key terms, including what constitutes ``opt-out'' and
``opt-in'' for purposes of giving customers control over the use of
their confidential information, what constitutes aggregate customer
proprietary information, and what constitutes a ``breach'' for purposes
of our proposed data security and data breach notification rules.
Finally, we seek comment on whether and how we should modify any of the
current Section 222 definitions, either to update those definitions or
harmonize them with the rules we propose to adopt with respect to BIAS
providers. We recognize there will be an interplay between commenters'
proposals about what substantive rules we should adopt to protect BIAS
customers' privacy interests and how we should define key terms and we
invite commenters to explore in detail the relationships between the
two.
1. Defining BIAS and BIAS Provider
11. We propose to apply the definition of ``Broadband Internet
Access Services'' or ``BIAS'' that we used in the 2015 Open Internet
Order. In that proceeding, we defined BIAS to mean ``[a] mass-market
retail service by wire or radio that provides the capability to
transmit data to and receive data from all or substantially all
Internet endpoints, including any capabilities that are incidental to
and enable the operation of the communications service, but excluding
dial-up Internet access service. This term also encompasses any service
that the Commission finds to be providing a functional equivalent of
the service described in the previous sentence, or that is used to
evade the protections set forth in this part.'' We propose to define
``broadband Internet access service provider'' (BIAS provider) as a
person or entity engaged in the provision of BIAS.
2. Defining Affiliate
12. We seek comment on how we should define ``affiliate'' for
purposes of our proposed rules. The Act, as amended, and our current
rules, define ``affiliate'' to mean ``a person that (directly or
indirectly) owns or controls, is owned or controlled by, or is under
common ownership or control with, another person,'' where the term
``own'' is defined to mean ``to own an equity interest (or the
equivalent thereof) of more than 10 percent.'' We seek comment on
whether we should adopt this definition or another definition for
purposes of our proposed rules, as well as any associated benefits and
burdens, particularly for small providers.
3. Defining Customer
13. We propose to define ``customer'' to mean (1) a current or
former, paying or non-paying subscriber to broadband Internet access
service; and (2) an applicant for broadband Internet access service. We
seek comment on our proposal and on whether we should harmonize the
existing Section 222 definition of customer with our proposed broadband
definition.
14. Under our current Section 222 rules, ``[a] customer of a
telecommunications carrier is a person or entity to which the
telecommunications carrier is currently providing service.'' We believe
that the existing rule's limitation to current subscribers is
insufficiently narrow, perhaps particularly as applied to the broadband
context. As technological capabilities have progressed, data retention
and processing have increased, concomitantly increasing the incentives
for retaining, using, and selling personal information of applicants
and of former customers. Because BIAS providers have the ability to
retain and reuse applicant and former customer proprietary information
long after the application process is over, or the former customer has
discontinued its subscription, we propose to define customer for BIAS
purposes to include both applicants for BIAS and former BIAS customers.
We recognize that not all aspects of our proposed rules will be
applicable to all such customers in every situation (e.g., a data
breach may impact some customers but not others). For the purposes of
these proposed rules we sometimes refer to ``affected customers'' or
``existing customers'' to designate a subset of customers, as
appropriate.
15. In seeking comment on our proposed definition of ``customer''
we inquire as to whether, without the privacy protections of Section
222, consumers may be hesitant to apply for BIAS or current BIAS users
may be apprehensive about switching service providers out of concern
that their current provider may stop protecting their privacy after
they switch providers. Could such apprehension inhibit competition and
innovation in the BIAS marketplace?
16. We recognize that a single BIAS subscription is often used by
multiple people. Residential fixed broadband services typically have a
single subscriber, but are used by all members of a household, and
often by their visitors. Some mobile BIAS providers offer friends and
family plans in which multiple people are enrolled on one BIAS account,
each with their own identified device(s) or user login. Should the
definition of customer reflect the possibility of multiple broadband
users? Should each member of a group plan or each user with a login be
treated as a distinct customer who must receive individualized notices
and consent requests? Is such a definition of ``customer''
appropriately consistent with the definition of ``end user'' adopted in
the 2015 Open Internet Order? Under such an interpretation, how would
or should BIAS providers treat members of a group plan who are minors
or are otherwise unable to understand notice and consent? How can we
ensure that BIAS providers protect the information of all users of
broadband Internet access service, given that the contract is between
the BIAS provider and its subscriber? Should we define ``subscriber''
as any person about whom broadband providers hold customer information?
How should we treat the interests of persons using corporate accounts,
for example, including the employees of a small business? We seek
comment on these issues and the benefits and burdens of any proffered
alternatives.
17. At the same time, we are cognizant of the potential burdens
that defining the term ``customer'' too broadly could place on BIAS
providers, and we believe that the definition we propose today strikes
the right balance between minimizing the burdens on BIAS providers and
protecting customer proprietary information. We believe that our
proposed definition will minimize the burden on BIAS providers by
limiting the proposed notice and consent requirements to interactions
with a single account holder, as opposed to every individual who
connects to a broadband service over that subscription. Do commenters
agree? We seek comment on the benefits and burdens associated with our
proposed definition, and any alternatives,
[[Page 23363]]
including, in particular, burdens on small providers.
18. We also seek comment on whether we should revise the definition
of ``customer'' in the existing CPNI rules to be consistent with our
proposed definition of ``customer'' in the BIAS context. At least some
of the concerns we identified above in regard to BIAS customers are not
unique to BIAS; voice customers in today's world of big data face
similar issues related to the protection of their own private
information when they apply for and after they have terminated service.
Given these concerns, we seek comment whether we should harmonize the
definition of ``customer'' across voice and broadband platforms for
purposes of protecting customer privacy.
19. Finally, to the extent we adopt rules that harmonize the
privacy requirements under section 222 with the requirements for cable
and satellite providers under Sections 631 and 338(i), should we
understand the term ``subscriber'' in those provisions of the Act to be
coextensive with the term ``customer'' we propose here?
4. Defining CPNI in the Broadband Context
20. As with the existing CPNI rules, we propose to adopt the
statutory definition of CPNI for use in the broadband context. Section
222(h)(1) defines CPNI to mean ``information that relates to the
quantity, technical configuration, type, destination, location, and
amount of use of a telecommunications service subscribed to by any
customer of a telecommunications carrier, and that is made available to
the carrier by the customer solely by virtue of the carrier-customer
relationship'' and ``information contained in the bills pertaining to
telephone exchange service or telephone toll service received by a
customer or a carrier,'' except that CPNI ``does not include subscriber
list information.'' We seek comment on this proposal. Is there any need
to include the second part of that definition in our rules regarding
BIAS services, given its applicability only to telephone exchange
service and telephone toll service?
21. We propose to interpret the phrase ``made available to the
carrier by the customer solely by virtue of the carrier-customer
relationship'' in the definition of CPNI to include any information
falling within a CPNI category, as discussed below, that the BIAS
provider collects or accesses in connection with the provision of BIAS.
Consistent with the Commission's 2013 CPNI Declaratory Ruling, this
includes information that a BIAS provider causes to be collected and
stored on customer premises equipment (CPE) or other devices, including
mobile devices, in order to allow the carrier to collect or access the
information. As the Commission held, the ``fact that CPNI is on a
device and has not yet been transmitted to the carrier's own servers
also does not remove the data from the definition of CPNI, if the
collection has been done at the carrier's direction.'' We also
recognize that a BIAS provider has the ability to create and append
CPNI to a customer's Internet traffic, such as by inserting a user ID
header (UIDH). We interpret any information the BIAS provider attaches
to a customer's Internet traffic to be CPNI if it falls within one of
the categories delineated in Section 222(h)(1)(A). We seek comment on
our approach.
22. In order to provide guidance to consumers and to BIAS
providers, we propose to provide specific examples of the types of
information that we consider CPNI in the broadband context. In the
context of the existing CPNI rules, the Commission has explicitly
declined to set out a comprehensive list of data elements that do or do
not satisfy the statutory definition of CPNI, and we propose to
continue to follow that model in the broadband context. The Commission
has, however, enumerated certain data elements that it considers to be
CPNI--including call detail records (including caller and recipient
phone numbers, and the frequency, duration, and timing of calls) and
any services purchased by the consumer, such as call waiting--and we
propose to delineate similar non-exhaustive examples of the types of
information that we would consider to constitute CPNI in the broadband
context. We believe that such guidance will help provide direction
regarding the scope of broadband providers' obligations and help to
increase consumers' confidence in the security of their confidential
information as technology continues to advance. We seek comment on this
approach, alternatives, and any associated benefits and burdens,
particularly for small providers.
a. Types of Information That Meet the Statutory Definition of CPNI
23. We propose that, at a minimum, we consider the following types
of information to constitute CPNI in the broadband context: (1) Service
plan information, including type of service (e.g., cable, fiber, or
mobile), service tier (e.g., speed), pricing, and capacity (e.g.,
information pertaining to data caps); (2) geo-location; (3) media
access control (MAC) addresses and other device identifiers; (4) source
and destination Internet Protocol (IP) addresses and domain name
information; and (5) traffic statistics. Below we offer explanations
for why we consider each of these type of data to fall within our
proposed definition of CPNI with respect to BIAS. We seek comment on
our proposed interpretations. We ask that commenters explain their
responses to our proposed interpretations and identify any other
element of the definition of CPNI which commenters believe covers any
of the specific data elements described below.
24. Broadband Service Plans. We propose to consider information
related to a customer's broadband service plan as CPNI in the broadband
context. Broadband service plans are analogous to voice telephony
service plans, which the Commission has long considered to be CPNI
under the existing CPNI rules. We believe that information related to
the telecommunications services the BIAS provider provides to the
customer, including type of service (e.g., fixed or mobile; cable or
fiber; prepaid or term contract), speed, pricing, and capacity
(including information pertaining to data caps) is information relating
to the ``quantity,'' ``technical configuration,'' ``type,'' and
``amount of use'' of a telecommunications service subscribed to by a
customer. We seek comment on this proposed interpretation. Are there
other data elements that are analogous to those included in a voice
telephony service plan that we should consider CPNI in the broadband
context?
25. Geo-Location. We propose to consider information related to the
physical or geographical location of a customer or the customer's
device(s) (geo-location), regardless of the particular technological
method a BIAS provider uses to obtain this information, to be CPNI in
the broadband context. The statutory definition of CPNI includes
information related to ``location'' of a telecommunications services
subscribed to by a customer. The Commission has held that ``[t]he
location of a customer's use of a telecommunications service also
clearly qualifies as CPNI.'' We seek comment on this proposed
interpretation.
26. Media Access Control (MAC) Addresses and Other Device
Identifiers. We propose to consider any MAC address associated with a
customer's device to be CPNI in the broadband context. A MAC address
uniquely identifies the network interface on a device, and thus
uniquely identifies the device itself (including the device
manufacturer and often the model); as such, we believe it is analogous
to the IMEI mobile device identifier in the
[[Page 23364]]
voice telephony context. Because BIAS providers use MAC addresses to
route data packets to the end user, we believe that we should consider
such information ``destination'' and ``technical configuration''
information under Section 222(h)(1)(A). Similarly, we propose to
consider other device identifiers and other information in link layer
protocol headers to be CPNI in the broadband context. We seek comment
on our proposed interpretation. We also seek comment on other types of
device identifiers that meet the statutory definition of CPNI. For
example, our TRS rules recognize that a unique device identifier such
as an ``electronic serial number'' is ``call data information'' in the
TRS CPNI context.
27. Internet Protocol (IP) Addresses and Domain Name Information.
We propose to consider both source and destination IP addresses as CPNI
in the broadband context. An IP address is the routable address for
each device on an IP network, and BIAS providers use the end user's and
edge provider's IP addresses to route data traffic between them. As
such, IP addresses are roughly analogous to telephone numbers in the
voice telephony context, and the Commission has previously held
telephone numbers dialed to be CPNI. Further, our CPNI rules for TRS
providers recognize IP addresses as call data information. IP addresses
are also frequently used in geo-location. As such, we believe that we
should consider IP addresses to be ``destination'' and ``location''
information under Section 222(h)(1)(A). Similarly, we propose to
consider other information in Internet layer protocol headers to be
CPNI in the broadband context, because they may indicate the ``type''
and ``amount of use'' of a telecommunication service. We seek comment
on this proposed interpretation.
28. Similarly, we propose to consider the domain names with which
an end user communicates CPNI in the broadband context. Domain names
(e.g., ``www.fcc.gov'') are common monikers that the end user uses to
identify the endpoint to which they seek to connect. Domain names also
translate into IP addresses, which we propose to consider CPNI. We
therefore propose to treat domain names as destination and location
information. We seek comment on this proposed interpretation.
29. Traffic Statistics. We propose to consider traffic statistics
to be CPNI pertaining to the ``type'' and ``amount of use'' of a
telecommunications service. We believe that ``amount of use''
encompasses quantifications of communications traffic, including short-
term measurements (e.g., packet sizes and spacing) and long-term
measurements (e.g., monthly data consumption, average speed, or
frequency of contact with particular domains and IP addresses). We
recognize that modern technology enables easily collecting and
analyzing traffic statistics to draw powerful inferences that implicate
customer privacy. For example, a BIAS provider could deduce the type of
application (e.g., VoIP or web browsing) that a customer is using, and
thus the purpose of the communication. Further, traffic statistics can
be used to determine the date, time, and duration of use, and deduce
usage patterns such as when the customer is at home, at work, or
elsewhere. We believe traffic statistics are analogous to call detail
information regarding the ``duration[] and timing of [phone] calls''
and aggregate minutes in the voice telephony context. We seek comment
on our proposed interpretation.
b. Other Broadband Data Elements That Could Meet the Statutory
Definition of CPNI
30. We also seek comment on whether we should consider other types
of information to fall within the statutory definition of CPNI in the
broadband context, including: (1) Port information; (2) application
headers; (3) application usage; and (4) CPE information.
31. Port Information. We seek comment on whether we should consider
port information to be ``technical configuration,'' ``type,''
``destination'' information, and/or any other category of CPNI under
Section 222(h)(1)(A). A port is a logical endpoint of communication
with the sender or receiver's application. The destination port number
determines which application receives the communication. We believe
that port destinations are analogous to telephone extensions in the
voice context. Port numbers identify or at least provide a strong
indication of the type of application used, and thus the purpose of the
communication, such as email or web browsing. We understand that BIAS
providers sometimes configure their networks using port information for
network management purposes, such as to block certain ports to ensure
network security. We seek comment on whether we should consider port
numbers and other information regarding port usage CPNI in the
broadband context. Similarly, we seek comment on whether we should
consider other information in transport layer protocol headers to be
CPNI in the broadband context, for instance because it may be
information that relates to the ``technical configuration'' or ``amount
of use'' of a telecommunications service.
32. Application Header. We seek comment on whether we should
consider application headers ``technical configuration,'' ``type,''
and/or ``destination'' information, or any other category of CPNI under
Section 222(h)(1)(A). Application headers are application-specific data
that assist with or otherwise relate to requesting and conveying
application-specific content. The application header communicates
information between the application on the end user's device and the
corresponding application at the other endpoint(s) with which the user
communicates. For example, application headers for web browsing
typically contain the Uniform Resource Locator (URL), operating system,
and web browser; application headers for email typically contain the
source and destination email addresses. The type of applications used,
the URLs requested, and the email destination all convey information
intended for use by the edge provider to render its service. We
understand that BIAS providers sometimes configure their networks using
application headers for network management purposes. We believe that
access to application headers is analogous in the voice telephony
context to accessing a customer's choices within telephone menus used
to route calls within an organization (e.g., ``Push 1 for sales. Push 2
for billing.''). We seek comment on whether we should consider
application headers CPNI in the broadband context. Similarly, we seek
comment on whether we should consider any other application layer
information to be CPNI in the broadband context.
33. Application Usage. We seek comment whether and under what
circumstances we should consider information the broadband provider
collects about the use of applications to meet the statutory definition
of CPNI. As the Commission discussed in the 2013 CPNI Declaratory
Ruling, if such information meets the terms of Section 222(h)(1)(A) and
the broadband provider directs the collection or storage of the
information, it is CPNI. Based on this clarification, should we
conclude that information the broadband provider collects about the
usage of applications is CPNI in the broadband context, if the
broadband provider directs such collection and the information
collected falls within the statutory elements of CPNI? Based on the
principles discussed in the 2013 CPNI Declaratory Ruling, could
application usage that
[[Page 23365]]
does not result in transmission also qualify as CPNI?
34. Customer Premises Equipment (CPE) Information. We seek comment
whether we should consider information regarding CPE as ``relat[ing] to
the . . . technical configuration'' and/or ``type . . . of use of a
telecommunication service,'' or any other category under the statutory
definition of CPNI. CPE is defined in the Act as ``equipment employed
on the premises of a person (other than a carrier) to originate, route,
or terminate telecommunications.'' In the broadband context, we believe
CPE would include, but not be limited to, a customer's smartphone,
tablet, computer, modem, router, videophone, or IP caption phone. The
nature of a customer's device may impact the technical configuration of
the broadband service based on the communications protocol that the
device uses and may also identify the type of service to which the
customer subscribes (e.g., fixed vs. mobile, cable vs. fiber). We seek
comment whether we should consider CPE information CPNI in the
broadband context.
35. Other. We seek comment on what other customer information there
is to which a BIAS provider has access by virtue of its provision of
BIAS, whether such information should appropriately be considered CPNI,
and why. We also seek comment on whether we should include any
additional information in the definition of CPNI in the mobile context.
If we find that any of the information discussed in this section is not
CPNI, we seek comment on whether and how it should be protected.
36. We also seek comment on whether we should consider adopting a
broader definition of CPNI and include additional categories of
customer information into CPNI. If so, what should that definition be
and what should it include? Is adopting a broader definition of CPNI
the best way to provide consumers with robust privacy protections? What
are the benefits and drawbacks to adopting a broader definition of
CPNI?
37. Finally, we seek comment on any other issues we should address
in conjunction with the definition of CPNI, as well as the benefits and
burdens associated with any proposals to remedy those concerns, and in
particular any associated benefits and burdens for small providers.
5. Defining Customer Proprietary Information
38. Section 222(a) imposes a general duty on telecommunications
carriers ``to protect the confidentiality of proprietary information
of, and relating to . . . customers.'' Although the Commission's
previous rulemakings addressing Section 222 have been limited to CPNI,
subsection (a) by its terms does not appear to be limited to protecting
customer information defined as CPNI. In its initial Section 222
rulemaking, the Commission limited itself to adopting rules
implementing the CPNI requirements of Sections 222(c)-(f) in response
to a petition from local exchange carrier associations. More recently,
however, the Commission recognized the obligation of providers to
protect the confidentiality of customer proprietary information
pursuant to Section 222(a) in the enforcement context. In the TerraCom
NAL we interpreted customer ``proprietary information'' as ``clearly
encompassing private information that customers have an interest in
protecting from public exposure,'' including, but not limited to,
``privileged information, trade secrets, and personally identifiable
information.'' We explained that, in the context of Section 222, ``it
is clear that Congress used the term `proprietary information' broadly
to encompass all types of information that should not be exposed widely
to the public, whether because that information is sensitive for
economic reasons or for reasons of personal privacy.''
39. In keeping with that interpretation of Section 222(a), we
propose to define ``proprietary information of, and relating to . . .
customers'' to include private information that customers have an
interest in protecting from public disclosure, and consider such
information to fall into two categories: (1) Customer proprietary
network information (CPNI); and (2) personally identifiable information
(PII) the BIAS provider acquires in connection with its provision of
BIAS. We refer to these two categories of data together as ``customer
proprietary information'' or ``customer PI.'' We believe Section 222(a)
protects CPNI because customer proprietary network information is a
specific subtype of customer proprietary information generally. As
described in more detail below, consistent with well-developed concepts
of what constitutes personally identifiable information in the modern
world, we propose to define PII to mean any information that is linked
or linkable to an individual. Protecting personally identifiable
information from breaches of confidentiality is a core value of most
privacy regimes. We seek comment on our proposal.
40. Providing protection for PII as well as CPNI will benefit
consumers, while having limited adverse impacts on BIAS providers, as
both are types of information that customers reasonably expect their
BIAS provider to keep secure and confidential. We expect that, for the
most part, broadband providers already keep such information secure and
treat it with some degree of confidentiality based on, among other
things, FTC guidance that BIAS providers would have reasonably
understood applied to them prior to the reclassification of broadband
in the 2015 Open Internet Order. We seek comment on whether there are
other categories of information that should be treated as falling under
Section 222(a) in the broadband context, and for which customers and
providers expect protection. Are there any categories of information
that are specific to the mobile BIAS context?
41. We also seek comment on whether we should harmonize the
existing CPNI rules with our proposed rules for broadband providers by
adopting one unified definition of customer PI, and on the benefits and
burdens of such an approach. We recognize that because the Commission
has not previously focused its attention on adopting rules defining the
scope of information protected by Section 222(a), our existing Section
222 rules do not separately define customer PI. Are voice
telecommunications providers' obligations to protect customer PI
sufficiently clear, or would it be helpful to have a codified
definition? Further, we observe that many telecommunications carriers
also provide both voice and broadband services. Would a harmonized
standard help reduce burdens for such companies, especially for small
providers?
6. Defining Personally Identifiable Information
42. Protecting personally identifiable information is at the heart
of most privacy regimes. We propose to define personally identifiable
information, or PII, as any information that is linked or linkable to
an individual. We recognize that, historically, legal definitions of
PII adopted different approaches. Some incorporated checklists of
specific types of information; others deferred to auditing controls.
Advances in computer science, however, have demonstrated that seemingly
anonymous information can often (and easily) be re-associated with
identified individuals. Our proposal incorporates this modern
understanding of data privacy, which is reflected in our recent
enforcement actions, and tracks the FTC and National Institute of
Standards and Technology (NIST) guidelines on PII. We propose to define
PII broadly because of both the interrelated nature
[[Page 23366]]
of different types of personal information and the large risks posed by
unauthorized uses and disclosures. We seek comment on our proposal.
43. Linked and linkable information. We propose that information is
``linked'' or ``linkable'' to an individual if it can be used on its
own, in context, or in combination to identify an individual or to
logically associate with other information about a specific individual.
The ``linked or linkable'' standard for determining the metes and
bounds of personally identifiable information is well established. In
addition to NIST and the FTC, the Department of Education, the
Securities and Exchange Commission, the Department of Defense, the
Department of Homeland Security, the Department of Health and Human
Services, and the Office of Management and Budget all use a version of
this standard in their regulations. We seek comment on our approach.
44. We propose to offer illustrative, non-exhaustive guidance
regarding the types of data that are PII. In order to provide such
guidance, we look to a number of sources, including our prior orders,
NIST, the FTC, the White House's proposed Consumer Privacy Bill of
Rights, and other federal and state statutes and regulations. We
propose that types of PII include, but are not limited to: Name; Social
Security number; date and place of birth; mother's maiden name; unique
government identification numbers (e.g., driver's license, passport,
taxpayer identification); physical address; email address or other
online contact information; phone numbers; MAC address or other unique
device identifiers; IP addresses; persistent online identifiers (e.g.,
unique cookies); eponymous and non-eponymous online identities; account
numbers and other account information, including account login
information; Internet browsing history; traffic statistics; application
usage data; current or historical geo-location; financial information
(e.g., account numbers, credit or debit card numbers, credit history);
shopping records; medical and health information; the fact of a
disability and any additional information about a customer's
disability; biometric information; education information; employment
information; information relating to family members; race; religion;
sexual identity or orientation; other demographic information; and
information identifying personally owned property (e.g., license
plates, device serial numbers). We recognize and acknowledge that
several of these data elements may overlap with our proposed
interpretation of the terms of the CPNI definition. We seek comment on
these examples and whether there are other categories of linked or
linkable information that we should recognize.
45. Other PII Considerations. Consistent with a widespread
understanding of what constitutes PII, we propose to consider a BIAS
customer's name, postal address, and telephone number as PII and,
consequently, that they are customer PI protected by Section 222(a) in
the broadband context. We recognize that because of the unique history
of telephone directory information, the Commission has previously
treated such information as not falling within the statutory definition
of CPNI in the voice telephony context. Indeed, the statutory
definition of CPNI ``does not include subscriber list information,''
which the Act defines as information ``(A) identifying the listed names
of subscribers of a carrier and such subscribers' telephone numbers,
addresses, or primary advertising classifications . . . and (B) that
the carrier or an affiliate has published, caused to be published, or
accepted for publication in any directory format.''
46. Unlike fixed voice providers in the 1990s, today's broadband
providers do not publish directories of customer information. Even in
the voice context, mobile providers have never published subscriber
list information, and in the fixed context, customers have long had the
option to request such customer information not be disclosed (i.e.,
that the customer be ``unlisted''), inherently recognizing the personal
nature of such information. Further, by signing up for broadband
service, customers do not think they are consenting to the public
release of their name, postal address, and telephone number, none of
which play the same role in the context of BIAS, as they do in the
context of telephone service. As such, we propose that there is no
subscriber list information in the broadband context, and therefore
that BIAS customers' names, postal addresses, and telephone numbers
should be treated as PII, and seek comment on our approach. We also
seek comment on whether we should treat such information as CPNI. We
also propose to harmonize our voice and broadband rules and treat such
information as customer PI in the voice context, except where such
information is published subscriber list information. We seek comment
on this proposal. Do commenters agree that this approach is consistent
with current customer expectations? What are the positive and negative
ramifications from this proposal? Is there another approach we can take
that will give consumers control over their personal information?
47. If we adopt rules harmonizing the privacy requirements of
Sections 222, 631, and 338(i), how should we interpret the term
``personally identifiable information'' as used in Sections 631 and
338(i)? Should we use the same definition we propose here?
48. Finally, we seek comment on alternative approaches to defining
PII. For example, instead of defining the term PII, what are the
benefits and burdens of leaving that term undefined and simply
providing guidance on what types of information qualify? What are the
benefits and burdens any alternative approaches?
7. Content of Customer Communications
49. We seek comment on how we should define and treat the content
of customer communications. The sensitivity and confidentiality of the
content of personal communications is one of the oldest and most-
established cornerstones of privacy law. Other federal and state laws,
including the Electronic Communications Privacy Act (ECPA), the
Communications Assistance for Law Enforcement Act (CALEA), and Section
705 of the Communications Act provide strong protections for the
content of communications carried over broadband and public switched
telephone networks. In light of the strong protections for the content
of communications offered by other laws, we seek comment on how we
should treat content under Section 222. As a threshold matter, should
some or all forms of content should also be understood as customer PI
under Section 222(a) or CPNI under Section 222(h)? What are the
implications of considering content as being covered by Section 222(a)
or (h), as well as by other relevant federal and state laws? We do not
think that providers should ever use or share the content of
communications that they carry on their network without having sought
and received express, affirmative consent for the use and sharing of
content. We therefore seek comment on whether there is a need to
provide heightened privacy protections to content of communications
beyond Section 705 and ECPA, and if there is, what additional
protections should be provided. Given that Section 705 provides an
additional basis for requiring heightened protections for content,
should we consider regulations under Section 705? We invite commenters
to address any legal authorities affecting commenters' conclusions
regarding content, including relevant provisions of the
[[Page 23367]]
ECPA and Section 705 of the Communications Act.
8. Defining Opt-Out and Opt-In Approval
50. We propose to define the term ``opt-out approval'' as a method
for obtaining customer consent to use, disclose, or permit access to
the customer's proprietary information in which a customer is deemed to
have consented to the use, disclosure, or access to the customer's
covered information if the customer has failed to object thereto after
the customer is provided appropriate notification of the BIAS
provider's request for consent consistent with the proposed
requirements set forth below in Section 64.7002 of the proposed rules.
We base our proposal on the definition for ``opt-out approval'' in the
Commission's existing CPNI rules. In the broadband context, we propose
to expand the Commission's existing definition to encompass all
customer PI (rather than limiting it to CPNI), and eliminate the
existing 30-day waiting period currently required to make a voice
customer's opt-out approval effective, as the existing definition of
opt-out approval for voice providers requires. We believe that, given
our proposed requirements that customers must be able to opt out at any
time and with minimal effort, a 30-day period may prove more cumbersome
than a customer's rapid expressions of preference. Since BIAS providers
come into contact with many types of customer PI beyond CPNI in their
provision of broadband services, we think it appropriate under Section
222(a) to include all customer PI so that customers can exercise more
control over the use and sharing of all their private information.
51. We propose to define the term ``opt-in approval'' as a method
for obtaining customer consent to use, disclose, or permit access to
the customer's proprietary information that requires that the BIAS
provider obtain from the customer affirmative, express consent allowing
the requested usage, disclosure, or access to the covered information
after the customer is provided appropriate notification of the
provider's request consistent with the requirements set forth below in
Section 64.7002 of the proposed rules and before any use of, disclosure
of, or access to such information. We base our proposal on the
definition for ``opt-in approval'' in the Commission's existing CPNI
rules for voice providers.
52. We seek comment on these proposed definitions, and more
specifically, whether there any changes to them that can be made to (1)
adapt them more appropriately to the BIAS context, or (2) provide
additional clarity for consumers and providers alike. We seek comment
on alternative approaches to defining these terms. We invite commenters
to offer real-world examples of choice-mechanisms and discuss whether
they would satisfy these definitions.
9. Defining Communications-Related Services and Related Terms
53. We seek comment on how best to define ``communications-related
services'' for purposes of our proposal to allow BIAS providers to use
customer PI to market communications-related services to their
subscribers, and to disclose customer PI to their communications-
related affiliates for the purpose of marketing communications-related
services subject to opt-out approval. Should we limit communications-
related services to telecommunications, cable, and satellite services
regulated by the Commission? If so, how should we treat services that
compete directly with services that are subject to Commission
jurisdiction? Alternatively, should we delineate other types of
services that we would consider communications-related?
54. The current Section 222 rules define communications-related
services to mean ``telecommunications services, information services
typically provided by telecommunications carriers, and services related
to the provision or maintenance of customer premises equipment.'' The
current Section 222 rules define ``information services typically
provided by telecommunications carriers'' to mean information services
as defined in the Communication Act of 1934, as amended, that are
typically provided by telecommunications carriers, such as Internet
access or voice mail services. The definition further specifies that
``such phrase `information services typically provided by
telecommunications carriers,' as used in this subpart, shall not
include retail consumer services provided using Internet Web sites
(such as travel reservation services or mortgage lending services),
whether or not such services may otherwise be considered to be
information services.'' If used in the BIAS context the combination of
those definitions would include a broad array of services. We are not
inclined to adopt such an expansive reading of ``communications-related
services,'' so we seek comment on how we might amend the current
definitions to narrow the scope of services we would treat as
``communications-related services'' in the broadband context. We also
seek comment on how we can best limit the definitions of
``communications-related services'' and, if necessary, ``information
services typically provided by a telecommunications provider'' to align
with consumer expectations about the extent to which BIAS providers use
and share customer PI with communications-related affiliates.
55. Even if we adopt a narrower definition of communications-
related services for purposes of the BIAS rules, we propose to amend
the definition of ``information services typically provided by
telecommunications carriers'' for purposes of the voice rules, in light
of the reclassification of broadband Internet access service as a
telecommunications service in the 2015 Open Internet Order, and to
align with current consumer expectations about the extent to which
telecommunications carriers (other than BIAS providers) use and share
customer PI with communications-related affiliates for purposes of
marketing communications-related services. Should we harmonize the
meaning of ``communications-related services'' across BIAS and other
telecommunications services? Relatedly, we seek comment on what
constitutes ``marketing'' for the purposes of this proposed rule.
10. Defining Aggregate Customer PI
56. We propose to define aggregate customer proprietary information
as collective data that relates to a group or category of services or
customers, from which individual customer identities and
characteristics have been removed. We observe that our proposed
definition for ``aggregate customer proprietary information'' mirrors
the statutory definition for the term ``aggregate customer
information'' in Section 222(h)(2). We use slightly different
terminology to make clear that our proposed rules addressing the use of
aggregate customer information are intended to address the use of all
aggregate customer PI and not just aggregate CPNI. We seek comment on
our proposal. Are there any reasons we should restrict our definition
to include only aggregate CPNI, or alternatively, to mirror the
statute's terminology of ``aggregate customer information''? Do any
additional security concerns arise from the use of aggregate customer
PI, in the fixed or mobile context, that would not arise if our
definition were restricted to including only CPNI? Would adopting the
statutory term ``aggregate customer information'' lead to any
enforcement concerns regarding what information is covered? Should our
proposed definition of aggregate
[[Page 23368]]
customer PI apply to both voice telephony and BIAS services? Are there
any reasons that the same definition of aggregate customer PI should
not be used for both of these types of services?
11. Defining Breach
57. For purposes of our proposed data breach notification
requirements, we propose to define ``breach'' as any instance in which
``a person, without authorization or exceeding authorization, has
gained access to, used, or disclosed customer proprietary
information.'' Unlike the ``breach'' definition in our current Section
222 rules, our proposal does not include an intent element, and it
covers all customer PI, not just CPNI. In defining breach we also look
to state data breach notification laws, many of which do not include an
intent requirement. We seek comment on this approach.
58. Not including a requirement that the unauthorized access be
intentional in the definition of ``breach'' will ensure data breach
notification in the case of inadvertent breaches that have potentially
negative consequences for customers. We seek comment on this approach.
Do commenters believe it is appropriate to require customer
notification of all breaches, whether inadvertent or intentional? What
are the burdens and benefits associated with this proposal? Should we
retain the intentionality requirement in certain contexts? If so, what
contexts and why? State statutes often include a provision exempting
from the definition of breach a good-faith acquisition of covered data
by an employee or agent of the company where such information is not
used improperly or further disclosed. Should we include such an
exemption in our definition of ``breach'' or is such a provision
unnecessary or otherwise unadvisable? Are there any alternative
proposals we should consider for the definition of breach?
59. We propose to include customer PI within the definition of
breach, which will have the effect of applying our data breach
notification requirements to breaches of customer proprietary
information. Although CPNI covers many categories of confidential
information, we believe that it is equally important that customers,
the Commission, and other law enforcement (in certain circumstances)
receive notice of a breach of other customer PI from or about the
customer. Section 222(a) requires carriers to protect the
confidentiality of ``proprietary information'' of and relating to
customers. As such, we believe we have authority to extend our proposed
breach reporting requirements to breaches of all customer PI, to ensure
that customers receive critical protection for this broader subset of
information. We seek comment on our proposal and on our authority to
require breach reporting for breaches of all customer PI. What are the
burdens and benefits of our proposed expansion of our requirements? How
will our proposal affect small businesses?
12. Other Definitions
60. We seek comment on whether there are other terms we should
define as part of adopting rules to protect the privacy of BIAS
customers' proprietary information, or voice telecommunications
definitions that we should revise in light of our proposals today.
61. For example, the existing CPNI rules define the term ``customer
premises equipment'' (CPE) to mean ``equipment employed on the premises
of a person (other than a carrier) to originate, route, or terminate
telecommunications.'' We seek comment whether we should adopt this
definition for purposes of the proposed broadband privacy rules. What
would be the scope of covered devices under the statutory definition or
any alternatives? Would ``premises of a person'' include Internet-
connected devices carried outside one's home or office? With large
numbers of consumer products becoming networked devices (e.g.,
thermostats, cars, home appliances, and others), are there particular
types of uses, activities, or devices that operate over broadband
Internet access service that we should or should not include within the
definition of CPE? Are there other terms the Commission should define
for the broadband privacy context?
62. We also seek comment on whether there are any other terms from
the existing CPNI rules that we need to revise, either to differentiate
them or to harmonize them with our proposed broadband privacy rules,
and to address the existing forbearance for BIAS. We propose to revise
the existing rules to make clear that they apply only to
telecommunications services other than BIAS, by revising the definition
of ``telecommunications carrier'' to exclude a provider of BIAS for
purposes of the existing rules. We seek comment on this approach, as
well as alternative approaches for doing so. Are any other changes to
the definitions necessary to preserve the existing voice CPNI rules
following the reclassification of broadband Internet access service?
What are the benefits and burdens of updating or not updating any of
these definitions, particularly for small providers? With regard to all
of the current definitions, should we merely update them and keep them
applicable solely to voice services, or should we craft one uniform set
of definitions for both voice and broadband CPNI? Is there any reason
not to harmonize these or other definitions as applied to voice and
broadband providers? What are the benefits and burdens of harmonizing
versus not harmonizing the definitions, particularly for small
providers?
63. We recognize that if we do update any definitions, we may need
to revise other aspects of the current CPNI rules to align with any
revised definitions. Likewise, if we revise any of the current
substantive rules we may need to revise additional definitions. Below,
we seek comment on harmonizing the current rules with our proposed
rules. Here we also seek comment on what other provisions of the
current CPNI rules we should revise and why. For example, our current
rules permit wireless providers to ``use, disclose, or permit access to
CPNI derived from its provision of CMRS, without customer approval, for
the provision of CPE and information service(s).'' At the time of
adoption, BIAS was classified as an ``information service,'' and as
such, this rule was intended to cover such services. We seek comment on
how we should revise this rule to reflect our reclassification of BIAS
as a telecommunications service.
B. Providing Meaningful Notice of Privacy Policies
64. Transparency is one of the core fair information practice
principles. Indeed, there is widespread agreement that companies should
provide customers with clear, conspicuous, and understandable
information about their privacy practices. There is also widespread
agreement about the challenge of providing useful and accessible
privacy disclosures to consumers. In recognition of the importance of
transparency, we propose rules requiring BIAS providers to provide
customers with clear and conspicuous notice of their privacy practices
at the point of sale and on an on-going basis through a link on the
provider's homepage, mobile application, and any functional equivalent.
In order to ensure customers have the information they need about BIAS
providers' privacy practices, we propose to provide specific direction
about what information must be provided in BIAS providers' privacy
notices, and we propose to require BIAS providers to provide existing
customers with advanced notice of material changes in their privacy
policies. To
[[Page 23369]]
ensure that the information that BIAS providers provide about their
privacy policies is accessible to consumers, we seek comment on
standardizing the formatting of broadband privacy notices and of
notices regarding material changes to privacy policies. We also seek
comment on ways to harmonize our proposed notice requirements with
privacy notice requirements for providers of voice and video services.
1. Privacy Notice Requirements
65. In proposing specific disclosure requirements for BIAS
providers' privacy and security policies, we look to the Commission's
open Internet transparency rule and the existing notice obligations for
traditional telecommunications carriers under Section 64.2008 of the
Commission's rules, as well as the notice provisions of the Cable
Privacy Act. We also look to the California Online Privacy Protection
Act, which establishes privacy policy requirements for online services,
and to numerous best practices regimes, including those proposed by the
FTC and the National Telecommunications and Information Administration
(NTIA). We also find various trade association recommendations
informative, including those adopted by the Digital Advertising
Alliance and the Network Advertising Initiative. In so doing, we
propose rules that would impose the following notice requirements with
respect to BIAS providers' privacy policies:
Types of Customer PI Collected and How They Are Used and
Disclosed. The notice must specify and describe:
[cir] The types of customer PI that the BIAS provider collects by
virtue of its provision of broadband service;
[cir] How the BIAS provider uses, and under what circumstances it
discloses, each type of customer PI that it collects; and
[cir] The categories of entities that will receive the customer PI
from the BIAS provider and the purposes for which the customer PI will
be used by each category of entities.
Customers' Rights With Respect to Their PI. The notice
must:
[cir] Advise customers of their opt-in and opt-out rights with
respect to their own PI, and provide access to a simple, easy-to-access
method for customers to provide or withdraw consent to use, disclose,
or provide access to customer PI for purposes other than the provision
of broadband services. Such method shall be persistently available and
made available at no additional cost to the customer.
[cir] Explain that a denial of approval to use, disclose, or permit
access to customer PI for purposes other than providing BIAS will not
affect the provision of any services to which the customer subscribes.
However, the provider may provide a brief description, in clear and
neutral language, describing any consequences directly resulting from
the lack of access to the customer PI.
[cir] Explain that any approval, denial, or withdrawal of approval
for the use of the customer PI for any purposes other than providing
BIAS is valid until the customer affirmatively revokes such approval or
denial, and inform the customer of his or her right to deny or withdraw
access to such PI at any time. However, the notification must also
explain that the provider may be compelled to disclose a customer's PI,
when such disclosure is provided for by other laws.
Requirements Intended to Increase Transparency of Privacy
Notices. To ensure customers can understand BIAS privacy notices, such
notices must:
[cir] Be comprehensible and not misleading;
[cir] Be clearly legible, use sufficiently large type, and be
displayed in an area so as to be readily apparent to the customer; and
[cir] Be completely translated into another language if any portion
of the notice is translated into that language.
Timing of Notice. To ensure customers receive timely and
persistent notice of a BIAS provider's privacy policies, the notice
must:
[cir] Be made available to prospective customers at the point of
sale, prior to the purchase of BIAS, whether such purchase is being
made in person, online, over the telephone, or via some other means;
[cir] Be made persistently available:
[ssquf] Via a link on the BIAS provider's homepage;
[ssquf] Through the BIAS provider's mobile application; and
[ssquf] Through any functional equivalent to the provider's
homepage or mobile application.
66. We seek comment on these proposed notice requirements. To what
extent are these practices already being followed by some or most BIAS
providers? To what extent are these practices consistent with the best
practices of other industries? Will the proposed requirements provide
BIAS customers with (1) clear and adequate notice of their BIAS
provider's privacy policies, and (2) sufficient information to enable
them to make informed decisions about their use and purchase of BIAS
services? Will the proposed requirements ensure that BIAS customers
receive sufficient information to give them confidence that their
broadband provider is protecting the confidentiality of their
proprietary information and providing them with sufficient ability to
decide whether and when to opt in to the sharing of data with third
parties? Are there additional specific requirements that we should
adopt so that privacy policy information is accessible to customers
with a disability, such as, for example, a link to a video of the
notice conveyed in American Sign Language (ASL)?
67. Required Disclosures. We seek comment whether there are other
types of information that we should require BIAS providers to include
in the notices of their privacy policies, or if there are any
categories of information we propose including that should not be
required. For example, should we require BIAS providers to provide
customers with information concerning their data security practices or
their policies concerning the retention and deletion of customer PI?
Further, to the extent that we determine that the content of customer
communications is covered by the transparency requirements we propose
to adopt, how can we ensure that customers have adequate notice
concerning how BIAS providers treat such information? In addition,
would it be technically and/or practically feasible to require that
BIAS providers provide consumers with notice of the specific entities
with which they intend to share their customer PI, rather than the
categories of entities, as we propose above? We note that California's
Shine the Light law requires businesses, upon request, to provide to
their customers, free of charge and within 30 days: (1) A list of the
categories of personal information disclosed by the business to third
parties for the third parties' marketing purposes; (2) the names and
addresses of all the third parties that received personal information
from the business in the preceding calendar year; and (3) if the nature
of the third parties' business cannot be reasonably determined by the
third parties' name, examples of the products or services marketed by
the third party. We seek comment on whether we should adopt a similar
requirement. Would such a requirement place too onerous a burden on
BIAS providers? What are the estimated costs of compliance associated
with such a requirement, if any? Are these costs outweighed by the
potential benefit to customers of disclosing this information?
68. Although our current Section 222 rules do not require voice
providers to have privacy notices, many of the categories of
information we propose to
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require in BIAS providers' privacy notices are required as part of the
current Section 222 requirements for notice before seeking approval for
using or sharing CPNI. We seek comment from providers and other
stakeholders on their experience with privacy disclosures in that
context and on how those experiences should inform the privacy notice
rules we propose to adopt for BIAS providers.
69. Timing and Placement of Privacy Notices. We seek comment on our
proposal regarding the timing and placement of privacy notices. We
believe that by requiring point-of-sale notices and requiring that
notices of a BIAS provider's privacy policies be persistently available
through a link on the provider's homepage and through its mobile
application, gives providers two existing, user-friendly avenues for
providing customers with notice of their privacy policies, while also
leaving open a technology-neutral, ``functional equivalent'' option in
the event that future innovations in technology offer new and
innovative ways to provide customers with transparency. Do commenters
agree? Are homepages and mobile applications two platforms through
which customers are likely to interface with privacy policies? Are
there any other times and points at which providers should provide
customers with notice of their privacy practices, other than those we
discuss above? If so, how should such notice be delivered? Should it be
provided through email or another agreed-upon means of electronic
communication, or should it perhaps be included regularly on customers'
bills for BIAS? What would be the cost of compliance, if any, of
supplying customers with privacy practice notifications via email or as
part of the customer's regular bill? Are there technical means of
conveying privacy notices that we might adopt?
70. Some rules and laws require annual or bi-annual notification of
privacy rights. The Commission's existing voice notification rules
require carriers using the opt-out mechanism to provide notices to
their customers every two years. Because we require BIAS providers to
have easy-to-access links to their privacy notices that are
persistently available on their homepage, through their mobile
applications, and through any functional equivalent, we do not think it
is a good use of resources to require BIAS providers to periodically
provide their privacy notices to their customers. We invite comment on
that approach. When customers receive regular privacy notices, do they
typically review and understand such annual notices? Do customers
typically take any action in regard to such notices? Would the
administrative costs of providing such annual notices outweigh the
benefits to the customer of receiving annual notices? If we do adopt a
regular privacy notice requirement, how should the notice be sent to
BIAS customers? Would email notice to the customer's email address of
record be sufficient? Should we require that any such annual notices be
sent by mail to the address of record? Is there another, more effective
way of providing annual notices to BIAS customers?
71. Compliance Burden. We seek comment on the burdens associated
with complying with our proposed privacy notice framework for BIAS
providers. What are the estimated costs of compliance, if any, that
this notice framework will impose on providers, given that they are
already obligated to provide notice of their privacy policies to
customers under the open Internet transparency rule? We believe that
the benefits to customer privacy of providing end users, edge
providers, and the general public with meaningful information about the
privacy policies of BIAS providers outweigh the administrative and
regulatory costs of the proposed notice requirements. We seek comment
on this conclusion. Are there any alternatives that would reduce the
burdens on BIAS providers, particularly small providers, while still
ensuring that BIAS providers' privacy practices are sufficiently
transparent?
72. Standardization of Privacy Notices. We also seek comment on
whether BIAS providers' privacy policy notices should be standardized
to enable better comprehension and comparison of privacy practices by
customers and to reduce the burden of regulatory compliance on BIAS
providers. There is broad recognition of the importance of simplifying
and standardizing privacy notices to make them more accessible to
consumers. In its 2012 Privacy Report, for example, the FTC recognized
that privacy policies in different industries would need to reflect
those differences, but called for the standardization of some elements
of privacy policies, including formatting and terminology ``to allow
consumers to compare the privacy practices of different companies and
to encourage companies to compete on privacy.'' The following year,
NTIA released a voluntary code of conduct detailing a uniform set of
guidelines for mobile application providers to use in crafting short
form privacy notices. In drafting the code, NTIA acknowledged that the
``transparency created by displaying information about application
practices in a consistent way . . . is intended to help consumers
compare and contrast data practices of apps.''
73. We seek comment on whether we should adopt a standardized
approach for BIAS providers' privacy notices in this proceeding. Would
a one-size-fits-all approach provide clear, conspicuous, and
understandable information? Are there models we should look to in
crafting our privacy notice requirements? For example, in the 2015 Open
Internet Order, we directed the Consumer Advisory Committee (CAC),
composed of both industry and consumer interests, to formulate and
submit to the Commission a proposed consumer-facing disclosure for
purposes of complying with the transparency rule. Should we follow a
similar approach? In a recent study of online privacy notices,
researchers at Carnegie Mellon University found that certain, specific
discrepancies exist between companies' actual privacy practices and
users' expectations of how their information is being used or shared.
The study concluded by suggesting that companies could develop shorter,
user-facing privacy notices that specifically emphasize those practices
where mismatches exist between a company's actual use and disclosure
policies and consumers' expectations. By using models of people's
privacy expectations, the study's authors suggest that companies could
selectively highlight or display those elements of privacy policies
that are likely to be most relevant to users. We seek comment on
whether we should use such a model in developing a standardized
template for privacy notices. Would such a model, or one similar to it,
lessen the burden on providers of providing privacy notices while also
ensuring that customers are kept adequately informed as to how their
BIAS providers use and share their information? Or, should we consider
multiple but structurally similar privacy policy disclosures?
74. In addition, we seek comment on whether such a standardized
disclosure should be adopted as a voluntary safe harbor for any adopted
privacy notice requirements. Would a safe harbor ease the regulatory
burden on BIAS providers, particularly small providers? How could we
ensure that a notice provided under such a safe harbor provision still
allows consumers adequate opportunity to consider and comprehend the
privacy policies of their respective BIAS providers?
75. We recognize that not all privacy policies may conform to a
uniform template. Is there a risk that using a uniform template for
privacy notices may result in the omission of crucial
[[Page 23371]]
information and ensuing consumer confusion or mistake? What is the best
way to ensure that BIAS providers are able to convey this privacy
policy information in accessible formats, like ASL? Are more general
guidelines that allow for flexibility preferable to the creation of a
uniform template? Should we, for example, look to the model code of
conduct for mobile application short-form privacy notices that came out
of the multi-stakeholder process convened by the NTIA at the Department
of Commerce in 2012 and 2013? If so, what elements from that model will
work well in the BIAS context and which will need to be adjusted?
76. Are there other approaches we can take to simplifying privacy
notices? For example, should we require a layered privacy notice that
includes a plain-language disclosure policy in addition to a more in-
depth disclosure? If so, what should go into the different layers of
such privacy notices?
77. In addition to simplifying and standardizing privacy notices,
we seek comment on whether we should take further steps to ensure (1)
that customers have access to sufficient information regarding their
BIAS provider's privacy policies, and (2) that such information is
presented in a form that is both palatable and easily comprehensible
for customers. In particular, we seek comment on whether the Commission
should require BIAS providers to create a consumer-facing privacy
dashboard that would allow customers to: (1) See the types and
categories of customer PI collected by BIAS providers; (2) see the
categories of entities with whom that customer PI is shared; (3) grant
or deny approval for the use or disclosure of customer PI; (4) see what
privacy selection the customer has made (i.e., whether the customer has
chosen to opt in, opt out, or take no action at all with regards to the
use or disclosure of her PI), and the consequences of this selection,
including a description of what types and categories of customer PI may
or may not be used or disclosed by a provider depending on the
customer's privacy selection; (5) request correction of inaccurate
customer PI; and (6) request deletion of any categories of customer PI
that the customer no longer wants the BIAS provider to maintain (e.g.,
online activity data), so long as such data is not necessary to provide
the underlying broadband service or needed for purposes of law
enforcement. We seek comment on the costs and benefits of requiring the
creation of such a dashboard, and any alternatives the Commission
should consider to minimize the burdens of such a program on small
providers.
2. Providing Notice of Material Changes in BIAS Providers' Privacy
Policies
78. In order to ensure that BIAS customers are fully informed of
their providers' privacy policies, and can exercise informed decisions
about consenting to the use or sharing of customer PI, we propose to
require BIAS providers to (1) notify their existing customers in
advance of any material changes in the BIAS provider's privacy
policies, and (2) include specific types of information within these
notices of material changes. Our proposal is consistent with, but more
extensive than, the requirement we adopted in the 2015 Open Internet
Order that BIAS providers update the disclosure of their network
practices, performance characteristics, and commercial terms (including
privacy practices) whenever there is a material change in that
disclosure. More specifically, we propose that a notice of material
changes must:
Be clearly and conspicuously provided through (1) email or
another electronic means of communication agreed upon by the customer
and BIAS provider, (2) on customers' bills for BIAS, and (3) via a link
on the BIAS provider's homepage, mobile application, and any functional
equivalent.
Provide a clear, conspicuous, and comprehensible
explanation of:
[cir] The changes made to the BIAS provider's privacy policies,
including any changes to what customer PI the BIAS provider collects,
and how it uses, discloses, or permits access to such information;
[cir] The extent to which the customer has a right to disapprove
such uses, disclosures, or access to such information and to deny or
withdraw access to the customer PI at any time; and
[cir] The precise steps the customer must take in order to grant or
deny access to the customer's PI. The notice must clearly explain that
a denial of approval will not affect the provision of any services to
which the customer subscribes. However, the provider may provide a
brief statement, in clear and neutral language, describing consequences
directly resulting from the lack of access to the customer's PI. If
accurate, a provider may also explain in the notice that the customer's
approval to use the customer's PI may enhance the provider's ability to
offer products and services tailored to the customer's needs.
Explain that any approval or denial of approval for the
use of customer PI for purposes other than providing BIAS is valid
until the customer affirmatively revokes such approval or denial.
Be comprehensible and not misleading.
Be clearly legible, use sufficiently large type, and be
placed in an area so as to be readily apparent to customers.
Have all portions of the notice translated into another
language if any portion of the notice is translated into that language.
79. We seek comment on our proposal. In particular, we seek comment
on whether the elements and disclosures that we propose to require as
part of the notification of material changes are sufficient to provide
customers with adequate and comprehensible notice of any material
changes in their BIAS providers' privacy policies. Are there any
additional disclosures not included in this proposed framework that
might be helpful to consumers? Are any of the proposed requirements
unnecessary or potentially unhelpful to consumers? Should we require
that the notification triggered by this proposed provision occur within
a specified timeframe in advance of the effectiveness of the provider's
material change? If so, what is an appropriate timeframe during which
BIAS providers should provide the notification? The 2015 Open Internet
Order defined a ``material'' change as ``any change that a reasonable
consumer or edge provider would consider important to their decisions
on their choice of provider, service, or application.'' Do we need to
update this definition to more clearly address privacy concerns raised
by material changes?
80. Our proposal is consistent with industry guidelines and other
standards regarding customer notice of material changes to privacy
policies. Our proposed rules build on these existing regulatory
frameworks and our own existing material change disclosure requirement
in an attempt to ensure that customers receive proper notice of any
material changes in their BIAS providers' privacy policies that may
affect how those customers' PI is used or disseminated, before such
material changes are made. We believe that by requiring BIAS providers
to furnish their customers with advance notice of material changes to
their privacy policies, our proposed requirement will help to ensure
that the manner in which customer PI is being used and disclosed will
remain transparent to customers, and will also enable customers to make
informed decisions about whether to
[[Page 23372]]
approve or disapprove any new uses or disclosures of their PI.
81. We believe that our proposal will also help to ensure that BIAS
providers cannot materially alter their privacy practices and use or
share customer PI in a way in which customers may not approve or may
not envision prior to customers even being made aware of such an
alteration in the first place. Further, our proposed requirements that
notices of material changes be clearly legible, placed in an area so as
to be readily apparent to customers, and be provided through email or
another electronic means of communication agreed upon by the customer
and BIAS provider--as well as on customers' bills for BIAS services and
through a link on the BIAS provider's homepage, mobile app, and any
functional equivalent--will help ensure that customers have ample
opportunity to learn of any material changes in their BIAS providers'
privacy practices. This will also have the added benefit of informing
interested members of the public, including privacy advocates, of any
such material changes.
82. We are particularly concerned about material changes to privacy
policies that BIAS providers seek to make retroactive. Our sister
agency, the FTC, has also long held as a ``bedrock principle'' that
companies should obtain affirmative express consent before making
material retroactive changes to their privacy policies. This principle
is echoed in the Organization for Economic Cooperation and
Development's privacy guidelines, which require that data controllers
specify the purpose of data use whenever those purposes change. We seek
comment on whether our proposed rules are sufficient to ensure that
providers seeking to retroactively change their privacy policies obtain
consent to any new or newly disclosed use or sharing of customer PI,
and that they honor consumers' decisions.
83. Finally, we seek comment on the burden that our proposed
material change notice requirements will place on BIAS providers,
particularly small providers. What are the estimated costs of
compliance, if any, that this framework will impose on BIAS providers?
Is there any way to modify our proposed material change rules so as to
lessen the burden of these requirements on small providers while still
achieving the Commission's stated goals of increasing transparency in
the BIAS market and keeping consumers well-informed of their BIAS
providers' privacy practices?
3. Mobile-Specific Considerations
84. As a general matter, we do not see a justification for treating
fixed and mobile BIAS differently. However, we understand that there
are fundamental differences between the two technologies: Specifically,
their mobility. We therefore seek comment on whether there are any
mobile-specific considerations to the notice requirements we have
proposed above. Given the increasing ubiquity of mobile devices in
today's society, we recognize that many consumers may utilize BIAS via
a mobile platform--some to the exclusion of fixed devices. We seek
comment on the technical feasibility of our proposed notice
requirements for mobile BIAS providers. Are there any practical
difficulties for providers of mobile BIAS in providing customers with
adequate notice? For instance, are there any ways in which our existing
and proposed notice requirements can or should be tailored to the
unique characteristics of mobile services and smaller screens? Are our
existing and proposed methods of notice adequate to ensure that mobile
customers, specifically, are kept well-informed of their providers'
respective privacy policies, as well as any material changes to such
policies? What other types of notice, if any, should be required,
specific to mobile BIAS providers? Is there any reason to hold mobile
BIAS providers to different notice requirements, or should they be
obligated to comply with the same framework as non-mobile BIAS
providers? Why or why not? How would any such mobile-specific
requirements benefit users of mobile BIAS? What would be the effect, if
any, on broadband competition from having a different set of notice
requirements applicable to mobile versus fixed BIAS providers?
4. Harmonizing Notices for Voice, Video, and Broadband Services
85. We seek comment on whether the Commission should harmonize
required privacy notices regarding the use of customer information for
voice, video, and broadband services. Section 64.2008 of the
Commission's rules requires telecommunications carriers to provide
individual notice to customers when soliciting approval to use,
disclose, or permit access to customers' CPNI. Additionally, Sections
631 and 338(i) of the Act require cable operators and satellite
carriers to provide notice to their subscribers of the collection, use,
and disclosure of subscribers' personally identifiable information.
This notice must be provided at the point of sale and at least once a
year thereafter. We seek comment on the best way to harmonize privacy
notice requirements for providers of voice, video, and broadband
Internet access services.
86. We observe that in today's market of bundled communications
services, many voice, broadband, and video providers offer multiple
services. Indeed, many companies currently offer double or triple play
packages that typically include both BIAS and video services, or BIAS,
video, and voice services, respectively. In a variety of proceedings,
the Commission has recognized the nexus between providing broadband and
``triple play'' packages that include other services such as video
programming, and we have acknowledged that `` `a provider's ability to
offer video service and to deploy broadband networks are linked
intrinsically, and the federal goals of enhanced cable competition and
rapid broadband deployment are interrelated.' '' In light of the pre-
existing notice requirements for providers of voice and video services,
we seek comment on how we can minimize the burden of the notification
processes proposed in this NPRM on BIAS providers.
87. We observe that some BIAS providers already provide one privacy
notice for all of their bundled services on their Web sites. Given that
many providers are already providing a single notice of their privacy
policies on their Web sites to all their voice, video, and BIAS
customers, we seek comment on whether harmonizing the privacy notice
requirements for these various types of services could lessen the
burden imposed on providers. More specifically, if a BIAS provider also
provides privacy notices to customers under our voice rules and/or
cable and satellite statutory requirements, should we allow that
provider to combine the notices so that their customers only receive
one notice as opposed to two or three? Should we reconcile the types of
information that are required to be in consumer privacy notices across
voice, video, and broadband Internet access platforms so that a
provider of these services need only send a single notice to customers
regarding its privacy practices? Is combining such notices likely to
confuse customers? Will requiring separate privacy notices for voice,
video, and broadband Internet access services be more easily understood
by customers? Do the administrative costs of providing separate notices
under the proposed rules as well as our voice and video rules outweigh
any benefits to
[[Page 23373]]
consumers of receiving these notices separately?
C. Customer Approval Requirements for the Use and Disclosure of
Customer PI
88. In this section, we propose a framework that empowers customers
to make informed decisions about the extent to which they will allow
their BIAS providers to use, disclose, or permit access to customer
proprietary information for purposes other than providing BIAS. Choice
is a critical component of protecting the confidentiality of customer
proprietary information. When armed with clear, truthful, and complete
notice of how their information is being used, customers can still only
protect their privacy if they have the ability to exercise their
privacy choices in a meaningful way. Empowering customers with control
over their information does not, however, mean prohibiting all uses of
their information, or bombarding them with constant solicitations for
approval. BIAS providers may make many beneficial uses and disclosures
of customer PI, and we do not propose to prevent these, so long as
customers can exercise their choice in the matter. We therefore offer a
proposed consumer choice framework that allows BIAS providers to engage
in certain necessary and beneficial uses and sharing of information
without the need for additional customer approval (such as providing
service itself, or facilitating emergency response to 911 calls), as
well as an efficient means of facilitating customer decisions regarding
BIAS provider use and sharing of customer PI.
89. We begin this section by addressing the types of customer
approval we propose to require for BIAS providers to use customer PI,
and for BIAS providers to disclose customer PI to their affiliates and
third parties. Section 222 and our current CPNI rules provide different
levels of customer approval depending on the type of uses and the user,
and we propose to do the same here. Specifically, we propose to require
BIAS providers to give a customer the opportunity to opt out of the use
or sharing of her customer PI prior to the BIAS provider (1) using the
customer's PI to market other communications-related services to the
customer; or (2) sharing the customer's PI with affiliates that provide
communications-related services, in order to market those
communications-related services to the customer. We also propose to
require BIAS providers to solicit and receive opt-in approval from a
customer before using customer PI for other purposes and before
disclosing customer PI to (1) affiliates that do not provide
communications-related services and (2) all non-affiliate third
parties. We also seek comment on other approaches to seeking customer
approval.
90. Second, we propose and seek comment on when BIAS providers
should notify customers of their opportunities to approve or disapprove
the use or disclosure of their information; the forms that such
notification and solicitation should take, including how customers
should be able to exercise their approval or disapproval; and how and
when customers' choices take effect. Third, we propose and seek comment
on how BIAS providers should document their compliance with the
proposed rules. Fourth, we seek comment on the applicability of these
proposals to small BIAS providers. Fifth, recognizing that the
framework proposed here differs from the current framework in place for
voice providers, we seek comment on whether we should harmonize the two
frameworks, or otherwise revise and modernize the existing voice
framework. We also seek comment on harmonizing the approval
requirements for cable and satellite providers under Sections 631 and
338(i) of the Act with those we propose for BIAS providers.
1. Types of Approval Required for Use and Disclosure of Customer PI
91. In this section, we propose rules addressing the type of
customer approval required for the use and sharing of customer PI.
Customers' privacy is affected differently depending upon the entity
using or accessing their private information and the purposes for which
that information is being used. Each of these factors can independently
affect the privacy impact of a given practice. For instance, customers
who would not object to their BIAS provider using information about
their bandwidth use to market a different monthly plan may object to
that same information being disclosed to third parties. Meanwhile,
customers may object even to uses of the same information for
unexpected purposes, such as marketing wholly unrelated services to the
customer. We therefore propose a framework to take these factors into
account. We welcome comment on this approach.
92. Below, we first address uses and disclosure that do not require
approval, or for which we propose to treat customer approval as
implied. We then address the circumstances under which we propose to
require customer opt-out and opt-in approval for the use and disclosure
of customer PI. Finally, we seek comment on alternative frameworks for
customer choice.
a. Permissible Uses and Disclosures of Customer PI for Which Customer
Approval Is Implied or Unnecessary
93. In this section, we seek comment on how to implement Section
222(c)(1)'s direction that broadband providers may use, disclose, or
permit access to individually identifiable CPNI without customer
approval in their provision of BIAS or ``services necessary to, or used
in, the provision'' of BIAS. We also propose to implement the goals of
the statutory exceptions found in Section 222(d)--which permit BIAS
providers to use, disclose, or permit access to CPNI without customer
approval in specifically enumerated circumstances--to all customer PI
in the broadband context, and below, propose rules that adapt those
provisions to BIAS. We believe that our proposed implementation of
these provisions in the broadband context is consistent with customer
expectations, necessary for the efficient delivery of BIAS, and
essential to allow emergency and law enforcement personnel to respond
quickly and effectively during those times when their services are
needed the most.
94. Services for Which Consent to the Use of Customer PI Is
Implied. Section 222(c)(1) permits a BIAS provider to ``use, disclose,
or permit access to individually identifiable [CPNI] in its provision
of (A) the telecommunications service from which such information is
derived, or (B) services necessary to, or used in, the provision of
such telecommunications service.'' We seek comment on how to apply this
in the broadband context. In particular, how should we interpret the
scope of activities that are ``in the provision'' of BIAS? We also seek
comment on how we should interpret the clause ``services necessary to,
or used in, the provision'' of broadband service in the BIAS context.
95. We propose to allow BIAS providers to use any customer PI, and
not only CPNI, for the purpose of providing BIAS or services necessary
to, or used in, the provision of BIAS. Is such a permissive expansion
consistent with Congress' direction that telecommunications carriers
``protect the confidentiality of proprietary information of, and
relating to . . . customers''? Why or why not? Is it necessary for BIAS
providers to use customer PI other than CPNI to provide BIAS? We also
note that Section 222(c)(1) does not restrict uses or disclosures of
CPNI that are ``required by law,'' and seek comment whether our
[[Page 23374]]
rules need to explicitly recognize that BIAS providers may disclose any
customer PI as required by law, including information that is not
specifically CPNI.
96. We also propose to adopt rules permitting BIAS providers to use
customer PI for the purpose of marketing additional BIAS offerings in
the same category of service (e.g., fixed or mobile BIAS) to the
customer, when the customer already subscribes to that category of
service from the same provider without providing the opportunity to
provide opt-out or opt-in consent. We observe that the current Section
222 rules permit carriers to ``use, disclose, or permit access to CPNI
for the purpose of . . . marketing service offerings among the
categories of service (i.e., local, interexchange, and commercial
mobile radio service (CMRS)) to which the customer already subscribes
from the same carrier, without customer approval.'' Given the
additional types of customer PI and CPNI available to BIAS providers
today, and the ways such information may impact the privacy of
customers, will permitting BIAS providers to use customer PI for their
own BIAS marketing purposes without explicit customer approval
adequately protect customer privacy in the broadband context? Are there
some forms of customer PI that a BIAS provider should not be permitted
to use in this context without receiving additional consent from its
subscribers? As discussed above, if we find that Section 222 provides
protections for the content of communications, we think that use of
content should be subject to heightened approval requirements. What
sort of requirements should we apply to a provider's use of content for
purposes of marketing BIAS to an existing BIAS customer? We also seek
comment whether (1) permitting broadband providers to use customer PI
to market broadband services to the customers in this manner is within
the bounds of authority contemplated by the statute, and (2) whether we
should revise our existing Section 222 rules to limit the exception to
``use'' of CPNI, or otherwise revise our rules.
97. Statutory Exceptions. Under Section 222(d) of the Act,
providers may use, disclose, or permit access to CPNI, without customer
notice or approval, to: (1) Initiate, render, bill, and collect for
broadband services; (2) protect the rights or property of the provider,
or to protect users and other providers from fraudulent, abusive, or
unlawful use of, or subscription to, broadband services; (3) provide
any inbound telemarketing, referral, or administrative services to the
customer for the duration of a call, if such call was initiated by the
customer and the customer approves of the use of such information to
provide service; and (4) provide call location information concerning
the user of a commercial mobile radio service or an IP-enabled voice
service in certain specified emergency situations. We propose to adopt
these exceptions, tailored to the broadband context, to the use or
disclosure of all customer PI. We seek comment on our proposal and on
potential alternatives.
98. Section 222(d)(4) permits providers to use and disclose CPNI to
provide ``call location information'' concerning the user of a
commercial mobile service for public safety. We believe that the
critical public safety purposes that underlie this provision counsel in
favor of applying a similar rule in the broadband context, and that
providing customer PI to emergency services, to immediate family
members in case of emergency, or to providers of information or
database management services for the delivery of emergency services,
are uses for which customer approval is implied. We therefore propose
to allow BIAS providers to use or disclose any geo-location
information, or other customer PI, for these purposes. We also propose
to permit BIAS providers to use or disclose location information to
support Public Safety Answering Point (PSAP) queries pursuant to the
full range of next generation 911 (NG911) calling alternatives,
including voice, text, video, and data, in addition to the
circumstances delineated by statute. Our proposal will help ensure that
PSAPs and emergency personnel have timely access to the full set of
information they may need to respond quickly and effectively to locate
and aid not only users of legacy voice services, but users of data,
video, and text services as well. We also seek comment whether BIAS
providers must support automated requests from PSAPs, to ensure that
emergency response is not hampered by time-consuming or inefficient
processes for necessary information. We seek comment on our proposed
application of this statutory provision in the broadband context and on
potential alternative approaches to the Section 222(d)(4) exception.
Alternatively, we seek comment whether we could directly apply the
provisions of Section 222(d)(4) to BIAS, by interpreting ``call
location information'' to mean ``broadband usage location
information.''
99. In addition, we propose to interpret Section 222(d)(2) to
permit BIAS providers to use or disclose CPNI whenever reasonably
necessary to protect themselves or others from cyber security threats
or vulnerabilities. Section 222(d)(2) permits providers to use CPNI to
protect the rights or property of the carrier, or to protect users of
those services and other carriers from fraudulent, abusive, or unlawful
use of, or subscription to, such services. We believe that this
proposal comports with the statute, because cyber security threats and
vulnerabilities frequently harm the rights or property of providers,
and typically harm users of those services and other carriers through
the fraudulent, abusive, or unlawful use of, or subscription to, such
services. Furthermore, we note that other statutes explicitly permit
particular types of disclosure, which may encompass customer PI. We
seek comment on this proposal. Should we extend this exception to
include all customer PI? What, if any, guidance should we provide about
what constitutes a cybersecurity threat entitled to this exception?
100. We also propose to interpret Section 222(d)(2) to allow
telecommunications carriers to use or disclose calling party phone
numbers, including phone numbers being spoofed by callers, without
additional customer consent when doing so will help protect customers
from abusive, fraudulent or unlawful robocalls. Month after month,
unwanted voice robocalls and texts (together, ``robocalls'') top the
list of consumer complaints we receive at the Commission. At best,
robocalls represent an annoyance; at worst they can lead to abuse and
fraud. All concerned parties--regulators, providers, and consumer
advocates--agree that better call blocking and filtering solutions are
critical to helping consumers. To that end, we recently clarified that
voice providers may offer their customers call blocking solutions
without violating their call completion requirements, and encouraged
providers to offer those solutions. We expect that sharing of calling
party information to prevent robocalls will benefit consumers. We seek
comment on this proposal, and on how well it fits within the framework
of 222(d)(2). Is it consistent with customer expectations?
101. We also seek comment on what other customer PI
telecommunications carriers, including interconnected VoIP providers,
should be allowed to use or share without additional consumer consent
pursuant to Section 222(d)(2) in order to prevent abusive, fraudulent,
or unlawful robocalls. What other types of customer PI could help
prevent robocalls, if shared with other providers and third party
robocall solution
[[Page 23375]]
providers? Are BIAS or other providers already using or sharing some
types of customer PI to mitigate the propagation of traffic that is
fraudulent, abusive, or unlawful? If so, are there lessons that can be
learned about the use or sharing of information that will assist in the
fight against robocalls?
102. We also seek comment on whether we should expand the
exceptions in Section 222(d) in the broadband context to permit
broadband providers to use all customer PI for these delineated
purposes. Is there any reason why providers would need to use customer
PI that is not CPNI for the purposes Congress enumerated? If so, would
such needs be outweighed by the countervailing interest in protecting
the privacy of customer information?
103. Finally, consistent with our findings in the voice context, we
propose to permit broadband providers to use CPNI without customer
approval in the provision of inside wiring installation, maintenance,
and repair services. We seek comment on this proposal, and specifically
whether commenters believe there is any reason not to apply this
provision in the broadband context. We also seek comment whether we
should establish any other exceptions to our proposed framework. For
instance, the existing CPNI rules permit providers to use or disclose
information for the limited purpose of conducting research on the
health effects of CMRS. Should a similar exception apply in the BIAS
context? We encourage commenters to identify why any such exceptions
would be consistent with Section 222 or other applicable laws.
b. Customer Approval Required for Use and Disclosure of Customer PI for
Marketing Communications-Related Services
104. FTC best practices counsel that consumer choice turns on the
extent to which the practice is consistent with the context of the
transaction or the consumer's existing relationship with the business.
Consistent with this and our existing rules, we propose that, except as
permitted above in Part III.C.1.a, BIAS providers must provide a
customer with notice and the opportunity to opt out before they may use
that customer's PI, or share such information with an affiliate that
provides communications-related services, to market communications-
related services to that customer. We seek comment on this proposal.
105. This approach is similar to the approach taken by our current
Section 222 rules, and we believe it is consistent with customers'
expectations. However, we invite comment on this approach, specifically
on customers' expectations and preferences regarding how their
broadband provider may itself use customer PI; and for what purposes it
should be allowed to share information with its affiliates subject to
opt-out approval. Given the prevalence of bundled service offerings, do
customers expect that their broadband providers could or should
themselves use or share the customers' proprietary information with
affiliates to market voice, video, or any types of communications-
related services tailored to their needs and preferences without their
express or implied approval? Or would customers prefer and expect to
have their customer PI used or shared with affiliates only after the
customers have affirmatively consented to such use or sharing? Do
customers' expectations depend as much on the type of customer PI that
is being shared as with the purpose of the sharing or the parties with
whom the information is being shared? For example, below, we seek
comment on whether we should require heightened consent obligations for
highly sensitive information, including geo-location information.
106. We are mindful that in adopting a framework for customer
approval for use by and disclosure to affiliates of customer PI, we do
not want to inadvertently encourage corporate restructuring or
gamesmanship driven by an interest in enabling use or sharing of
customer PI subject to less stringent customer approval requirements.
We believe that we can discourage such gamesmanship by treating use by
an affiliate as subject to the same limits as use by a BIAS provider.
We seek comment on this proposal. We also seek comment on what effect
our proposed choice requirements will have on marketing of broadband
and related services, as well as on the digital advertising industry.
What effect will they have on competition between BIAS providers and
over-the-top (OTT) service providers that offer services that may be a
competitive threat or a potential competitor to separate voice, video,
or information services offered by broadband providers, and which are
not subject to our rules?
107. We also observe that in adopting the existing Section 222
rules for the sharing of CPNI with affiliates, the Commission concluded
that because principles of agency law hold carriers responsible for
their agents' improper uses or disclosures of CPNI, carriers have
greater incentives to maintain appropriate control of CPNI disclosed to
agents. The Commission concluded that an opt-out regime for the sharing
of CPNI with affiliates that offer communications-related services for
purposes of marketing such services would adequately protect consumers'
privacy because a carrier's need to maintain a continuing relationship
with its customer, and the risk of being held responsible for the
misuse of customer information by an affiliate, would incentivize the
carrier to prevent privacy harms. We believe such findings to be
relevant in the broadband context as well, and seek comment on whether
such findings are applicable to BIAS. Do consumers have a different
expectation of privacy when it comes to BIAS, as opposed to voice,
affiliates? Does the changing nature of affiliate relationships require
more caution in the BIAS context than the voice context?
108. Alternatively, we seek comment whether we should require BIAS
providers to obtain customer opt-in approval for the use and sharing of
all customer PI, except as described in Part III.C.1.a. Would such an
approach be ``narrowly tailored'' to materially advance the
government's interest under Central Hudson? Conversely, would a
requirement of opt-out approval be more appropriate for all BIAS
provider uses of customer PI and sharing with affiliates? Should we
adopt the FTC's recommendation that affiliates generally be treated as
``third parties . . . unless the affiliate relationship is clear to
consumers''? If so, how would we determine if the relationship is clear
to consumers? Would co-branding suffice? We also seek comment on
whether we should treat all affiliates as third parties, that is,
requiring opt-in consent from customers for any sharing with any
affiliates. Would such a rule be properly tailored to meet the
substantial interest in protecting customer privacy? Would it promote
gamesmanship in the corporate structure of BIAS providers? We also seek
comment on how we should treat third parties acting as contractors and
performing functions for or on behalf of a BIAS provider. Should they
be treated differently than other types of third parties?
c. Customer Approval Required for Use and Disclosure of Customer PI for
All Other Purposes
109. Consistent with the existing voice rules and other privacy
frameworks, we propose to require BIAS providers to seek and receive
opt-in approval from their customers before using or sharing customer
PI for all uses and sharing other than those described above in Parts
III.C.1.a and III.C.1.b. Specifically, we propose to require BIAS
providers to obtain customer opt-in approval before (1) using customer
PI
[[Page 23376]]
for purposes other than marketing communications-related service; (2)
sharing customer PI with affiliates providing communications-related
services for purposes other than marketing those communications-related
services; and (3) sharing customer PI with all other affiliates and
third parties. Consistent with the Commission's existing rules, we
include joint venture partners and independent contractors within the
category of ``third parties'' for purposes of our proposed rules. We
believe that customers desire and expect the opportunity to
affirmatively choose how their information is used for purposes other
than marketing communications-related services by their provider and
its affiliates. We seek comment on this proposal and on potential
alternatives to these requirements.
110. BIAS Providers and Affiliates. We seek comment whether BIAS
providers need or benefit from using customer PI for purposes other
than marketing communications-related services. If so, what are those
uses, and are they consistent with customer expectations? What are the
privacy risks for customers from those additional uses? We observe that
many companies can meet the Act's definition of ``affiliate'' while
bearing little resemblance--in the services offered, or even in their
name--to what customers recognize as their provider. This, combined
with lack of competition between BIAS providers and with high switching
costs, could negatively impact BIAS providers' incentives in protecting
the customer-carrier relationship with respect to use and disclosure of
customer PI to affiliates. Does obtaining opt-in permission for these
uses or disclosures prevent BIAS providers or consumers from making
valuable use of this information? Does our proposed approach align with
customer expectations of how their PI should be treated by their BIAS
provider and the provider's affiliates? Should opt-in consent be
required for disclosure or use of certain customer PI in the mobile
context? Most notably, should we require opt-in consent in the mobile
context for sharing geo-location data with affiliates, regardless of
whether it is required in the fixed context? Does this proposal
accommodate the expanded scope of uses and services now provided by
BIAS affiliates and others, particularly given the above-noted concerns
about the breadth of affiliates in today's BIAS environment?
111. Third Parties. The Commission has a substantial government
interest in protecting the privacy of customer information, and our
proposal is designed to materially advance that interest. Research
demonstrates that customers view the use of their personal information
by their broadband provider differently than disclosure to or use by a
third party for a variety of reasons. More recently, studies from the
Pew Research Center show that the vast majority of adults deem it
important to control who can get information about them. Increasing the
number of entities that have access to customer PI logically increases
the risk of unauthorized disclosure by both insiders and computer
intrusion. Risk of harm to the customer is exacerbated by the fact that
third-party entities receiving customer information have no direct
business relationship with the consumer and, hence, a reduced or absent
incentive to honor the privacy expectations of those customers. As the
Commission has found in the voice context, once confidential customer
information ``enters the stream of commerce, consumers are without
meaningful recourse to limit further access to, or disclosure of, that
personal information.'' We anticipate that this is equally true for
other forms of customer PI.
112. For these reasons, and because the use of customers' personal
information might fall outside the protections of Section 222 once that
information is disclosed to third parties, we believe that the threat
to broadband customers' privacy interest from having their personal
information disclosed to such entities without their affirmative
approval is a substantial one, and there is a greater need to ensure
express consent from an approval mechanism for third party disclosure.
We seek comment on this analysis, and in particular, the threat to
broadband customers' privacy stemming from disclosure of customer
information to third parties.
113. We seek comment on the burdens that the proposed opt-in
framework for disclosure to third parties would impose on broadband
providers. Are such costs outweighed by the providers' duty to protect
their customers' private information and customers' interest in
maintaining control over their private information? We note that our
current voice rules require opt-in approval for disclosure to most
third parties. Further, some state laws also require customer
permission for ISPs to disclose information if the disclosure is not in
the ordinary course of the ISP's business. We also seek comment on the
effect that our proposal will have on small providers.
114. We seek comment on what effect, if any, our proposed opt-in
approval framework will have on marketing in the broadband ecosystem,
over-the-top providers of competing services, the larger Internet
ecosystem, and the digital advertising industry. We recognize that edge
providers, who may have access to some similar customer PI, are not
subject to the same regulatory framework, and that this regulatory
disparity could have competitive ripple effects. However, we believe
this circumstance is mitigated by three important factors. First, the
FTC actively enforces the prohibitions in its organic statute against
unfair and deceptive practices against companies in the broadband
ecosystem that are within its jurisdiction and that are engaged in
practices that violate customers' privacy expectations. We have no
doubt that the FTC will continue its robust privacy enforcement
practice. Second, the industry has developed guidelines recommending
obtaining express consent before sharing some sensitive information,
particularly geo-location information, with third parties, and large
edge providers are increasingly adopting opt-in regimes for sharing of
some types of sensitive information. Third, edge providers only have
direct access to the information that customers choose to share with
them by virtue of engaging their services; in contrast, broadband
providers have direct access to potentially all customer information,
including such information that is not directed at the broadband
provider itself to enable use of the service. We seek comment on these
expectations. Do commenters agree that these factors mitigate any
potential competitive effects that might result from our proposed opt-
in framework for disclosure of customer PI to third parties? What other
factors counsel for or against it?
115. Alternatives. In the alternative, we seek comment whether an
opt-out approval framework would be more appropriate for BIAS
providers' (and their affiliates') use of customer PI for purposes
other than marketing communications-related services, and for
disclosure of customer PI to third parties, or for some subset of such
activities. Are there reasons why such uses and disclosures of customer
PI--or some subset of disclosures--should be subject to a more lenient
standard of consent, such as opt-out approval? Why or why not? Would
opt-out approval be an effective means of protecting customers from the
harms that are attendant upon unknowing and unwanted third party
disclosures, or from unexpected uses of their customer PI by their
broadband providers? If so,
[[Page 23377]]
are there particular types of uses, data, or third parties for which a
heightened standard of approval should be required?
d. Other Choice Frameworks
116. We have sought comment on one framework for approaching the
types of control to give consumers over their customer PI. We also
invite commenters to propose other frameworks for ensuring that
broadband customers are given the ability to control the use and
disclosure of their confidential information.
117. Are there other ways of differentiating between expected and
unexpected uses and contexts for BIAS provider use of customers' PI
that would be more useful? How should different types and contexts of
information and usage be assigned different levels of required
approval? Given the various types of information at issue, is there the
risk that customers could be overwhelmed by choice and allow default
options to stand? Would this militate towards requiring opt-in approval
for more types of information? What approach, if any, best balances
consumer benefits with minimizing regulatory burdens on broadband
providers?
118. In particular, we seek comment whether certain types of
``highly sensitive'' customer information should be used by BIAS
providers, even for the provision of the service, or shared with their
affiliates offering communications-related services, only after
receiving opt-in approval from customers. For example, the FTC has
recognized certain types of information as particularly sensitive,
including Social Security numbers and financial information, geo-
location information, children's information, and health information.
Given the highly sensitive nature of such information, customers may
have an interest in ensuring that such data is not used without their
prior, affirmative authorization. We seek comment on these issues. For
example, location-based information--particularly mobile geo-location
data--that reveals a customer's residence or current location is
particularly sensitive in nature, and consumers may have a keen
interest in safeguarding such data out of concerns for both safety and
basic privacy. In the voice context, Congress recognized that use of
``call location information'' should not be used or disclosed without
the ``express prior authorization of the customer.'' How should we
consider treatment of location information in the broadband context?
Likewise, we seek comment on what steps we could take to ensure knowing
consent regarding the customer PI of children. Are there other types of
information that we should treat as highly-sensitive and subject to
opt-in protection? For example, should practices that involve using or
sharing a customer's race or ethnicity, or other demographic
information about a customer be subject to heightened privacy
protections? Are there any types of information that BIAS providers
should never use for purposes other than providing BIAS services?
119. We also seek comment on how to treat the content of
communication, if we determine that it is covered by Section 222. The
content of communications contain a wide variety of highly personal and
sensitive information. Congress has also recognized that content of
communications should be protected in all but the most exceptional
circumstances. In addition to personal privacy implications, provider
use of communications content raises competitive issues. A broadband
provider may be able to glean competitively sensitive information from
the contents of customers' communications. Would such conduct be
prohibited under the Commission's general conduct rule prohibiting
carriers from unreasonably interfering with or unreasonably
disadvantaging end users' ability to select, access, and use broadband
Internet access service or the lawful Internet content applications,
services, or devices of their choice? We seek comment on whether the
use or sharing, including with affiliates, of the content of customer
communications should be subject to opt-in approval. We also seek
comment on other approaches to the use of the content of customer
communications, including how such approaches interact with our
treatment of other types of information covered by Section 222.
120. Finally, we seek comment whether customers expect their BIAS
providers to treat their PI differently depending on how the provider
acquires it, and whether BIAS providers do and should treat such
information differently. Should a broadband provider obtain some form
of consumer consent before combining data acquired from third-parties
with information it obtained by virtue of providing the broadband
service?
2. Requirements for Soliciting Customer Opt-Out and Opt-In Approval
121. In this section, we seek comment on the appropriate procedures
and practices for BIAS providers to obtain meaningful customer approval
for the use or disclosure of customer PI. To that end, we first propose
to require BIAS providers to solicit customer approval the first time
that a BIAS provider intends to use or disclose the customer's PI in a
manner that requires customer approval under our proposed rules.
Second, we seek comment on the format of BIAS provider solicitations
for customer approval, as well as the methods and formats by which
customers may exercise their privacy choices. Specifically, we propose
that BIAS providers must give customers a convenient and persistent
ability to express their approval or disapproval of the use or
disclosure of their information, at no cost to the customer. Third, we
propose that a customer's choice must persist until it is altered by
the customer, and that it should take effect promptly after the
customer's expression of her choice. Fourth, we seek comment whether to
apply the voice notice requirements specific to one-time usage of CPNI
to BIAS providers' one-time usage of customer PI. We seek comment on
these proposals, and reasonable alternatives thereto.
122. Notice and Solicitation of Customer Approval Required Prior to
Use or Disclosure of Customer PI. To ensure that customers provide
meaningful approval, we propose to require BIAS providers to solicit
customer approval--subsequent to the point-of-sale--when a BIAS
provider first intends to use or disclose the customer's proprietary
information in a manner that requires customer approval. To ensure that
customers' approval is fully informed, we propose to require BIAS
providers to notify customers of the types of customer PI for which the
provider is seeking customer approval to use, disclose or permit access
to; the purposes for which such customer PI will be used; and the
entity or types of entities with which such customer PI will be shared.
We seek comment on this approach. Is there other information that a
provider should be required to share as part of receiving opt-out or
opt-in consent for the use or disclosure of customer information? For
example, should a provider be required to share information about the
arrangements it has made with third parties for the use of customer PI?
If so, what information should they be required to share? We also seek
comment on whether providers should be required to provide a link to
the provider's privacy policy notice or other information when seeking
approval for the use or sharing of customer PI. We are cognizant of the
risk of information-overload if consumers are given more information
than they need to make an informed
[[Page 23378]]
decision. We believe that our proposal, combined with the requirement
to have a persistent and easily available longer privacy policy notice
strikes the right balance, but we invite comment on whether there is
other or different information that BIAS customers will need to make
well informed opt-in and opt-out decisions. Also, while we believe that
notice of a BIAS provider's privacy policies and customers' approval
rights at the time of sale is necessary to help customers make an
informed decision on which broadband service to purchase, such notice
can often be too remote in time from when the information is actually
used to give customers meaningful choice. Therefore, we believe that
customers' informed approval requires notification and solicitation the
first time that a BIAS provider will actually use or disclose a
customer's PI. We seek comment on our proposal.
123. As the FTC has concluded, in order to be most effective,
choice mechanisms that allow consumers control over how their data is
used should be provided ``at a time and in a context that is relevant
to consumers.'' We believe that providing notice and soliciting
customer choice at this time may give customers useful information when
it is most relevant to them, offsetting the risk that customers will be
presented with so much information at the point of sale that they will
not be able to meaningfully read and understand the privacy policies.
Further, providing notice and soliciting choice before a provider
wishes to use or disclose customer PI may also reduce the need for
annual or other periodic notices. We seek comment on our proposal.
Could notices upon use or disclosure contribute to ``notice fatigue''
over time, instead of lessening its impact at point of sale?
124. We also seek comment whether we should require BIAS providers
to notify customers of their privacy choices and solicit customer
approval at other prominent points in time. For example, should
broadband providers be required to solicit customers' ``just-in-time''
approval whenever the relevant customer PI is collected or each time
the broadband provider intends to use or disclose the relevant customer
PI? What are the practical and technical realities of any such
approaches? Are there any mobile-specific considerations that the
Commission should consider in determining when the opportunity to
provide customer approval should be given?
125. Notice and Solicitation Methods. We seek comment on how BIAS
providers should notify customers of upcoming uses and disclosures of
their PI, and solicit customer approval for those uses and disclosures.
Should we permit each BIAS provider to determine the best method for
soliciting customer approval, such as through email or another agreed
upon means of electronic communication; separately by postal mail to
the customer address of record; included on customer bills; or through
some other method? Are there other technological solutions to providing
customers notice that would minimize the burden on providers, and that
would be equally or more efficient than these methods, such as, for
example, a ``notification'' on the customer's device that accesses the
broadband service? Alternatively, should we require BIAS providers to
use a specific method or methods? We seek comment on any particular
requirements that should apply for any of the above methods of
soliciting approval.
126. Customer Approval Methods. We propose to require BIAS
providers to make available to customers a clearly disclosed, easy-to-
use method for the customer to deny or grant approval, such as through
a dashboard or other user interface that is readily apparent and easy
to comprehend, and be made available at no cost to the customer. We
propose that such approval method should be persistently available to
customers, such as via a link on a BIAS provider's homepage and mobile
application, as well as any functional equivalents to them. We believe
that this proposed requirement will directly and materially protect
customer privacy by ensuring that customers have the ample opportunity
to exercise their approval rights. Customers cannot effectively
exercise their approval if the interface for expressing that choice is
difficult to use, or if it is only rarely or sporadically available.
127. We seek comment on our proposal, and on any further
requirements we should impose on the opportunity to grant or deny
approval that may enhance customer comprehension. Should customers be
given the ability to approve or disapprove uses within the text of the
notice or solicitation, in addition to a dashboard or other persistent
mechanism? And, given that some customers are unaccustomed to
interacting with their provider via applications or the provider's
homepage, should we require broadband providers to provide customers
with the ability to provide customer approval via other written,
electronic, or oral means, e.g., through written correspondence, a
toll-free number, or dedicated email address? How would such a
requirement affect provider burdens?
128. We also seek comment on whether there are any mobile-specific
considerations that we should consider in determining how the
opportunity to provide customer approval should be given. For example,
since mobile BIAS may be more accessible to children beyond parental
supervision, are different approval methods necessary regarding consent
of minors on mobile devices? Finally, we seek comment whether any of
our proposed requirements are unnecessary or unlikely to aid customers.
129. Effectiveness of Customer Choice. We propose that approval or
disapproval to use, disclose, or permit access to customer PI obtained
by a broadband provider must remain in effect until the customer
revokes or limits such approval or disapproval, and seek comment on
this proposal. Are there particular considerations (for instance, with
already-collected information) when customers disapprove of uses that
they have previously approved, or vice versa? We also propose that BIAS
providers must act upon customers' privacy choices ``promptly'' after
customers provide or withdraw consent for the use or disclosure of
their information. We seek comment whether it is necessary for the
Commission to establish guidelines for what ``promptly'' means in this
context. Why or why not? If so, we seek comment on what the guidelines
and time frame might be. If a customer later reconsiders and changes
his approval, how long should the provider be given to update this
consent choice? Should the two lengths of time be the same? How does
this proposal affect potential rules limiting data retention and
requiring disposal of customer data? Would a customer's withdrawal of
consent require disposal of her already-collected data immediately,
after a period of time, or not at all?
130. Notice Requirements for One-Time Usage of Customer PI.
Additionally, we seek comment on whether to apply or adapt the current
voice notice requirements specific to one-time usage of CPNI to BIAS
providers' one-time usage of customer PI. The current voice rules allow
a more flexible process for providing notice and accepting consent, so
long as the approval granted is for the limited purposes of the
particular interaction, such as during the duration of a customer
service call or during a real-time chat. Do these or some other
requirements make sense in the broadband context? Do they make sense
[[Page 23379]]
as extended to all customer proprietary information?
3. Documenting Compliance With Proposed Customer Consent Requirements
131. In order to ensure that the requisite approval is clearly
established before the use or disclosure of customer PI, and also that
the approval can be demonstrated after the use or disclosure, we
propose to require BIAS providers to document the status of a
customer's approval for the use and disclosure of customer PI, and we
seek comment on that proposal. We base our proposal on the existing
rules governing safeguards on the use and disclosure of customer PI for
voice telecommunications services. Specifically, we propose requiring
BIAS providers to (1) maintain records on customer PI disclosure to
third parties for at least one year, (2) maintain records of customer
notices and approval for at least one year, (3) adequately train and
supervise their personnel on customer PI access, (4) establish
supervisory review processes, and (5) provide prompt notice to the
Commission of unauthorized uses or disclosures. With these proposed
rules, we seek to promote consumer confidence that BIAS providers are
adequately protecting customers' PI, to provide clear rules of the road
to BIAS providers about their obligations, and to maintain consistency
with existing legal requirements and customer expectations. Are there
any other or different requirements that we should adopt in order to
ensure that providers document their compliance with our customer
consent requirements? Should we require BIAS providers to file an
annual compliance certification with the Commission, as is required
under the current Section 222 rules? Are there alternative approaches
to safeguard customers' proprietary information and boost customer
confidence in the privacy of their customer PI that we should consider?
132. Finally, in addition to the above proposals, we seek comment
on any other mechanisms or alternatives that would help document
compliance with our proposed customer approval framework, boost
customer confidence in BIAS provider safeguards of customer PI, and
harmonize the proposed rules with existing legal requirements and
customer expectations.
4. Small BIAS Providers
133. We seek comment on ways to minimize the burden of our proposed
customer choice framework on small BIAS providers. In particular, we
seek comment on whether there are any small-provider-specific
exemptions that we might build into our proposed approval framework.
For example, should we allow small providers who have already obtained
customer approval to use their customers' proprietary information to
grandfather in those approvals? Should this be allowed for disclosure
to third parties? Should we exempt providers that collect data from
fewer than 5,000 customers a year, provided they do not share customer
data with third parties? Are there other such policies that would
minimize the burden of our proposed rules on small providers? If so,
would the benefits to small providers of any suggested exemptions
outweigh the potential negative impact of such an exemption on the
privacy interests of the customers who contract for the provision of
BIAS with small providers? Further, were we to adopt an exemption, how
would we define what constitutes a ``small provider'' for purposes of
that exemption?
5. Harmonizing Customer Approval Requirements
134. We seek comment on whether we should take steps to harmonize
the existing customer approval requirements for voice services with
those requirements we have proposed for broadband providers to ensure
that the privacy of customers' PI is protected, and that our
regulations are competitively neutral, across all platforms. Are there
aspects of the existing rules that should be more explicitly
incorporated into our proposal, or eliminated to better comport with
our proposal? Are there aspects of the proposed rules that should be
applied in the voice context? Would harmonizing these rules benefit
traditional voice subscribers? Would harmonizing our existing and
proposed rules benefit providers who offer both services by clarifying
and streamlining the customer approval requirements applicable to both
types of services? In harmonizing the existing voice rules with our
proposed rules for BIAS providers, how should we address voice services
provided to large enterprise customers, which are currently not subject
to the voice rules? Are there other changes that can be made to our
rules that govern the marketing of service offerings that might improve
them in the voice context? We also seek comment on how our
reclassification of BIAS as a telecommunications service affects the
obligations of voice carriers under our rules.
135. We also seek comment on whether we should adopt rules
harmonizing the approval requirements we propose for BIAS customers
with the approval requirements for use of subscriber information in
Sections 631 and 338(i). We note that those provisions of the Act
prohibit the use of the cable or satellite system to collect, use, or
share personally identifiable information for purposes other than
provision of the underlying services and other very limited purposes,
absent the express written or electronic consent of the subscriber,
except to provide the underlying service and for certain other very
limited purposes.
D. Use and Disclosure of Aggregate Customer PI
136. Because of the complexity of the issues surrounding
aggregation, de-identification, and re-identification of the data that
BIAS providers collect about their customers, we propose to address
separately the use of, disclosure of, and access to aggregate customer
information. Consistent with reasonable consumer expectations, existing
best practices guidance from the FTC and NIST, and Section 222(c)(3)'s
treatment of aggregate CPNI, we propose to allow BIAS providers to use,
disclose, and permit access to aggregate customer PI if the provider
(1) determines that the aggregated customer PI is not reasonably
linkable to a specific individual or device; (2) publicly commits to
maintain and use the aggregate data in a non-individually identifiable
fashion and to not attempt to re-identify the data; (3) contractually
prohibits any entity to which it discloses or permits access to the
aggregate data from attempting to re-identify the data; and (4)
exercises reasonable monitoring to ensure that those contracts are not
violated. We also propose that the burden of proving that individual
customer identities and characteristics have been removed from
aggregate customer PI rests with the BIAS provider.
137. Recognizing that aggregate, non-identifiable customer
information can be useful to BIAS providers and the companies they do
business with, and not pose a risk to the privacy of consumers, Section
222(c)(3) permits telecommunications carriers to use, disclose, or
permit access to aggregate customer information--collective data that
relates to a group or category of services or customers, from which
individual customer identities and characteristics have been removed--
without seeking customer approval. Our proposed rule expands this
concept to include all customer PI, and imposes safeguards to ensure
that such information is in fact aggregated and non-identifiable, and
that safeguards
[[Page 23380]]
have been put in place to prevent re-identification of this
information.
138. We believe our multi-pronged proposal, grounded in FTC
guidance, will give providers enough flexibility to ensure that as
technology changes, customer information is protected, while at the
same time minimizing burdens and maintaining the utility of aggregate
customer information. Below we discuss and seek comment on each of the
prongs of our proposed rule regarding the use and disclosure of
aggregate customer PI. We also seek comment on whether we should extend
our proposed rule to providers of voice telecommunications services. To
the greatest extent possible, we ask that commenters ground their
comments in practical examples: What kinds of aggregate, non-
identifiable information do or can BIAS providers use and share?
139. Not Reasonably Linkable. In order to protect the
confidentiality of individual customers' proprietary information, the
first prong of our approach would require providers to ensure the
aggregated customer PI is not reasonably linkable to a specific
individual or device. Our proposal recognizes that techniques that once
appeared to prevent re-identification of aggregate information have
increasingly become less effective. It is also consistent with FTC
guidance which recommends that companies take reasonable measures to
ensure that the data is de-identified, and recommends that this
determination should be based on the particular circumstances,
including the available methods and technologies, the nature of the
data at issue, and the purposes for which it will be used.
140. We seek comment on this proposal. Are the factors identified
by the FTC well-suited to determining whether a BIAS provider has taken
reasonable measures to de-identify data? Are there other factors that
we should expect providers to take into account? Should we provide
guidance on what we mean by linked and linkable information? NIST
defines linked information as ``information about or related to an
individual that is logically associated with other information about
the individual,'' and linkable information as ``information about or
related to an individual for which there is a possibility of logical
association with other information about the individual.'' Should we
adopt either or both of these standards? Are there other approaches we
should use to decide whether information is reasonably linkable? For
example, HIPAA permits covered entities to de-identify data through
statistical de-identification, whereby a properly qualified
statistician, using accepted analytic techniques, concludes that the
risk is substantially limited that the information might be used, alone
or in combination with other reasonably available information, to
identify the subject of the information.
141. We seek comment on alternative approaches to this prong and
the comparative merits of each possible approach. We also seek comment
whether we should require BIAS providers to retain documentation that
outlines the methods and results of the analysis showing that
information that it has treated as aggregate information has been
rendered not reasonably linkable.
142. Public Commitments. Prong two of our proposal would require
BIAS providers to publicly commit to maintain and use aggregate
customer PI in a non-individually identifiable fashion and to not
attempt to re-identify the data. Such public commitments would help
ensure transparency and accountability, and accommodate new
developments in the rapidly evolving field of privacy science. This
prong and the next are consistent with FTC guidance and the
Administration's draft privacy bill recommending that companies
publicly commit not to re-identify data and contractually prohibit any
entity with which a company shares customer data from attempting to re-
identify it. We seek comment on this proposal. Would this requirement
help ensure that providers are protecting the confidentiality of
customer PI? How could or should a BIAS provider satisfy the
requirement to make a public commitment not to re-identify aggregate
customer PI? For example, would a statement in a BIAS provider's
privacy policy be sufficient?
143. Limits on Other Entities. The third prong of our proposal
would require providers to contractually prohibit any entity to which
the BIAS provider discloses or permits access to the aggregate customer
data from attempting to re-identify the data. This proposal presents a
modern approach to the difficulties of ensuring the privacy of
aggregate information, recognizing that businesses are often in the
best position to control each other's practices. Researchers have
argued that such contractual prohibitions are an important part of
protecting consumers' privacy, because making data completely non-
individually identifiable may not be possible or even desirable. We
recognize that the categories of what can potentially be reasonably
linkable information will continue to evolve, and we believe these
contractual provisions provide a critical layer of privacy protection
that remains constant regardless of changes in the technology.
144. Reasonable Monitoring. Related to the requirements for prong
three, the fourth prong of our approach requires BIAS providers to
exercise reasonable monitoring of the contractual obligations relating
to aggregate information and to take reasonable steps to ensure that if
compliance problems arise they are immediately resolved. This prong is
a logical outgrowth of the previous prongs, and it is consistent with
the 2012 FTC Privacy Report. We seek comment regarding the types of
monitoring and remediation steps BIAS providers should be required to
take to ensure that entities with which they have shared aggregate
customer PI are not attempting to re-identify the data. What potential
burdens and benefits would arise from this proposal?
145. Alternatives. Alternatively, we seek comment whether we should
develop a list of identifiers that must be removed from data in order
to determine that ``individual customer identities and characteristics
have been removed.'' If we take such an approach, should it replace
all, a portion of, or be in addition to our current proposal? HIPAA
incorporates such a standard, and under this approach, a covered entity
or its business associate may de-identify information by removing 18
specific identifiers. Under HIPAA, the covered entity must also lack
actual knowledge that the information could be used alone or in
combination with other information to identify an individual who is a
subject of the information. We are aware of criticisms that the
approach taken by HIPAA no longer provides the levels of protection
previously assumed. One legal scholar, for example, argues that ``[t]he
idea that we can single out fields of information that are more
linkable to identity than others has lost its scientific basis and must
be abandoned.'' Are such concerns valid? Were we to adopt a similar
standard to that in HIPAA, what categories of identifiers would be
relevant in the broadband context? And, given the wide variety of
customer data to which BIAS providers have access by virtue of their
provision of BIAS, is such a list even feasible? Is it likely that any
list developed would be rendered obsolete by technological developments
in the data re-identification field? How could we best ensure that the
categories we identify remain adequate to prevent aggregate customer PI
from being re-identified? Should we adopt a catch-all to address
evolving methods of de-identification and re-identification of
aggregate customer PI, and if so, how
[[Page 23381]]
would such a process work? We also seek comment whether, if we were to
pursue such an approach, we should also adopt an ``actual knowledge''
standard, as HIPAA includes. How would the Commission enforce such a
standard, and would it encourage willful ignorance on the part of
broadband providers?
146. Are there any additional or alternative requirements we should
adopt that might make aggregate customer information less susceptible
to re-identification? If so, what are they, and why would they be
preferable to the procedures we have proposed above? As commenters
consider whether we should adopt each of the prongs of our proposed
rule, and any proposed alternatives, we welcome comment on how
providers would demonstrate compliance with each prong of the proposal,
and of any alternative proposals. Are there specific record keeping
requirements we should impose on providers to demonstrate compliance?
We also seek comment on the costs and benefits of each prong and of all
of them collectively. We invite proposals on how we could limit any
burdens associated with compliance, particularly for smaller providers.
147. We also seek comment on how de-identified, but non-collective
data should be treated under Section 222 and our rules. We note that
there is an existing petition before the Commission that may address
some of these issues. See Petition of Public Knowledge et al. for
Declaratory Ruling Stating that the Sale of Non-Aggregate Call Records
by Telecommunications Providers without Customers' Consent Violates
Section 222 of the Communications Act, WC Docket No. 13-306 (filed Dec.
11, 2013). We do not believe that the use and disclosure of such
information would fall under the exception for use and disclosure of
aggregate customer data enumerated in Section 222(c)(3), because by
definition aggregate data must be collective data. Do commenters agree?
Does Section 222 require us to conclude that all CPNI should be
considered individually identifiable unless it meets the definition of
aggregate, i.e., is both de-identified and collective? Does the use and
disclosure of such information then fall under the general use and
disclosure prohibitions of Section 222(c)(1)? Does Section 222(a)
provide the Commission authority to adopt privacy protections regarding
all such data that is customer PI? We seek comment whether de-
identified but non-collective data should be subject to the proposed
opt-out and opt-in customer consent requirements described above.
148. We seek comment on whether we should, for the sake of
harmonization, apply our proposed rules for BIAS providers' use and
disclosure of, and access to, aggregate customer proprietary
information to all other telecommunications carriers. Likewise, should
we adopt rules harmonizing the treatment of aggregate information by
cable and satellite providers with the treatment of aggregate
information by telecommunications carriers? We note that neither
Section 222 nor the Commission's currently existing implementing rules
explicitly restrict carriers' use of aggregate customer PI. However, as
noted above, as technology has evolved, information that previously
appeared to be aggregate may no longer be. We think this is true
whether a company offers voice telephony or BIAS. Providers,
researchers, and others make valuable use of aggregate customer
information, but this use must comport with contemporary understandings
of how to ensure the information is aggregate information and not re-
identifiable. Accordingly, we ask commenters to explain whether our
proposed rules should apply to all providers regardless of the
technology used to provide service.
E. Securing Customer Proprietary Information
149. Strong data security protections are crucial to protecting the
confidentiality of customer PI. As the FTC has observed, there is
``widespread evidence of data breaches and vulnerabilities related to
consumer information,'' and such incidents ``undermine consumer trust,
which is essential for business growth and innovation.'' Therefore, to
protect confidential customer information from misappropriation,
breach, and unlawful disclosure, we propose robust and flexible data
security requirements for BIAS providers. We propose both a general
data security requirement for BIAS providers and specific types of
practices they must engage in to comply with the overarching
requirement.
150. Our proposal to adopt a general standard and identify specific
activities the provider must engage in to comply with that standard is
informed by existing federal data security laws and regulations and
proposed best practices that recognize that privacy and security are
inextricably linked and require affirmative safeguards to protect
against unauthorized access of consumer data. In proposing this two-
step approach to data security we look to HIPAA and its implementing
regulations, GLBA and its implementing regulations, the FTC's best
practices guidance, FTC and FCC settlements of specific data security
investigations, and state laws.
151. Specifically, we propose to require BIAS providers to protect
the security and confidentiality of all customer proprietary
information from unauthorized uses or disclosures by adopting security
practices calibrated to the nature and scope of the BIAS provider's
activities, the sensitivity of the underlying data, and technical
feasibility. To ensure compliance with this obligation, we propose to
require BIAS providers to, at a minimum, adopt risk management
practices, institute personnel training practices, adopt customer
authentication requirements, identify a senior manager responsible for
data security, and assume accountability for the use and protection of
customer PI when shared with third parties. In addition, we seek
comment on whether we should also include data minimization, retention,
and destruction standards in any data security regime we adopt.
Finally, we seek comment on harmonizing the data security requirements
for BIAS providers and those for voice providers, and on adopting
harmonized data security requirements for cable and satellite
providers.
1. General Standard
152. We believe that Section 222(a) requires BIAS providers to
protect the security, confidentiality, and integrity of customer PI
that such BIAS provider receives, maintains, uses, discloses, or
permits access to from any unauthorized uses or disclosures, by
adopting security practices appropriately calibrated to the nature and
scope of the BIAS provider's activities, the sensitivity of the
underlying data, and technical feasibility. We propose to adopt a rule
codifying this obligation. We seek comment on this proposal.
153. Data security is one of the core principles of the FIPPs. The
FIPPs call for organizations to protect personal information ``through
appropriate security safeguards against risks such as loss,
unauthorized access or use, destruction, modification, or unintended or
inappropriate disclosure.'' As a result, numerous federal and state
laws have adopted general data security requirements for the entities
they cover. The Satellite and Cable Privacy Acts, for example, require
cable and satellite operators to ``take such actions as are necessary
to prevent unauthorized access to [personally identifiable] information
by a person other than the subscriber or cable operator [or satellite
carrier].'' HIPAA requires the adoption of security regulations to
protect the integrity,
[[Page 23382]]
confidentiality, and availability of electronic health records that are
held or transmitted by covered entities. Similarly, the Safeguards
Rule, adopted by the FTC to implement GLBA, requires financial
institutions under the FTC's jurisdiction to ``[i]nsure the security
and confidentiality of customer information''; ``[p]rotect against any
anticipated threats or hazards to the security or integrity of such
information''; and ``[p]rotect against unauthorized access to or use of
such information that could result in substantial harm or inconvenience
to any customer.''
154. Our proposal is also consistent with the approach that the FTC
has taken in providing guidance on best practices for all companies
under its jurisdiction, and in using the ``unfairness'' prong of
Section 5 of the FTC Act in its enforcement work. The FTC has taken
enforcement action in cases where companies have failed to take
``reasonable and appropriate'' steps to protect consumer data,
including several dozen cases against businesses that failed to protect
consumers' personal information. It is also worth noting that a number
of states have enacted legislation requiring regulated entities to take
reasonable measures to protect and secure personal data from
unauthorized use or disclosure.
155. We seek comment on how we should interpret the terms
``security, confidentiality, and integrity'' in our proposed
overarching data security requirement. For example, the HIPAA
implementing rules define confidentiality as ``the property that data
or information is not made available or disclosed to unauthorized
persons or processes'' and integrity as ``the property that data or
information have not been altered or destroyed in an unauthorized
manner.'' Conversely, while the GLBA requires organizations to ``insure
the security and confidentiality of customer records and information,''
it does not separately define the terms ``security'' and
``confidentiality.'' We seek comment whether we should define these
terms and, if so, how we should define them. Are these terms already
firmly established in the data security context and in other laws or
should we rely on some other definition? Do these terms indicate three
separate duties under Section 222, or are they all elements of the
single, overarching duty under our proposed data security requirements?
Further, to the extent that we determine that contents of customer
communications may be considered CPNI, PII, or neither, how can we
ensure that broadband providers appropriately protect such information?
2. Protecting Against Unauthorized Use or Disclosure of Customer PI
156. To ensure BIAS providers comply with our proposed overarching
requirement to protect the security, confidentiality, and integrity of
customer PI, we propose in this section to require every BIAS provider
to:
Establish and perform regular risk management assessments
and promptly address any weaknesses in the provider's data security
system identified by such assessments;
Train employees, contractors, and affiliates that handle
customer PI about the BIAS provider's data security procedures;
Ensure due diligence and oversight of these security
requirements by designating a senior management official with
responsibility for implementing and maintaining the BIAS provider's
data security procedures;
Establish and use robust customer authentication
procedures to grant customers or their designees' access to customer
PI; and
Take responsibility for the use of customer PI by third
parties with whom they share such information.
157. This proposed data security framework is intended to be robust
and flexible and to help ensure that BIAS providers protect the
confidentiality of their customers' information, and enhance their
customers' ability to effectively decide under what circumstances the
BIAS provider should use and share customer confidential information.
As discussed in more detail below, it is also consistent with a variety
of federal laws and regulations, and best practices. We seek comment on
this proposed framework.
158. In order to allow flexibility for practices to evolve as
technology advances, while requiring the regulated entities to install
protocols and safeguards that are available and economically justified,
we propose not to specify technical measures for implementing the data
security requirements outlined below. This follows the regulatory
approaches taken at other federal agencies. We believe this approach
will encourage BIAS providers to design security measures that can
easily adapt to new and different technologies. We seek comment on this
approach.
159. Are there additional data security obligations that would help
to ensure the security, confidentiality, and integrity of customer PI?
Are any of our proposed requirements not needed? We recognize that most
BIAS providers already have robust data security measures in place. To
what extent are some or all BIAS providers already engaged in these or
other data security measures? What are the costs involved with each
element of our proposal, and of any other proposed elements? Are there
any costs or burdens unique to small entities? How would the security
measures contemplated under our proposed rules impact small businesses?
We also seek comment on whether there are alternative actions that BIAS
providers could employ to meet the same goals.
160. We also seek comment whether we should establish safe harbors
or convene stakeholders to establish best practices similar to NTIA's
privacy multi-stakeholder processes. If we were to undertake a similar
multi-stakeholder process, how could we facilitate the success of such
a process? How could we ensure that any developed best-practices
evolved over time?
161. Alternatively, we seek comment on whether we should prescribe
specific administrative, technical, and physical conditions that must
be included as part of a BIAS provider's plan to secure customer
proprietary information. Would prescribing specific, technologically-
motivated security measures unnecessarily limit additional protective
measures that a BIAS provider would otherwise implement instead of, or
in addition to, the prescribed measures? Would specific data security
measures reduce BIAS providers' incentives to be more innovative with
security or have an impact on competition, assuming BIAS providers
compete on the level of security employed? How would having specific
security measures help or hamper enforcement efforts? Below we invite
comment on each of the areas that we propose to require BIAS providers
to incorporate into their data security practices.
a. Risk Management Assessments
162. To help identify and protect against risks to the security,
confidentiality, and integrity of customer PI, we propose requiring
BIAS providers to establish and perform regular risk management
assessments and promptly remedy any security vulnerabilities identified
by such assessments. In combination with the other safeguards we
propose today, we believe that regular risk management assessments will
help enable BIAS providers to adequately protect customer PI from
reasonably foreseeable risks to the data's security, confidentiality,
and integrity. We propose to allow each BIAS provider to
[[Page 23383]]
determine the particulars of and design its own risk management
program, taking into account the probability and criticality of threats
and vulnerabilities that may impact the confidentiality of customer PI
used, disclosed, or maintained by the BIAS provider. We seek comment on
our proposal and rationale.
163. Our proposal aligns with the data security process established
under GLBA, which requires financial institutions to perform risk
assessments to ``[i]dentify reasonably foreseeable internal and
external risks to the security, confidentiality, and integrity of
customer information'' in their possession. Similarly, under the
Security Rule, implementing HIPAA, organizations must ``[i]mplement
policies and procedures to prevent, detect, contain, and correct
security violations,'' which includes a requirement for risk analysis.
The HIPAA Security Rule also requires that, as part of the risk
analysis, covered organizations ``conduct an accurate and thorough
assessment of the potential risks and vulnerabilities to the
confidentiality, integrity, and availability of electronic protected
health information held by the [organization].'' We base our proposal
on these well-established frameworks and seek comment on whether there
are additional models or frameworks we should consider. Should we
require technical audits such as penetration tests, given concerns
about the adequacy of survey-based risk assessments? Are there any
elements that would be inapplicable in the broadband context?
164. Alternatively, we seek comment whether we should specify the
manner in which the risk management assessments should be designed and
conducted instead of allowing the BIAS provider to determine the
specifics. HIPAA risk analyses under the Security Rule must include:
The scope of the analysis, data collection, identification and
documentation of potential threats and vulnerabilities, assessment of
current security measures, determination of the likelihood and
potential impact of the threat occurrence, determination of the level
of risk, and documentation of these efforts. We seek comment on whether
we should follow a similar approach and impose specific risk management
requirements on BIAS providers. Or, should we instead establish a safe
harbor with specific criteria to be included in a risk management
assessment in order to qualify for the safe harbor? Under either
circumstance, what should the specific requirements be?
165. We also seek comment on whether we should define ``regular''
as part of the ``regular risk assessment'' requirement. If so, how
often should we require BIAS providers to conduct risk assessments?
Should the required frequency of risk assessment differ based on the
sensitivity of the underlying information?
166. Finally, to ensure the effectiveness of the risk management
assessments, we propose that a BIAS provider should be required to
promptly remedy any data security vulnerabilities it identifies through
such assessments. We seek comment on this proposal. Should we define
``promptly'' as part of the requirement to ``promptly address'' any
weaknesses identified? If so, what would be a reasonable amount of time
to qualify as ``promptly'' to adequately protect customers while
allowing the BIAS provider an opportunity to react appropriately to the
security risk at hand?
b. Employee Training To Protect Against Unauthorized Use or Disclosure
of Customer PI
167. We also propose to require BIAS providers to protect against
unauthorized uses or disclosures of customer PI by training their
employees, agents, and contractors that handle customer PI on the data
security measures employed by the BIAS provider and by sanctioning any
such employees, agents, or contractors for violations of those security
measures. Data security training is well recognized as a key component
of strong data security practices. A training requirement is a well-
established part of the Commission's treatment of CPNI for voice
providers. The Commission adopted a personnel training safeguard as
part of its original 1998 CPNI rules, requiring that carriers train all
employees with access to customer records as to when they can and
cannot access CPNI and that they maintain internal procedures for
managing employees that misuse CPNI. In its data security consent
orders, the Enforcement Bureau has also adopted training requirements
to help ``ensure that consumers can trust that carriers have taken
appropriate steps to ensure that unauthorized persons are not
accessing, viewing or misusing their personal information.'' We seek
comment on our proposal and our rationale.
168. Our proposal also aligns with the FTC's rules implementing
GLBA, which requires staff training as part of a covered entity's
security program as well as taking steps to ensure that their
affiliates and service providers safeguard customer information in
their care. The rules implementing HIPAA also require data security
training, although those rules are focused on the employees of a
covered entity and not its agents or contractors.
169. The existing training programs required by the HIPAA and GLBA
rules do not specify all the topics that must be included under the
training program, nor do they mandate the frequency or length of
training. We seek comment whether we should follow this approach or
provide further clarifications on the training process. We also seek
comment whether we should require training be done on an annual basis
or with some other specified frequency, or establish a minimum
frequency. Are there additional entities to which these training
requirements should apply?
c. Ensuring Reasonable Due Diligence and Corporate Accountability
170. To ensure that BIAS providers have a robust data security
program that includes any requirements that we ultimately adopt, we
propose requiring BIAS providers to designate a senior management
official with responsibility for implementing and maintaining the BIAS
provider's information security program to ensure that someone with
authority in the company has personal knowledge of and responsibility
for the BIAS provider's data security practices. As with the other data
security requirements we propose, this proposal is firmly rooted in
existing privacy regimes. For example, the HIPAA rules require each
covered entity to designate a privacy official.
171. In fact, since the Commission first promulgated its CPNI
rules, corporate oversight has been included as part of the data
security requirements. As the Commission explained, having a corporate
officer attest to having personal knowledge of the carrier's data
security compliance is ``an appropriate and effective additional
safeguard.'' We seek comment on our proposal to require BIAS providers
to designate a senior management official to implement and maintain the
provisions of the BIAS providers' data security procedures. We
recognize that many BIAS providers currently have senior officials
responsible for privacy and data security and seek comment on the
burden of this requirement, in light of BIAS providers' existing
management and compliance structures.
172. We also seek comment whether we should require additional
information or verification measures as part of this requirement for
oversight. For example, should we specify qualifications that a senior
management
[[Page 23384]]
official should or must have to serve in this capacity? Are there any
other specifications that we should or should not include as part of
this requirement?
d. Customer Authentication Requirements for Access to Customer
Proprietary Information
173. To honor customers' rights to access their personal
information while ensuring that BIAS providers comply with their duty
to safeguard confidential customer data, we propose to require BIAS
providers to adopt robust customer authentication requirements. We seek
comment on whether we should require providers to use, at a minimum, a
multi-factor authentication before granting a customer access to the
customer's PI or before accepting another person as that customer's
designee with a right to access a customer's PI. We also propose to
require BIAS providers to notify customers of account changes to
protect against fraudulent authentication attempts. Relatedly, we also
seek comment on the methods by which consumers should be allowed to
access their customer PI and whether we should adopt rules requiring
BIAS providers to correct inaccurate customer PI.
(i) Robust Authentication Requirements
174. In order to protect against unauthorized access to customer
PI, we propose to require BIAS providers to adopt robust customer
authentication and we seek comment on requiring the use of multi-factor
authentication. We believe that customer authentication is a critical
element in ensuring that the confidentiality of customers' PI is
protected. We seek comment on our proposals.
175. We do not currently propose to require BIAS providers to adopt
multi-factor authentication or, more granularly, specific types of
multi-factor authentication methods, because we recognize that there is
no perfect and permanent approach to customer authentication.
Technology develops over time. Multi-factor authentication requires
users to authenticate through multiple elements in order to prove one's
identity, under the assumption that it is unlikely that an unauthorized
actor will be able to succeed at more than one form of authentication.
We understand that currently used authentication mechanisms vary by
company, by industry, and often by the sensitivity of the underlying
data. Types of authentication credentials currently fall into one of
three categories: (i) Something people know, such as a password or a
personal identification number (PIN); (ii) something people possess,
such as a token or access key; and (iii) something people are, such as
biometric information based on typing patterns or fingerprints. Multi-
factor authentication typically combines at least two of these
categories, requiring, for example, that users provide a password in
addition to an access key code that is maintained on a separate device.
As a result, multi-factor authentication is widely considered to be one
of the most secure authentication methods currently available.
176. We seek comment on the advantages and disadvantages of
requiring multi-factor authentication. Are there security risks
associated with multi-factor authentication that we should take into
account? How would consumers be affected by a multi-factor
authentication requirement? What would be the additional costs imposed
on BIAS providers and/or consumers? If a cell phone number or email
address is used to provide new information after authentication, how
can the provider be certain that neither has been compromised? Are
there customers that would not be able to take advantage of a multi-
factor authentication process based on lack of access to specific types
of technology? If so, what alternatives should be available, and should
we require providers to make these alternatives available? Would a
multi-factor authentication requirement unduly burden small providers?
How would a multi-factor authentication regime work for interactions
that are off-line, i.e., in-person access to customer PI via a face-to-
face interaction at the BIAS provider's regional offices or via a
telephone call? Are there specific issues with respect to multi-factor
authentication and customers with disabilities that we should take into
account?
177. We seek comment on other robust methods of customer
authentication. FTC guidance encourages ``[c]ompanies engaged in
providing data for making eligibility determinations [to] develop best
practices for authenticating consumers for access purposes,'' and
highlights the security work of the private sector such as Payment Card
Institute Data Security Standards for payment card data, the Better
Business Bureau, and the Direct Marketing Association that developed
and implemented best practices for authenticating consumer accounts.
Further, NIST's cybersecurity standards recommend authentication
standards based on risk models, noting that ``the level of
authentication required for online banking is likely to differ from
that required to access an online magazine subscription.'' We seek
comment on application of these authentication practices and standards
to the relationship between BIAS providers and their customers, as well
as the benefits and drawbacks of adopting any of these methods as
requirements in the broadband context. Are there any authentication
methods being used that we should discourage or even prohibit because
they are outdated, present their own privacy or data security risks,
are unworkable for people with certain types of disabilities, or for
other reasons? For example, do authentication methods that rely on
additional, less mutable, personal information, such as fingerprints or
other biometric information, raise particular concerns in the case of a
breach of that personal information or other scenarios? Would BIAS
providers need to employ additional safeguards to secure this
authentication-specific information? Should our rules prohibit BIAS
providers from requiring their customers to provide biometric
information as part of any authentication scheme?
178. We also seek comment on whether we should require password
protection. Our existing voice rules rely on authenticating customers
based on a password the customer must establish before seeking to
obtain call-detail information over the telephone or via online access.
These measures were implemented to address the problem of pretexting,
where parties pretend to be a particular customer or other authorized
person in order to obtain access to that customer's call detail or
other private communications records.
179. However, given the frequency with which passwords are
compromised due to phishing attacks, password database leaks, and reuse
of passwords across multiple Web sites and service offerings, we have
concerns whether a password is a sufficient safeguard when a customer
requests access to customer PI over a customer-initiated phone call or
via online access in the broadband context. We seek comment generally
on the efficacy of password authentication in this context. If
commenters agree that password protection should be part of a robust
customer authentication mechanism, should we prescribe additional
requirements, such as mandating the use of secret questions or
character limitations on passwords? Or should we establish a particular
standard with respect to password protection and leave it up to the
provider to determine the best way to meet that standard?
180. We also seek comment whether we should adopt specific
authentication
[[Page 23385]]
procedures for particular scenarios, as our existing Section 222 rules
do with respect to customer authentication over a telephone call, or
should instead adopt a flexible system like that which we propose for
data security measures. If the former, what should such authentication
procedures be, and under what scenarios should they be required? What
are the advantages and disadvantages of each regime? What are the
implications for BIAS providers of requiring a particular type of
authentication measure? Would adopting a particular authentication
model or practice stifle development of new technologies that may
provide improved security, or possibly provide a specific target for
bad actors to work around, in effect making the practice less effective
as a security precaution? We also seek comment on how to ensure that
any ultimate authentication requirement we adopt is flexible enough to
incorporate and encourage the latest technological advances.
181. We also seek comment on whether there are other authentication
methods that BIAS providers can employ to make the authentication
process less cumbersome for consumers. For example, are there ways for
BIAS providers to work with existing edge providers that already
authenticate their users to simplify customer authentication? Allowing
third-party credentials can save time and resources in managing
identities for both customers and businesses. The benefits to
organizations and individuals can be significant, but there is also a
concern that these connections meant to improve security can create
opportunities for increased tracking of users. We seek comment whether
and how the proposed rules should and can accommodate such innovations.
182. Finally, we seek comment on whether we should harmonize the
existing authentication requirements for voice providers with the
authentication method we ultimately adopt for BIAS providers. Do the
existing voice authentication rules, with their emphasis on passwords
following a customer-initiated request, continue to be both relevant
and effective? Should we update these rules to require robust customer
authentication similar to what we propose for BIAS? Why or why not? Are
there other steps we should take to harmonize the authentication
requirements for voice and BIAS providers? Are there specific customer
authentication rules we should adopt for cable and satellite providers
in light of their obligation to prevent unauthorized access to a
subscriber's personally identifiable information? In addition, we seek
comment on whether we should adopt employee and contractor
authentication requirements to permit access to customer PI. If so,
what standards should we adopt?
(ii) Notification of Account Changes
183. We also propose requiring BIAS providers to notify customers
of account changes, and attempted account changes, as an additional
check against fraudulent account access. The change notification
requirement we propose today is similar to the requirement under our
existing Section 222 rules, which requires carriers to ``notify
customers immediately whenever a password, customer response to a back-
up means of authentication for lost or forgotten passwords, online
account, or address of record is created or changed.'' As the
Commission explained in 2007, account change notification is an
important tool that allows customers to monitor their accounts'
security and protects customers from data thieves that might otherwise
manage to circumvent a provider's authentication protections.
184. We recognize that notifying customers of account changes is a
best practice already followed by many BIAS providers, as well as other
companies operating in the broadband ecosystem. We seek comment,
particularly those which are grounded on practical experience, on how
our proposal for notification of account changes can be implemented
with minimal burdens to customers and BIAS providers. How can we ensure
that our proposal does not result in customer ``notice fatigue,''
lessening the usefulness of notices? Similarly, how can we ensure that
notice requirement does not impose an undue burden on BIAS providers,
particularly smaller providers? When sending an authentication notice,
should BIAS providers be required to send the notification to another
form of customer contact information than what is listed as the point
of contact for any multi-factor authentication mechanism? What if a
customer has only one means of being immediately notified (i.e., a
phone number but no email address)? How can BIAS providers be sure that
they are sending the authentication notification to the correct
customer and not the bad actor attempting to fraudulently authenticate
the customer account? Are there other potential risks and benefits from
this proposal we should consider?
185. We also propose to require BIAS providers to notify customers
when someone has unsuccessfully attempted to access the customer's
account or change account information. Providing such notice will alert
the customer of possible data breach attempts. We seek comment on this
proposal. Might it risk additional customer notice fatigue? Do the
benefits outweigh the burdens?
186. We also seek comment on whether we should harmonize our
account change notification requirements for voice and BIAS providers.
Are there reasons that customer change notification regimes should be
different for voice and BIAS providers? Should we have harmonized
account change notification requirements for cable and satellite
providers?
(iii) Right To Access and Correct Customer Data
187. We also seek comment on whether to adopt rules requiring BIAS
providers to provide their customers with access to all customer PI in
their possession, including all CPNI, and a right to correct that data.
Access and correction rights are one of the FIPPs. We ask commenters to
address how we can best balance the benefits of providing customers
with access and the right to correct their personal information without
imposing undue burdens on BIAS providers that collect such data.
188. As we consider these questions, we seek comment on the
different forms that customer PI could take when collected and retained
by broadband providers, and whether these different types of
information may require different customer access regimes. For example,
if BIAS providers possess customer PI in a machine-readable format,
should they be required to provide customers with access to such data
in a different form? What are the burdens likely to be associated with
such a requirement? Are there certain sensitive classes of customer PI,
such as search and browsing history or location data, that a BIAS
customer should always have the ability to access? Alternatively, are
there certain classes of customer PI that are inherently not sensitive,
or fundamentally technical, thereby decreasing consumers' interest in
obtaining disclosure of such data? Recognizing that there are economic
costs associated with any disclosure regime, how should we take into
account any competitive effects that may flow from the development of
customer access rules applicable to broadband providers? We note that
edge providers, data brokers, and other entities in the Internet
ecosystem also collect, process, retain, and distribute large
quantities of sensitive consumer data. Should we consider the
restrictions, or lack thereof, that are
[[Page 23386]]
currently placed on edge providers or other entities in crafting rules
for broadband providers?
189. We observe that, while the Cable and Satellite Privacy Acts
explicitly provide a mechanism for subscribers to correct their
personal information, Section 222 does not, and our current CPNI rules
contain no such provision. How should this impact our assessment of
whether to incorporate a right to correct customer PI into our
broadband rules? What economic burdens or other risks would accompany
application of this right to the information collected by broadband
service providers? What are the data security risks that would attend
customer access rights? On the other hand, what consumer protection
benefits are likely to result from codifying a right to correct
customer PI?
190. Relatedly, we recognize that Section 222(c)(2) grants the
right of access to CPNI to ``any person designated by the customer.''
However, our existing CPNI rules do not currently contain any special
provisions for voice customers to authorize third party access to their
CPNI. Are such regulations necessary in the broadband context? If so,
are they also necessary in the voice context? Should we harmonize our
BIAS and voice services rules with respect to rights of access to
customer PI?
191. If we do adopt rules requiring providers to make customer PI
accessible to customers, should we also adopt rules requiring BIAS
providers to give their customers clear and conspicuous notice of their
right of access, along with a simple, easily accessible method of
requesting their customer PI? How should such notice and access be
structured? If we do adopt right of access rules, how should we ensure
that customers with disabilities achieve the same level of access? If
we do adopt such rules for BIAS providers, should we adopt rules
harmonizing cable and satellite rights of access obligations under
Sections 631 and 338(i)?
e. Accountability for Third Party Misuse of Customer PI
192. We seek comment on how best to ensure that the security,
confidentiality, and integrity of customer PI is protected once a BIAS
provider shares it with a third party and it is out of the BIAS
provider's immediate control. Our goal is to promote customers'
confidence that their information is secure not only with their BIAS
provider, but also with anyone with whom the customer has provided
approval for the BIAS provider to share his or her data. Consumers may
be apprehensive about disclosing their personal information to BIAS
providers if they cannot trust that their data will not be misused
downstream. They may also be less likely to provide consent via an opt-
out or opt-in mechanism if that information will no longer be protected
in the recipients' hands. As the Commission has previously found,
``[i]n the absence of'' downstream safeguards, ``the important consumer
protections enacted by Congress in Section 222 may be vitiated by the
actions of agents.'' We believe that these risks are even greater in
the broadband context than the voice telephony context because of the
vast wealth of sensitive personal information handled by BIAS providers
and exchanged through broadband Internet access services.
193. We believe that Section 222(a) requires BIAS providers to
ensure the confidentiality of customer PI when shared with third
parties. The Commission has held that ``a carrier's Section 222 duty to
protect CPNI extends to situations where a carrier shares CPNI with its
joint venture partners and independent contractors'' and has held
carriers accountable for privacy violations of such third parties. Some
economic literature suggests that holding a provider vicariously liable
would maximize their incentives to ensure the data is protected. What
are the benefits and drawbacks of holding providers accountable for the
data security practices of its contractors, joint-venture partners, or
any other third parties with which it contracts and shares customer PI?
We seek comment on that approach. Is it too stringent? Should BIAS
providers be held accountable for third party recipients' handling of
customer PI for the entire lifecycle of the data or for a more limited
duration?
194. Another way BIAS providers can help to ensure that third
parties protect customer data shared by the BIAS provider is to obtain
contractual commitments from third parties to safeguard such data prior
to disclosing customer PI to those third parties. Such safeguards are a
fundamental part of the best practices guidance the FTC provides to
companies about data security practices. In the past, the Commission
recognized that telecommunications services providers can protect
against third party misuse through their own private contract
arrangements. Should we follow that example here? Or, should we require
BIAS providers to obtain specific contractual commitments from third
party recipients of customer PI to ensure the protection of such data?
If so, what should such contracts include? Should the third party
commit to, for example, (1) limit the use and disclosure of customer PI
to the specific purpose for which the provider shared the customer PI
with the third party and to which the customer provided approval; (2)
take precautions to protect the customer PI from unauthorized use,
disclosure, or access; (3) train its employees on the provisions of its
information security program and monitor compliance; (4) follow the
same data security requirements that we adopt for BIAS providers; (5)
follow the data breach notification procedures we adopt for BIAS
providers; (6) notify the BIAS provider of any breach of security
involving customer PI as expeditiously as possible and without
unreasonable delay; (7) institute data retention limits and
minimization procedures; and/or (8) document of compliance with these
contractual commitments, including records of the use and/or disclosure
of customer PI, as appropriate? What are the benefits and burdens of
each of these options, in particular on small providers, and would the
benefits of such obligations outweigh the burdens associated with
compliance?
195. Relatedly, we seek comment on whether we should require mobile
BIAS providers to use their contractual relationship with mobile device
or mobile operating system (OS) manufacturers that manufacture the
devices and hardware that operate on the mobile BIAS provider's network
to obtain the contractual commitments described above. How do
providers' contracts with device manufacturers and mobile OS
manufacturers currently handle the treatment of customer PI? What would
be the benefits and drawbacks of imposing security-specific obligations
in those contracts?
196. Finally, we seek comment on other alternatives that we should
consider regarding BIAS provider accountability for downstream privacy
violations, as well as whether we should take any actions to either
harmonize or distinguish our proposal from the existing voice CPNI
rules.
f. Other Safeguards
197. In addition to the safeguards we propose above, we seek
comment on whether there are other safeguards that BIAS providers
should employ to protect against reasonably anticipated unauthorized
use or disclosure of customer PI by the BIAS provider, its employees,
agents, and contractors. For example, we seek comment on whether
restricting access to sensitive data; setting criteria for secure
passwords; segmenting networks; requiring secure access for employees,
agents and
[[Page 23387]]
contractors; and keeping software patched and updated would be useful
security measures to reduce the probability of threats. If so, should
we require them? If not, what other security measures should we
consider?
198. In addition we seek comment whether we should require or
encourage BIAS providers to use standard encryption when handling and
storing personal information. The FTC established best practices for
maintaining industry-standard security, SSL encryption among them,
which it considers to be a ``reasonable and appropriate'' step to
secure user data. Should we mandate that customer PI be encrypted when
stored by BIAS providers?
3. Factors for Consideration in Implementing Proposed Customer Data
Security Measures
199. In determining how to implement the data security requirements
outlined above, we believe that a BIAS provider should, at a minimum,
take into account the nature and scope of the BIAS provider's
activities and the sensitivity of the underlying data, and we propose
to codify it as a rule. We derive our proposal from existing privacy
statutes and frameworks, including the GLBA and the FTC's Privacy
Framework. Our proposed approach also mirrors our existing CPNI rules
for voice providers, which permit telecommunications carriers to
individually determine the specific ``reasonable measures'' that will
enable them to comply with the general duty to discover and protect
against unauthorized access to proprietary information. We seek comment
on our proposal.
200. We believe that Section 222(a) requires BIAS providers to, at
a minimum, consider these factors when designing their safeguards to
protect the confidentiality, integrity, and security of customer PI,
and we seek comment on the inclusion of these factors and whether there
are additional factors that we should consider. What are the benefits
and drawbacks of such an approach to customers and BIAS providers?
Would any of the factors discussed below not be considered
``reasonable'' in the broadband context? How does such an approach
conform to existing industry standards? Does such an approach allow for
sufficient innovation and flexibility as technology advances?
201. Nature and Scope of BIAS Provider Activities. We propose that
any specific security measures employed by a BIAS provider should take
into consideration the nature and scope of the BIAS provider's
activities. We believe this sliding scale approach affords sufficient
flexibility for small providers while still protecting their customers.
The Commission has previously explained that ``privacy is a concern
which applies regardless of carrier size or market share.'' However, we
recognize that the same data security protections may not be necessary
in all cases. For example, a small provider with only a few customers
may not store, use, or disclose customer PI in the same manner as a
large provider. In such a case, what constitutes a ``reasonable''
safeguard might be different.
202. Sensitivity of Customer PI. We also propose that the security
measures a BIAS provider employs should consider the sensitivity of the
underlying customer PI. This sliding scale approach follows the FTC's
proposed Privacy Framework, which includes a recommendation for
allowing consumers to access the data companies maintain on them, with
the level of access ``proportionate to the sensitivity of the data and
the nature of its use.'' Likewise, NIST also ranks the sensitivity of
PII on different ``impact levels,'' ranging from low, moderate, or
high, based on the effect of the disclosure of the underlying
information. We seek comment on this proposal and our rationale for it.
4. Limiting Collection, Retention, and Disposal of Data
203. The more customer information that a BIAS provider maintains,
and the more sensitive that information is, the stronger the data
security measures a BIAS provider will need to employ to protect the
confidentiality of that information. In this section, we seek comment
on data minimization, including whether we should impose reasonable
data collection and retention limits. We also seek comment on whether
we should prescribe specific data destruction policies as part of any
data retention limits.
a. Limiting Collection of Sensitive Customer Information
204. We seek comment on whether we should adopt rules limiting BIAS
providers' collection of sensitive customer information, or providing
customer control over the collection of such information. The FIPPs
indicate that ``[o]rganizations should only collect PII that is
directly relevant and necessary to accomplish the specified purpose(s)
and only retain PII for as long as is necessary to fulfill the
specified purpose(s).'' We recognize that while the Cable and Satellite
Privacy Acts prohibit operators from using the cable or satellite
systems to collect PII concerning any subscriber without the prior
written or electronic consent of the subscriber concerned, Section 222
does not contain an analogous provision regarding the collection of
customer information. Likewise, the Commission's existing privacy rules
do not contain any blanket limitations on the ability of communications
service providers to collect certain types of customer data.
205. We seek comment on whether we should adopt ex ante rules
regulating the collection of customer data by broadband service
providers. We recognize that declining data storage costs may mean that
customer data, once collected, can be retained indefinitely. This in
turn may present data security risks that impact a provider's
obligation to protect customer data pursuant to Section 222(a).
206. We seek comment on the effect of unrestricted data collection
practices on data security, as well as the relationship to the concept
of privacy-by-design. If we do adopt rules restricting the types of
data BIAS providers can collect, will there be negative societal
consequences? For example, data collected in conjunction with other
online services has yielded services such as spam filters that use a
variety of data for ``machine learning.'' Are there particular types of
customer data, such as health information, that a provider should be
prohibited from collecting? Could such a requirement be implemented and
operationalized without undue burden? Is it possible for a BIAS
provider to reasonably distinguish between types of data that it
collects such that it could comply with such a requirement?
b. Data Retention Limits
207. Similarly, we seek comment on whether we should require BIAS
providers to set reasonable retention limits for customer PI. If so,
what should those retention limits be? Data retention limits can also
reduce the burden of data security. Limiting data retention is also one
of the seven principles of the FIPPs. Many privacy-by-design regimes,
where consumer privacy is built into every stage of product
development, include data retention limitations as a fundamental part
of their designs. FTC guidance emphasizes the importance of data
retention limits, recommending that entities retain customer data only
as long as necessary for the legitimate purpose for which it was
collected with the caveat that retention periods ``can be
[[Page 23388]]
flexible and scaled according to the type of relationship and use of
the data.''
208. The FTC recommends that data retention periods should be based
on the underlying nature of protected information, suggesting that data
relating to children should have a shorter retention period than data
relating to adults. The Cable and Satellite Privacy Acts require
entities to destroy personal data if the information is no longer
necessary for the purpose for which it was collected, and the Video
Privacy Protection Act requires records with protected information to
be destroyed as soon as practicable. While these limits are often
contextually based on what is ``reasonable'' for a particular use or
industry, there are circumstances where long term retention of customer
data is unlikely to be reasonable. Should we adopt rules harmonizing
data retention requirements for telecommunications carriers with those
provided for cable and satellite providers under Sections 631 and
338(i)?
209. We seek comment whether it would be appropriate to apply any
of these standards in the broadband context. Why or why not? Are there
other data retention policies utilized by industry that we should look
to as a guide? We also seek comment whether we should adopt a specific
timeframe or a flexible standard for data retention by BIAS providers.
For example, should we adopt a specific retention period for customer
data upon termination of the broadband service and the carrier-customer
relationship (i.e., a former customer)? Should the same data retention
standard apply to a BIAS provider's retention of customer PI for
existing customers? What should be the appropriate retention period if
someone merely completes the information form for a service but does
not obtain that service?
210. Should we adopt different data retention limits for different
categories of data? If so, how should we define those categories of
data, and what would those retention periods be? For example, should a
separate standard exist for data that has been de-identified? In
addition, how could we ensure any retention periods are sufficiently
flexible to accommodate requests from law enforcement or legitimate
business purposes?
211. On the other hand, we recognize that some data retention can
be beneficial. Historic data can be useful to individuals and serve
broader social goals. For example, as the FTC Staff Report on Privacy
explains, data retention limits could limit innovation by requiring the
destruction of data that could be used in the future to develop new
products that can potentially benefit customers. We seek comment on
whether and how our rules should take into account these potential
benefits of data retention.
c. Destruction of Customer Proprietary Information
212. We also seek comment whether we should implement specific
measures for BIAS providers when disposing of customer PI.
Alternatively, we seek comment whether we should establish a general
data destruction requirement but allow industry to determine best
practices for data disposal in this area. What types of data
destruction practices do BIAS providers currently abide by? What are
the current industry standards, if any?
213. We seek comment on whether we should adopt data destruction
requirements and, if so, how sensitive data should be disposed of when
it is no longer needed. Should we follow the model laid out by the Fair
and Accurate Credit Transactions Act (FACTA), which requires the proper
disposal of information contained in consumer reports and records?
Under the FTC disposal rule, which implements FACTA with respect to
companies under the FTC's jurisdiction, companies must ``tak[e]
reasonable measures to protect against unauthorized access to or use of
[consumer] information in connection with its disposal.'' The rule
offers a non-exhaustive list of such reasonable measures that includes
burning, pulverizing, or shredding paper so that they are unreadable
and cannot be practicably reconstructed and destroying or erasing
electronic media such that it cannot be practicably read or
reconstructed. Should we take a similar approach here? Several states
have also enacted laws regarding the disposal of records that contain
personal information. Should we look to any such state laws for
guidance?
214. We also seek comment on the potential costs and correlating
burdens of imposing such requirements. Would the requirements be
particularly costly or burdensome for small BIAS providers? Could the
costs of a data destruction program be absorbed by the BIAS provider or
would any additional cost be passed on to customers? Is there a
meaningful way to quantify the privacy benefits to consumers to justify
any additional costs or benefits? Is there a way for BIAS providers to
ensure that a customer's data has been properly disposed of and
communicate that to the customer? If we adopt data destruction
requirements for BIAS providers, should we also adopt them for voice
providers?
F. Data Breach Notification Requirements
215. In order to encourage providers to protect the confidentiality
of customer proprietary information, and to give consumers and law
enforcement notice of failures to protect such information, in this
section, we propose data breach notification requirements for BIAS
providers and providers of other telecommunications services. The
importance of customer and law enforcement notification in the event of
a data breach is widely recognized. Our existing Section 222 rules
impose data breach obligations on voice providers; 47 states, the
District of Columbia, Guam, Puerto Rico and the Virgin Islands have
adopted data breach notification laws; and the FTC has repeatedly
testified in support of federal data breach legislation. The rules we
propose today seek to incorporate the lessons learned from existing and
proposed data breach notification frameworks, while addressing the
extensive sets of customer data available to providers of
telecommunications services, and our role in helping to identify and
protect against network vulnerabilities.
216. We propose and seek comment on specific data breach
notification requirements for providers of telecommunications services.
We think harmonizing these requirements is a common-sense approach to
ensuring that customers of all telecommunications services, the
Commission, and other federal law enforcement receive timely notice of
data breaches of customer PI. We structure these proposals with the
goal of ensuring that affected customers, the Commission, and other
federal law enforcement agencies receive timely notice of data breaches
so they can take appropriate action to mitigate the impact of such
breaches and prevent future breaches. Specifically, we propose that in
the event of a breach carriers shall:
Notify affected customers of breaches of customer PI no
later than 10 days after the discovery of the breach, subject to law
enforcement needs, under circumstances enumerated by the Commission.
Notify the Commission of any breach of customer PI no
later than 7 days after discovery of the breach.
Notify the Federal Bureau of Investigation (FBI) and the
U.S. Secret Service (Secret Service) of breaches of customer PI
reasonably believed to relate to more than 5,000 customers no
[[Page 23389]]
later than 7 days after discovery of the breach, and at least 3 days
before notification to the customers.
217. We discuss and seek comment on each of these proposals in
detail below, but as an initial matter we seek comment on our proposals
generally. Below, we first discuss our requirements for notifying
customers and federal law enforcement of data breaches. We also seek
comment on what information should be provided to customers and law
enforcement as part of the data breach notification, whether we should
impose record keeping requirements with respect to data breach
notification, and whether we should, in fact, harmonize our voice and
broadband data breach notification rules, and on whether we should
adopt harmonizing rules for cable and satellite providers. Finally, we
seek comment on appropriate breach notification requirements in
response to a breach of data received by a third party.
1. Customer Notification
218. We propose to require BIAS providers and other
telecommunications carriers to notify customers of breaches of customer
PI no later than 10 days after discovery of the breach, absent a
request by federal law enforcement to delay customer notification.
Recognizing the harms inherent in over-notification, we propose to
adopt a trigger to limit breach notification in certain circumstances.
We seek comment on this proposal.
219. We seek comment on under what circumstances BIAS providers
should be required to notify customers of a breach of customer PI. For
consistency and to minimize burdens on breached entities, we look to
other federal statutes and other jurisdictions as a basis for
determining when it is appropriate to notify, or not notify, consumers
of a breach of customer PI. Various state regulations employ a variety
of triggers to address this challenge. We seek comment on whether some
of these state requirements would also effectively serve our purpose.
For example, some states do not require disclosure if, after an
appropriate investigation, the covered entity determines that there is
not a reasonable likelihood that harm to the consumers will result from
the breach. Should we require breach reporting based on the likelihood
of misuse of the data that has been breached or of harm to the
consumer? If so, how would broadband providers, and the Commission,
determine the likelihood of misuse or harm? If we adopted such a
standard, is it necessary to clarify what is meant by ``misuse'' or
``harm''? Is it necessary to also require the provider to consult with
federal law enforcement when determining whether there is a reasonable
likelihood of harm or misuse?
220. Alternatively, should the requirement to notify customers of a
breach be calibrated to a particular type of misuse or harm? Should it
be calibrated to the sensitivity of the information? If we allow time
for an appropriate investigation, how much time should providers have
before they need to make their determination or disclose the breach to
customers? If the provider determines that harm to the customer is
likely to occur, how quickly thereafter would the provider need to
notify the customer of the breach? Are there other triggers we should
consider, such as the number of affected consumers? Should different
triggers apply to different types of customer PI? Are there other
factors that we should consider before requiring breach notifications?
What are the potential enforcement and compliance implications
associated with this approach?
221. Our existing Section 222 rule does not specify how quickly
affected customers must be notified of a data breach involving CPNI.
Instead it requires that seven full business days pass after
notification to the FBI and the Secret Service before the carrier may
notify customers or disclose the breach to the public. Notifying
affected customers no later than 10 days following discovery of the
breach will allow customers to take any measures they need to address
the breach in as timely a manner as possible. We seek comment on this
proposal and on potential alternatives.
222. Consistent with our current Section 222 rules, our proposed
rules allow federal law enforcement to direct a provider to delay
customer notification if notification would interfere with a criminal
or national security investigation. We seek comment on this proposal.
Should we delay customer notification in every--or in any--instances
because of the potential for such notification to interfere with an
investigation? The Commission adopted the staggered notification system
at the request of federal law enforcement. But, is that still an
approach recommended by law enforcement and other stakeholders? Our
current Section 222 rules allow carriers to notify affected customers
sooner than otherwise required in order to avoid immediate and
irreparable harm, but only after consultation with the relevant
investigating agency. Should we include such an exception in any new
rules?
223. Instead of requiring customer notification of a data breach
within a specific period of time, should we adopt a more flexible
standard for the timing of customer notification? For example, many
state data breach statutes impose an ``expeditiously as practicable''
or ``without unreasonable delay'' standard instead of a set timeframe
for reporting. What are the benefits and drawbacks to such an approach?
If we were to adopt such a standard, should we provide guidance on what
would be considered a ``reasonable'' delay? Under such an approach, how
could the Commission ensure that both federal law enforcement agencies
and customers are notified in a timely manner? Could the Commission
effectively enforce these requirements with such an approach? Should
the Commission consider establishing any exceptions to this
requirement? Or, should breaches of voice customer PI be distinguished
from breaches of broadband customer PI for the reporting requirement?
What would the impact of this requirement be on small providers?
224. Although we propose to require notice to customers only after
discovery of a breach, we seek comment on whether we should require
notice when the telecommunications carrier discovers conduct that would
reasonably lead to exposure of customer PI. Should any such requirement
be adopted in addition to or in place of a requirement to provide
notice upon discovery of a breach?
225. Content of customer data breach notification. We propose to
require that the customer data breach notice include basic information
about the breach sufficient to convey an understanding of the scope of
the breach, any harm that might result, and whether customers should
take action in response. Specifically we propose to require that a
carrier's notification to affected customers include the following:
The date, estimated date, or estimated date range of the
breach;
A description of the customer PI that was used, disclosed,
or accessed, or reasonably believed to have been used, disclosed, or
accessed, by a person without authorization or exceeding authorization
as a part of the breach of security;
Information the customer can use to contact the
telecommunications provider to inquire about the breach of security and
the customer PI that the carrier maintains about the customer;
Information about how to contact the Federal
Communications Commission and any state regulatory agencies relevant to
the customer and the service; and
[[Page 23390]]
Information about national credit-reporting agencies and
the steps customers can take to guard against identity theft, including
any credit monitoring or reporting the telecommunications provider is
offering customers affected by the breach of security.
226. We seek comment on this proposal and potential alternatives.
The existing Section 222 breach notification rule does not specify the
content of customer notification. In 2007, the Commission declined to
do so, leaving the contents to the discretion of carriers to tailor the
language and method to the circumstances. Although we continue to
believe that breached entities should have discretion to tailor the
language and method of notification to the circumstances, we believe
that it is appropriate to specify the above as a baseline of
fundamental information that should be provided to affected individuals
to ensure customers receive an adequate level of protection. Does our
proposal include the information that customers will likely need in
order to take measures to address a breach and its ramifications? Is
there additional information that we should require providers to
include in their data breach notifications to customers? Should any of
the proposed content requirements be revised, and should any be
removed? Should content requirements vary based on the type of
information breached, the number of customers affected, the extent of
economic harm, if any, or other factors? If so, how should the
requirements vary?
227. Method of customer data breach notification. In order to
inform customers about breaches, we propose that the telecommunications
carrier should provide written notification to the customer's address
of record, email address, or by contacting the customer by other
electronic means using contact information the customer has provided
for such purposes. This framework ensures that customers receive prompt
notification in the manner in which they expect to be contacted by
their telecommunications carriers. In 2007, the Commission chose not to
specify the method by which carriers would notify their affected
customers of a breach. Our proposal is consistent with the HIPAA breach
rule and many state breach notification rules that specify that
notification can be by mail, by email, or by other electronic means
using contact information the customer has provided. Service providers
should be in the best position to know how to reach their customers
with important notifications and should have already established how to
communicate important notifications to their customers. We seek comment
on our proposal, and whether a more specific notification method is
necessary or desirable to protect customers.
2. Notification to Federal Law Enforcement and the Commission
228. In order to ensure that law enforcement has timely notice to
conduct confidential investigations into data breaches, we propose to
require telecommunications providers to notify the Commission no later
than seven days after discovering any breach of customer PI, and to
notify the FBI and the Secret Service no later than seven days after
discovery a breach of customer PI reasonably believed to have affected
at least 5,000 customers. With regard to federal law enforcement
notification, we further require that such notifications occur at least
three days before a provider notifies its affected customers, except as
discussed above. We seek comment on our proposal.
229. Our proposal, which aims to balance the importance of data
breach notifications with the administrative burdens on
telecommunications carriers and law enforcement agencies from excessive
reporting, is consistent with many state statutes requiring notice to
state law enforcement authorities, proposed federal legislation, and
the Executive Branch's legislative proposal, each of which require law
enforcement notification of large breaches. We do not want over-
reporting to the FBI and the Secret Service to impose an excessive
burden on their resources. We seek comment on our proposed threshold of
5,000 affected customers before a provider must report a data breach to
the FBI and the Secret Service. Should we have a threshold for such
reporting? If so, is 5,000 affected customers the correct threshold?
For example, although a slightly different context, we note that some
states have a minimum threshold of 10,000 affected customers for
reporting to the consumer reporting agencies. We observe that our
proposed threshold would reduce the burden on existing voice
telecommunications carriers, which are currently required to report all
breaches to the FBI and Secret Service. Does the proposed reporting
threshold meet the needs of law enforcement and provide adequate
safeguards? We also seek comment on whether other or different federal
law enforcement agencies should receive data breach notification
reports from providers. In addition to other federal law enforcement
agencies, we also seek comment about whether we should require
telecommunications carriers to report breaches to relevant state law
enforcement agencies. What are the benefits and drawbacks of this
proposal, particularly for small providers?
230. We propose to require providers to give the Commission notice
of all data breaches, not just those affecting 5,000 or more customers.
As the agency responsible for regulating telecommunications services,
we have a responsibility to know about problems arising in the
telecommunications industry. Breaches affecting smaller numbers of
customers may not cause the same law enforcement concerns as larger
breaches because they may be less likely to reflect coordinated attacks
on customer PI. They may, however, provide a strong indication to
Commission staff about existing data security vulnerabilities that
Commission staff can help providers address through informal
coordination and guidance. They may also shed light on providers'
ongoing compliance with our rules. We invite commenters to explain
whether the Commission should be notified of all data breaches. Are
there reasons that the Commission should not be notified of all data
breaches? How much of an incremental burden is associated with
notifying the Commission of all data breaches as opposed to only
notifying customers of all data breaches?
231. We also propose that notification to federal law enforcement,
when required, should be made no later than seven days after discovery
of the breach, and at least three days before notification of a
customer. We seek comment on this proposal and on potential alternative
approaches. Will the proposed time-frames for reporting to law
enforcement agencies be effective? The Commission's existing rule
provides that such notification must be made ``[a]s soon as
practicable, and in no event later than seven (7) business days, after
reasonable determination of the breach.''
232. Although we propose to require notice to law enforcement only
upon discovery of a breach, we seek comment on whether we should
require notice when the telecommunications provider discovers conduct
that would reasonably lead to exposure of customer PI. Should any such
requirement be adopted in addition to or in place of a requirement to
provide notice upon discovery of a breach? Is such a requirement
overly-broad to achieve our purposes? Would such a duty help protect
customers against breaches and against the effects of being unaware
that their information has been breached? If we do adopt such a
requirement, should we require that the provider reasonably
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believe that the potential breach could affect a certain number of
customers?
233. The method and content of data breach notification to federal
law enforcement. We propose to extend our existing Section 222
requirements for both the method and substance of the data breach
notification to federal law enforcement agencies to include notice to
the Commission, and to impose the same obligations on BIAS providers.
Our current breach notification rule requires that voice providers
notify the FBI and Secret Service ``through a central reporting
facility'' to which the Commission maintains a link on its Web site. We
believe that the information currently submitted through the FBI/Secret
Service reporting facility is sufficient, and that the same information
should be reported under the rule we propose here. We seek comment on
our proposal. Are there any additional or alternative categories of
information or methods of communication that should be included in
these disclosures? To protect individuals' privacy, we do not propose
requiring that any personal information about individuals be included
in breach reports submitted to the Commission or to other governmental
entities. Are there any reasons such personal information should be
included, and how could we ensure that any such requirement would be
consistent with our goal of protecting the privacy of individuals?
Alternatively, should we affirmatively prohibit customer PI from being
included in reports submitted to the Commission or other governmental
entities?
3. Record Retention
234. We propose to extend our existing Section 222 record retention
requirements regarding data breaches to BIAS providers. Currently,
voice providers are required to maintain a record of any discovered
breaches and notifications to the FBI, the Secret Service, and
customers regarding those breaches for a period of at least two years.
This record must include, if available, the date that the carrier
discovered the breach, the date that the carrier notified the Secret
Service and the FBI, a detailed description of the CPNI that was
breached, and the circumstances of the breach. As with the rest of our
proposal, we propose to extend this requirement to include a detailed
description of the customer PI that was breached. We seek comment on
this proposal.
235. We seek comment on how telecommunications carriers subject to
our existing Section 222 rules have found the current Section 222
requirement to work in practice. What have been the costs for
compliance with this provision? Is any of the information that we
propose to be retained unnecessary? Are there additional categories of
information that should be retained? We also seek comment whether this
requirement has proved useful to law enforcement needs. We seek comment
on other potential alternatives. What are the benefits and drawbacks of
any alternative approaches?
4. Harmonization
236. We seek comment on our proposal to apply new data breach
notification requirements to both voice and BIAS providers. Both BIAS
providers and providers of voice telephony receive sensitive
information from customers, including about usage of the service
provided. When this information is compromised, customers may suffer
substantial financial, privacy-related, and other harms. Accordingly,
we ask commenters to explain whether our proposed rules should apply
equally to all providers of telecommunications services. We are
interested in understanding any efficiencies gained or potential
problems caused by harmonizing the data breach notification rules
across technologies. Are there any reasons that BIAS providers and
other telecommunications carriers should have different notification
requirements for breaches of customer PI? If so, what requirements
should we adopt in the BIAS and voice contexts? We also seek comment on
whether we should adopt harmonizing rules for cable and satellite
providers.
5. Third-Party Data Breach Notification
237. As a final matter, we seek comment on how our rules should
treat data breaches by third parties with which a BIAS provider has
shared customer PI. Should we require BIAS providers to contractually
require third parties with which they share customer PI to follow the
same breach notification rules we adopt for BIAS? Are such contractual
safeguards necessary to ensure that third-party breaches are discovered
and the relevant parties notified on a timely basis? Should we permit
BIAS providers and third parties to determine by contract which party
will provide the notifications required under our rules when there is a
third-party breach? Where third parties are contractually obligated to
provide these notifications, should BIAS providers be required to
provide notifications of their own? Could such dual notifications
confuse or overwhelm consumers, or would they rather help consumers
better understand the circumstances of a breach and hold their
providers accountable for their data management practices? Which
approach best serves the needs of law enforcement? Are there
alternative approaches to third-party data breach notification that we
should consider?
G. Practices Implicating Privacy That May Be Prohibited Under the Act
238. We seek comment on whether there are certain BIAS provider
practices implicating privacy that our rules should prohibit, or to
which we should apply heightened notice and choice requirements. In
particular, we propose to prohibit the offering of broadband services
contingent on the waiver of privacy rights by consumers, and seek
comment on whether practices involving (1) the offering of higher-
priced broadband services for heightened privacy protections, (2) the
use of deep packet inspection (DPI) for purposes other than network
management, and (3) persistent identifiers should be prohibited or
subject to heightened privacy protections. On what statutory basis
could we rely to prohibit such practices? We seek comment on whether
such practices are consistent with preserving customer choice,
protecting the confidentiality of customer proprietary information, and
the public interest. We also seek comment on the restrictions imposed
on carriers' use of proprietary information in Section 222(b).
239. We encourage commenters who suggest heightened notice and
choice requirements for certain practices to describe the consent
regime that they propose, explain why it is appropriate for the
practice at issue, and identify the statutory authority that supports
such requirements. For instance, would requiring carriers to
``refresh'' opt-in or opt-out consent periodically for certain
practices be appropriate? Should more prominent notice or specific
prescribed text be required in certain instances? Should we work with
interested stakeholders to develop privacy best practices guidelines
and create a ``privacy protection seal'' that BIAS providers could
display on their Web sites to indicate compliance with those
guidelines? For any alternatives commenters propose, we ask that they
also comment on the benefits and burdens of their proposals,
particularly for small providers. Are there certain types of practices
for which a notice-and-choice regime is insufficient to protect
consumer privacy? Why or why not? What are viable alternatives to
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notice and choice and what are their associated benefits and burdens,
particularly for small providers? Are there ways that the Commission
can encourage BIAS providers to engage in privacy-by-design practices
to build privacy protections into new or existing systems and products?
240. Service Offers Conditioned on the Waiver of Privacy Rights. We
propose to prohibit BIAS providers from making service offers
contingent on a customer surrendering his or her privacy rights. The
FTC has raised concerns about these kinds of arrangements by broadband
providers, noting that ``[w]hen consumers have few options for
broadband service, the take-it-or-leave-it approach [to privacy]
becomes one-sided in favor of the service provider.'' In such
situations, the FTC found, for example, that ``the service provider
should not condition the provision of broadband on the customer's
agreeing to . . . allow the service provider to track all of the
customer's online activity for marketing purposes.'' We seek comment on
our proposal to prohibit these types of arrangements, and on
alternative approaches we might take to protect broadband consumers
from potentially coercive service offerings. Notwithstanding their
risks, are there countervailing consumer benefits associated with these
types of offers to provide BIAS?
241. Financial Inducement Practices. We also seek comment on
whether business practices that offer customers financial inducements,
such as lower monthly rates, for their consent to use and share their
confidential information, are permitted under the Communications Act.
Certain broadband providers, including AT&T, have begun to experiment
with these types of business models. For example, AT&T's Gigapower
fiber-to-the-premises (FTTP) service currently offers consumers a
``Premiere'' pricing option, which, in exchange for a rate that is
roughly $30 off of the standard $100 monthly subscription fee, allows
AT&T to use ``individual Web browsing information,'' including search
and browsing history ``to tailor ads and offers to [customers']
interests.'' AT&T has reportedly indicated that since its debut, a
substantial majority of its Gigapower customers have elected to
participate in the discounted Internet Preferences program.
242. We recognize that it is not unusual for consumers to receive
perks in exchange for use of their personal information. In the brick-
and-mortar world, loyalty programs that track consumers purchasing
habits and provide rewards in exchange for that information are common.
In the broadband ecosystem, ``free'' services in exchange for
information are common. However, it is not clear that consumers
generally understand that they are exchanging their information as part
of those bargains.
243. Notwithstanding the prevalence of such practices in other
contexts, the FTC and others have argued that these business models
unfairly disadvantage low income or other vulnerable populations who
are unable to pay for more expensive, less-privacy invasive service
options. Others have warned that these types of financial inducements
could become ``coercive tools to force consumers to give up their
statutory rights.'' We seek comment on these concerns. What is the
current impact on low-income consumers and others of business practices
that offer financial inducements in return for customers' consent to
their broadband providers using and sharing confidential information?
What is likely to be the impact if such practices become more wide-
spread among broadband providers?
244. Given these concerns, Should we adopt rules concerning the use
of such practices by BIAS providers? Should the offering of such
practices be subject to the opt-out or opt-in frameworks we propose
above? Our proposed rules require BIAS providers to allow customers to
deny or withdraw approvals at any time and require that a denial or
withdrawal will not affect the provision of any services to which the
customer subscribes. Are these principles consistent with allowing
financial inducements? If we were to allow financial inducements, how
should a rule allowing withdrawal of approval work? Should such
practices be subject to heightened notice and choice requirements, and,
if so, what requirements? Section 222(c)(1) prohibits providers from
using or disclosing individually identifiable CPNI for purposes other
than providing the telecommunications service, absent customer
approval. We seek comment whether a customer's approval to use or
disclose his or her proprietary information in exchange for financial
incentives is meaningful if customers' broadband choices are limited by
lack of competition, switching costs, or financial hardship. Does
simply offering such practices violate providers' baseline duty under
Section 222(a) to protect the confidentiality of customers' proprietary
information? Should BIAS providers be prohibited from engaging in such
practices?
245. Despite the risks discussed above, some have argued that
consumers stand to benefit from the sale of personal information
collected by entities such as ISPs and other telecommunications
companies. In light of these potential consumer benefits, should we
accept that, upon being fully informed about the privacy rights they
are exchanging for a discounted broadband price, consumers can and
should be allowed to enter into such bargains? Are there any baseline
privacy protections with which providers should be required to comply?
If instances arise where it appears that the providers is offering
subscribers financial inducements to waive their privacy rights the
value of which far exceed the value to the provider of the customer's
data, how should we evaluate such offers?
246. Deep Packet Inspection. We seek comment whether the use of DPI
for purposes other than providing broadband services, and reasonable
management thereof, should be prohibited or otherwise subject to a
heightened approval framework. DPI involves analyzing Internet traffic
beyond the basic header information necessary to route a data packet
over the Internet. DPI is used by network operators to gather
information about the contents of a particular data packet, and may be
used for reasonable network management, such as some tailored network
security practices. In addition, DPI has been used by network providers
in order to serve targeted advertisements. DPI has also been used by
network providers to identify and block specific packets.
247. The FTC has found that the use of DPI by Internet service
providers for marketing purposes raises unique privacy concerns. Noting
that broadband providers are uniquely situated as a ``gateway'' to the
Internet, the FTC has found that ``ISPs are thus in a position to
develop highly detailed and comprehensive profiles of their customers--
and to do so in a manner that may be completely invisible.'' The 2012
FTC Privacy Report also noted that switching costs and a lack of
competitive options for broadband service may inhibit consumers'
ability to avoid these practices, should they wish to do so. As a
result, the FTC voiced ``strong concerns about the use of DPI for
purposes inconsistent with an ISP's interaction with a consumer,'' and
called for express consumer consent requirements, or more robust
protections, as a precondition for their use.
248. We seek comment whether BIAS providers' use of DPI for
purposes other
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than providing broadband services, or as required by law, should be
prohibited. Should such practices be subject to either the opt-out or
opt-in requirements we have proposed above, or heightened approval
requirements? For what purposes do broadband providers engage in DPI?
What would be the benefits and drawbacks of prohibiting the use of DPI
for purposes other than providing BIAS? What would be the costs to
consumers and BIAS providers of such a prohibition?
249. Under what authority could the Commission regulate or prohibit
DPI practices? For example, do such practices violate a provider's duty
to protect the confidentiality of customer information under Section
222(a)? Do such practices violate a provider's duties under Section
705? We also seek comment about the extent to which adoption of
encryption technology would mitigate privacy concerns regarding
broadband provider use of DPI. What types of information that may be
learned by BIAS providers' use of DPI are encrypted, and what types are
not encrypted? To what extent does an end user have control over the
use of encryption? How, if at all, should the extent of BIAS
competition and switching costs for BIAS be taken into account in
addressing the impact of DPI on consumer privacy protection?
250. Persistent Tracking Technologies. We seek comment whether the
use of persistent tracking technologies should be prohibited, or
subject to opt-out or opt-in consent. Under our proposed rules, certain
types of information used in persistent tracking technologies, such as
unique identifiers, would be considered both CPNI and PII. The use of
persistent tracking technologies may allow network operators to obtain
detailed insight into their customers' Internet usage. For example,
UIDH, injected by carriers into the HTTP header of a data packet, allow
BIAS providers to repackage and use customer data for targeted
advertising purposes. Unlike cookies, which are located in a web
browser and may be controlled locally, UIDH are injected by carriers at
the network level, thereby preventing customers from removing them
directly. The Enforcement Bureau recently entered into a consent decree
with a carrier that used UIDH without obtaining informed consent from
its customers. As part of the Consent Decree, the carrier paid a fine
and agreed to obtain opt-in approval from its customers before sending
UIDH to third-party Web sites.
251. We seek comment on what other technologies can be used by BIAS
providers to track broadband users and their devices, either by storing
information (e.g., cookies), collecting partially unique information
(e.g., fingerprinting) or associating information at the network level
(e.g., UIDH). Do these technologies pose a privacy risk to BIAS
customers and, if so, what are the best ways to protect customers'
private information and enhance customer control?
252. We seek comment on whether the use of persistent tracking
technologies may expose BIAS customers to unique privacy harms, and as
such, whether the Commission should prohibit BIAS providers from
employing such practices to collect and use customer PI and CPNI.
Alternatively, should the use of persistent tracking technologies be
subject to opt-in or opt-out consent? Do customers understand how BIAS
providers are using this technology such that notice and the
opportunity to approve such uses is ``informed''? How do BIAS providers
use the information gleaned from such technologies? What are the
benefits to customers of such technology, if any? What would be the
benefits and drawbacks to prohibiting such practices, or subjecting
their use to opt-in or opt-out approval? Under what authority could the
Commission prohibit BIAS providers' deployment of such technologies?
Does the use of such technology violate BIAS providers' duty to protect
the confidentiality of customer information, with or without customer
approval? Does it violate any other provisions of the Communications
Act?
253. Section 222(b). We also seek comment on how best to interpret
and apply in the BIAS context the limitations imposed by Section 222(b)
on carriers receiving proprietary information from other carriers for
the purposes of providing telecommunications services. Under Section
222(b), a ``telecommunications carrier that receives or obtains
proprietary information from another carrier for purposes of providing
any telecommunications service shall use such information only for such
purpose, and shall not use such information for its own marketing
efforts.'' The Commission has previously interpreted this section as
applying specifically to carriers' propriety information. Should we
understand this section as protecting information about all of the
traffic that a BIAS provider receives from another provider from being
used by the receiving BIAS provider for any purpose other than the
provision of the telecommunications service? Should we understand this
provision to be referring only to information that is proprietary to a
telecommunications carrier, or to all three types of proprietary
information referred to in Section 222(a)--``proprietary information of
or relating to telecommunications carriers, equipment manufacturers and
customer proprietary information?'' What are the privacy implications
of the different readings of this provision?
254. Other. Lastly, we seek comment whether there are other uses or
disclosures of customer PI, other than those we have here described,
that should be prohibited or subject to heightened notice and choice
requirements. If so, what are they, and why should they be prohibited
or subject to more stringent notice and choice requirements? On what
authority could we act to prohibit such practices?
H. Dispute Resolution
255. We seek comment on whether our current informal complaint
resolution process for alleged violations of the Communications Act is
sufficient to address customer concerns or complaints with respect to
the collection, use, and disclosure of customer information covered by
our proposed rules. At present, customers who experience privacy
violations may file informal complaints through the Consumer Inquiries
and Complaints Division of the Consumer & Governmental Affairs Bureau.
Are these mechanisms adequate? If not, we seek comment on whether BIAS
providers currently do or should provide other optional, impartial, and
efficient dispute resolution mechanisms. Such programs, if structured
fairly and operated efficiently, could help customers resolve privacy
complaints more quickly and with less cost than formal complaints to
the Commission or private litigation. However, if procedures are not
carefully structured, BIAS providers could use dispute resolution
programs to disadvantage customers and deny them the full panoply of
due process rights they would receive through formal legal processes.
256. BIAS providers are of course free to offer arbitration as a
method of dispute resolution. Arbitration can be a useful tool in the
dispute resolution toolkit, but it may not suitable for all situations.
We seek comment on whether to prohibit BIAS providers from compelling
arbitration in their contracts with customers. In the 2015 Open
Internet Order, we agreed with the observation that ``mandatory
arbitration, in particular, may more frequently benefit the party with
more resources and more understanding of the dispute procedure, and
therefore should not be
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adopted.'' We further discussed how arbitration can create an
asymmetrical relationship between large corporations that are repeat
players in the arbitration system and individual customers who have
fewer resources and less experience. Just as customers should not be
forced to agree to binding arbitration and surrender their right to
their day in court in order to obtain broadband Internet access
service, they should not have to do so in order to protect their
private information conveyed through that service.
257. We additionally seek comment on any other dispute resolution
proposals we should consider in conjunction with this rulemaking,
including whether and how to harmonize such proposals with our existing
voice CPNI framework. To the extent we should adopt any dispute
resolution requirements, we seek comment on how to ensure access to
dispute resolution for customers with disabilities. For all dispute
resolution proposals, we seek comment on the benefits and burdens of
such proposals--in particular the burdens such proposals would place on
small providers--and any reasonable alternatives that could alleviate
associated burdens.
I. Preemption of State Law
258. Consistent with the Commission's approach to the current
Section 222 rules, we propose to preempt state laws only to the extent
that they are inconsistent with any rules adopted by the Commission.
The states are very active participants in ensuring their citizens have
robust privacy and data security protections, and we do not intend to
curtail their work. However, the Commission is tasked with implementing
the requirements of Section 222, and as the Commission has previously
found, we ``may preempt state regulation of intrastate
telecommunications matters `where such regulation would negate the
Commission's exercise of its lawful authority because regulation of the
interstate aspects of the matter cannot be severed from regulation of
the intrastate aspects.' ''
259. We observe that the Commission has interpreted this limited
exercise of its preemption authority to allow states to craft laws
regarding the collection, use, disclosure, and security of customer
data that are more restrictive than those adopted by the Commission,
provided that regulated entities are able to comply with both federal
and state laws. Our proposal is consistent with the approach adopted by
the Commission in prior CPNI Orders, and is in line with the
Commission's goal of allowing states to craft their own laws related to
the use of personal information, including CPNI. Therefore, as the
Commission has done in previous CPNI orders, we propose to preempt
inconsistent state laws on a case-by-case basis, without the
presumption that more restrictive state requirements are inconsistent
with our rules. We seek comment on this proposal, and on any
alternative approaches we may take to state laws governing customer PI
collected by BIAS providers and addressed by our proposed rules.
Specifically, we seek comment on whether broader application of our
preemption authority is warranted, or, alternatively, whether we should
decline to preempt state law in this area altogether. We seek comment
on the benefits and risks presented by these competing approaches to
preemption.
J. Other Proposed Frameworks and Recommendations
260. Various stakeholders have publicly proposed BIAS privacy
frameworks and recommendations for us to consider. These include
frameworks offered by a coalition of industry associations that
includes a number of BIAS providers (Industry Framework), New America's
Open Technology Institute (OTI Framework), Public Knowledge (PK
Framework), the Electronic Privacy Information Center (EPIC Framework),
the Information Technology and Innovation Foundation (ITIF), and
Digital Content Next (Digital Content Framework). Like the proposals in
this Notice, all of the stakeholder proposals include components that
would impose transparency, choice, and security obligations on
confidential consumer information collected by BIAS providers, and we
have incorporated some of their recommendations in to our own. However,
we recognize that our consideration of how best to ensure BIAS
providers protect the confidentiality of their customers' information
could also benefit from feedback on these alternative proposals as a
whole. We therefore describe each proposed framework briefly in turn,
and seek comment on their proposals, as additions to or substitutes for
our own.
261. In addition to seeking comment on each of these sets of
proposals, we seek comment on how these separate proposals correspond
with our proposed framework. Are there aspects of them that should be
incorporated into our proposal? We note that there is broad agreement
about the importance of transparency, choice, and data security, but in
other ways some of the proposals appear to be inconsistent with each
other. How should those inconsistencies be resolved? Does our
definition of key terms, including CPNI, customer PI, and personally
identifiable information, account for the scope of protections and
obligations contemplated under these proposals, given possible
discrepancies in how those terms are defined between different
frameworks?
262. Industry Framework. The Industry Framework proposes four
principles that we should consider when adopting privacy rules: (1)
Transparency; (2) respect for context/consumer choice; (3) data
security; and (4) data breach notification. The proponents of the
Industry Framework also recommend that any privacy rules we adopt
should be limited to prohibiting unfair and deceptive practices, as
outlined in the FTC's Policy Statements. They also argue that any such
privacy rules should (and lawfully can) only apply to
telecommunications service providers in the provision of
telecommunications service, and only to CPNI that is made available by
virtue of the customer-carrier relationship. They also contend that any
such rules should not apply to any information that has been de-
identified, aggregated, or does not otherwise identify a known
individual.
263. The proponents of the Industry Framework also recommend a
general approach of setting privacy or security goals, rather than
methods by which those goals are to be achieved, and suggests that we
should, beyond issuing rules, provide additional guidance on
interpreting the privacy framework through workshops or reports, and
encourage and support industry guidelines. They also recommend
harmonizing the existing CPNI guidelines with any BIAS guidelines we
adopt and that we should adopt more flexible standards than are
currently part of the Section 222 rules.
264. The Industry Framework also details more specific principles
to which it believes BIAS providers should adhere. First, the Industry
Framework specifies that BIAS providers should give notice that is
neither deceptive nor unfair that describes the collection, use, and
sharing of CPNI with third parties. Second, the Industry Framework
recommends requiring BIAS providers to provide consumer choice where
the failure to do so would be deceptive or unfair. However, the
Industry Framework specifies that consumers need not be given a choice
when their information will be used for product or service fulfillment,
fraud prevention, compliance with law, responses to government
requests, network
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management, first-party marketing, and affiliate sharing where the
affiliate relationship is reasonably clear to consumers. Third, the
Industry Framework recommends that BIAS providers maintain a CPNI data
security program that has reasonable protections to prevent
unauthorized access, use, or disclosure, concomitant with the nature
and scope of the company's activities, the sensitivity of the data, and
the size and complexity of the company's data operation. Fourth, the
Industry Framework recommends requiring BIAS providers to notify
customers of data breaches when a breach is likely to cause substantial
harm to customers and failure to notify would be unfair or deceptive,
with providers having the flexibility to determine how and when to
provide notice. We seek comment on these proposals.
265. OTI Framework. The OTI Framework begins by recommending that
we adopt a broad definition of CPNI in the broadband context, which
would include subscriber location information; sites visited;
specification of connected devices; and time, amount, and type of
Internet traffic. The OTI Framework also proposes that the definition
of CPNI should be expanded ``where appropriate'' to account for ``new
risks in broadband context,'' and that we should define (and presumably
protect) ``proprietary information'' as defined in the TerraCom NAL.
With that proposed definition in place, the OTI Framework makes several
specific policy recommendations on (1) notice and consent, (2)
disclosure of CPNI to customers, (3) data security and breach
notification, (4) complaint process, and (5) differential privacy
protections based on price. In the matters of notice and consent, the
OTI Framework recommends that we require BIAS providers to give
accurate and reasonably specific notice of uses of information and of
any third parties to whom the information will be disclosed. The OTI
Framework proposes opt-in consent for all non-service-related uses of
CPNI. The OTI Framework also appears to suggest that we provide rules
or other guidance on how BIAS providers might disclose CPNI to
customers, as required under Section 222(c)(2). The OTI Framework also
recommends required data breach notification similar to the existing
CPNI rules. The OTI Framework proposes a formal complaint process for
violations of the privacy rules similar to the processes for wireline
and wireless telephony. Finally, the OTI Framework proposes prohibiting
BIAS providers from charging subscribers for the baseline privacy
protections specified in the OTI Framework. We seek comment on these
proposals.
266. PK Framework. In its proposed privacy framework, Public
Knowledge recommends that we restate and adopt the framework of the
2007 CPNI Order, which it argues would include finding all PII within
the scope of CPNI, not implementing a safe harbor rule, and requiring
carriers to improve data security protections of their own accord as
new precautions become available, without requiring additional
rulemaking. Public Knowledge proposes that BIAS providers, and not
customers, bear the burden of ensuring privacy protections, while
allowing customers to engage in privacy-enhancing practices themselves.
In particular, this means that the availability of customer-initiated
protections like encryption and VPNs does not absolve BIAS providers
from protecting the information of customers who do not purchase or
deploy those solutions. Public Knowledge also recommends that we
prohibit BIAS providers from interfering with customers' privacy
enhancing tools and techniques, such as blocking tracking software or
clearing it from caches.
267. The PK Framework also includes recommendations on two
particular practices: Deep packet inspection and differential privacy
protections based on discounts or other inducements. With regard to
deep packet inspection, the PK Framework suggests that consent to use
or disclose CPNI does not mean consent to use or disclose
communications content. Public Knowledge further recommends that we
prohibit ``any provider under any circumstances from using DPI or other
tools to view the content of subscriber traffic.'' With regard to
differing privacy protections, the PK Framework recommends prohibiting
BIAS providers from ``coercing consent'' from customers by charging
fees or withholding functionality of services that a subscriber
``reasonably believes are included as part of the purchase of [BIAS].''
However, the PK Framework does not recommend a categorical prohibition
on inducements to consent, though it cautions that some ``discounts''
and ``services'' may be disguised coercive tools, and that discounts
could have a disparate impact against the privacy of lower-income
customers.
268. Finally, the PK Framework recommends that we seek comment on
supplementing the privacy and competition protections of Section 222
with rules based on our authority over cable and wireless providers.
With regard to privacy, the PK Framework recommends enhancing cable
privacy rules under Section 631 and wireless privacy under Section
303(b) to ensure that protections based in Section 222 can be equally
applied in those contexts. With regard to competition, the PK Framework
recommends supplementing competition-enhancing rules derived from
Section 222 with authority from Section 628 and Section 303(b), to
prevent anticompetitive uses of customer information in wireless and
video services, including over-the-top video services. We seek comment
on these proposals.
269. EPIC Framework. EPIC makes five recommendations for privacy
rules. First, it argues that the rules should apply the FIPPs, as
outlined in the HEW Report and the Consumer Privacy Bill of Rights.
Second, it recommends data minimization requirements, including rules
limiting the collection of data, requiring the disposal or de-
identification of data that is no longer needed, and requiring
reasonable data retention and disposal policies. EPIC opposes mandatory
data retention and recommends data be retained for the shortest period
possible. Third, the EPIC Framework recommends we promote privacy
enhancing technologies such as ``Do Not Track'' mechanisms. Fourth, the
EPIC Framework argues that all Internet-based service providers obtain
opt-in consent for the use or disclosure of consumer data.
270. EPIC also recommends that the rules incorporate its Code of
Fair Information Practices for the National Information Infrastructure,
which itself incorporates several principles and recommendations,
including: Protecting the confidentiality of electronic communications;
limiting data collection; requiring explicit consent for service
provider disclosure; requiring providers to disclose data collection
practices; prohibiting payment for routine privacy protection, and
allowing charges only for ``extraordinary'' privacy protection;
appropriate security policies; and an enforcement mechanism. We seek
comment on these proposals.
271. ITIF Recommendations. In a paper on broadband privacy, ITIF
makes a number of recommendations, beginning with a recommendation that
we forbear from the application of Section 222 to BIAS. Alternatively,
ITIF recommends that we declare the privacy policies of BIAS providers
as non-common carrier services, thus allowing the FTC to exercise
jurisdiction over their privacy practices. ITIF's third proposal is
that we limit rules to those which correspond as much as possible
[[Page 23396]]
to the FTC's past privacy enforcement in this area. ITIF suggests that
any fines enforcing such rules be tied to actual consumer harm and
amplified when the harm was intentional. The ITIF Recommendations also
suggest that we should support and encourage the continued formation of
industry best practices; the development of experiments with pricing
around new uses of consumer data; and the use, disclosure, and sharing
of aggregate and de-identified customer data. We seek comment on these
proposals.
272. Digital Content Framework. Digital Content Next stresses the
importance of respecting consumers' expectations within the context of
the interaction, as well as providing consumers with transparency and
choice. The Digital Content Framework further recommends that, in the
context of BIAS providers, the contrast between the amount of
information collected and the customers' expectations of how that
information is to be used suggests that service providers should be
held to a higher standard than other participants in the online
ecosystem.
273. Digital Content Next recommends we require broadband providers
to provide consumers with transparency and meaningful choice,
particularly when information is used outside of consumer expectations
and outside of the context in which the information was initially
given. Digital Content Next more specifically suggests that we follow
the pattern of our existing Section 222 rules, allowing opt-out
approval for marketing services similar to the providers' and requiring
opt-in approval for broader marketing or advertising. The Digital
Content Framework further recommends that the choice mechanisms should
be clear, easy to use, and persistent, suggesting that they could take
the form of account settings set up by the provider, or the recognition
of signals sent by a device or a browser. Digital Content Next also
recommends we work with self-regulatory bodies, the FTC, and BIAS
providers on developing business practices and technologies, including
how to account for customers' privacy choice mechanisms across multiple
devices and in cross-device tracking. We seek comment on these
proposals.
274. Other. Finally, we seek comment on any alternative approaches
we can take to protect customer privacy, preserve customer control, and
promote innovation, as well as the benefits and burdens associated with
any such alternatives.
K. Multi-Stakeholder Processes
275. We seek comment on whether there are specific ways we should
incorporate multi-stakeholder processes into our proposed approach to
protecting the privacy of customer PI. The Department of Commerce's
2010 Green Paper recommended use of multi-stakeholder processes to
clarify how the FIPPs should be applied in particular commercial
contexts. Since then, the Department of Commerce through NTIA has
convened multi-stakeholder processes on several topics, including
mobile application transparency, facial recognition technology, and
unmanned aircraft systems. The Administration's Privacy Bill of Rights
also incorporates multi-stakeholder processes into its framework. We
seek comment on what lessons have been learned from the multi-
stakeholder processes that NTIA has convened on behalf of the
Department of Commerce. Would such processes be useful in developing
guidelines and best practices relating to these proposed rules? Above
we have sought comment on whether aspects of our proposed rules, such
as notice language or security standards would benefit from a multi-
stakeholder process such as that conducted by NTIA. Would a similar
process be useful to address the privacy practices of broadband
providers more generally, or in other specific areas? If so, how should
the process be managed and governed? Should such processes serve as a
supplement or an alternative to further rulemaking?
III. Legal Authority
276. In this section, we discuss and seek comment on our statutory
authority to adopt the rules we propose in this Notice and for any
other rules that we may conclude, as a result of this proceeding, to be
in the public interest. Since the enactment of the Communications Act
of 1934, there has been an expectation that providers of communications
services have obligations to protect both the security and the privacy
of information about their customers. We intend our proposed rules to
be primarily grounded in Section 222. However, we believe that we can
also find support in other sections of the Communications Act,
including Sections 201 and 202 of the Communications Act, which
prohibit telecommunications carriers from engaging in unjust,
unreasonable, or unreasonably discriminatory practices; Section 706 of
the Telecommunications Act of 1996, as amended (1996 Act), which
requires the Commission to use regulating methods that remove barriers
to infrastructure investment; and Section 705 of the Communications
Act, which restricts the unauthorized publication or use of
communications. Taken together, these statutory provisions give us the
authority and responsibility to ensure that telecommunications carriers
and other service providers protect the confidentiality of private
customer information and give their customers control over the
carriers' use and sharing of such information.
277. The Act gives us the authority to prescribe rules that may be
necessary in the public interest to carry out the Communications Act,
and our authority to adopt rules to interpret and implement Section
222's provisions is well established. We welcome comment on the legal
framework we offer below for this proceeding and invite commenters to
offer their own legal analysis on whether the rules we propose, the
alternatives on which we seek comment, and the recommendations that
commenters make are consistent with and supported by the statutory
authority upon which we rely, or on other statutory authority,
including, for example, Sections 631 and 338(i) of the Communications
Act. To the extent that commenters offer alternate proposals, we
welcome explanations of the extent to which such proposals are
consistent with and authorized by Section 222 or other relevant
statutory provisions. We focus our discussion in this legal authority
section on some of the most significant issues in this proceeding, but
we also invite commenters to offer analysis of the Commission's legal
authority on all of the rules we propose today.
A. Section 222 of the Communications Act
278. In the sections above, we seek comment on adopting rules that
require telecommunications carriers, including providers of BIAS, to
protect, and to provide their customers with notice, choice, and data
security with respect to their customer PI. As described in more detail
below, we believe that these proposals are fully supported by Section
222, and invite comment on that issue.
279. Congress added Section 222 to the Communications Act in 1996.
Section 222, entitled ``Privacy of customer information,'' established
a new statutory framework governing carrier use and disclosure of
customer proprietary network information and other customer information
obtained by carriers in their provision of telecommunications services.
Fundamentally, Section 222 obligates telecommunications carriers to
protect
[[Page 23397]]
the confidentiality of proprietary information, including proprietary
information about their customers, and in furtherance of that
obligation it requires carriers to seek approval before using or
sharing customer proprietary network information. When we reclassified
BIAS as a telecommunications service, we determined that forbearance
from Section 222 would not serve the public interest because of the
importance of ensuring that BIAS customers have strong privacy
protections.
280. We recognize that earlier Commission decisions focused
primarily on Section 222(c)'s protection of CPNI, and could be read to
imply that CPNI is the only type of customer information protected.
However, those decisions simply did not need to address the broader
protections offered by Section 222(a), and we do not so limit ourselves
here. The focus of the earliest decisions implementing Section 222 was
generally on the restrictions on use and sharing of individually
identifiable CPNI in particular, especially from the perspective of
introducing competition into the telecommunications market and
replacing the CPNI rules that the Commission had adopted before the
1996 Act, which were focused on protecting independent enhanced service
providers and equipment suppliers from discrimination by incumbent
local exchange carriers. The duty to secure the confidentiality of
customer information beyond CPNI would not have been as substantial a
concern in the years before it became so common for information to be
stored electronically. In 2007, the Commission strengthened its rules
governing secure handling of CPNI in order to address problems that had
been identified regarding the advertising and sale of personal
telephone records, which are indisputably CPNI, and in doing so
acknowledged the general mandate to protect confidentiality in 222(a).
281. Today, when telecommunications services are provided by myriad
carriers, and when customers' sensitive information is typically held
in digital form that could pose security risks if not managed properly,
we believe that Section 222(a) should be understood to mean what it
says and that it should not be so narrowly construed. More recently,
the Commission made clear its view that the set of customer information
protected by Section 222(a) is broader than CPNI in the 2014 TerraCom
NAL, and reiterated that view in the 2015 Lifeline Reform Order.
282. In this Notice, we now propose rules that we believe are
necessary to implement carriers' obligation to protect customer
information that is not CPNI, and we seek comment here specifically on
our proposal that subsection (a) of Section 222 provides authority for
the Commission to adopt such rules. Furthermore, we understand that the
phrase ``protect the confidentiality'' means more than preventing
unauthorized access; confidentiality includes the concept of trust, and
consumers rightfully expect that information that their BIAS providers
acquire by virtue of providing BIAS should be used and shared only for
expected purposes. Indeed, we believe that each of the core privacy
principles we seek to uphold in this proceeding--transparency, choice,
and security--is built into the authority granted by Section 222.
283. Transparency. We have often exercised our authority under
Section 222 to describe the types of notice that would be necessary to
constitute ``approval'' under Sections 222(c)(1), (c)(2), and (d)(3).
Without adequate disclosure, consumers cannot truly be held to have
approved any given use or sharing of their information. Furthermore, we
believe that adequate disclosure of privacy and security practices is
necessary to protect the confidentiality of proprietary information of
and relating to customers. Disclosure helps to ensure that consumers,
and not only service providers, can assign the appropriate weight to
the privacy of their information compared to the value of allowing the
service provider to use or share the information. We also tentatively
conclude that adequate transparency is necessary to ensure that BIAS
providers' practices are just, reasonable, and not unreasonably
discriminatory, and that disclosures are in fact a necessary part of
providing just and reasonable service. Finally, we believe that
transparency obligations do not constitute unconstitutionally compelled
speech under the First Amendment, and we seek comment on that issue.
284. Choice. Customer approval is a key component of the privacy
framework of Section 222, and a core part of our existing CPNI rules.
Our proposed rules for BIAS providers draw from this framework,
requiring customer approval for many uses, but permitting that approval
to be granted in an opt-out framework for many uses where an opt-in
approval requirement may be overly burdensome. This framework, in the
context of our existing rules, was successfully adopted after the Tenth
Circuit found an earlier set of rules with fewer opt-out options to be
insufficiently supported by the record at the time. The rules we
propose here, like the existing CPNI rules, are intended to directly
advance both the substantial public interest in consumer privacy as
well as Section 222's mandate to protect customer confidentiality,
while not being more extensive than necessary to serve those interests,
according to the criteria of Central Hudson. For customers to be able
to protect their privacy, they must have a way to easily locate and
exercise their options, and they must be able to give or withhold their
consent for uses of their information not directly related to the
provision of their service. These proposed rules correspond with well-
established rules in the voice context, and allow for a number of uses
with no additional approval, or opt-out or opt-in approval, from
customers, imposing no more restrictions than are necessary to protect
customer privacy and control.
285. Data Security and Breach Notification. Section 222 leaves no
doubt that every telecommunications carrier has a duty to protect its
customers' proprietary information. The Commission has referred
specifically to Section 222(a) as imposing security obligations on
telecommunications carriers and providing authority to the Commission
to adopt security-focused rules, and we have implemented security and
data breach obligations on CPNI under the more specific auspices of
Section 222(c). We believe that the same authority justifies the
revised breach notification requirements we propose in this Notice,
including the requirement that carriers notify customers, law
enforcement, and the Commission of breaches of customer PI that is not
CPNI. We also do not believe that such breach notification
requirements, which are common in other sectors and in many states,
constitute unjustified compelled speech that implicates the First
Amendment.
B. Additional Statutory Authority
286. We also believe that our proposals find support in a number of
other statutory provisions, which provide authority to protect against
unjust, unreasonable, and unreasonably discriminatory practices;
interception or divulgence of communications; and the untimely
deployment of advanced telecommunications services. An additional
source of authority includes our particular authority over wireless
licensees.
[[Page 23398]]
1. Sections 201-202 of the Communications Act
287. In the 2015 Open Internet Order, we interpreted Section 201
and 202 in the broadband Internet access services context through our
adoption of the ``no-unreasonable interference/disadvantage'' standard.
That standard, which is codified in our rules at Section 8.11, ``is
specifically designed to protect against harms to the open nature of
the Internet.'' Of particular relevance for the proceeding initiated by
this Notice, we found that ``practices that fail to protect the
confidentiality of end users' proprietary information, will be unlawful
if they unreasonably interfere with or disadvantage end user consumers'
ability to select, access or use broadband services, applications, or
content.'' Against that backdrop, we seek comment on how our
interpretation of Sections 201 and 202 in the broadband Internet access
services context should inform rules adopted in this proceeding to
address consumer privacy and security.
288. We also note that Section 5 of the Federal Trade Commission
Act declares that unfair methods of competition and unfair or deceptive
acts or practices in or affecting commerce are unlawful. There is a
distinct congruence between practices that are unfair or deceptive and
many practices that are unjust, unreasonable, or unreasonably
discriminatory. Indeed, both Commissions have found that Section 201 of
the Communications Act and Section 5 of the FTC Act can be read as
prohibiting the same types of acts or practices, and the FTC has a rich
body of precedent, in enforcement actions and consent orders, that
measures privacy and data-security practices against the unfair-or-
deceptive standard. Although the FTC lacks statutory authority to
prevent common carriers from using such unfair or deceptive acts or
practices, we seek comment on the extent to which Section 5 of the FTC
Act and the FTC's precedents may inform our consideration of whether
practices by common carriers are unjust or unreasonable.
2. Section 705 of the Communications Act
289. Section 705 of the Communications Act has been in place since
the adoption of the Communications Act in 1934. Section 705(a)
establishes that providers of communications services by wire and radio
have obligations not to ``divulge or publish the existence, contents,
substance, purport, effect, or meaning'' of communications that they
carry on behalf of others. We believe that Section 705 can thus provide
a source of authority for rules protecting the privacy of customer
information, including the content of their communications. Do
commenters agree? To what extent do Section 705, as well as provisions
of Title 18 of the United States Code, currently limit the practices of
BIAS providers? To what extent might it be necessary for the Commission
to use its authority to interpret and implement Section 705 to protect
subscribers to BIAS services?
3. Section 706 of the Telecommunications Act of 1996
290. Section 706(a) of the Telecommunications Act of 1996 directs
the Commission to take actions that ``shall encourage the deployment on
a reasonable and timely basis of advanced telecommunications capability
to all Americans.'' To do so, the Commission may utilize, ``in a manner
consistent with the public interest, convenience, and necessity, price
cap regulation, regulatory forbearance, measures that promote
competition in the local telecommunications market, or other regulating
methods that remove barriers to infrastructure investment.'' In
addition, Section 706(b) provides that the Commission ``shall take
immediate action to accelerate deployment of such capability by
removing barriers to infrastructure investment and by promoting
competition in the telecommunications market,'' if it finds after
inquiry that advanced telecommunications capability is not being
deployed to all Americans in a reasonable and timely fashion. In
Verizon v. FCC, the DC Circuit upheld the Commission's transparency
rule as authorized pursuant to Section 706. In doing so, it upheld the
Commission's judgment that Section 706 constitutes an independent
source of affirmative statutory authority to regulate BIAS providers.
The Commission reaffirmed that view in the 2015 Open Internet Order.
291. We believe that rules governing the privacy and security
practices of BIAS providers, such as those discussed in this Notice,
would be independently supported by Section 706. We also believe that
the proposed transparency, choice, and security requirements further
align with the virtuous cycle of Section 706, since they have the
potential to increase customer confidence in BIAS providers' practices,
thereby boosting confidence in and therefore use of broadband services,
which encourages the deployment on a reasonable and timely basis of
advanced telecommunications capability to all Americans. We seek
comment on this analysis.
4. Title III of the Communications Act
292. Section 303(b) of the Act directs the Commission to, ``as
public convenience, interest, or necessity requires,'' ``[p]rescribe
the nature of the service to be rendered by each class of licensed
stations and each station within any class.'' Section 303(r),
furthermore, directs the Commission to make rules and regulations, and
prescribe restrictions and conditions, to carry out the Act. In
addition, Section 316 authorizes the Commission to adopt new conditions
on existing licenses if it determines that such action ``will promote
the public interest, convenience, and necessity.'' To the extent that
BIAS is provided by licensed entities providing mobile BIAS, these
provisions would appear to support adoption of rules such as those we
consider in this proceeding. We seek comment on this conclusion.
IV. Procedural Matters
A. Ex Parte Rules
293. This proceeding shall be treated as a ``permit-but-disclose''
proceeding in accordance with the Commission's ex parte rules. Persons
making ex parte presentations must file a copy of any written
presentation or a memorandum summarizing any oral presentation within
two business days after the presentation (unless a different deadline
applicable to the Sunshine period applies). Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentation must (1) list all persons attending or otherwise
participating in the meeting at which the ex parte presentation was
made, and (2) summarize all data presented and arguments made during
the presentation. If the presentation consisted in whole or in part of
the presentation of data or arguments already reflected in the
presenter's written comments, memoranda or other filings in the
proceeding, the presenter may provide citations to such data or
arguments in his or her prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such data
or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule 1.1206(b). In proceedings governed by
rule 1.49(f) or for which the Commission has made available a
[[Page 23399]]
method of electronic filing, written ex parte presentations and
memoranda summarizing oral ex parte presentations, and all attachments
thereto, must be filed through the electronic comment filing system
available for that proceeding, and must be filed in their native format
(e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this
proceeding should familiarize themselves with the Commission's ex parte
rules.
B. Accessible Formats
294. To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an email to [email protected] or call the Consumer & Governmental
Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
C. Paperwork Reduction Act
295. This NPRM seeks comment on potential new or revised
information collection requirements. If the Commission adopts any new
or revised information collection requirements, the Commission will
publish a notice in the Federal Register inviting the public to comment
on the requirements, as required by the Paperwork Reduction Act of
1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to
the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how
it might ``further reduce the information collection burden for small
business concerns with fewer than 25 employees.''
D. Contact Person
296. For further information about this proceeding, please contact
Sherwin Siy, FCC Wireline Competition Bureau, Competition Policy
Division, Room 5-C225, 445 12th Street SW., Washington, DC 20554, (202)
418-2783, [email protected].
V. Ordering Clauses
297. Accordingly, it is ordered, pursuant to Sections 1, 2, 4(i)-
(j), 201(b), 222, 303(b), 303(r), 316, 338(i), 631, and 705 of the
Communications Act of 1934, as amended, and Section 706 of the
Telecommunications Act of 1996, as amended, 47 U.S.C. 151, 152, 154(i)-
(j), 201(b), 222, 303(b), 303(r), 316, 338(i), 605, and 1302, that this
Notice of Proposed Rulemaking is adopted.
298. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the policies and rules
proposed in this Notice of Proposed Rulemaking (NPRM or Notice).
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the Notice provided on the front page of this item. The
Commission will send a copy of the Notice, including this IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration (SBA).
A. Need for, and Objectives of, the Proposed Rules
2. In this NPRM, we propose to apply the traditional privacy
requirements of the Communications Act to the most significant
communications technology of today: broadband Internet access service.
Our approach can be simply stated: First, consumers must be able to
protect their privacy, which requires transparency, choice, and data
security. Second, BIAS providers are the most important and extensive
conduits of consumer information and thus have access to very sensitive
and very personal information that could threaten a person's financial
security, reveal embarrassing or even harmful details of medical
history, or disclose to prying eyes the intimate details of interests,
physical presence, or fears. But, third, the current federal privacy
regime does not now comprehensively apply the traditional principles of
privacy protection to these 21st Century telecommunications services
provided by broadband networks. That is a gap that must be closed, and
this NPRM proposes a way to do so by securing what Congress has
commanded--the ability of every telecommunications user to protect his
or her privacy.
3. Privacy protects important personal interests. Not just freedom
from identity theft or financial loss but also from concerns that
intimate, personal details should not become grist for the mills of
public embarrassment or harassment or the basis of opaque, but harmful
judgments, such as discrimination. The power of modern broadband
networks is that they allow consumers to reach from their homes (or
cars or sidewalks) to the whole wide world instantaneously. The
accompanying concern is that those broadband networks can now stand
over the shoulder of every subscriber who surfs the web, sends an email
or text, or even walks down a street carrying a mobile device. Absent
legally-binding principles, those networks have the ability and
incentive to use and share extensive and personal information about
their customers. The protection of privacy thus both protects
individuals and encourages use of broadband networks.
B. Legal Basis
4. The legal basis for any action that may be taken pursuant to the
Notice is contained in Sections 1, 2, 4(i)-(j), 201(b), 222, 303(r),
338(i), and 705 of the Communications Act of 1934, as amended, and
Section 706 of the Telecommunications Act of 1996, as amended, 47
U.S.C. 151, 152, 154(i)-(j), 201(b), 222, 303(r), 338(i), 605, and
1302.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
5. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A ``small business concern'' is one which: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the Small Business
Administration (SBA).
1. Total Small Entities
6. Our actions, over time, may affect small entities that are not
easily categorized at present. We therefore describe here, at the
outset, three comprehensive small entity size standards that could be
directly affected herein. As of 2014, according to the SBA, there were
28.2 million small businesses in the U.S., which represented 99.7% of
all businesses in the United States. Additionally, a ``small
organization is generally any not-for-profit enterprise which is
independently owned and operated and not dominant in its field''.
Nationwide, as of 2007, there were approximately 1,621,215 small
organizations. Finally, the term ``small governmental
[[Page 23400]]
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand''. Census Bureau data for 2011
indicate that there were 90,056 local governmental jurisdictions in the
United States. We estimate that, of this total, as many as 89,327
entities may qualify as ``small governmental jurisdictions''. Thus, we
estimate that most local governmental jurisdictions are small.
2. Broadband Internet Access Service Providers
7. The proposed rules would apply to broadband Internet access
service providers (BIAS providers). The Economic Census places these
firms, whose services might include Voice over Internet Protocol
(VoIP), in either of two categories, depending on whether the service
is provided over the provider's own telecommunications facilities
(e.g., cable and DSL ISPs), or over client-supplied telecommunications
connections (e.g., dial-up ISPs). The former are within the category of
Wired Telecommunications Carriers, which has an SBA small business size
standard of 1,500 or fewer employees. These are also labeled
``broadband.'' The latter are within the category of All Other
Telecommunications, which has a size standard of annual receipts of $25
million or less. These are labeled non-broadband. According to Census
Bureau data for 2007, there were 3,188 firms in the first category,
total, that operated for the entire year. Of this total, 3144 firms had
employment of 999 or fewer employees, and 44 firms had employment of
1000 employees or more. For the second category, the data show that
1,274 firms operated for the entire year. Of those, 1,252 had annual
receipts below $25 million per year. Consequently, we estimate that the
majority of broadband Internet access service provider firms are small
entities.
8. The broadband Internet access service provider industry has
changed since this definition was introduced in 2007. The data cited
above may therefore include entities that no longer provide broadband
Internet access service, and may exclude entities that now provide such
service. To ensure that this IRFA describes the universe of small
entities that our action might affect, we discuss in turn several
different types of entities that might be providing broadband Internet
access service. We note that, although we have no specific information
on the number of small entities that provide broadband Internet access
service over unlicensed spectrum, we include these entities in our
Initial Regulatory Flexibility Analysis.
3. Wireline Providers
9. Wired Telecommunications Carriers. The SBA has developed a small
business size standard for Wired Telecommunications Carriers, which
consists of all such companies having 1,500 or fewer employees.
According to Census Bureau data for 2007, there were 3,188 firms in
this category, total, that operated for the entire year. Of this total,
3,144 firms had employment of 999 or fewer employees, and 44 firms had
employment of 1000 employees or more. Thus, under this size standard,
the majority of firms can be considered small.
10. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. The closest applicable size
standard under SBA rules is for Wired Telecommunications Carriers.
Under that size standard, such a business is small if it has 1,500 or
fewer employees. According to Commission data, 1,307 carriers reported
that they were incumbent local exchange service providers. Of these
1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and
301 have more than 1,500 employees. Consequently, the Commission
estimates that most providers of local exchange service are small
entities that may be affected by rules adopted pursuant to the Notice.
11. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The closest
applicable size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. According to Commission
data, 1,307 carriers reported that they were incumbent local exchange
service providers. Of these 1,307 carriers, an estimated 1,006 have
1,500 or fewer employees and 301 have more than 1,500 employees.
Consequently, the Commission estimates that most providers of incumbent
local exchange service are small businesses that may be affected by our
proposed rules.
12. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate size standard under SBA rules is for
the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 1,442 carriers reported that they were
engaged in the provision of either competitive local exchange services
or competitive access provider services. Of these 1,442 carriers, an
estimated 1,256 have 1,500 or fewer employees and 186 have more than
1,500 employees. In addition, 17 carriers have reported that they are
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500
or fewer employees. In addition, 72 carriers have reported that they
are Other Local Service Providers. Of the 72, seventy have 1,500 or
fewer employees and two have more than 1,500 employees. Consequently,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, Shared-Tenant Service
Providers, and other local service providers are small entities that
may be affected by our proposed rules.
13. We have included small incumbent LECs in this present RFA
analysis. As noted above, a ``small business'' under the RFA is one
that, inter alia, meets the pertinent small business size standard
(e.g., a telephone communications business having 1,500 or fewer
employees), and ``is not dominant in its field of operation.'' The
SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent LECs are not dominant in their field of operation because any
such dominance is not ``national'' in scope. We have therefore included
small incumbent LECs in this RFA analysis, although we emphasize that
this RFA action has no effect on Commission analyses and determinations
in other, non-RFA contexts.
14. Interexchange Carriers. Neither the Commission nor the SBA has
developed a small business size standard specifically for providers of
interexchange services. The appropriate size standard under SBA rules
is for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 359 carriers have reported that they are
engaged in the provision of interexchange service. Of these, an
estimated 317 have 1,500 or fewer employees and 42 have more than 1,500
employees. Consequently, the Commission estimates that the majority
[[Page 23401]]
of IXCs are small entities that may be affected by our proposed rules.
15. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
operator service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 33 carriers have reported that
they are engaged in the provision of operator services. Of these, an
estimated 31 have 1,500 or fewer employees and two have more than 1,500
employees. Consequently, the Commission estimates that the majority of
OSPs are small entities that may be affected by our proposed rules.
16. Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to Other Toll Carriers. This category includes toll carriers that do
not fall within the categories of interexchange carriers, operator
service providers, prepaid calling card providers, satellite service
carriers, or toll resellers. The closest applicable size standard under
SBA rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 284 companies reported that their primary
telecommunications service activity was the provision of other toll
carriage. Of these, an estimated 279 have 1,500 or fewer employees and
five have more than 1,500 employees. Consequently, the Commission
estimates that most Other Toll Carriers are small entities that may be
affected by rules adopted pursuant to the Notice.
4. Wireless Providers--Fixed and Mobile
17. The broadband Internet access service provider category covered
by these proposed rules may cover multiple wireless firms and
categories of regulated wireless services. Thus, to the extent the
wireless services listed below are used by wireless firms for broadband
Internet access service, the proposed actions may have an impact on
those small businesses as set forth above and further below. In
addition, for those services subject to auctions, we note that, as a
general matter, the number of winning bidders that claim to qualify as
small businesses at the close of an auction does not necessarily
represent the number of small businesses currently in service. Also,
the Commission does not generally track subsequent business size
unless, in the context of assignments and transfers or reportable
eligibility events, unjust enrichment issues are implicated.
18. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. For the category of Wireless
Telecommunications Carriers (except Satellite), census data for 2007
show that there were 1,383 firms that operated for the entire year. Of
this total, 1,368 firms had employment of 999 or fewer employees and 15
had employment of 1000 employees or more. Since all firms with fewer
than 1,500 employees are considered small, given the total employment
in the sector, we estimate that the vast majority of wireless firms are
small.
19. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses. The Commission defined ``small business'' for the wireless
communications services (WCS) auction as an entity with average gross
revenues of $40 million for each of the three preceding years, and a
``very small business'' as an entity with average gross revenues of $15
million for each of the three preceding years. The SBA has approved
these definitions.
20. 1670-1675 MHz Services. This service can be used for fixed and
mobile uses, except aeronautical mobile. An auction for one license in
the 1670-1675 MHz band was conducted in 2003. One license was awarded.
The winning bidder was not a small entity.
21. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite). Under the SBA small business size standard, a business is
small if it has 1,500 or fewer employees. According to Commission data,
413 carriers reported that they were engaged in wireless telephony. Of
these, an estimated 261 have 1,500 or fewer employees and 152 have more
than 1,500 employees. Therefore, a little less than one third of these
entities can be considered small.
22. Broadband Personal Communications Service. The broadband
personal communications services (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission initially defined a ``small
business'' for C- and F-Block licenses as an entity that has average
gross revenues of $40 million or less in the three previous calendar
years. For F-Block licenses, an additional small business size standard
for ``very small business'' was added and is defined as an entity that,
together with its affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years. These small
business size standards, in the context of broadband PCS auctions, have
been approved by the SBA. No small businesses within the SBA-approved
small business size standards bid successfully for licenses in Blocks A
and B. There were 90 winning bidders that claimed small business status
in the first two C-Block auctions. A total of 93 bidders that claimed
small business status won approximately 40 percent of the 1,479
licenses in the first auction for the D, E, and F Blocks. On April 15,
1999, the Commission completed the reauction of 347 C-, D-, E-, and F-
Block licenses in Auction No. 22. Of the 57 winning bidders in that
auction, 48 claimed small business status and won 277 licenses.
23. On January 26, 2001, the Commission completed the auction of
422 C and F Block Broadband PCS licenses in Auction No. 35. Of the 35
winning bidders in that auction, 29 claimed small business status.
Subsequent events concerning Auction 35, including judicial and agency
determinations, resulted in a total of 163 C and F Block licenses being
available for grant. On February 15, 2005, the Commission completed an
auction of 242 C-, D-, E-, and F-Block licenses in Auction No. 58. Of
the 24 winning bidders in that auction, 16 claimed small business
status and won 156 licenses. On May 21, 2007, the Commission completed
an auction of 33 licenses in the A, C, and F Blocks in Auction No. 71.
Of the 12 winning bidders in that auction, five claimed small business
status and won 18 licenses. On August 20, 2008, the Commission
completed the auction of 20 C-, D-, E-, and F-Block Broadband PCS
licenses in Auction No. 78. Of the eight winning bidders for Broadband
PCS licenses in that auction, six claimed small business status and won
14 licenses.
24. Specialized Mobile Radio Licenses. The Commission awards
``small entity'' bidding credits in auctions for Specialized Mobile
Radio (SMR) geographic area licenses in the
[[Page 23402]]
800 MHz and 900 MHz bands to firms that had revenues of no more than
$15 million in each of the three previous calendar years. The
Commission awards ``very small entity'' bidding credits to firms that
had revenues of no more than $3 million in each of the three previous
calendar years. The SBA has approved these small business size
standards for the 900 MHz Service. The Commission has held auctions for
geographic area licenses in the 800 MHz and 900 MHz bands. The 900 MHz
SMR auction began on December 5, 1995, and closed on April 15, 1996.
Sixty bidders claiming that they qualified as small businesses under
the $15 million size standard won 263 geographic area licenses in the
900 MHz SMR band. The 800 MHz SMR auction for the upper 200 channels
began on October 28, 1997, and was completed on December 8, 1997. Ten
bidders claiming that they qualified as small businesses under the $15
million size standard won 38 geographic area licenses for the upper 200
channels in the 800 MHz SMR band. A second auction for the 800 MHz band
was held on January 10, 2002 and closed on January 17, 2002 and
included 23 BEA licenses. One bidder claiming small business status won
five licenses.
25. The auction of the 1,053 800 MHz SMR geographic area licenses
for the General Category channels began on August 16, 2000, and was
completed on September 1, 2000. Eleven bidders won 108 geographic area
licenses for the General Category channels in the 800 MHz SMR band and
qualified as small businesses under the $15 million size standard. In
an auction completed on December 5, 2000, a total of 2,800 Economic
Area licenses in the lower 80 channels of the 800 MHz SMR service were
awarded. Of the 22 winning bidders, 19 claimed small business status
and won 129 licenses. Thus, combining all four auctions, 41 winning
bidders for geographic licenses in the 800 MHz SMR band claimed status
as small businesses.
26. In addition, there are numerous incumbent site-by-site SMR
licenses and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. We do not know how many firms provide 800
MHz or 900 MHz geographic area SMR service pursuant to extended
implementation authorizations, nor how many of these providers have
annual revenues of no more than $15 million. One firm has over $15
million in revenues. In addition, we do not know how many of these
firms have 1,500 or fewer employees, which is the SBA-determined size
standard. We assume, for purposes of this analysis, that all of the
remaining extended implementation authorizations are held by small
entities, as defined by the SBA.
27. Lower 700 MHz Band Licenses. The Commission previously adopted
criteria for defining three groups of small businesses for purposes of
determining their eligibility for special provisions such as bidding
credits. The Commission defined a ``small business'' as an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $40 million for the preceding three years.
A ``very small business'' is defined as an entity that, together with
its affiliates and controlling principals, has average gross revenues
that are not more than $15 million for the preceding three years.
Additionally, the lower 700 MHz Service had a third category of small
business status for Metropolitan/Rural Service Area (MSA/RSA)
licenses--``entrepreneur''--which is defined as an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $3 million for the preceding
three years. The SBA approved these small size standards. An auction of
740 licenses (one license in each of the 734 MSAs/RSAs and one license
in each of the six Economic Area Groupings (EAGs)) commenced on August
27, 2002, and closed on September 18, 2002. Of the 740 licenses
available for auction, 484 licenses were won by 102 winning bidders.
Seventy-two of the winning bidders claimed small business, very small
business or entrepreneur status and won a total of 329 licenses. A
second auction commenced on May 28, 2003, closed on June 13, 2003, and
included 256 licenses: 5 EAG licenses and 476 Cellular Market Area
licenses. Seventeen winning bidders claimed small or very small
business status and won 60 licenses, and nine winning bidders claimed
entrepreneur status and won 154 licenses. On July 26, 2005, the
Commission completed an auction of 5 licenses in the Lower 700 MHz band
(Auction No. 60). There were three winning bidders for five licenses.
All three winning bidders claimed small business status.
28. In 2007, the Commission reexamined its rules governing the 700
MHz band in the 700 MHz Second Report and Order. An auction of 700 MHz
licenses commenced January 24, 2008 and closed on March 18, 2008, which
included, 176 Economic Area licenses in the A Block, 734 Cellular
Market Area licenses in the B Block, and 176 EA licenses in the E
Block. Twenty winning bidders, claiming small business status (those
with attributable average annual gross revenues that exceed $15 million
and do not exceed $40 million for the preceding three years) won 49
licenses. Thirty three winning bidders claiming very small business
status (those with attributable average annual gross revenues that do
not exceed $15 million for the preceding three years) won 325 licenses.
29. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and
Order, the Commission revised its rules regarding Upper 700 MHz
licenses. On January 24, 2008, the Commission commenced Auction 73 in
which several licenses in the Upper 700 MHz band were available for
licensing: 12 Regional Economic Area Grouping licenses in the C Block,
and one nationwide license in the D Block. The auction concluded on
March 18, 2008, with 3 winning bidders claiming very small business
status (those with attributable average annual gross revenues that do
not exceed $15 million for the preceding three years) and winning five
licenses.
30. 700 MHz Guard Band Licensees. In 2000, in the 700 MHz Guard
Band Order, the Commission adopted size standards for ``small
businesses'' and ``very small businesses'' for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. A small business in this service is an entity
that, together with its affiliates and controlling principals, has
average gross revenues not exceeding $40 million for the preceding
three years. Additionally, a very small business is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $15 million for the preceding
three years. SBA approval of these definitions is not required. An
auction of 52 Major Economic Area licenses commenced on September 6,
2000, and closed on September 21, 2000. Of the 104 licenses auctioned,
96 licenses were sold to nine bidders. Five of these bidders were small
businesses that won a total of 26 licenses. A second auction of 700 MHz
Guard Band licenses commenced on February 13, 2001, and closed on
February 21, 2001. All eight of the licenses auctioned were sold to
three bidders. One of these bidders was a small business that won a
total of two licenses.
31. Air-Ground Radiotelephone Service. The Commission has
previously used the SBA's small business size standard applicable to
Wireless Telecommunications Carriers (except Satellite), i.e., an
entity employing no more than 1,500 persons. There are approximately
100 licensees in the Air-
[[Page 23403]]
Ground Radiotelephone Service, and under that definition, we estimate
that almost all of them qualify as small entities under the SBA
definition. For purposes of assigning Air-Ground Radiotelephone Service
licenses through competitive bidding, the Commission has defined
``small business'' as an entity that, together with controlling
interests and affiliates, has average annual gross revenues for the
preceding three years not exceeding $40 million. A ``very small
business'' is defined as an entity that, together with controlling
interests and affiliates, has average annual gross revenues for the
preceding three years not exceeding $15 million. These definitions were
approved by the SBA. In May 2006, the Commission completed an auction
of nationwide commercial Air-Ground Radiotelephone Service licenses in
the 800 MHz band (Auction No. 65). On June 2, 2006, the auction closed
with two winning bidders winning two Air-Ground Radiotelephone Services
licenses. Neither of the winning bidders claimed small business status.
32. AWS Services (1710-1755 MHz and 2110-2155 MHz bands (AWS-1);
1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands
(AWS-2); 2155-2175 MHz band (AWS-3)). For the AWS-1 bands, the
Commission has defined a ``small business'' as an entity with average
annual gross revenues for the preceding three years not exceeding $40
million, and a ``very small business'' as an entity with average annual
gross revenues for the preceding three years not exceeding $15 million.
For AWS-2 and AWS-3, although we do not know for certain which entities
are likely to apply for these frequencies, we note that the AWS-1 bands
are comparable to those used for cellular service and personal
communications service. The Commission has not yet adopted size
standards for the AWS-2 or AWS-3 bands but proposes to treat both AWS-2
and AWS-3 similarly to broadband PCS service and AWS-1 service due to
the comparable capital requirements and other factors, such as issues
involved in relocating incumbents and developing markets, technologies,
and services.
33. 3650-3700 MHz band. In March 2005, the Commission released a
Report and Order and Memorandum Opinion and Order that provides for
nationwide, non-exclusive licensing of terrestrial operations,
utilizing contention-based technologies, in the 3650 MHz band (i.e.,
3650-3700 MHz). As of April 2010, more than 1270 licenses have been
granted and more than 7433 sites have been registered. The Commission
has not developed a definition of small entities applicable to 3650-
3700 MHz band nationwide, non-exclusive licensees. However, we estimate
that the majority of these licensees are Internet Access Service
Providers (ISPs) and that most of those licensees are small businesses.
34. Fixed Microwave Services. Microwave services include common
carrier, private-operational fixed, and broadcast auxiliary radio
services. They also include the Local Multipoint Distribution Service
(LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz
Service, where licensees can choose between common carrier and non-
common carrier status. At present, there are approximately 36,708
common carrier fixed licensees and 59,291 private operational-fixed
licensees and broadcast auxiliary radio licensees in the microwave
services. There are approximately 135 LMDS licensees, three DEMS
licensees, and three 24 GHz licensees. The Commission has not yet
defined a small business with respect to microwave services. For
purposes of the IRFA, we will use the SBA's definition applicable to
Wireless Telecommunications Carriers (except satellite)--i.e., an
entity with no more than 1,500 persons. Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. The Commission does not have data
specifying the number of these licensees that have more than 1,500
employees, and thus is unable at this time to estimate with greater
precision the number of fixed microwave service licensees that would
qualify as small business concerns under the SBA's small business size
standard. Consequently, the Commission estimates that there are up to
36,708 common carrier fixed licensees and up to 59,291 private
operational-fixed licensees and broadcast auxiliary radio licensees in
the microwave services that may be small and may be affected by the
rules and policies adopted herein. We note, however, that the common
carrier microwave fixed licensee category includes some large entities.
35. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (MDS) and Multichannel Multipoint Distribution
Service (MMDS) systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (BRS) and Educational Broadband Service (EBS) (previously
referred to as the Instructional Television Fixed Service (ITFS)). In
connection with the 1996 BRS auction, the Commission established a
small business size standard as an entity that had annual average gross
revenues of no more than $40 million in the previous three calendar
years. The BRS auctions resulted in 67 successful bidders obtaining
licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67
auction winners, 61 met the definition of a small business. BRS also
includes licensees of stations authorized prior to the auction. At this
time, we estimate that of the 61 small business BRS auction winners, 48
remain small business licensees. In addition to the 48 small businesses
that hold BTA authorizations, there are approximately 392 incumbent BRS
licensees that are considered small entities. After adding the number
of small business auction licensees to the number of incumbent
licensees not already counted, we find that there are currently
approximately 440 BRS licensees that are defined as small businesses
under either the SBA or the Commission's rules.
36. In 2009, the Commission conducted Auction 86, the sale of 78
licenses in the BRS areas. The Commission offered three levels of
bidding credits: (i) A bidder with attributed average annual gross
revenues that exceed $15 million and do not exceed $40 million for the
preceding three years (small business) received a 15 percent discount
on its winning bid; (ii) a bidder with attributed average annual gross
revenues that exceed $3 million and do not exceed $15 million for the
preceding three years (very small business) received a 25 percent
discount on its winning bid; and (iii) a bidder with attributed average
annual gross revenues that do not exceed $3 million for the preceding
three years (entrepreneur) received a 35 percent discount on its
winning bid. Auction 86 concluded in 2009 with the sale of 61 licenses.
Of the ten winning bidders, two bidders that claimed small business
status won 4 licenses; one bidder that claimed very small business
status won three licenses; and two bidders that claimed entrepreneur
status won six licenses.
37. In addition, the SBA's Cable Television Distribution Services
small business size standard is applicable to EBS. There are presently
2,436 EBS licensees. All but 100 of these licenses are held by
educational institutions. Educational institutions are included in this
analysis as small entities. Thus, we estimate that at least 2,336
licensees are small businesses. Since 2007, Cable
[[Page 23404]]
Television Distribution Services have been defined within the broad
economic census category of Wired Telecommunications Carriers; that
category is defined as follows: ``This industry comprises
establishments primarily engaged in operating and/or providing access
to transmission facilities and infrastructure that they own and/or
lease for the transmission of voice, data, text, sound, and video using
wired telecommunications networks. Transmission facilities may be based
on a single technology or a combination of technologies.'' The SBA has
developed a small business size standard for this category, which is:
All such firms having 1,500 or fewer employees. To gauge small business
prevalence for these cable services we must, however, use the most
current census data that are based on the previous category of Cable
and Other Program Distribution and its associated size standard; that
size standard was: All such firms having $13.5 million or less in
annual receipts. According to Census Bureau data for 2007, there were a
total of 996 firms in this category that operated for the entire year.
Of this total, 948 firms had annual receipts of under $10 million, and
48 firms had receipts of $10 million or more but less than $25 million.
Thus, the majority of these firms can be considered small.
5. Satellite Service Providers
38. Satellite Telecommunications Providers. Two economic census
categories address the satellite industry. The first category has a
small business size standard of $30 million or less in average annual
receipts, under SBA rules. The second has a size standard of $30
million or less in annual receipts.
39. The category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing telecommunications
services to other establishments in the telecommunications and
broadcasting industries by forwarding and receiving communications
signals via a system of satellites or reselling satellite
telecommunications.'' For this category, Census Bureau data for 2007
show that there were a total of 570 firms that operated for the entire
year. Of this total, 530 firms had annual receipts of under $30
million, and 40 firms had receipts of over $30 million. Consequently,
we estimate that the majority of Satellite Telecommunications firms are
small entities that might be affected by our action.
40. The second category of Other Telecommunications comprises,
inter alia, ``establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.'' For this
category, Census Bureau data for 2007 show that there were a total of
1,274 firms that operated for the entire year. Of this total, 1,252 had
annual receipts below $25 million per year. Consequently, we estimate
that the majority of All Other Telecommunications firms are small
entities that might be affected by our action.
6. Cable Service Providers
41. Because Section 706 requires us to monitor the deployment of
broadband using any technology, we anticipate that some broadband
service providers may not provide telephone service. Accordingly, we
describe below other types of firms that may provide broadband
services, including cable companies, MDS providers, and utilities,
among others.
42. Cable and Other Program Distributors. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' The SBA has developed a small business size standard
for this category, which is: All such firms having 1,500 or fewer
employees. To gauge small business prevalence for these cable services
we must, however, use current census data that are based on the
previous category of Cable and Other Program Distribution and its
associated size standard; that size standard was: All such firms having
$13.5 million or less in annual receipts. According to Census Bureau
data for 2007, there were a total of 2,048 firms in this category that
operated for the entire year. Of this total, 1,393 firms had annual
receipts of under $10 million, and 655 firms had receipts of $10
million or more. Thus, the majority of these firms can be considered
small.
43. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. Industry data
shows that there were 1,141 cable companies at the end of June 2012. Of
this total, all but ten cable operators nationwide are small under this
size standard. In addition, under the Commission's rules, a ``small
system'' is a cable system serving 15,000 or fewer subscribers. Current
Commission records show 4,945 cable systems nationwide. Of this total,
4,380 cable systems have less than 20,000 subscribers, and 565 systems
have 20,000 or more subscribers, based on the same records. Thus, under
this standard, we estimate that most cable systems are small entities.
44. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' The Commission has determined that an operator serving
fewer than 677,000 subscribers shall be deemed a small operator, if its
annual revenues, when combined with the total annual revenues of all
its affiliates, do not exceed $250 million in the aggregate. Based on
available data, we find that all but ten incumbent cable operators are
small entities under this size standard. We note that the Commission
neither requests nor collects information on whether cable system
operators are affiliated with entities whose gross annual revenues
exceed $250 million, and therefore we are unable to estimate more
accurately the number of cable system operators that would qualify as
small under this size standard.
7. All Other Telecommunications
45. The Census Bureau defines this industry as including
``establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite
[[Page 23405]]
systems. Establishments providing Internet services or Voice over
Internet Protocol (VoIP) services via client-supplied
telecommunications connections are also included in this industry.''
The SBA has developed a small business size standard for this category;
that size standard is $32.5 million or less in average annual receipts.
According to Census Bureau data for 2007, there were 2,383 firms in
this category that operated for the entire year. Of these, 2,346 firms
had annual receipts of under $25 million and 37 firms had annual
receipts of $25 million or more. Consequently, we estimate that the
majority of these firms are small entities that may be affected by
rules adopted pursuant to the Further Notice.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
46. This Notice of Proposed Rulemaking proposes and/or seeks
comment on several regulations that could affect small providers,
including (1) the provision of meaningful notice of privacy policies;
(2) customer approval requirements for the use and disclosure of
customer PI; (3) the use and disclosure of aggregate customer PI; (4)
the security of customer proprietary information; (5) data breach
notification; (6) other practices implicating privacy; and (7) dispute
resolution.
47. Meaningful Notice of Privacy Policies. As discussed above, this
Notice proposes to require BIAS providers to provide meaningful notice
of privacy policies. The Notice proposes rules and/or seeks comment on
the content, location, timing, and formatting of different types of
privacy notices. In order to promote transparency and inform all BIAS
customers of their privacy choices and security, these proposed rules
will apply to small providers as well as large providers. The Notice
seeks comment on alternative ways of achieving these goals. The Notice
seeks comment on the compliance costs of these proposals for small
providers. The Notice also seeks comment on whether to harmonize these
proposals with existing regulations regarding voice CPNI, and whether
such harmonization can reduce compliance burdens.
48. Customer Approval Requirements. As discussed above, this Notice
proposes to require BIAS providers to obtain customer approval in order
to use, access, or disclose customer proprietary information. This
Notice proposes and/or seeks comment on (1) the contexts in which BIAS
providers need to seek opt-out and opt-in consent for uses of customer
information; (2) the requirements BIAS providers must meet to ensure
that customers can easily learn about and effectively express their
choices; (3) the ways in which BIAS providers should document their
compliance with customers' choices. In order to protect the privacy
choices of all BIAS customers, these proposals will apply to small
providers as well as large providers. The Notice seeks comment on the
effects of these proposals on small providers, as well as whether and
how to harmonize these proposals with existing regulations regarding
voice CPNI.
49. Use and Disclosure of Aggregate Customer PI. As discussed
above, this Notice proposes rules and seeks comment on BIAS provider
use, access, and disclosure of aggregate customer PI. Our proposed
rules would allow BIAS providers, including small providers, to use,
access, and disclose aggregate customer PI if the provider (1)
determines that the aggregated customer PI is not reasonably linkable
to a specific individual or device; (2) publicly commits to maintain
and use the aggregate data in a non-individually identifiable fashion
and to not attempt to re-identify the data; (3) contractually prohibits
any entity to which it discloses or permits access to the aggregate
data from attempting to re-identify the data; and (4) exercises
reasonable monitoring to ensure that those contracts are not violated.
In order to promote all customers' privacy interests in the
transparency, choice, and security of how their data is used, these
proposals will apply to small providers as well as large providers. We
also seek comment on alternative approaches to handling aggregate
customer PI, as well as the burdens our proposed rules would place on
small providers.
50. Securing Customer Proprietary Information. As discussed above,
this Notice proposes rules and seeks comment on requiring BIAS
providers to protect the security and confidentiality of customer PI by
adopting security practices calibrated to the nature and scope of the
BIAS provider's activities, the sensitivity of the underlying data, and
technical feasibility. These proposals include requiring BIAS providers
to protect against unauthorized use or disclosure of customer PI by (1)
conducting risk management assessments; (2) training employees to
protect against reasonably anticipated unauthorized use or disclosure
of customer PI; (3) ensuring reasonable due diligence and corporate
accountability; and (4) requiring customer authentication for access to
customer proprietary information. We seek comment on how to hold BIAS
providers accountable for third party misuse of customer PI and whether
we should impose reasonable data collection, retention, and disposal
rules. In order to protect the security of all BIAS customers' private
information, these proposals will apply to small providers as well as
large providers. We also seek comment on alternative approaches to
securing customer PI, the burdens the proposed rules would place on
small providers, and whether to harmonize our security proposals with
existing regulations for voice CPNI.
51. Data Breach Notification Requirements. As discussed above, the
Notice proposes rules and seeks comment on requiring telecommunications
providers to give customers, the Commission, and other law enforcement
notice when a breach of customer PI has occurred. In addition, the
Notice proposes to harmonize the existing voice CPNI data breach rules
with these proposed rules for BIAS provider data breaches. These
proposals include (1) requiring telecommunications providers to notify
customers within ten days after the discovery of a data breach, subject
to law enforcement needs, under circumstances enumerated by the
Commission; (2) the necessary content of a customer data breach
notification; (3) requiring telecommunications providers to notify the
Commission within seven days, and to notify the Federal Bureau of
Investigation and the U.S. Secret Service, in the event of a data
breach affecting more than 5,000 customers, within seven days; (4) two-
year record retention rules for data breaches; and (5) seeking comment
on how to address third party data breaches. In order to promote
transparency and security for all telecommunications customers, these
proposed rules will apply to small providers as well as large
providers. The Notice also seeks comment on alternative data breach
notification approaches as well as the burdens that our proposals will
have on small providers.
52. Other Practices Implicating Privacy. As discussed above, the
Notice seeks comment on whether there are certain BIAS provider
practices implicating privacy that our rules should prohibit, or to
which we should apply heightened notice and choice requirements. In
particular, the Notice proposes to prohibit service offers conditioned
on the waiver of privacy rights. The Notice also seeks comment on how
to address (1) financial inducement practices; (2) deep packet
inspection for purposes other than
[[Page 23406]]
network management; and (3) persistent tracking technologies. In order
to protect the privacy of all BIAS customers, any such rules may be
applied to small providers as well as large providers. In the course of
seeking comment on these subjects, the Notice seeks comment on
alternative approaches and burdens to small providers.
53. Dispute Resolution. As discussed above, the Notice seeks
comment on whether the Commission's current informal complaint
resolution process is sufficient or if BIAS providers should offer
additional dispute resolution mechanisms for broadband privacy
disputes. In order to promote all customers' privacy interests in the
transparency, choice, and security of how their data is used, any such
resulting rules may apply to small providers as well as large
providers. The Notice seeks comment as well on alternative approaches
as well as the burdens any approaches would have on small providers.
E. Steps Take To Minimize the Significant Economic Impact on Small
Entities and Significant Alternatives Considered
54. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(1) the establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.''
55. The Commission expects to consider the economic impact on small
providers, as identified in comments filed in response to the Notice
and this IRFA, in reaching its final conclusions and taking action in
this proceeding. Moreover, in formulating these rules, we seek to
provide flexibility for small providers whenever possible, by setting
out standards and goals for the providers to reach in whichever way is
most efficient for them.
56. Definitions. As discussed above, in proposing definitions to
accompany these proposed rules we seek comment on alternative
formulations, including alternatives that could reduce burdens on small
providers. We seek comment on alternative definitions of the terms
affiliate; customer; CPNI; customer PI; opt-out and opt-in approval;
communications-related services; breach; and other terms and ask how
such alternatives could affect the benefits and burdens to small
providers. In addition to these requests for comment, we seek comment
generally on alternative definitions that would reduce burdens on small
providers.
57. Providing Meaningful Notice of Privacy Policies. As discussed
above, we seek comment on alternative approaches to our proposed
privacy notice rules that would alleviate burdens on small providers.
In particular, we seek comment on notice practices currently in use and
industry best practices, in order to develop efficient and effective
options. We seek comment on the compliance burden associated with our
proposed rules and alternatives that would alleviate the burden on
small providers in particular. We seek comment on whether a privacy
policy safe harbor rule would ease the regulatory burden on small
providers. We also seek comment on other alternatives for simplifying
and standardizing privacy notices and whether these approaches, such as
the creation of a privacy dashboard, could alleviate burdens on small
providers. For notices of material changes to privacy policies, we
specifically seek comment on burdens, compliance costs, and
alternatives for small providers.
58. Customer Approval Requirements for the Use and Disclosure of
Customer PI. As discussed above, we seek comment on alternative
customer approval rules that could alleviate burdens on small providers
while preserving the ability of all BIAS customers to have meaningful
choices in the use and disclosure of their personal information. Choice
is a critical component of protecting the confidentiality of customer
proprietary information. We seek comment on ways to minimize the burden
of our proposed customer choice framework on small BIAS providers. In
particular, we seek comment on whether there are any small-provider-
specific exemptions that we might build into our proposed approval
framework. For example, should we allow small providers who have
already obtained customer approval to use their customers' proprietary
information to grandfather in those approvals? Should this be allowed
for third parties? Should we exempt providers that collect data from
fewer than 5,000 customers a year, provided they do not share customer
data with third parties? Are there other such policies that would
minimize the burden of our proposed rules on small providers? If so,
would the benefits to small providers of any suggested exemptions
outweigh the potential negative impact of such an exemption on the
privacy interests of the customers of small BIAS providers? Further,
were we to adopt an exemption, how would we define what constitutes a
``small provider'' for purposes of that exemption?
59. Use and Disclosure of Aggregate Customer PI. As discussed
above, we seek comment on alternative approaches to the use and
disclosure of aggregate customer PI that could alleviate burdens on
small BIAS providers. In particular, we seek comment on an approach to
aggregate customer PI that is similar to that used by HIPAA, and
whether such an approach would be less burdensome to small BIAS
providers. We also ask that as commenters consider whether we should
adopt each of the prongs of our proposed rule, and any proposed
alternatives, that they also consider how we could limit any burdens
associated with compliance, particularly for small providers.
60. Securing Customer Proprietary Information. As discussed above,
we seek comment on alternative approaches to secure customer
proprietary information that could alleviate burdens on small BIAS
providers. We propose that any specific security measures employed by a
BIAS provider take into consideration the nature and scope of the BIAS
provider's activities, because we believe that this sliding scale
approach will afford sufficient flexibility for small providers while
still protecting their customers. The Commission has previously
explained that ``privacy is a concern which applies regardless of
carrier size or market share.'' However, we recognize that the same
data security protections may not be necessary in all cases. For
example, a small provider with only a few customers may not store, use,
or disclose customer PI in the same manner as a large provider. In such
a case, what constitutes ``reasonable'' safeguards might be different.
We seek comment on current data security practices in the industry and
alternative structures that can build on current best practices to
alleviate burdens. We seek comment on alternatives to our proposed rule
on account change notifications that could reduce burdens on small
providers. When discussing whether to require multi-factor
authentication or contractual data security commitments from third
party recipients of customer PI, we seek comment on the burdens such
proposals could place on small providers and alternatives that could
reduce such burdens. We also ask that comments
[[Page 23407]]
and proposals regarding data destruction discuss potential burdens for
small providers.
61. Data Breach Notification Requirements. As discussed above, we
seek comment on alternative approaches to data breach notifications
that could alleviate burdens on small providers. In particular we
propose a threshold of 5,000 affected customers for breach notification
of the Federal Bureau of Investigation and U.S. Secret Service, and
seek comment on how such a threshold could benefit or burden small
providers. We also seek comment on record retention rules and
alternatives that could reduce compliance burdens.
62. Other Practices Implicating Privacy. As discussed above, in
seeking comment on whether to prohibit specific practices implicating
privacy, we also seek comment on how proposals and alternatives can
alleviate burdens on small providers. In particular, when seeking
comment on whether heightened notice and choice requirements are
necessary for some practices, we specifically ask commenters to address
the burdens of their proposals on small providers, and alternatives to
reduce such burdens.
63. Dispute Resolution. As discussed above, in seeking comment on
potential approaches to dispute resolution, we also seek comment on how
proposals and alternatives can benefit or burden small providers.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
None.
List of Subjects in 47 CFR Part 64
Claims, Communications common carriers, Computer technology,
Credit, Foreign relations, Individuals with disabilities, Political
candidates, Radio, Reporting and recordkeeping requirements,
Telecommunications, Telegraph, Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to revise Part 64 of Title 47 of the
Code of Federal Regulations as follows:
PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
0
1. The authority citation for part 64 is revised to read as follows:
Authority: 47 U.S.C. 154, 254(k), 403, Pub. L. 104-104, 110
Stat. 56. Interpret or apply 47 U.S.C. 201, 202, 218, 222, 225, 226,
227, 228, 254(k), 301, 303, 332, 338, 551, 616, 620, 705, 1302, and
the Middle Class Tax Relief and Job Creation Act of 2012, Pub. L.
112-96, unless otherwise noted.
Subpart U--Customer Proprietary Network Information
0
2. Amend Sec. 64.2003 as follows:
0
a. Redesignate paragraphs (d) through (r) as indicated in the table
below:
------------------------------------------------------------------------
Old paragraph New paragraph
------------------------------------------------------------------------
(d) (e)
(e) (f)
(f) (g)
(g) (i)
(h) (j)
(i) (k)
(j) (l)
(k) (m)
(l) (n)
(m) (p)
(n) (q)
(o) (r)
(p) (s)
(q) (t)
(r) (u)
------------------------------------------------------------------------
0
b. Add new paragraphs (d), (h), and (o), and revise newly redesignated
paragraphs (c), (j), (k), (l), (r), and (s) to read as follows:
Sec. 64.2003 Definitions.
* * * * *
(c) Affiliate. The term ``affiliate'' has the same meaning given
such term in Section 3 of the Communications Act of 1934, as amended,
47 U.S.C. 153.
(d) Breach of security. The terms ``breach of security,''
``breach,'' or ``data breach,'' mean any instance in which a person,
without authorization or exceeding authorization, has gained access to,
used, or disclosed customer proprietary information.
* * * * *
(h) Customer proprietary information. The term ``customer
proprietary information'' or ``customer PI'' means:
(1) Customer proprietary network information; and
(2) Personally identifiable information (PII) a carrier acquires in
connection to its provision of telecommunications service.
* * * * *
(j) Customer premises equipment (CPE). The term ``customer premises
equipment (CPE)'' has the same meaning given to such term in Section 3
of the Communications Act of 1934, as amended, 47 U.S.C. 153.
(k) Information services typically provided by telecommunications
carriers. The phrase ``information services typically provided by
telecommunications carriers'' means only those information services (as
defined in Section 3 of the Communication Act of 1934, as amended, 47
U.S.C. 153) that are typically provided by telecommunications carriers,
such as voice mail services. Such phrase ``information services
typically provided by telecommunications carriers,'' as used in this
subpart, shall not include retail consumer services provided using
Internet Web sites (such as travel reservation services or mortgage
lending services), whether or not such services may otherwise be
considered to be information services.
(l) Local exchange carrier (LEC). The term ``local exchange carrier
(LEC)'' has the same meaning given to such term in Section 3 of the
Communications Act of 1934, as amended, 47 U.S.C. 153.
* * * * *
(o) Personally Identifiable Information. The term ``personally
identifiable information'' or ``PII'' means any information that is
linked or linkable to an individual.
* * * * *
(r) Telecommunications carrier or carrier. The terms
``telecommunications carrier'' or ``carrier'' shall have the same
meaning as set forth in Section 3 of the Communications Act of 1934, as
amended, 47 U.S.C. 153. For the purposes of this subpart, the term
``telecommunications carrier'' or ``carrier'' shall include an entity
that provides interconnected VoIP service, as that term is defined in
Sec. 9.3 of this chapter, and shall exclude an entity that provides
broadband Internet access service, as that term is defined in Sec. 8.2
of this chapter.
(s) Telecommunications service. The term ``telecommunications
service'' has the same meaning given to such term in Section 3 of the
Communications Act of 1934, as amended, 47 U.S.C. 153.
* * * * *
0
3. Revise Sec. 64.2011 to read as follows:
Sec. 64.2011 Data breach notification.
(a) Customer notification. A telecommunications carrier must notify
affected customers of covered breaches of customer PI no later than 10
days after the discovery of the breach, subject to law enforcement
needs.
(1) A telecommunications carrier required to provide notification
to a customer under this paragraph may provide such notice by any of
the following methods:
(i) Written notification, sent to the postal address of the
customer provided by the customer for contacting that customer;
(ii) Email or other electronic means using information provided by
the
[[Page 23408]]
customer for contacting that customer for data breach notification
purposes.
(2) The customer notification required to be provided under this
section must include:
(i) The date, estimated date, or estimated date range of the breach
of security;
(ii) A description of the customer PI that was used, disclosed, or
accessed, or reasonably believed to have been used, disclosed, or
accessed, by a person without or exceeding authorization as a part of
the breach of security;
(iii) Information that the customer can use to contact the
telecommunications carrier to inquire about the breach of security and
the customer PI that the telecommunications carrier maintains about
that customer;
(iv) Information about how to contact the Federal Communications
Commission and any state regulatory agencies relevant to the customer
and the service; and
(v) Information about the national credit-reporting agencies and
the steps customers can take to guard against identity theft, including
any credit monitoring or reporting the telecommunications carrier is
offering customers affected by the breach of security.
(3) If a federal law enforcement agency determines that the
notification to customers required under this paragraph would interfere
with a criminal or national security investigation, such notification
shall be delayed upon the written request of the law enforcement agency
for any period which the law-enforcement agency determines is
reasonably necessary. A law enforcement agency may, by a subsequent
written request, revoke such delay or extend the period set forth in
the original request made under this paragraph by a subsequent request
if the law enforcement agency determines that further delay is
necessary.
(b) Commission notification. A telecommunications carrier must
notify the Federal Communications Commission of any breach of customer
PI no later than seven days after discovering such breach. Such
notification shall be made electronically by means of a reporting
system that the Commission makes available on its Web site.
(c) Federal law enforcement notification. A telecommunications
carrier must notify the Federal Bureau of Investigation (FBI) and the
U.S. Secret Service (Secret Service) whenever a breach is reasonably
believed to have compromised the customer PI of more than 5,000
individuals, no later than seven (7) days after discovery of the
breach, and at least three (3) days before notification to the affected
customers. Such notification shall be made through a central reporting
facility. The Commission will maintain a link to the reporting facility
on its Web site.
(d) Recordkeeping. A telecommunications carrier must maintain a
record of any breaches of security discovered and notifications made to
customers, the Commission, the FBI, and the Secret Service pursuant to
this section. The record must include, if available, dates of discovery
and notification, a detailed description of the customer PI that was
the subject of the breach, and the circumstances of the breach.
Telecommunications carriers shall retain such records for a minimum of
2 years.
0
4. Add subpart GG to part 64 as follows:
Subpart GG--Privacy of BIAS Customer Information
Sec.
64.7000 Definitions.
64.7001 Notice requirements for providers of broadband Internet
access services.
64.7002 Customer approval requirements.
64.7003 Documenting compliance with customer approval requirements.
64.7004 Service offers conditioned on the waiver of privacy rights.
64.7005 Data security requirements for broadband Internet access
service providers.
64.7006 Breach notification.
64.7007 Effect on state law.
Sec. 64.7000 Definitions.
(a) Aggregate customer proprietary information. The terms
``aggregate customer proprietary information'' or ``aggregate customer
PI'' means collective data that relates to a group or category of
services or customers, from which individual customer identities and
characteristics have been removed.
(b) Breach of security. The terms ``breach of security,''
``breach'', or ``data breach,'' mean any instance in which a person,
without authorization or exceeding authorization, has gained access to,
used, or disclosed customer proprietary information.
(c) Broadband Internet Access Service (BIAS). The term ``broadband
Internet access services'' or ``BIAS'' has the same meaning given such
term in Sec. 8.2(a) of this chapter.
(d) Broadband Internet access service provider. The term
``broadband Internet access service provider'' or ``BIAS provider''
means a person or entity engaged in the provision of BIAS.
(e) Customer. The term ``customer'' means:
(1) A current or former, paying or non-paying, subscriber to a
broadband Internet access service; or
(2) An applicant for a broadband Internet access service.
(f) Customer proprietary information. The term ``customer
proprietary information'' or ``customer PI'' means:
(1) Customer proprietary network information; and
(2) Personally identifiable information (PII) a BIAS provider
acquires in connection to its provision of BIAS.
(g) Customer proprietary network information. The term ``customer
proprietary network information (CPNI)'' has the same meaning given to
such term in the Communications Act of 1934, as amended, 47 U.S.C.
222(h)(1).
(h) Opt-in approval. The term ``opt-in approval'' means a method
for obtaining customer consent to use, disclose, or permit access to
the customer's proprietary information that requires that the BIAS
provider obtain affirmative, express consent from the customer allowing
the requested usage, disclosure, or access to the customer PI,
consistent with the requirements set forth in Sec. 64.7002 of this
subpart.
(i) Opt-out approval. The term ``opt-out approval'' means a method
for obtaining customer consent to use, disclose, or permit access to
the customer's proprietary information under which a customer is deemed
to have consented to the use, disclosure, or access to the customer's
covered information if the customer has failed to object thereto after
the BIAS provider's request for consent consistent with the
requirements set forth in Sec. 64.7002 of this subpart.
(j) Personally Identifiable Information. The term ``personally
identifiable information'' or ``PII'' means any information that is
linked or linkable to an individual.
Sec. 64.7001 Notice requirements for providers of broadband Internet
access services.
(a) Providing notice of privacy policies. A BIAS provider must
clearly and conspicuously notify its customers of its privacy policies.
The notice must:
(1) Specify and describe:
(i) The types of customer PI that the BIAS provider collects by
virtue of its provision of broadband service;
(ii) How the BIAS provider uses, and under what circumstances it
discloses, each type of customer PI that it collects; and
(iii) The categories of entities that will receive the customer PI
from the BIAS provider and the purposes for which the customer PI will
be used by each category of entities.
[[Page 23409]]
(2) Advise customers of their opt-in and opt-out rights with
respect to their own proprietary information, and provide access to a
simple, easy-to-access method for customers to provide or withdraw
consent to use, disclose, or provide access to customer PI for purposes
other than the provision of BIAS. Such method shall be persistently
available and made available at no additional cost to the customer.
(3) Explain that a denial of approval to use, disclose, or permit
access to customer PI for purposes other than providing BIAS will not
affect the provision of any services to which the customer subscribes.
However, the provider may provide a brief description, in clear and
neutral language, describing any consequences directly resulting from
the lack of access to the customer PI.
(4) Explain that any approval, denial, or withdrawal of approval
for the use of the customer PI for any purposes other than providing
BIAS is valid until the customer affirmatively revokes such approval or
denial, and inform the customer of his or her right to deny or withdraw
access to such PI at any time. However, the notice must also explain
that the provider may be compelled to disclose a customer's PI when
such disclosure is provided for by other laws.
(5) Be comprehensible and not misleading.
(6) Be clearly legible, use sufficiently large type, and be
displayed in an area so as to be readily apparent to the customer; and
(7) Be completely translated into another language if any portion
of the notice is translated into that language.
(b) Timing. Notice required under paragraph (a) of this section
must:
(1) Be made available to prospective customers at the point of
sale, prior to the purchase of BIAS, whether such purchase is being
made in person, online, over the telephone, or via some other means;
and
(2) Be made persistently available via a link on the BIAS
provider's homepage, through the BIAS provider's mobile application,
and through any functional equivalent to the provider's homepage or
mobile application.
(c) Material changes in a BIAS provider's privacy policies. A BIAS
provider must provide existing customers with advanced notice of
material changes to the BIAS provider's privacy policies. Such notice
must:
(1) Be clearly and conspicuously provided through each of the
following means:
(i) Email or another electronic means of communication agreed upon
by the customer and BIAS provider;
(ii) On customers' bills for BIAS; and
(iii) Via a link on the BIAS provider's homepage, mobile
application, and any functional equivalent.
(2) Provide a clear, conspicuous, and comprehensible explanation
of:
(i) The changes made to the BIAS provider's privacy policies,
including any changes to what customer PI the BIAS provider collects,
and how it uses, discloses, or permits access to such information;
(ii) The extent to which the customer has a right to disapprove
such uses, disclosures, or access to such information and to deny or
withdraw access to the customer PI at any time; and
(iii) The precise steps the customer must take in order to grant or
deny access to the customer PI. The notice must clearly explain that a
denial of approval will not affect the provision of any services to
which the customer subscribes. However, the provider may provide a
brief statement, in clear and neutral language, describing consequences
directly resulting from the lack of access to the customer PI. If
accurate, a provider may also explain in the notice that the customer's
approval to use the customer's PI may enhance the provider's ability to
offer products and services tailored to the customer's needs.
(3) Explain that any approval or denial of approval for the use of
customer PI for purposes other than providing BIAS is valid until the
customer affirmatively revokes such approval or denial.
(4) Be comprehensible and not misleading.
(5) Be clearly legible, use sufficiently large type, and be placed
in an area so as to be readily apparent to customers.
(6) Have all portions of the notice translated into another
language if any portion of a notice is translated into that language.
Sec. 64.7002 Customer approval requirements.
Except as described in paragraph (a) of this section, a BIAS
provider may not use, disclose, or provide access to customer PI except
with the approval of a customer.
(a) Approval for use, disclosure, or permitting access inferred. A
customer is considered to have provided approval for the customer's
BIAS provider to use, disclose, or permit access to customer PI for the
following purposes:
(1) In its provision of the broadband Internet access service from
which such information is derived, or in its provision of services
necessary to, or used in, the provision of such broadband service.
(2) To initiate, render, bill and collect for broadband Internet
access service, and closely related services, e.g., tech support
related to the broadband Internet access services.
(3) To protect the rights or property of the BIAS provider, or to
protect users of the broadband Internet access service and other BIAS
providers from fraudulent, abusive, or unlawful use of the broadband
Internet access service.
(4) To provide any inbound marketing, referral, or administrative
services to the customer for the duration of the interaction, if such
interaction was initiated by the customer and the customer approves of
the use of such information to provide such service.
(5) To support queries by Public Safety Answering Points and other
authorized emergency personnel pursuant to the full range of NG911
calling alternatives (including voice, text, video and data); to inform
the user's legal guardian or members of the user's immediate family of
the user's location in an emergency situation that involves the risk of
death or serious physical harm; or to providers of information or
database management services solely for purposes of assisting in the
delivery of emergency services in response to an emergency.
(6) As otherwise required by law.
(b) Approval for use inferred. A BIAS provider may use customer PI
for the purpose of marketing additional BIAS offerings in the same
category of service (e.g., fixed or mobile BIAS) to the customer, when
the customer already subscribes to that category of service from the
same provider, without further customer approval.
(c) Notice and solicitation required. Except as described in
paragraph (a) of this section, a BIAS provider must solicit customer
approval, as provided for in paragraphs (e) and (f) of this section,
when it intends to first use, disclose, or provide access to the
customer's proprietary information and in so doing must clearly and
conspicuously disclose:
(1) The types of customer PI for which it is seeking customer
approval to use, disclose or permit access to;
(2) The purposes for which such customer PI will be used; and
(3) The entities or types of entities to which it intends to
disclose or provide access to such customer PI.
(d) Method for solicitation for customer approval. A BIAS provider
must make available a simple, easy-to-access method for customers to
provide or withdraw consent at any time. Such method must be clearly
disclosed, persistently available, and made available at no additional
cost to the
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customer. The customer's action must be given effect promptly after the
decision to provide or withdraw consent is communicated to the BIAS
provider.
(e) Opt-Out approval required. Except as otherwise provided in
paragraph (a) of this section, a BIAS provider must obtain opt-out or
opt-in approval from a customer to:
(1) Use customer PI for the purpose of marketing communications-
related services to that customer; and
(2) Disclose or permit access to customer PI to its affiliates that
provide communications-related services for the purpose of marketing
communications-related services to that customer.
(f) Opt-In approval required. Except as otherwise provided, a BIAS
provider must obtain customer opt-in approval to use, disclose, or
permit access to customer PI.
(g) Use and disclosure of aggregate customer PI. A BIAS provider
may use, disclose, and permit access to aggregate customer PI other
than for the purpose of providing BIAS and for services necessary to,
or used in, the provision of BIAS, if the BIAS provider:
(1) Determines that the aggregated customer PI is not reasonably
linkable to a specific individual;
(2) Publicly commits to maintain and use the aggregate customer PI
in a non-individually identifiable fashion and to not attempt to re-
identify such information;
(3) Contractually prohibits any entity to which it discloses or
permits access to the aggregate customer PI from attempting to re-
identify such information; and
(4) Exercises reasonable monitoring to ensure that those contracts
are not violated.
For purposes of this section, the burden of proving that individual
customer identities and characteristics have been removed from
aggregate customer PI rests with the BIAS provider.
Sec. 64.7003 Documenting compliance with customer approval
requirements.
A BIAS provider must implement a system by which the status of a
customer's approval to use, disclose, and provide access to customer PI
can be clearly established both prior to and after its use, disclosure,
or access. A BIAS provider must:
(a) Train its personnel as to when they are and are not authorized
to use, disclose, or permit access to customer PI and have an express
disciplinary process in place.
(b) Maintain a record of all instances where customer PI was
disclosed to or accessed by third parties for at least one year. The
record must include a description of the specific customer PI that was
disclosed to or accessed by third parties, a list of the specific third
parties who received the customer PI, and the basis for disclosing or
providing access to such information to third parties.
(c) Maintain a record of all customer notifications, whether oral,
written, or electronic, for at least one year.
(d) Establish a supervisory review process regarding the provider's
compliance with the rules in this subpart.
(e) Provide written notice to the Commission within five days of
the discovery of any instance where the opt-out mechanisms do not work
properly, to such a degree that consumers' inability to opt-out is more
than an anomaly; or the provider used, disclosed, or permitted access
to customer PI subject to opt-in approval requirements without first
having received opt-in approval. Such notice must be submitted even if
the provider offers other methods by which customers may opt-out. The
notice shall include:
(1) The provider's name;
(2) A description of the opt-out mechanism(s) at issue and the
problem(s) experienced, if relevant;
(3) A description of:
(i) Any customer PI used, disclosed, or accessed without opt-out or
opt-in approval;
(ii) With whom or by whom such customer PI has been used,
disclosed, or accessed;
(iii) For what purposes such customer PI was used, disclosed, or
accessed; and
(iv) Over what period of time such customer PI was used, disclosed,
or accessed;
(4) The remedy proposed and when it will be or was implemented; and
(5) A copy of the notice provided contemporaneously to customers.
Sec. 64.7004 Service offers conditioned on the waiver of privacy
rights.
A BIAS provider is prohibited from conditioning offers to provide
broadband Internet access service on a customer's agreement to waive
privacy rights guaranteed by law or regulation. A BIAS provider is
further prohibited from discontinuing or otherwise refusing to provide
broadband Internet access service due to a customer's refusal to waive
any such privacy rights.
Sec. 64.7005 Data security requirements for broadband Internet access
service providers.
(a) Data security requirements. A BIAS provider must ensure the
security, confidentiality, and integrity of all customer PI the BIAS
provider receives, maintains, uses, discloses, or permits access to
from any unauthorized uses or disclosures, or uses exceeding
authorization. At minimum, this requires a BIAS provider to:
(1) Establish and perform regular risk management assessments and
promptly address any weaknesses in the provider's data security system
identified by such assessments;
(2) Train employees, contractors, and affiliates that handle
customer PI about the BIAS provider's data security procedures;
(3) Designate a senior management official with responsibility for
implementing and maintaining the broadband provider's information
security measures;
(4) Establish and use robust customer authentication procedures to
grant customers or their designees' access to customer PI; and
(5) Notify customers of account changes, including attempts to
access customer PI, in order to protect against fraudulent
authentication.
(b) A BIAS provider may employ any security measures that allow the
provider to reasonably implement the requirements set forth in this
section, and in doing so must take into account, at minimum:
(1) The nature and scope of the BIAS provider's activities;
(2) The sensitivity of the customer proprietary information held by
the BIAS provider.
Sec. 64.7006 Breach notification.
(a) Customer notification. A BIAS provider must notify affected
customers of covered breaches of customer PI no later than 10 days
after the discovery of the breach, subject to law enforcement needs.
(1) A BIAS provider required to provide notification to a customer
under this subsection may provide such notice by any of the following
methods:
(i) Written notification, sent to the postal address of the
customer provided by the customer for contacting that customer; or
(ii) Email or other electronic means using information provided by
the customer for contacting that customer for data breach notification
purposes.
(2) The customer notification required to be provided under this
section must include:
(i) The date, estimated date, or estimated date range of the breach
of security;
(ii) A description of the customer PI that was used, disclosed, or
accessed, or reasonably believed to have been used,
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disclosed, or accessed, by a person without or exceeding authorization
as a part of the breach of security;
(iii) Information that the customer can use to contact the BIAS
provider to inquire about the breach of security and the customer PI
that the BIAS provider maintains about that customer;
(iv) Information about how to contact the Federal Communications
Commission and any state regulatory agencies relevant to the customer
and the service; and
(v) Information about the national credit-reporting agencies and
the steps customers can take to guard against identity theft, including
any credit monitoring or reporting the telecommunications carrier is
offering customers affected by the breach of security.
(3) If a federal law enforcement agency determines that the
notification to customers required under this subsection would
interfere with a criminal or national security investigation, such
notification shall be delayed upon the written request of the law
enforcement agency for any period which the law enforcement agency
determines is reasonably necessary. A law enforcement agency may, by a
subsequent written request, revoke such delay or extend the period set
forth in the original request made under this paragraph by a subsequent
request if the law enforcement agency determines that further delay is
necessary.
(b) Commission notification. A BIAS provider must notify the
Federal Communications Commission of any breach of customer PI no later
than seven days after discovering such breach. Such notification shall
be made electronically by means of a reporting system that the
Commission makes available on its Web site.
(c) Federal law enforcement notification. A BIAS provider must
notify the Federal Bureau of Investigation (FBI) and the U.S. Secret
Service (Secret Service) whenever a breach is reasonably believed to
have compromised the customer PI of more than 5,000 customers, no later
than seven (7) days after discovery of the breach, and at least three
(3) days before notification to the affected customers, whichever comes
first. Such notification shall be made through a central reporting
facility. The Commission will maintain a link to the reporting facility
on its Web site.
(d) Recordkeeping. A BIAS provider must maintain a record of any
breaches of security discovered and notifications made to customers,
the Commission, the FBI, and the Secret Service pursuant to this
section. The record must include, if available, dates of discovery and
notification, a detailed description of the customer PI that was the
subject of the breach, and the circumstances of the breach. BIAS
providers shall retain such records for a minimum of 2 years.
Sec. 64.7007 Effect on state law.
The rules set forth in this subpart shall preempt state law only to
the extent that such state laws are inconsistent with the rules set
forth herein. The Commission shall determine whether a state law is
preempted on a case-by-case basis, without the presumption that more
restrictive state laws are preempted.
[FR Doc. 2016-08458 Filed 4-19-16; 8:45 am]
BILLING CODE 6712-01-P