United States: FCC Releases Proposed Rule Requiring Internet Service Providers To Comply With New Privacy Obligations

On April 1, the Federal Communications Commission issued a notice of proposed rulemaking ("NPRM") that would require Internet service providers ("ISPs") to clearly disclose how customer data is being used, take reasonable steps to protect that information, and notify affected customers within 10 days of discovering a data breach.  The NPRM — formally approved by a 3-2 Democratic majority of FCC commissioners on March 31 — would require ISPs to follow the sort of regulations that currently apply to common carriers under the Communications Act.

By way of background, the FCC gained authority to set privacy rules on ISPs after it issued its controversial Open Internet order last year.  The Open Internet order reclassified broadband Internet access service as a telecommunications service subject to Title II of the Communications Act.  This effectively gave the FCC authority to be privacy regulator of broadband providers.

Under the Open Internet order, ISPs must comply with new privacy obligations, including those in 47 U.S.C. § 222 governing proprietary information and customer proprietary network information ("CPNI").  Existing regulations under Section 222 mandate that telecommunications providers have a duty to protect customer confidential information.  The FCC's NPRM proposes to supplement Section 222 to require more expansive privacy and data protection standards for Internet service.

Notable features of the NPRM include:

  • Defining personal information: The NPRM first proposes to broadly define personal information to include both CPNI – or information that relates to the quantity, technical configuration, type, destination, location, and usage information – and personally identifiable information ("PII") collected by the broadband providers.
  • Opt-in and opt-out provisions:  Under the NPRM, consumers would be able to opt out of programs that let ISPs use the data they collect to offer other services themselves.  At the same time, ISP companies would require explicit opt-in consent for data to be shared with third parties, mirroring the structure in place with the Gramm-Leach-Bliley Act and similar regulations.  Companies subject to the NPRM will be required to keep records of all disclosures of PII to third parties, as well as of all customer notices and consents.
  • Restrictions on use of aggregate customer information:  The regulations will restrict uses of aggregate customer information, and there will be limited exemptions for de-identified forms of personal information and CPNI.  Aggregate information can only be used and disclosed if: (1) it is not reasonably linkable to a specific individual or device; (2) the provider publicly commits to use it in a non-identifiable manner, and to not attempt to re-identify it; (3) third parties that receive or access it are contractually prohibited from attempting to re-identify it; and (4) the broadband provider has reasonable monitoring of third-party compliance with contracts pertaining to aggregate data.
  • Data security requirements:  Providers will be required to maintain data security programs for PII that must include: (1) routine risk assessments and prompt remediation of weaknesses; (2) employee, contractor, and affiliate training on data security procedures; (3) appointment of a senior official to oversee data security procedures; (4) adoption of robust customer authentication procedures for access to PII, and (5) oversee and monitor third parties that receive PII. 
  • Strict breach notification obligations:  The proposed regulations include strict breach reporting obligations that will require notification to individuals within 10 days of the breach, and to the FCC (and potentially the FBI and Secret Service) within seven  days of the breach.  Breaches are broadly defined to include even unintentional unauthorized access, use, or disclosure of PII, and there are no exceptions for access by a provider employee or agent, or for incidents that do not involve risk of harm to the customer. Like many other regulations or guidelines, the FCC's NPRM provides no real direction on what constitutes sound information security controls.  What is needed more than regulation and exposure is a safe harbor.  Like existing schemes, even well-intentioned companies have no assurance that what they implement will not nonetheless be later deemed insufficient following an event.  The alternative for other agencies (such as the FTC) has been to issue bulletins and guidelines, although for the FTC that was only after more than ten years of enforcement actions.  While companies cannot eliminate this uncertainty, it is important that the correct choice be made between business functionality and cyber security controls.  Sound information governance with proper documentation can help mitigate the risks in a now closely regulated industry.
  • Is the FCC ready to become ISPs' chief regulator of cyber security issues?  A recent CBS 60 Minutes segment that aired on April 17 suggests that it may not be.  The program highlighted a Signal System 7 ("SS7") flaw that allowed a hacker to intercept a call and listen to the contents of the conversation.  The 60 Minutes segment spurred the FCC into action with David Simpson, head of the FCC's Public Safety Bureau, saying he has tasked his staff with looking into the SS7 allegations.  This reaction, however, raised concerns about the FCC's familiarity with modern cyber security issues given that the SS7 flaw itself has been public knowledge since 2014 when Karsten Nohl, the German researcher featured on 60 Minutes, first publicized the issue.
  • Internet service providers have voiced strong opposition to the NPRM, arguing that it puts them on an unequal footing with other Internet companies that collect data on users which are only overseen by the Federal Trade Commission and thus only limited by representations made in privacy policies or other consumer-facing promises.

The Troutman Sanders’ Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Reade Jacob
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions