United States: Broadband Internet Service Providers In Regulatory Limbo After Repeal Of FCC Privacy And Data Security Rules

Last Updated: April 26 2017
Article by Cadwalader, Wickersham & Taft LLP, Keith M. Gerver and Joseph V. Moreno
Most Read Contributor in United States, October 2019

Potentially signaling the end of the short-lived stint by the Federal Communication Commission ("FCC") to regulate consumer data privacy on the internet, the Trump Administration recently repealed Obama-era data privacy and security rules for broadband providers.  The action, passed by Congress and signed by President Trump pursuant to the Congressional Review Act, completely rescinds the rules that would have gone into effect later this year.  While the move has been welcomed by industry insiders, it leaves broadband providers in regulatory limbo as the Trump Administration seeks to determine which agency and what rules will oversee data protection in this sector going forward.

The FCC's Privacy Order and Its Repeal

In November 2016, the FCC released comprehensive consumer privacy and data security rules (the "2016 Privacy Order") for broadband internet access service ("BIAS") providers.1  BIAS providers offer consumers high-speed, continuous access to the internet, typically through cable, telephone, wireless, or fiber-optic connections.  They are different from entities such as Amazon and Facebook, which do not provide connections to the internet but rather offer internet services such as cloud storage, messaging, news, video streaming, and online shopping and are regulated, with respect to data privacy matters, by the Federal Trade Commission ("FTC").

The 2016 Privacy Order would have, among other things, required BIAS providers to obtain affirmative customer consent ("opt-in" consent) prior to using and sharing, for commercial purposes, confidential customer data, such as a user's web browsing history, application usage history, or geo-location information, and prohibited them from refusing to serve customers who did not provide such consent.  It also required BIAS providers to adopt "reasonable measures" to protect customer data from unauthorized disclosure, and required them to give notice to customers affected by any data breach "without unreasonable delay" but not later than 30 days after determining that a breach had occurred.

Repeal of the 2016 Privacy Order comes as a welcome development for industry groups, which vigorously opposed them both prior to and subsequent to their finalization.  In January 2017, the FCC received multiple petitions to reconsider and stay the order.2  The BIAS industry complained that some of the new rules – particularly the opt-in rule for the use of sensitive customer information – put BIAS providers at a competitive disadvantage because the rules were more restrictive than FTC rules that applied to other internet entities such as Amazon and Facebook and, further, would have required costly updates to BIAS providers' systems.  In response, the FCC – now with a Chairman appointed by President Trump and a majority of Republican-appointed commissioners – reversed course and, on March 1, 2017, voted to stay some of the provisions of the 2016 Privacy Order that had been due to come into effect.3  Shortly thereafter, Congress and President Trump used their authority under the Congressional Review Act to completely rescind the 2016 Privacy Order.4

Is Net Neutrality Next?

To answer the question of where the Trump Administration might go from here first requires an explanation of how the FCC came to be responsible for regulating data privacy and security for BIAS providers in the first place.

Until 2015, BIAS providers, like other internet service and content providers, were not considered to be "common carriers" by the FCC and, thus, were not subject to data privacy regulation by the FCC.  Instead, for matters concerning data privacy and protection, BIAS providers looked to the FTC.  That changed in 2015, when the FCC issued the "Open Internet Order,"5 which reclassified BIAS providers as "telecommunications services" and, therefore, subjected them to common carrier regulation by the FCC under Title II of the Communications Act of 1934 ("Title II").  Among other things, Title II requires "telecommunications services" to furnish services to customers "upon reasonable request" and prohibits "unjust and unreasonable discrimination" in the services that common carriers provide.  Title II further provides that "telecommunications services" have a duty to protect the privacy of customer data.6

This reclassification was necessary for the FCC to promote and establish, as the centerpiece of the Open Internet Order, "net neutrality" rules for BIAS Providers.  "Net neutrality" rules require BIAS providers to allow users equal access to all otherwise lawful internet websites, content, and services, without favoring or restricting access, whether the websites are owned or controlled by the service providers' affiliates, business partners, or competitors.  For example, absent net neutrality rules, a BIAS provider might, in exchange for a fee or other consideration, agree with a video sharing website, such as YouTube, to provide its customers with faster and better access to YouTube than to a rival video sharing website, such as Vimeo.

Previous attempts by the FCC to impose net neutrality rules on BIAS providers had been rejected by the Court of Appeals for the D.C. Circuit.  Most recently, in 2014, the D.C. Circuit held that the FCC did not have the authority to impose net neutrality rules on BIAS providers because they were not subject to the common carrier rules under Title II.7  In response, the FCC reclassified BIAS providers as common carriers in its Open Internet Order.  The 2016 Privacy Order was an attempt by the FCC to further define the data privacy and protection rules that applied to BIAS providers under Title II.

The Trump Administration now seeks to return the BIAS industry to privacy oversight by the FTC, as both the current FCC and FTC Chairpersons have indicated that "jurisdiction over broadband providers' privacy and data security practices should be returned to the FTC, the nation's expert agency with respect to these important subjects."8  However, this is easier said than done, as it would require that the FCC revoke the Open Internet Order and its accompanying net neutrality rules.  Such a move would be favored by the BIAS industry and the new Chairman of the FCC, Ajit Pai, who regards the net neutrality rules as a "mistake,"9 but would be met by criticism from many major internet content providers and services, such as Amazon, Google, and Facebook.10

In the meantime, the FTC is without authority to regulate BIAS providers regarding data privacy, as the FTC Act contains an express exemption of FTC jurisdiction for common carriers.11  Further complicating matters is an August 2016 decision of the Court of Appeals for the Ninth Circuit, which interpreted the FTC's common carrier exemption as including all activities of any entity designated as a common carrier, even those activities that are unrelated to the entity's common carrier business and which otherwise might be subject to FTC jurisdiction if they were carried out by a separate entity.12  If the Ninth Circuit position were to stand and be adopted by other Circuits – the FTC is currently seeking a rehearing en banc – the FCC suddenly might find itself responsible for regulating a host of non-common carrier related business activities merely because they are provided by entities that have been designated as common carriers under Title II.

Many large BIAS providers have faced this uncertainty by pledging to take "reasonable measures to protect customer information" and notify "consumers of data breaches as appropriate" in accordance with the existing FTC data privacy framework (i.e., ensuring that their data security practices are not "unfair or deceptive" in contravention of Section 5 of the FTC Act).[13]  

BIAS providers are also presently subject to a host of state laws concerning data privacy and protection, including at least 48 state data breach notification laws, the most recent of which was enacted in New Mexico.14  These laws typically require businesses to notify the state authorities, affected customers, and major credit reporting agencies when the state's residents' confidential personal information, such as social security or driver's license numbers, credit card numbers, and passwords, have been exposed through a data breach.  In addition, some states, such as Massachusetts15 and California,16 also require businesses to implement and maintain reasonable security procedures and practices to protect customer information.  Finally, some states maintain consumer protection laws, which, similar to the FTC Act, generally protect against unfair or deceptive trade practices and have been used by state attorney generals to penalize companies that fail to protect customer data.17 


The Trump Administration's repeal of the 2016 Privacy Order has provided a respite for the BIAS industry from vigorous new requirements that would have gone into effect this year.  However, it also has created a period of regulatory uncertainty as regulators determine the way forward, including the fate of the Open Internet Order.  In the meantime, BIAS providers should, as they have promised, continue to follow reasonable data privacy and protection practices, consistent at least with those required by the FTC, and also carefully consider whether any other applicable federal or state data privacy laws apply to their business.


1   Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, Report and Order, 31 FCC Rcd 13911 (2016), available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-148A1.pdf.

2   See, e.g., Joint Petition for Stay, available at https://ecfsapi.fcc.gov/file/101270254521574/012717%20Petition%20for%20Stay.pdf ("Stay Petition").

3   See Order Granting Stay Petition, available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-17-19A1.pdf.

4  See S.J. Res. 34 – 115th Congress, available at https://www.congress.gov/bill/115th-congress/senate-joint-resolution/34/text.

5  See Protecting and Promoting the Open Internet, Report and Order on Remand, Declaratory Ruling, and Order, 30 FCC Rcd 5601 (2015), available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1.pdf.

6   See 47 U.S.C. § 222(a) ("Every telecommunications carrier has a duty to protect the confidentiality of proprietary information of, and relating to . . . customers.").

7   See Verizon v. F.C.C., 740 F.3d 623 (D.C. Cir. 2014).

8   See Joint Statement of Acting FTC Chairman Maureen K. Ohlhausen and FCC Chairman Ajit Pai on Protecting Americans' Online Privacy, available at https://www.ftc.gov/news-events/press-releases/2017/03/joint-statement-acting-ftc-chairman-maureen-k-ohlhausen-fcc.

9   See Remarks of Federal Communications Commission Chairman Ajit Pai at the Mobile World Congress (February 28, 2017), available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-343646A1.pdf.

10 See Google, Facebook and Amazon write to FCC demanding true net neutrality, The Guardian (May 7, 2014), available at https://www.theguardian.com/technology/2014/may/08/google-facebook-and-amazon-sign-letter-criticising-fcc-net-neutrality-plan.

11 See 15 U.S.C. § 45(a)(2).

12 See F.T.C. v. AT&T Mobility LLC, 835 F.3d 993 (9th Cir. 2016).  The FTC has sought rehearing en banc.

13 See Stay Petition, ISP Privacy Principles.

14 See New Mexico H.B. 15, Data Breach Notification Act (2017).

15 See Mass Gen. Laws Ann. ch. 93H, § 2.

16 See Cal. Civ. Code § 1798.81.5(b).

17 See, e.g., Press Release, A.G. Schneiderman Announces $100K Settlement with E-Retailer after Data Breach Exposes Over 25K Credit Card Numbers, N.Y. State Attorney General's Office (Aug. 5, 2016), available at https://ag.ny.gov/press-release/ag-schneiderman-announces-100k-settlement-e-retailer-after-data-breach-exposes-over

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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.


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.


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