As we head into this long holiday weekend, the FCC gives us something to think about. To seek guidance or not to seek guidance, that is the question.
Today, the FCC released its Open Internet Advisory Opinion Procedures.1 These procedures are applicable to all providers of broadband Internet access service (both fixed and mobile) and are meant to clarify the process introduced in the 2015 Open Internet Order for companies to get advice from the FCC about the legality of new or future practices.2 To be clear, the procedures are not meant to address blocking, throttling, or paid prioritization. Rather, they are meant to provide the FCC with an opportunity to address other practices and conduct that may unreasonably interfere with or unreasonably disadvantage the ability of consumers to obtain desired Internet content, services, and applications or of an “edge provider” to access consumers using the Internet.3
So, what are the possibilities for the procedures? On the positive side:
- Advisory opinion procedures have been used successfully by other government agencies to provide clarity and certainty to business owners. For example, the FTC has a long history of issuing antitrust advisory opinions that the corporate world relies on when making merger and acquisition decisions, especially in determining whether a particular deal is subject to Hart Scott Rodino reporting requirements. If successfully implemented and embraced, the FCC could create a similarly successful advisory structure for broadband Internet access providers in an Open Internet world.
- If the FCC’s actions match its representations, guidance now could mean avoiding an enforcement action later. Not only for individuals who actively seek guidance, but for the industry as a whole, as the FCC builds a pool of publicly available advisory opinions.
- Provided the guidance request fully and accurately contains all the material facts and representations necessary to support the opinion, the requester may rely on an opinion in the event of a potential enforcement inquiry. If the FCC later rescinds an advisory opinion, such a rescission would only apply to future conduct and would not be retroactive.
It is not all sparklers and watermelon, however. There are potential pitfalls:
- The FCC states that failure to seek an advisory opinion will not be used as evidence that an entity’s practices are inconsistent with the Open Internet rules. It is not a far stretch, however, to imagine that failing to seek an advisory opinion could be viewed as lack of good faith by an entity.
- The requirement that a request for guidance be sufficiently concrete and detailed to permit the FCC to conduct an in-depth evaluation creates a convenient loophole for the FCC. While there can be no doubt that detailed requests are necessary for the FCC to provide meaningful guidance, the ability of the FCC to discount an advisory opinion later if it feels that the guidance request did not contain all the material facts and representations necessary to support the opinion is a very real consideration.
As with most other submissions to the FCC, requesters of advisory opinions must certify that their factual representations are truthful and accurate, and that they have not intentionally omitted any material information from the request. As a result, a Federal False Claims Act violation potentially lurks for the unsophisticated or requesters who are careless in the formation of their requests.
- The FCC reserves the right to ask parties requesting opinions, as well as other parties with relevant information or who may be impacted by the conduct, for additional information. Thus, a potential requester should consider the unintended stones that may be overturned in the process of seeking an advisory opinion.
- Just because you ask, doesn’t mean they have to answer. The FCC is free to refuse to consider a request for an advisory opinion, particularly if the request does not involve a substantial question of fact or law and there is clear FCC precedent. In the meantime, the potential requester may have alerted the FCC to facts better left unrevealed, at least for the moment.
- The FCC has no firm deadline to rule on or respond to a request for an advisory opinion. So, by the time the FCC responds, the requester may have already had to implement the business practice at issue and a negative ruling from the FCC may serve to frustrate or complicate ongoing business transactions.
Bear in mind that there are specific requirements that must be met to request an advisory opinion. First, the entity seeking guidance must be subject to the FCC’s jurisdiction. Second, the guidance request must be about the entity’s own “prospective or proposed” activity or business practice that may implicate the Open Internet rules.
In addition, the FCC will not provide guidance related to ongoing or prior conduct, or conduct that is the subject of a current government investigation or proceeding. The FCC has imposed a continuing obligation on requesters to inform the FCC if a request involves the same or substantially the same conduct that is the subject of a current government investigation or proceeding.
Finally, it is important to keep in mind that requests for advisory opinions, as well as any associated materials will be made publicly available, so companies seeking guidance should think long and hard about precisely what information they wish to make public and what information they should protect under the FCC’s confidentiality rules.4
Requests for advisory opinions must be e-filed using the FCC’s website or with the Office of the Secretary and also must be submitted to the Chief of the Enforcement Bureau and the Chief of the Investigations and Hearings Division of the Enforcement Bureau. Requests may be withdrawn at any time before the FCC issues an opinion or before the requester receives notice from the FCC that it intends to issue an adverse decision.
A link to the Public Notice discussing the procedures is provided here.
The rules governing Open Internet advisory opinions can be found in Section 8.18 of the FCC’s rules, 47 C.F.R. § 8.18.
Because guidance requests can expose well-meaning companies to potential enforcement actions and Federal False Claims Act liability, companies considering seeking an FCC advisory opinion should consult telecommunications counsel first. Dorsey & Whitney LLP has extensive FCC enforcement experience and stands ready to help companies navigate this complicated new Open Internet world.
1 See Open Internet Advisory Opinion Procedures, Public Notice, GN Docket No. 14-28, DA 15-692 (rel. July 2, 2015).
2 See Protecting and Promoting the Open Internet, GN Docket No. 14-28, Report and Order on Remand, Declaratory Ruling, and Order, FCC 15-24, at ¶¶ 36, 229-39; see also 47 C.F.R. § 8.18 (Advisory Opinions).
3 The FCC’s rules define an “edge provider” as “any individual or entity that provides content, application or service over the Internet, and any individual or entity that provides a device used for accessing any content, application or service over the Internet.” 47 C.F.R. § 8.2(b).
4 The FCC’s confidentiality rules can be found at 47 C.F.R. § 0.459.