There has been a lot of talk lately about Section 230 of the Communications Act in the news. This section gives protection to interactive computer services for their content moderation practices. In July 2020, the NTIA filed a petition with the FCC seeking new rules regarding the scope and applicability of Section 230. The Section 230 debate even looks like it will lead to a new FCC Commissioner since the President withdrew his re-nomination of current FCC Commissioner O’Rielly and nominated Nathan Simington who is with NTIA. Does Section 230 affect a telecom-only provider though? It does not, in its current form. What could change that would affect a telecom-only provider? This could come in the form of a possible new nationwide privacy law.
Let us start with who the possible government players are when it comes to telecom services. In the telecom world we have always thought of the FCC as the only entity to worry about, but tend to ignore the FTC?
The FTC has a dual role. On one hand it protects consumers from unfair, deceptive, or fraudulent practices. On the other hand, it promotes competition by enforcing antitrust law. For most telecom providers, their interaction with the FTC will be in connection with its enforcement of prohibited unfair or deceptive trade practices (Section 5 of the FTC Act). To this end, it conducts investigations, and sues companies and people that violate the law.
The FTC Act currently exempts common carriers from the FTC’s jurisdiction (i.e., IXCs, LECs, and CMRS Voice Services) because these entities are regulated by the FCC. However, the FTC has traditionally regulated the non-common carrier activities of companies otherwise classified as common carriers. For example, in the past, the FTC asserted jurisdiction over AT&T Mobility’s throttling practices claiming that its notice regarding data throttling was an unfair practice under the FTC act.
There is an important difference in the way the FCC and FTC implement their jurisdiction: The FTC uses a case-by case approach to enforce the law prohibiting unfair and deceptive acts and practices, applying general legal principles to specific facts, conducting investigations, and filing lawsuits to obtain redress for consumers. Its rulemaking authority is limited. In contrast, the FCC has a broader public interest mandate and exercises its jurisdiction by adopting rules “before the event” (ex-ante regulation) that includes prospective measures such as pricing regulation and placing obligations on a provider to offer certain services or file certain documents.
Senators and members of Congress have been very active lately as the country has been focused on privacy issues. With COVID-19 these events have been delayed, but lawmakers continue to press forward with hearings and the introduction of proposed laws. The US Senate Committee on Commerce, Science, and Transportation, recently held a hearing titled, “Revisiting the Need for Federal Data Privacy Legislation.” This hearing was to examine the current state of consumer data privacy and legislative efforts to provide baseline data protections for all Americans. The hearing was also to examine lessons learned from the implementation of state privacy laws in the U.S. and the E.U. General Data Protection Regulation, as well as how the COVID-19 pandemic has affected data privacy.
Also, among the sea of proposed federal legislation, one recently introduced law looks like it would give the FTC additional authority, including over telecoms. This new law is titled the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act. The legislation would provide Americans with more choice and control over their data and direct businesses to be more transparent and accountable for their data practices. The bill would also enhance the FTC’s authority and provide additional resources to enforce the SAFE DATA Act.
Importantly, based on the proposed language, the SAFE DATA Act would also apply to common carriers (i.e., IXCs, LECs, and CMRS Voice Services), stating that the FTC “shall also enforce this Act and the regulations promulgated under this Act” “with respect to common carriers subject to the Communications Act of 1934” as amended.
Although the SAFE DATA Act may face a long road to passage since this year’s session is coming to an end, it still could enlighten us to the possible content of the finally enacted product.