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FCC to ISPs: Inaccurate Disclosures Violate Transparency Rule

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Released: July 23, 2014
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PUBLIC NOTICE

Federal Communications Commission

445 12th St., S.W.

News Media Information 202 / 418-0500

Internet: http://www.fcc.gov

TTY: 1-888-835-5322

Washington, D.C. 20554

DA 14-1039

July 23, 2014

Enforcement Advisory No. 2014-03

FCC ENFORCEMENT ADVISORY

OPEN INTERNET TRANSPARENCY RULE

BROADBAND PROVIDERS MUST DISCLOSE ACCURATE INFORMATION

TO PROTECT CONSUMERS

Providers of broadband Internet access services must disclose accurate information about their

service offerings and make this information accessible to the public. This requirement, known as the

Open Internet Transparency Rule, has been in full force and effect since 2011.1 The Transparency

Rule ensures that consumers have access to information that helps them make informed choices

about the broadband Internet access services

they buy, so that consumers are

not

misled or

surprised by the quality or cost of the services

they actually receive. The rule also supports

innovation and competition by ensuring that edge providers, including both startups and established

providers, have information that may be relevant to the development of their business plans. The

Commission takes the requirements of the Transparency Rule seriously, and we intend to take

enforcement action against providers that do not comply with it.

Who Is Subject to the Transparency Rule? The rule applies to every provider of broadband

Internet access services in the United States. This includes fixed broadband Internet access providers

(for example, cable companies, landline telephone companies, and fixed wireless or satellite service

providers),

as well as mobile broadband Internet access providers (for example, mobile wireless

providers that offer data plans for Internet access for smartphones).2

What Does the Transparency Rule Require? The Transparency Rule requires every fixed and

mobile broadband Internet access provider to “publicly disclose accurate information regarding the

1 See 47 C.F.R. § 8.3 (Transparency Rule); see also Preserving the Open Internet, 76 Fed. Reg. 59,192, 59,192 (Sept. 23,

2011) (announcing November 20, 2011 as effective date of rule); Preserving the Open Internet, Report and Order, 25

FCC Rcd 17905, 17936–41, paras. 53–61 (2010) (Open Internet Order), aff’d in part, vacated and remanded in part sub

nom. Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014). In January 2014, the United States Court of Appeals for the District

of Columbia Circuit upheld the Transparency Rule, while overturning other portions of the FCC’s Open Internet Order.

See Verizon v. FCC, 740 F.3d at 659.

2 See 47 C.F.R. § 8.11 (defining “fixed” and “mobile” broadband Internet access service).

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network management practices, performance, and commercial terms of its broadband Internet

access services sufficient for consumers to make informed choices regarding use of such services and

for content, application, service, and device providers to develop, market, and maintain Internet

offerings.”3

Accuracy is the bedrock of the Transparency Rule. Under the rule, all disclosures that broadband

Internet access providers make about their

network management practices, performance, and

commercial terms of broadband services must be accurate. A core purpose of the Transparency Rule

is to allow consumers to understand what they are purchasing.4 Accurate disclosures ensure that

consumers—as well as the Commission and the public as a whole—are informed about a broadband

Internet access provider’s network management practices, performance, and commercial terms.

Thus, the Transparency Rule prevents a broadband Internet access provider from making assertions

about its service that contain errors, are inconsistent with the provider’s disclosure statement, or are

misleading or deceptive.

Importantly, the Transparency Rule can achieve its purpose of sufficiently informing consumers only

if advertisements and other public statements that broadband Internet access providers make about

their services are accurate and consistent with any official disclosures that providers post on their

websites or make available in stores or over the phone. A provider making an inaccurate assertion

about its service performance in an advertisement, where the description is most likely to be seen by

consumers, could not defend itself against a Transparency Rule violation by pointing to an “accurate”

official disclosure in some other public place. That would be impossible to reconcile with the

purpose of the Transparency Rule. Thus, the Transparency Rule requires accuracy wherever

statements regarding network management practices, performance, and commercial terms appear—

in mailings, on the sides of buses, on website banner ads, or in retail stores.5

What Penalties Apply? Parties that violate the Transparency Rule may be subject to Commission

enforcement,

potentially

including

monetary

penalties

as

set

out

in

Section

503(b)

of

the

Communications Act.6

3 47 C.F.R. § 8.3; see also FCC Enforcement Bureau and Office of General Counsel Issue Advisory Guidance for

Compliance with Open Internet Transparency Rule, Public Notice, 26 FCC Rcd 9411 (2011).

4 47 C.F.R. § 8.3; see also, e.g., Open Internet Order, 25 FCC Rcd at 17936-37, para. 53 (“disclosure ensures that end

users can make informed choices regarding the purchase and use of broadband service”).

5 In declining to require multiple targeted disclosures, the Commission observed in the Open Internet Order that, at a

minimum, a provider potentially could satisfy the Transparency Rule by providing sufficient information in a single

disclosure posted on its website. See Open Internet Order, 25 FCC Rcd at 17940, paras. 57-58. While the Open

Internet Order thereby provides guidance on the minimum disclosure necessary to satisfy the rule’s requirement that

sufficient information be disclosed, the Commission in no way suggested that the rule’s accuracy requirement would

not apply to any additional assertions a provider may choose to make about its network management practices,

performance, or commercial terms of service. Moreover, for the reasons noted in the text, disclosures cannot be

sufficient to satisfy the rule if they are contradicted by providers’ other service descriptions, especially where the most

easily seen descriptions, such as those in advertisements, are themselves inaccurate.

6 Section 503(b) of the Communications Act provides for maximum forfeitures ranging from $16,000 to $1,575,000 for

any single act or failure to act, depending on the nature of the violation and the entity involved (excluding the

broadcast of obscene, indecent, or profane language, which is subject to a higher maximum forfeiture). 47 U.S.C. §

503(b); see also 47 C.F.R. § 1.80(b). The Commission recently adjusted its forfeiture penalties to account for inflation

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Need More Information?

Media inquiries should be directed to Mark Wigfield at 202-418-0253 or

mark.wigfield@fcc.gov. Information about the FCC’s Open Internet proceeding is available at

http://www.fcc.gov/openinternet. For general information on the FCC, you can contact the FCC at 1-

888-CALL-FCC (1-888-225-5322) or visit our website at www.fcc.gov.

To request materials in accessible formats for people with disabilities (Braille, large print, electronic

files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs

Bureau at 202-418-0530 (voice), (202) 418-0432 (TTY).

Issued by: Acting Chief, Enforcement

Bureau

in 2013. See Amendment of Section 1.80(b) of the Commission's Rules, Adjustment of Civil Monetary Penalties to Reflect

Inflation, Order, 28 FCC Rcd 10785 (Enf. Bur. 2013).

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