MVPD Termination Fees, Data Breach Rules Elicit Rare Commissioner Dissents

After a span of frequent unanimity among the FCC commissioners, this week brought a spate of dissents from GOP commissioners, with no votes at Wednesday's open meeting coming after dissents the previous day on an order upholding a Wireless Bureau decision excluding SpaceX from participating in the Rural Digital Opportunity Fund program (see 2312130004). At the December meeting, Commissioners Brendan Carr and Nathan Simington raised the specter of the federal government increasing rate regulation in dissents against the MVPD early termination fees (ETF) NPRM. They complained that the data breach notification rules were an attempt to sidestep the Congressional Review Act.

Over Simington's partial dissent, the commissioners also approved 4-1 an order that facilitates blocking robotexts. In addition, it requires ad sellers to obtain consumers' consent to receive texts one service provider at a time.

After the meeting, Carr dismissed the idea of a growing gap among commissioners. "I'm very, very confident we're going to find common ground again on very tough, very difficult issues," he said. "We did that ... for an extended period of time in a 2-2 environment and I think we're going to continue to do it."

But Simington was not as upbeat as Carr. Now that there's a full set of commissioners with October's seating of majority Commissioner Anna Gomez, "the hour of partisan politics has come round at last, and today's crypto rate regulation slouches toward approval," Simington said in his dissent to the ETF and prorated refunds NPRM. The NPRM proposes prohibiting cable and direct broadcast satellite services from levying early-termination fees for service cancellation and requiring subscribers receive a prorated credit or rebate for the time left in a billing cycle after cancelation of service.

Assuming any MVPD ETF and refund rules survive a legal challenge, "consumers will be worse off," Simington said. He called it naive to think cable and DBS operators unable to charge ETFs would still offer cheap, long-term-commitment rates for subscribers instead of more-expensive month-to-month plans. He said the proposed ETF and refunds rules would make it marginally harder for MVPDs to operate since their streaming competitors don't face such rules.

Carr said he "tend[s] to impose a really high bar” on voting against NPRMs: The ETF and refund NPRM join "a handful of exceptions to that rule." He added, "I cannot sign on to the Biden administration's inexorable march for regulating rates."

Gomez said that with more video choices than ever, it was important the agency review whether billing practices inhibit consumers. She urged questions be included in the NPRM about the state of the video marketplace. Commissioner Geoffrey Starks called the NPRM "an inquiry" into fees issues, including whether there are situations in which they could be to subscribers' benefit.

The data breach order expands FCC breach notification rules to cover types of customers' personally identifiable information that carriers and telecommunications relay services providers hold, and expands the definition of "breach" to include certain inadvertent access or disclosure.

Carr said the order lacks a "serious attempt" to explain how data breach rules are not the same or much the same as those nullified as part of the ISP privacy rules killed in a Congressional Review Act resolution of disapproval (see 1704030054). He said the order's logic that it's permissible to pass some of the rules nullified in 2017 "creates an exception that swallows the CRA whole." He added that the data breach order exceeds FCC authority over personally identifiable information, even though Congress never granted the agency that authority.

Simington said the data breach order "is not necessarily bad policy," but it's part of the FCC's broader, indefensible effort to adopt the ISP privacy order piecemeal. "I frankly have no doubt that this commission will, if given the chance, adopt even more aspects," he said.

The majority commissioners repeatedly used the word "overdue" to describe the data breach rules update. "We need to do more to both protect seizing consumer data and notify consumers and authorities when a data breach occurs," Starks said. The agency has "clear authority" to protect confidential and proprietary information under Section 222 of the Communications Act.

Robotexts

By adopting that one-to-one robotext consent policy on “a factually thin record,” the FCC is “over our skis,” Simington said. “We today clumsily rush to save the American consumer from herself by sticking our finger in yet another new pie, vigorously stirring, calling the resulting mess a cobbler [and] insisting that it's healthier,” he said. Simington conceded he approved aspects of the order other than the one-to-one consent rules, which he said will harm small businesses without deterring lawbreaking companies that are the main source of illegal robotexts. “It is another paper consumer victory for a Commission at least as interested in appearances as reality,” he said. The Small Business Administration Office of Advocacy pressed the agency to seek further comment on one-to-one consent rather than pulling the trigger on an order (see 2312080049), and Simington said he would have supported including it in the further notice.

Allowing companies to send texts to customers who never agreed to receive them is a “lead generator loophole” in robotext prevention, said Rosenworcel. “We make clear that any company that wants to use robocalls and robotexts in their businesses obtain consent one-to-one,” she said. “This loophole has been identified as a problem by countless consumer groups, members of Congress, and state attorneys general because it creates a marketplace for our numbers, with companies buying and selling access to our phones and in the process cranking up the number of unwanted calls and texts we receive. ... We need to find every way we can under the law to stop these junk robocalls and robotexts from reaching us on our devices.”

Along with preventing a single consumer consent to receive calls from applying to multiple telemarketers at once, the order also lets the FCC red flag certain numbers and require mobile carriers to block them. It also includes a further notice seeking comment on additional blocking requirements and text message authentication based on the Stir/Shaken rules, and requiring email-to-text services opt-in.

The robotext order will have "a massive impact" on how leads are generated, TCPA attorney Eric Troutman of Troutman Amin said in an email to subscribers. “Only a single entity can be afforded consent at a time, so enterprises that use a franchise model or conglomerate approach may no longer be able to engage in outreach to their own customers,” Troutman said.

Through the order, the FCC “has chosen to protect U.S. telephone subscribers rather than lead generators who are largely at fault for the billion-plus monthly telemarketing calls,” said National Consumer Law Center Senior Counsel Margot Saunders in a news release. Said Electronic Privacy Information Center attorney Chris Frascella in the same release, “Once in force, this clarification should eliminate the great majority of unwanted, and unconsented to, telemarketing calls and texts.”

Meeting Notebook

An order adopted Wednesday will give healthcare providers that expect to be eligible for the rural healthcare program conditional approval to request funding sooner, align program deadlines, simplify rules for urban rate calculations and free up unused funding for other purposes. The FCC "needs to update its rural health care program to ensure that it serves the places that need support with modern telehealth technology," Rosenworcel said. The order also established a deadline for providers to submit invoices for "any undisbursed funding commitments without an applicable invoice deadline," releasing as much as $22.2 million in unclaimed program support from funding year 2019 and prior years.

Commissioners also unanimously adopted an NPRM seeking comment on implementing a 100% hearing-aid compatibility (HAC) requirement for wireless handset models (see 2312070038). The NPRM tentatively concludes that a 100% requirement for wireless handsets "is achievable" and seeks comment on expanding the definition of HAC to include the use of Bluetooth coupling between handsets and hearing aids. "The forward-looking recommendations developed by the HAC Task Force are the result of years of strong collaboration, and they set a path for 100% wireless handset compatibility while retaining the flexibility necessary to protect world-leading innovation in mobile devices," said CTIA Director-Regulatory Affairs Christiaan Segura: "This blueprint, along with the interim waiver standard adopted earlier this year, promote innovation, reflect marketplace developments and will benefit consumers with disabilities."

Carr's chief of staff, Ben Arden, is returning to the Media Bureau after four years in the commissioner's office, Carr said. Gregory Watson, a policy adviser in Carr’s office since 2021, will replace him.

On Tuesday, the FCC unanimously approved implementation of the Low-Power Protection Act -- an item that had been slated for Wednesday’s meeting. It opens a yearlong window for a narrow subset of low-power TV stations to apply for Class A interference protection (see 2312080043). “Implementation of the Low Power Protection Act represents an important first step,” said Advanced Television Broadcasting Alliance Executive Director Lee Miller. “But Congress and the FCC must continue to recognize the contributions of LPTV stations and create a regulatory environment that encourages investment and removes the uncertainty over LPTV stations today.”