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Latest Update on Pending Privacy Legislation, June 8th

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Proposed Data Privacy Bill Stands a Shot at Becoming First Comprehensive Federal Privacy Law

A discussion draft of a comprehensive data privacy bill was released last Friday by a bipartisan group of legislators in the House and Senate. Consumer rights advocates say the proposed compromise legislation is the biggest step to date toward granting individuals meaningful privacy protections.

The draft bill, currently known as the American Data Privacy and Protection Act (the “Data Privacy Act”), would allow users to opt out of target advertisements and to sue Internet companies that improperly sell their data. It is sponsored by US Reps Frank Pallone, Jr (D-NJ) and Cathy McMorris Rodgers (R-WA), who are Chairman and Ranking Member of the House Committee on Energy and Commerce, and US Senator Roger Wicker (R-MS), Ranking Member of the Senate Committee on Commerce, Science and Transportation. However, insiders say the legislation faces an uphill battle without the support of Sen. Maria Cantwell (D-WA), who is chair of the Senate Commerce Committee. Cantwell is believed to support more liberal priorities for online user rights.

BLOOSTONLAW TELECOM UPDATE 4 June 8, 2022

“This bipartisan and bicameral effort to produce a comprehensive data privacy framework has been years in the making, and the release of this discussion draft represents a critical milestone,” Pallone, Rodgers, and Wicker said. “In the coming weeks, we will be working with our colleagues on both sides of the aisle to build support and finalize this standard to give Americans more control over their personal data. We welcome and encourage all of our colleagues to join us in this effort to enable meaningful privacy protections for Americans and provide businesses with operational certainty. This landmark agreement represents the sum of years of good faith efforts by us, other Members, and numerous stakeholders as we work together to provide American consumers with comprehensive data privacy protections.”

As summarized by a House Energy and Commerce Committee press release, the Data Privacy Act would:

  • Establish a strong national framework to protect consumer data privacy and security;
  • Grant broad protections for Americans against the discriminatory use of their data;
  • Require covered entities to minimize on the front end, individuals’ data they need to collect, process, and transfer so that the use of consumer data is limited to what is reasonably necessary, proportionate, and limited for specific products and services;
  • Require covered entities to comply with loyalty duties with respect to specific practices while ensuring consumers don’t have to pay for privacy;
  • Require covered entities to allow consumers to turn off targeted advertisements;
  • Provide enhanced data protections for children and minors, including what they might agree to with or without parental approval;
  • Establish regulatory parity across the internet ecosystem; and
  • Promote innovation and preserve the opportunity for start-ups and small businesses to grow and compete.

The legislation would give individual users new rights to access, correct and delete their digital data, and companies would be responsible for informing third parties to make changes to the data of users that have submitted a verified request. The Federal Trade Commission (FTC) would be required to maintain a public registry of data brokers and create a mechanism of users to opt out of targeted advertisements and other data sharing practices. Individuals would be permitted to sue companies, but only after a four-year waiting period after the legislation is enacted. They would also need to notify state and federal officials before proceeding, and they could not pursue their legal action of a government prosecutor takes up their case.

Proposed exceptions in the current draft (at Section 209) would generally allow collection, processing or transfer of covered data for narrowly-tailored purposes such as completing transactions, when data is collected to perform system maintenance, diagnostics or when addressing security incidents, among other things. The draft bill also provides exemptions for small entities that earned gross annual revenues of $41 million or less for the prior three years, that did not collect or process the covered data of 100,000 individuals in a year (except for processing payments and promptly deleting covered data for requested products/services) and that did not derive more than half their revenue from transferring covered data. These smaller entities may choose to delete, rather than correct, and individual’s covered data.

The Center for Democracy & Technology (CDT), a nonprofit research group that receives funding from tech companies such as Apple and Google, issued the following statement upon the release of the proposal:

“This draft shows that there is a bipartisan path forward on long-overdue legislation to protect consumers’ privacy. Americans want and desperately need legislation to protect their personal data and promote trust in the online world. While it’s not perfect, the draft is a hopeful first step. We urge Congress to move forward with the legislative process and pass legislation by the end of this year.”

 

FCC’s Chairman Pai Asks Congress to Repeal T-Band Mandate

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FCC Chairman Ajit Pai reiterated his call for congressional repeal of the T-band auction mandate while also circulating a notice of proposed rulemaking (NPRM) that would take the next statutorily required step to implement this mandate to his fellow commissioners.

“An FCC auction of the T-band is a bad idea,” Pai said. “But as of today, the law mandates that we do it. It’s unfortunate that commission resources must be dedicated to laying the groundwork for an auction that will likely fail. This is especially true at a time when we are making every effort to keep Americans safe and connected, including allowing expanded temporary use of this very spectrum to help first responders save lives.

“Fortunately, there is bipartisan legislation in Congress to repeal this mandate, including bills that couple repeal with 9-1-1 fee diversion reform as reported out by the Committee on Commerce, Science and Transportation of the U.S. Senate and the Subcommittee on Communications and Technology of the Committee on Energy and Commerce of the U.S. House of Representatives. I hope legislation passes soon, so first responders who rely on this spectrum no longer need to worry about a potential loss of or significant disruption to their mission-critical radio systems. I remain committed to helping Congress in any way I can to ensure that such harms to public safety operations do not come to pass.”

In 2012, Congress passed the Middle Class Tax Relief and Job Creation Act requiring the FCC to reallocate T-band spectrum used by public-safety and private wireless licensees and “begin a system of competitive bidding” for reallocated spectrum by 2021. The FCC has compiled a record on the T-band that demonstrates that an auction is unlikely to yield sufficient revenue to cover the costs to move public safety users out of the band.

Pai first asked Congress to repeal the mandate late last year.

FCC Releases Rural Call Completion Order and Further Rulemaking

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Comments are due by June 4; reply comments are due by June 19.

The FCC has released its Rural Call Completion Order (RCC Order) and Third Further Notice of Proposed Rulemaking (Third FNPRM). In the RCC Order, the FCC adopts a new rule to address rural call completion issues, including issues raised by AICC. The FCC’s rule requires “covered providers,” defined as entities that select the initial long-distance route for a large number of lines, to monitor the performance of the “intermediate providers” to which they hand off calls and holds covered providers responsible for the entire path of the call.  The FCC also requires covered providers to make available a point of contact to address rural call completion issues.

Specifically, the FCC’s rule adopted in the RCC Order provides that a covered provider, for each intermediate provider with which it contracts, shall: (a) monitor the intermediate provider’s performance in the completion of call attempts to rural telephone companies (both incumbent and competitive local exchange carriers ) from subscriber lines for which the covered provider makes the initial long-distance call path choice; and (b) based on the results of such monitoring, take steps that are reasonably calculated to correct any identified performance problem with the intermediate provider, including removing the intermediate provider from a particular route after sustained inadequate performance. This requirement entails both prospective evaluation to prevent problems and retrospective investigation of any problems that arise. The FCC also requires covered providers to take steps that are reasonably calculated to correct any identified performance problem with the intermediate provider. Although covered providers have flexibility in the remedial steps they choose so long as they pursue a solution that is reasonably calculated to be effective, the FCC specifically requires removing intermediate providers from routes where warranted.

The FCC requires covered providers to exercise oversight regarding their entire intermediate provider call path to rural destinations. However, the FCC does not cap the number of intermediate providers.

Covered providers are required to make available on their websites a telephone number and email address for the purpose of receiving and responding promptly to any rural call completion issues. The contact information must be easy to find and use. Covered providers must ensure that any staff reachable through this contact information has the technical capability to promptly respond to and address call completion concerns. The contact information must be kept current on their websites and updated with any changes within ten business days.

The FCC declines to set specific performance targets or benchmarks for call answer rates, call completion rates, or any other performance metric.

Rural Call Completion Further Rulemaking

In the Third FNPRM, the FCC seeks comment on rules to be applied to intermediate providers to address rural call completion issues and to comply with the Rural Call Completion Act (RCC Act).  Most of the proposed rules for intermediate providers follow the rule adopted for covered providers and will work in connection with that rule to prevent rural call completion issues, address issues when they occur, allow alarm industry members to identify the entities involved in call completion issues and provide a contact person to resolve any issues.

The Third FNPRM also asks for comment on service quality standards to be applied to intermediate providers.

The FCC seeks comment on the following issues:

  1. The FCC proposes to require any intermediate provider to register with the FCC, and provide its business name, primary address; the name, telephone number email address and business address of its regulatory contact and/or designated agent for service of process; all business names that the intermediate provider has used in the past; and the states in which it provides service. The FCC also proposes that a point of contact must be provided for addressing rural call completion issues including the name, title, business address, telephone number and email address of at least one contact person.
  2. The FCC proposes that a covered provider may not rely on any unregistered intermediate providers in the path of a given call.
  3. The FCC proposes that covered providers must be responsible for knowing the identity of all intermediate providers in a call path and must furnish upon request to the FCC or state authorities the identities of any or all intermediate provides in the respective call paths.

The FCC also seeks comment on service quality requirements for intermediate providers. The RCC Act requires intermediate providers that offer, or hold themselves out as offering, the capability to transmit covered voice communications from one destination to another and that charge any rate to any other entity (including an affiliated entity) to comply with “service quality standards” to be established by the Commission. In promulgating such standards, the Commission must “ensure the integrity of the transmission of covered voice communications to all customers in the United States” and “prevent unjust or unreasonable discrimination among areas of the United States in the delivery of covered voice communications.” The term “service quality standards” is not defined in the RCC Act. However, the FCC notes that “the Senate Commerce Committee Report states that such standards ‘could include the adoption of specific call completion metrics or the more general adoption of duties to complete calls analogous to those that already apply to covered providers under prior Commission rules and orders.’”

The FCC seeks comment on the following issues concerning service quality standards for intermediate providers:

  1. The FCC proposes to require intermediate providers to take reasonable steps to: (1) prevent “call looping,” a practice in which the intermediate provider hands off a call for completion to a provider that has previously handed off the call; (2) “crank back” or release a call back to the originating carrier, rather than simply dropping the call, upon failure to find a route; and (3) not process calls so as to “terminate and re-originate” them (e.g., fraudulently using “SIM boxes” or unlimited VoIP plans to re-originate large amounts of traffic in an attempt to shift the cost of terminating these calls from the originating provider to the wireless or wireline provider).
  2. The FCC states that Section 64.1601(a)(2) of the Commission’s rules already requires intermediate providers within an interstate or intrastate call path that originate and/or terminate on the PSTN to pass unaltered to subsequent providers in the call path signaling information identifying the telephone number, or billing number, if different, of the calling party that is received with a call. In addition, section 64.2201(b) requires intermediate providers to return unaltered to providers in the call path any signaling information that indicates that the terminating provider is alerting the called party, such as by ringing. The FCC asks if any additional rules are necessary to prevent intermediate providers from manipulating signaling information for calls destined for rural areas?
  3. The FCC asks whether it should require intermediate providers to temporarily or permanently remove an intermediate provider who fails to perform at an acceptable service level from the routing path, as it required for covered providers and whether it should require intermediate providers to take reasonable steps to limit the number of intermediate providers after them in the call chain?
  4. The FCC proposes to require intermediate providers to have processes in place to monitor their own rural call completion performance when transmitting covered voice communications.
  5. The FCC asks if it should adopt duties to complete calls for intermediate carriers like those that already apply to covered providers under prior Commission rules and orders?
  6. The FCC asks if it should require intermediate providers to meet or exceed one or more numeric rural call completion performance targets or thresholds while giving them flexibility in how to meet this requirement? If so, what metric(s) should be utilized and what target(s) or threshold(s) should be set?
  7. The FCC seeks comment on whether intermediate providers should be required to certify that they do not transmit covered voice communications to other intermediate providers that are not registered with the Commission.
  8. The FCC asks whether specific service quality measures for intermediate provider should be adopted. The FCC states that following adoption of rules implementing the RCC Act, covered providers who qualify for the safe harbor provisions will also be exempt from the service quality requirements of the RCC Act.
  9. The FCC asks whether an intermediate provider’s failure to comply with the quality standards or to fully and accurately register should result in removal from the registry, thereby preventing covered providers from using that intermediate provider?

Comments are due by June 4, 2018 and reply comments are due by June 19, 2018. To comment, visit FCC.

 

—Contributed by Mary Sisak, Blooston Law Firm, TMA Counsel