FTC and FCC Draft a Memorandum of Understanding Regarding Enforcement of Broadband Business Practices

The Federal Trade Commission and Federal Communications Commission have released a draft memorandum of understanding on how they intend to coordinate their investigation and enforcement of any business practices by broadband providers that may raise consumer protection concerns after the FCC adopts its Restoring Internet Freedom proposal.

The 2015 Open Internet Order claimed exclusive FCC jurisdiction over broadband provider business practices as common carrier activities, which effectively stripped the FTC of its authority to protect consumers and promote competition regarding broadband providers. The FCC proposes to restore that authority to the FTC at its December 14, 2017 meeting. My October 19, 2017 Perspectives explained why the FTC is better qualified to handle this enforcement role, based on its existing legal authority, its expertise, and its institutional advantages. 

The agencies issued a statement explaining how they intend to work together to protect consumers:

The FCC will review informal complaints concerning the compliance of Internet service providers (ISPs) with the disclosure obligations set forth in the new transparency rule. Those obligations include publicly providing information concerning an ISP’s practices with respect to blocking, throttling, paid prioritization, and congestion management. Should an ISP fail to make the required disclosures—either in whole or in part—the FCC will take enforcement action.

The FTC will investigate and take enforcement action as appropriate against ISPs concerning the accuracy of those disclosures, as well as other deceptive or unfair acts or practices involving their broadband services.

The FCC and the FTC will broadly share legal and technical expertise, including the secure sharing of informal complaints regarding the subject matter of the Restoring Internet Freedom Order. The two agencies also will collaborate on consumer and industry outreach and education.

In short, the FCC will require that broadband providers disclose any blocking, throttling, paid prioritization or congestion management practices, and failures to make these disclosures will be handled by the FCC’s Enforcement Bureau. The FCC would then defer to FTC enforcement if a broadband provider does not follow what it said in its disclosure, which the FTC would investigate as a consumer protection matter and pursue an enforcement action if it finds a violation.