On November 5, 2015, the Federal Communications Commission Enforcement Bureau announced a $595,000 settlement agreement with Cox Communications, Inc. to resolve an investigation into whether the company failed to properly protect its customers’ personal information when electronic data systems were breached in August 2014. According to the FCC, Cox exposed the personal information of numerous customers and failed to report the breaches through the Commission’s established breach-reporting portal.
In its recent Open Internet Order, the U.S. Federal Communications Commission determined that broadband Internet access services are appropriately classified as common carrier “telecommunications services” under the Telecommunications Act of 1996. In doing so, the agency established itself as the primary U.S. data privacy and security regulator for those services and triggered additional requirements under the Act. It also promised a future rulemaking that could result in a sea change in how ISPs and their business partners interact with consumer data. Although the decision is widely expected to be appealed in court, organizations operating across the broadband ecosystem would be prudent to assess the potential impact on their current and planned online service portfolio.
The Federal Communications Commission recently issued a Notice of Apparent Liability for Forfeiture proposing a $10 million penalty against TerraCom, Inc. and YourTel America, Inc. (collectively, the “companies”) for allegedly violating laws protecting consumers’ personal information. Specifically, the FCC alleged that the companies placed the personal data of up to 300,000 consumers at risk by storing Social Security numbers, names, addresses, driver’s licenses, and other proprietary information on unprotected Internet servers that “anyone in the world could access.” The decision is the FCC’s first case involving data security. It is also informative as to the FCC’s current and evolving expectations with regard to carriers’ duties to protect sensitive consumer information, and it underscores the need for organizations in the communications sector to keep a close eye on both FCC and Federal Trade Commission data privacy and security enforcement activity.