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Case for Edge Regulations Gets a New Face(book)

WASHINGTON — The Cambridge Analytica data issue roiling policymakers here appears to be more than just the latest on a growing list of flashpoints between the federal government and edge providers, who have grown rapidly from scrappy garage innovators to internet behemoths.

NCTA: The Internet & Television Association has been pushing Capitol Hill hard to start scrutinizing the Big Four edge providers — most recently, in an interview on C-SPAN — with an assist from Federal Communications Commission chair Ajit Pai. But Facebook may had just handed them the issue that turns this flashpoint into a political conflagration. Or, as NCTA president and CEO Michael Powell prefers, an “inflection point.”

That would be the revelation that data firm Cambridge Analytica used Facebook info from some 50 million users — without their permission — to build profiles to sell to political campaigns, including President Donald Trump’s.

The approach of internet service providers to the network neutrality issue has been to call for Congress to come up with new rules. But if that’s the case, they want rules to apply to everyone, particularly the edge giants — Google, Amazon, Facebook — that are competitors in the delivery of content to eyeballs that also dwarf them in size and market cap.

Scott Cleland, who heads ISP-backed group NetCompetition, portrayed the Facebook pile-on as the natural outgrowth of D.C.’s hands-off approach to the web.

“U.S. Internet law and policy, which exempts and immunizes internet platforms from most normal social responsibility and government accountability, has created a de facto anti-social contract with the American people; a cheater’s charter for internet platforms; and an increasingly corrosive culture of unaccountability,” he said.

But that clearly appears to be changing, particularly after Facebook suspended Cambridge Analytica from the social media platform two weeks ago, saying that was because a University of Cambridge professor had lied to it and violated its policy by sharing data from an app using Facebook Login with Analytica.

Social Media Mea Culpa

Facebook has apologized, blaming a third party and promising to do better, but it appears too late to head off major scrutiny. That’s because Facebook is under a 2011 consent decree with the Federal Trade Commission over failing to sufficiently protect the privacy of its users. The FTC last week confirmed it has launched an investigation into the Cambridge data use, saying it had major concerns.

The FTC’s tough talk highlights another factor favoring a government push to scrutinize edge providers and ISPs with the goal to insure that edge providers and their content don’t escape a network neutrality regime that applies to internet service providers.

The FTC is in the spotlight now that the FCC reclassification of ISPs as Title I information services in the network neutrality rule rollback has deeded the FTC primary oversight of data privacy and security, as well as nondiscrimination.

It has been making the point, pointedly, that it has the power and expertise, with an assist from the FCC, and will use that power as the new sheriff in town.

“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” Tom Pahl, acting director of the agency’s Bureau of Consumer Protection, said in confirming the investigation. “Foremost among these tools is enforcement action against companies that fail to honor their privacy promises,” and engage in unfair acts that cause substantial injury to consumers in violation of the FTC Act.

And Pai has shown himself to be on the same page as NCTA when it comes to calling for more scrutiny of the edge. He laid into edge providers in a speech last fall, telling a Future of Internet Freedom conference that Twitter is a bigger threat to the open internet than ISPs. Democrats are getting on that train, likely in part because the Cambridge data could have been used to help Trump get elected.

“This is a major breach that must be investigated,” said Sen. Amy Klobuchar (D-Minn.), ranking member of the Senate Rules Committee, following the Cambridge revelations.

A Matter of Policies

Facebook did say that characterizing this as a data breach was off-base, but that passing the information on to Cambridge Analytica was a violation of its policies. But that is not good enough for Hill Democrats or Republicans. Sen. Ed Markey (D-Mass.) called for hearings two weeks ago, as did Rep. Frank Pallone (D-N.J.), ranking member of the House Energy & Commerce Committee.

Sen. Mark Warner (D-Va.), ranking member of the Senate Intelligence Committee, investigating Russian interference in U.S. election, including buying online political ads as part of that interference, agreed it should be a spur to political ad disclosure legislation.

Last week, the official calls went out from both sides of the aisle. Zuckerberg had told CNN he would be happy to testify if he were the right person. Not-so-happy senators and House members from both sides of the aisle made it clear they thought he was.

Sen. John Thune (R-S.D.), chairman of the Senate Commerce Committee, and ranking member Bill Nelson (D-Fla.) released a joint statement making the request for Zuckerberg’s appearance, saying he needed to restore lost trust, safeguard users’ data, and end a troubling series of belated responses to serious problems.

Bipartisan leaders of the House Energy & Commerce Committee, and the Communications and Digital Subcommittees followed suit, saying they wanted him to testify about the “disturbing” allegations.

Zuckerberg may be happy to appear, but it could be NCTA members that wind up smiling over a new D.C. hands-on policy.