FCC Privacy Proposal Draws Public Praise, Criticism

Stakeholders and interested observers didn't even wait for the FCC to finish outlining the new broadband privacy proposal--and its opt-in requirement for sharing targeted ads--to reporters before they were peppering them with comments.

Privacy groups were looking for sector-specific rules and they got them. ISPs were looking for a lighter hand, although FCC officials signaled it was the beginning of a process--it is rulemaking proposal--with plenty of time for input and alternative proposals, some of which have already been offered up.

Cable operators and other ISPs had suggested the FCC use the FTC model, which is to inforce privacy polices under its unfair and deceptive practices authority, rather than come up with a new regulatory regime. Apparently, that didn't happen. Consumer privacy activists pushed for strong rules, saying the FTC model was too weak, relying on enforcing company promises. The FCC appeared to be listening.

Out of the gate almost before the electrons had dried on the FCC fact sheet was Public Knowledge, one of those who had called for tough new rules.

“We applaud the Chairman for taking a decisive step to protect consumers," said staff attorney Meredith Rose. "That he has done so despite overwhelming industry opposition shows a deep commitment to the Commission’s role as a consumer protection agency. Laws enshrining the right of consumers to enjoy safe, secure communication date back to the very earliest days of the Postal Service; and, much as access to letter carriers was at that time--and access to the telephone network was a generation ago--access to broadband Internet today is an absolutely ecessary conduit for participation in modern society."

Tech think tank, the Information Technology and Innovation Foundation (ITIF), was not happy.

"A sector-specific privacy rulemaking for broadband providers is misguided," said telecommunications policy analyst Doug Brake. "Under the FTC’s enforcement of best practices and broadband provider policies, privacy protections are already well balanced with other values, such as cost, usability, or innovation. Moreover, a sector-specific rulemaking ignores privacy-protecting technologies like encryption and virtual networks, and the fact that all major broadband providers already allow consumers to control how their information is used."

Free State Foundation President Randolph May agreed.

"FCC Chairman Tom Wheeler appears determined to use the expansion of the FCC's power resulting from the agency's Open Internet order classification of broadband Internet providers as common carriers to adopt new, more burdensome privacy regulations applicable to ISPs," he said; "This is another case of the FCC wanting to exercise expansive regulatory authority because it can, not because it is wise."

As to the FCC's claim it was taking a flexible approach to a privacy regime it signaled was clearly needed given the customer info ISPs had access to.

“The FCC is ‘solving’ a problem entirely of its own making,” said Berin Szoka, president of TechFreedom, following the release of a fact sheet on the proposal. “There was no ‘regulatory vacuum’ over broadband privacy until the FCC ‘stole the FTC’s jurisdictional lunch money,’ using ‘strong net neutrality’ as pretext for a naked regulatory power grab....“When Wheeler claims his proposed approach will be ‘flexible,’ he really means the Chairman and Enforcement Bureau chief will retain unfettered discretion to make essentially arbitrary decisions about the future of broadband."

Senior FCC officials pointed out Thursday (March 10) that the proposal does not affect search engines and edge providers, something ISPs argued left a privacy gap.

But Gaurav Laroia, policy counsel for Free Press, another fan of strong rules, suggested there was a difference. “As with the social media sites or search engines we use, our broadband providers can monitor and misuse our most private information, Laroia said. "But while we can choose among millions of options when it comes to websites and apps, we have little to no choice when it comes to our Internet service providers. That’s why Congress was wise to require that the FCC maintain special privacy protections for customers of all common carriers. It’s crucial for the FCC to modernize these protections and apply them to broadband. By initiating this rulemaking, the FCC is taking the first step toward fulfilling its responsibility under Title II to protect the privacy of all telecommunications customers —including broadband Internet users. Chairman Wheeler and the other commissioners must establish the agency as  a strong defender of online privacy.”

Jeff Chester, executive director of the Center for Digital Democracy, was another fan.

"The proposed FCC opt-in for most consumer transactions can provide a foundation where data is under a person’s control—not a broadband company or some unknown third party," he said. "It’s a major step forward for the U.S., which has lagged behind other countries when it comes to protecting consumer privacy rights. As Americans learn more about the actual privacy-threatening practices of ISPs, we expect them to support speedy approval of new privacy safeguards by the FCC."

Allison Remsen, executive Director of Mobile Future, saw the item as clouding that future.

“While protecting privacy is a priority for the industry, the key question is how best to ensure simplicity, transparency and consistency for consumers," she said "The goal here should be to ensure consumers get the protection they deserve and expect whether they are interacting with a service regulated by the FTC or the FCC. Imposing conflicting or overly prescriptive FCC rules that stray from the FTC’s proven approach will not keep pace with innovation and will only serve to give consumers a false sense of security and fewer competitive service offerings. With the FCC’s role to regulate in this area far from certain, this proceeding adds another layer of uncertainty to America’s mobile sector.”

Senate Commerce Committee member and leading privacy advocate Edward Markey (D-Mass.) had urged the FCC to adopt strong rules and clearly thought that was what he got.

“I applaud Chairman Wheeler for releasing a proposal to ensure broadband customers have their privacy protected. Internet service providers have a duty to protect the privacy of consumers who use the company’s wired and wireless infrastructure to connect to the world," he said. "I urge the Commission to take up the proposal at its March meeting and move quickly to put these rules on the books.”  

The fact that the FCC is applying the rules to edge providers search engines and Web sites is a big issue with Fred Campbell, director of Tech Knowledge.

"Private consumer information is like any other secret. Even if you only tell a few friends you think you can trust, your secret will likely spread. And the Internet companies the FCC refuses to hold accountable for your privacy — like Google — aren't your friends," he said. "They're in the business of selling your secrets — secrets so valuable that Google is now the largest company the world has ever known. Yet the FCC plans to exempt Google and the Internet's other biggest secret-sellers from its new privacy rules. It's the equivalent of adopting a nuclear weapons ban that applies to everyone except the United States and Russia — the world’s biggest nuclear powers — and claiming the ban will keep the world safe from nuclear attack."

USTelecom was taking the FCC at its word that it was seeking input on the proposal and that it was still, at least in some respects, a work in progress.

“Consumers should be able to count on privacy rules that are evenly applied across the Internet economy. We are pleased the commission’s proposal includes the general principles emphasizing consumer choice, transparency and data security outlined in the broad industry framework presented by USTelecom and four other associations representing the vast majority of the nation’s Internet service providers," said USTelecom President Walter McCormick. "As the FCC considers proposals that will be submitted into the record in this proceeding, we believe it is important to develop an accurate picture of how consumer Internet information is used and by whom. We urge the commission to implement the general principles we have outlined in a flexible way based on the Federal Trade Commission’s longstanding and effective approach to privacy that has applied across the Internet, including to broadband providers, for years. Fragmenting current privacy protections for using the Internet won’t serve anyone well.”

The FCC will first have to collect likely at least a couple monthsworth of comments before it could vote on an order. Officials signaled they were still open to new ideas, and sought comment in the proposal on a number of issues, including whether some information needed more protection than others and exactly what customer information could be shared on an opt in vs. op out basis.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.