FCC ISP Privacy Proposal To Explore Variety of Approaches Beyond Bright-Line Rules

FCC Chairman Tom Wheeler, who circulated an NPRM Thursday on proposed privacy rules for ISPs requiring them to protect subscribers (see 1603100019), said in a Huffington Post blog post aimed at consumers: The FCC is protecting “your data.” The NPRM is set for a vote at the FCC's March 31 open meeting, as reported by Communications Daily (see 1602110054 and 1603100019). A senior FCC official said on a call with reporters the NPRM will explore a wide range of options. Wheeler said the proposal doesn't ask questions about edge providers like Facebook and Google but is sector specific. There's a long history in the U.S. of sector privacy rules and the FCC is the expert agency over ISPs, a senior agency official said.

Under the proposal, consumers would have to “opt in” for their data to be shared, a senior FCC official said. Several wrinkles emerged during the FCC call with reporters. Agency officials said the FCC will explore whether there's an alternative to rules, such as seeking an agreement through a multistakeholder process. Privacy experts said during a recent C-SPAN discussion that such a process would likely take too long and compromise would be difficult (see 1603080067). FCC officials also said the NPRM asks whether a case-by-case approach to regulation is preferable to bright-line rules. The FTC uses both approaches, a senior FCC official said.

The NPRM will explore whether some data, such as geolocation information, information about children, financial information and Social Security numbers, should receive enhanced protections under the rules, officials said.

“It’s the age of anywhere, anytime Internet connectivity -- do you know where your information is?” Wheeler asked in the blog post. “Whenever we go online, we share information about ourselves. This information can be used to recommend a TV show based on what we’ve watched before. It can help target advertisements for products that we’re interested in. And it can also paint a portrait of our family life, our health, our finances, and other sensitive personal details.”

The proposed rules are “narrowly focused on the personal information collected by network providers,” Wheeler said. “The privacy practices of the websites that you choose to visit are not covered by this proposal,” he said. “Indeed, there are other federal and state agencies, namely the Federal Trade Commission -- that do a great job dealing with such companies and their privacy practices.”

Commissioner Mike O’Rielly slammed the FCC factsheet released Thursday on the proposed rules. The agency is “is doubling down on its misguided and broken Net Neutrality decision by imposing troubling and conflicting ‘privacy' rules on Internet companies,“ O’Rielly said in a statement. “While I will read the document, this direction does not surprise me given this agency’s reckless approach to an important topic, especially where it clearly lacks expertise, personnel, or understanding.”

“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,” said Sen. Ed Markey, D-Mass., in a statement. “I urge the Commission to take up the proposal at its March meeting and move quickly to put these rules on the books.”

Lines are already well drawn and groups on both sides pushed out statements Thursday. “Today, Americans have really no privacy when they go online, use mobile phones, or stream videos,” emailed Jeffrey Chester, executive director of the Center for Digital Democracy. “They face a growing threat to their privacy as cable and phone company broadband ISPs construct a powerful and pervasive data gathering apparatus.”

Wheeler should be applauded for pushing forward on rules, said Meredith Rose, staff attorney at Public Knowledge. “That he has done so despite overwhelming industry opposition shows a deep commitment to the Commission’s role as a consumer protection agency,” Rose said in a news release. “Laws enshrining the right of consumers to enjoy safe, secure communication” aren't new and date to the earliest days of the Postal Service, she said: As mail or phone service were, “Internet today is an absolutely necessary conduit for participation in modern society.”

The proposal is “misguided,” said Doug Brake, telecom policy analyst with the Information Technology and Innovation Foundation. “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,” Brake said in a news release. “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.” Brake said it’s “unfortunate that privacy activists have successfully convinced the FCC to ignore the benefits of FTC privacy oversight.”

The proposal is “unwise,” said Free State Foundation President Randolph May. “It is difficult to understand, at a time when concern about excessive government spending and over-regulation is running at an all-time high, why the FCC needs to develop a new regulatory regime that duplicates the work the FTC is doing and has been doing for years.” Given the FTC's “general privacy jurisdiction” and expertise, there is no need for the FCC to impose separate rules “especially when there is no evidence the FTC has not been active in protecting consumer privacy,” May said.

“Half measures aren't enough to protect consumer privacy,” said Fred Campbell, director of Tech Knowledge. “Sadly, the FCC's privacy proposal is a half-measure that applies to a limited set of Internet companies that collect a subset of consumer information.” Mobile Future also raised concerns. “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,” said Executive Director Allison Remsen.