Broadband services

FCC Dems Pass Broadband Privacy Rules

The "ayes" have it.

Once again the Federal Communications Commission (FCC) has voted three to two to pass a controversial new telecom policy proposal. In today's case, Chairman Tom Wheeler alongside fellow Democratic Commissioners Mignon Clyburn and Jessica Rosenworcel supported passage of new broadband privacy rules, while Republican Commissioners Ajit Pai and Michael O'Rielly vehemently dissented.

The goal of the broadband privacy order is to give consumers more control over the data that Internet service providers can collect about their usage profiles and behaviors. Among its provisions, the ruling commands ISPs to clearly notify users about any personal data being collected, as well as any data breaches that may cause consumer harm. ISPs must also implement appropriate security practices to protect personal information.

These aspects of the ruling, however, are not the most contentious. Controversially, the FCC order also dictates what type of personal data can be collected and how ISPs must gain customer permission to collect it. For the first time, the ruling says ISPs must now gain "opt-in" consent for any sensitive information, including geo-location, children's information, health information, financial information, Social Security numbers, web browsing history, app usage history and the content of communications. ISPs only need opt-out permission to collect non-sensitive data, such as the tier of service a customer is using.

One thing the ruling does not do is outlaw the practice of ISPs charging higher rates for broadband service with tighter privacy policies -- a practice that AT&T Inc. (NYSE: T) recently discontinued on its own. (See Consumer Privacy Still an Elusive Goal.)

It does require "heightened disclosure" of the practice and gives the FCC the right to "determine on a case-by-case basis the legitimacy of programs that relate service price to privacy protections."

For more fixed broadband market coverage and insights, check out our dedicated Gigabit/Broadband content channel here on Light Reading.

Consumer advocates heavily support the new broadband privacy initiative, but opponents of the ruling argue that it sets up a massive divide between ISPs and other Internet companies like Google (Nasdaq: GOOG) and Facebook . These other Internet companies -- so-called edge providers -- are governed by the Federal Trade Commission , and currently do not face the same regulations that the FCC is imposing on telecom companies.

In his dissent, Commissioner Pai argued that ISPs don't deserve to be governed under stricter regulations than edge providers, particularly when edge providers are responsible for some of the most egregious privacy infractions of late. Pai noted recent stories about Google dropping a ban on personally identifiable web tracking, Yahoo Inc. (Nasdaq: YHOO) scanning the contents of emails, Apple Inc. (Nasdaq: AAPL) tracking phone numbers in iMessage, Twitter Inc. revealing users' home locations and Microsoft Corp. (Nasdaq: MSFT)'s Skype conferencing application being labelled "among the worst in privacy" by Amnesty International.

Commissioner O'Rielly also cited the irony of imposing heavier regulations on ISPs given that telecom companies can still buy consumer data even if they can't collect it themselves.

"The ultimate absurdity of these rules," said O'Rielly, "is that the broadband providers remain free to purchase and use the information they need from most other Internet companies, including edge providers, because other companies not covered by the rules will continue to operate on the FTC's opt-out regime."

However, Commissioner Rosenworcel praised the ruling even while still acknowledging that there is more work to be done. Rosenworcel said that the government will have to harmonize regulations across sectors and suggested the creation of an inter-agency privacy council in the future to work toward that goal.

Chairman Wheeler, meanwhile, was adamant about the importance of the new privacy rules as a first step, declaring repeatedly that "it is the consumer's information," and "before today there were no protections."

Predictably, the industry reactions to today's ruling were fast and fierce, with the National Cable & Telecommunications Association (NCTA) calling it "profoundly disappointing." The United States Telecom Association (USTelecom) blasted the classification of web browsing data as sensitive information as "a disservice to the goal of providing consumers with consistency in privacy expectations when they use the internet," and adding that it "poses a threat to continuing web innovation."

On the other side of the aisle, Free Press hailed the new privacy ruling, noting that the decision "recognizes that internet service providers like AT&T, Comcast and Verizon have congressionally mandated obligations to protect customer privacy and obtain consent before sharing personal information."

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

KBode 10/31/2016 | 1:21:51 PM
Industry response... The rules seem pretty basic and sensible to me, and in many instances require things ISPs were already doing.

Interesting to see Verizon say the rules are in line with FTC enforcement and being happy with the rules, while the NCTA and AT&T said the exact opposite, and complained.
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