Commentary

FCC Proposes Broadband Privacy Rules

A divided FCC voted to move forward with a proposal for tough new broadband privacy rules.

The proposed rules would require ISPs to obtain consumers' consent before drawing on their Web-surfing data for behavioral targeting. The FCC's three Democrats, including Chairman Tom Wheeler, voted in favor of moving forward with the proposal, while the two GOP Commissioners opposed doing so.

"If this plan is adopted, each of us will have the right to exercise control over what personal data our broadband provider uses and under what circumstances it shares our personal information with third parties or affiliated companies," Wheeler stated Thursday. "This proposal does not prohibit ISPs from using and sharing customer data -- it simply proposes that the ISP first obtain customers’ express permission before doing so."

The basic framework of the proposed rules, as outlined by Wheeler, requires broadband providers to obtain consumers' opt-in consent before using data about them for ad purposes -- unless the ads are related to other communications services. Using data in order to market other communications services requires only opt-out consent. That exception appears to only applied in limited circumstances. For instance, if Verizon wanted to market its wireless service to a customer who already subscribed to Verizon FiOS, Verizon would only need that customers' opt-out consent.

But details remain very much up for discussion. Commissioner Jessica Rosenworcel said at the meeting that the FCC is seeking answers to more than 500 specific questions, including ones centered on the agency's approach toward opt-in and opt-out consent. (The official Notice of Proposed Rulemaking, which will include all of the agency's questions, wasn't available as of Thursday afternoon.)

The rules also could prohibit ISPs from charging subscribers higher rates to avoid being tracked. AT&T currently charges U-Verse customers in Austin and Kansas City an extra $29 a month -- before taxes and other fees -- to avoid being tracked for ad-targeting purposes. Consumer advocates have criticized that approach, arguing that AT&T's pricing structure is turning privacy into a luxury service.

As expected, the broadband industry quickly criticized the decision to move forward with the proposed rules. Broadband providers say they shouldn't be subject to different privacy rules than Google, Facebook or other so-called "edge" providers. Those companies typically allow consumers to opt out of behavioral targeting.

"The FCC’s proposed tentative conclusions, if adopted, will create a morass of regulations in the Internet privacy space and fail to provide a platform allowing consumers to count on privacy rules that are evenly applied across the Internet economy," USTelecom President Walter McCormick stated after the vote.

Comcast Senior Executive Vice President David Cohen adds: "Many entities -- operating systems, search engines, social media sites, browsers, ISPs, and others -- have access to this data, whether through their own collection or through purchasing the data from third parties, like data brokers. The real issue is whether we can create a set of meaningful and consistent protections for consumer online data."

Privacy advocates, however, point out ISPs are different from companies that offer content or services online. For one thing, broadband providers have information about every site users visit. Even when sites use encryption technology -- and most don't -- ISPs can still glean information from them.

The FCC won't vote on whether to enact the proposed rules until after reviewing comments on them.

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