Commentary

Senate To Grill FCC And FTC On Broadband Privacy

Lawmakers on the Senate Judiciary Committee plan to examine proposed new privacy rules that would limit Internet service providers' ability to use subscribers' Web-surfing history for ad purposes.The subcommittee on Privacy, Technology and the Law will hold a hearing on the matter next Wednesday afternoon. Federal Communications Commission Chairman Tom Wheeler and Commissioner Ajit Pai are expected to testify, as are Federal Trade Commission Chairwoman Edith Ramirez and Commissioner Maureen Ohlhausen.

The rules, proposed by Wheeler in March, would require Internet service providers to obtain consumers' express consent before collecting data about their Web-surfing activity in order to serve them behaviorally targeted ads.

The regulations also could ban some types of tracking technology, including "supercookies." The proposal specifically refers to Verizon's unique identification headers -- 50-character alphanumeric strings the company used to inject into all unencrypted traffic on its mobile network. Ad networks were able to use those headers to send targeted ads to mobile users, even when they tried to avoid tracking by deleting their cookies.

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The FTC's Ohlhausen has gone on record as opposing a mandate for ISPs to obtain opt-in consent before engaging in online behavioral advertising. She said in a recent speech that consumers don't necessarily want their Internet service providers to refrain from data collection without explicit permission. She also argued that a broad opt-in requirement will prevent companies from using data in unanticipated ways.

Pai at the FCC also opposes the proposal, arguing that it unfairly subjects ISPs to more limits than online publishers and ad companies.

"When it comes to privacy, the principle of parity makes sense," he said in a statement dissenting from the FCC's decision to move forward with the proposal. "The FCC tilts the regulatory playing field by proposing to impose more burdensome regulation on Internet service providers, or ISPs, than the FTC imposes on so-called 'edge providers,'” he stated. "But consumers don’t necessarily know which particular online entities can access their personal information, let alone the regulatory classification of those entities. They do care that their personal information is protected by everyone who has access to it."

For their part, ISPs have made clear that they don't want to see the rules go through, and some ad industry groups have not yet committed to a position.

At least one company appears to see an opportunity in the proposal. Ghostery, which offers consumers the ability to block ads from third parties, disclosed last week in a public filing that it recently met with FCC officials to discuss "its experience with transparency and consumer control mechanisms."

Ghostery added: "We emphasized the importance of focusing on informed consent rather than strict opt-in versus opt-out approaches for consumer control."

While Ghostery hasn't fleshed out its ideas in a regulatory filing, the company said in a recent blog post that it's had discussions with ISPs about enabling consumers to block third-party ads on the network level.

The FCC is accepting initial comments on the proposed privacy rules through May 27.

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