A proposal to protect consumers' privacy by limiting broadband providers' ability to serve targeted ads "overshoots the mark," says Jon Leibowitz, former chair of the Federal Trade Commission.
Leibowitz, who now works at a law firm that represents Internet service providers, says in a new Federal Communications Communication filing that the proposed rules "go well beyond those imposed upon the rest of the Internet economy."
His comments come in response to an FCC proposal to prohibit broadband providers from using data about consumers' Web activity for ad-targeting purposes without their opt-in consent. Those rules would only apply to Internet service providers, and not "edge providers" -- meaning companies that offer Web content or services, like Google, Facebook, Netflix and ad networks.
Many Web content companies and ad networks allow consumers to opt out of receiving behaviorally targeted ads -- but few companies, if any, seek consumers' opt-in consent for targeting.
The broadband industry argues that the proposed rules will confuse consumers by creating different privacy standards for ISPs and edge providers. The Association of National Advertisers also says it will urge the FCC to avoid restrictive privacy regulations for broadband providers.
But consumer groups support the FCC's proposal, arguing that ISPs arguably have access to far more consumer data than any individual Web company. Advocacy groups also say consumers have choices about which Web sites to visit, but most people have limited options when it comes to a broadband provider.
FCC Chairman Tom Wheeler argues that broadband providers should be subject to more restrictions than Web sites for several reasons. "We can choose not to visit a Web site or not to sign up for a social network, or we can choose to drop one and switch to another in milliseconds. But broadband service is different," he recently stated. "Once we subscribe to an ISP -- for our home or for our smartphone -- most of us have little flexibility to change our mind or avoid that network rapidly."
But Leibowitz writes that the proposed rules are too broad. "Rather than narrowly tailoring a requirement for opt-in consent to truly 'sensitive data,' the proposed rules would impose a broad opt-in requirement upon broadband providers," he writes.
That requirement "has the potential to stifle innovation and competition in the online advertising marketplace, and undermine benefits to consumers," Leibowitz contends.
He adds that broadband providers "should be able to use information in a manner consistent with consumer expectations and in a way that correlates to how the rest of the Internet ecosystem provides choice -- on an opt-out basis."