Broadband Carriers Urge FCC To Roll Back New Privacy Rules

Broadband carriers are urging the Federal Communications Commission to reconsider its stringent new privacy rules, which require carriers to obtain consumers' opt-in consent before drawing on their Web-surfing data for ad targeting.

In a petition filed Monday, the trade group US Telecom Association argues that carriers shouldn't be subject to tougher rules than other Web companies -- like search engines and social networking services.

The rules, which took effect this week, prohibit Internet service providers from drawing on information about subscribers' Web activity and app usage for ad targeting, without their opt-in consent.

The regulations apply only to companies that provide consumers with access to broadband, like Comcast, Time Warner and Verizon. Online publishers, search engines, social networks and other so-called "edge providers" aren't required to follow the FCC rules. Instead, those companies generally adhere to an industry code that allows consumers to opt out of receiving targeted ads based on Web-surfing data. (The self-regulatory code also requires companies to seek opt-in consent from consumers before drawing on a narrow category of "sensitive" data, including financial account information, geolocation data and certain types of healthcare information.)

The US Telecom Association argues that the rules rest on the "false" premise that carriers "are nearly omniscient and have greater visibility into consumer data" than other Web companies.

"Given the recent rise of encryption and multiple ISP connections per user, any given ISP has rapidly declining visibility into the details of consumers’ Internet usage and, in some respects, less visibility than leading social media platforms, search engines, and data brokers," US Telecom asserts in its 25-page petition.

That argument isn't new. The carriers have claimed for many months that they have no unique insight into consumers' Web activity. Last February, privacy expert and former White House official Peter Swire authored a paper -- partially funded by the industry group Broadband for America -- concluding that the growing use of encryption, combined with consumers' increasing reliance on smartphones and tablets, deprives broadband carriers of comprehensive information about their subscribers' Web use.

But others, including the consultancy Upturn, disagree with Swire's assessment. "Today, ISPs can see a significant amount of their subscribers' Internet activity, and have the ability to infer substantial amounts of sensitive information from it," that group wrote in a report funded by the Media Democracy Fund. "ISPs and the vendors that serve them have clear opportunities to develop methods of inferring important information even from encrypted data flows."

Broadband carriers aren't the only ones opposed to the new rules. Late last year, Google foe Oracle argued that the privacy requirements will benefit the search company by "hamstringing ISPs while allowing Google to continue to engage in invasive data collection and aggregation techniques, bolstered by its tight control of the Android operating system."

The major ad industry groups also petitioned the FCC to reconsider the rules. Those groups make several arguments, including that the new rules are unconstitutional because they violate broadband providers' free speech rights.

"The creation, analysis, and transfer of consumer data for marketing purposes constitutes speech," the groups say in a petition filed Tuesday. "The prohibition against the use of ... all web viewing history and app usage information, without opt-in consent, unlawfully restrains and unreasonably burdens the ability of [broadband] providers to engage in broad ranges of protected speech," the ad groups argue.

The FCC hasn't indicated how it will act on the new petitions for reconsideration. But the rules faced an uncertain future even before the trade groups asked the agency to revisit the regulations, given that the two Republicans on the FCC said last month that they aim to repeal the net neutrality and privacy rules.

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