In a 3-2 party-line vote, the FCC on Thursday gave initial approval for a set of proposed privacy regulations that would require broadband Internet service providers (ISPs) to gain consumer consent before collecting and sharing certain data.
The rules, proposed by FCC Chairman Tom Wheeler earlier this month, would separate consumer data into three categories requiring different kinds of consent (inherent, opt-out and opt-in) prior to collection or sharing, require ISPs to disclose their data gathering practices and beef up regulations surrounding ISP protection of consumer data and breach reporting requirements.
According to the FCC, the rules will apply only to broadband service providers, but not other services of a broadband provider, such as the operation of a social media website, or issues such as government surveillance, encryption or law enforcement. The rules also do not apply to apply to the privacy practices of web sites and other “edge services” under the jurisdiction of the Federal Trade Commission, the FCC said.
Wheeler said Thursday the proposed rules will “give all consumers the tools we need to make informed decisions about how our ISPs use and share our data, and confidence that ISPs are keeping their customers’ data secure.”
The preliminary passage of Wheeler’s rules was celebrated by consumer advocacy group Consumer Action, which commended the FCC for “recognizing that consumers should not have to choose between going online and enjoying privacy protection.”
In his dissent, however, Commissioner Ajit Pai said the rules “simply favor one set of corporate interests over another.”
Since they won’t apply to other tracking technologies from companies like Microsoft, Facebook, Apple and others, Pai argued the rules will have virtually no impact on consumer privacy. Instead, he said, the rules will simply give an advantage to those technology companies “who are already winning.”
“There is no good reason to single out ISPs, new entrants in the online advertising space, for disparate treatment,” Pai said. “Consumers could and should have an expectation of privacy. That expectation should be reflected in uniform regulation of all companies in the Internet ecosystem.”
Commissioner Michael O’Rielly also dissented, warning the rules would likely “impede innovation” and prevent companies from developing new revenue streams.
O’Rielly’s objections in particular reflected comments previously issued by Moody’s Investors Service shortly after the proposal was issued. At the time, Moody’s said the rules have the potential to “severely handicap” AT&T and Verizon’s ability to compete with the likes of Facebook and Google.
AT&T’s Senior Vice President of Federal Regulatory Bob Quinn on Thursday also blasted the rules, saying they would create an “un-level playing field that would limit or even prohibit broadband providers from utilizing any of the ad-supported models adopted by edge providers that have proven so popular with consumers.” Quinn, too, warned the rules will “ultimately lead to higher broadband prices and less broadband deployment in the United States.”
A public comment period on the rules will now be held, after which the commission will hold a final vote on whether or not to approve the proposed rules. During the public comment period, the FCC said it is seeking input on “additional or alternative paths to achieve pro-consumer, pro-privacy goals.”
Filed Under: Industry regulations