Internet providers attack rules on privacy
A fledgling federal rule to prevent Internet providers from harvesting and selling information about customers’ Web browsing without their consent appears destined for the chopping block under the Trump administration.
In what the Federal Communications Commission called an effort to give broadband customers more meaningful choice, transparency and protection over how their personal information is used, the agency passed rules mandating that Internet providers obtain explicit permission from customers to use and share personally identifiable data for things like targeted advertising.
The new rules, which took effect Jan. 3, are already facing a full-court press from a cadre of lobbyists and trade groups representing Internet providers and advertising companies chafing at what they see as an overbroad and unfair attempt to constrict their access to the currency of the digital economy.
Internet providers like Comcast, Verizon and AT&T, proponents of the regulations said, aren’t content to sit on the sidelines while the likes of Google
and Facebook make billions of dollars by selling their users’ data to advertisers.
“The truth of the matter is that (the Internet providers) want to be Google and Facebook and compete with those companies, so they feel as if they’re at a disadvantage,” said Dallas Harris, a legal and policy fellow at Public Knowledge, a consumer advocacy group.
Advertisers spent $17.6 billion online in the U.S. alone in the third quarter of 2016, according to the Interactive Advertising Bureau. That’s up $2.9 billion from the previous quarter. Marketing trade group Digital Context Next estimates that Facebook and Google accounted for 99 percent of that growth.
On top of browsing histories, the commission included “precise geo-location data, financial information, health information, children’s information, Social Security numbers, app usage history and the content of communications” in the private data Internet providers must obtain permission to collect. Previously, Internet providers could collect and sell that data unless customers tell them to stop.
“The idea behind these rules is to remind consumers that it’s your data, you should be in control of how it’s used,” Harris said. “Internet service providers don’t have an automatic right to use it however they want.”
Proponents of the regulations also say that the relative dearth of options for broadband Internet providers across the U.S. plays into the debate.
“If you only have one or two real options for high-speed Internet in your market, and they get carte blanche about how to use your data, you’re stuck with whatever they choose to do with it,” said Zach Brock, the CEO of Common Networks, a startup wireless Internet provider in San Francisco.
Brock said Common Networks doesn’t seek to make money from customer data.
Critics of the privacy rules gained ground last Tuesday when the FCC announced that it was seeking more public comment on the regulations after it received a litany of petitions against them. Such industry opposition is mingling with vocal resistance from within the FCC itself, further kindling anxieties among privacy proponents that the rules may be dismantled.
“I would be surprised if they survived,” said Dave Thomas, a telecommunications attorney at the law firm Sheppard, Mullin, Richter & Hampton. “In the reconsideration phase, it’s a lot easier for the commissioners to do an aboutface because (the rules) aren’t as set and established.” The regulations narrowly passed the commission by a 3-2 vote. The two “no” votes came from Republican Commissioners Ajit Pai and Michael O’Rielly. Both are expected to play increasingly prominent roles under President Trump.
On Friday, Politico reported that Pai had been tapped to be the commission’s next chairman, citing unnamed sources familiar with the appointment.
“Were it up to me, the FCC would have chosen a different path — one far less prescriptive and one consistent with two decades of privacy law and practice,” Pai wrote in his formal dissent, adding that the rules would cement the dominance of companies like Facebook and Google “in the online advertising market, and lead to consumer confusion about which online companies can and cannot use their data.”
Daniel Jaffe, who leads government relations for the Association of National Advertisers, called the FCC’s effort to broaden what’s considered sensitive data a “vast overkill under the guise of protecting us.
“They’ve gone and created a rule that sweeps in everything and makes no distinctions, and is really just basically useless and counterproductive,” Jaffe said.
Jaffe said that his organization, which represents the interests of the marketing industry, was actively involved in efforts to strike down the rule, including pushing lawmakers to use their authority under the Congressional Review Act to block significant regulations within 60 days after they take effect. The CRA applies to rules that have at least a $100 million impact on the economy.
“This rule would certainly have that,” Jaffe said, adding that if the rules aren’t overturned, “we’d go to court. One way or another, we think the odds are that this rule-making will get overturned,” he said.
Advocates for rolling back the rules also found an unexpected ally in Oracle, the database software company that has increasingly invested in tools to manage online marketing campaigns in recent years. The company wrote to the FCC in late December arguing that Internet providers shouldn’t face constrictions on what they’re able to do with their customers’ data while other online services — Google in particular — are allowed to reap vast profits from it.
The new rule, Oracle Senior Vice President Kenneth Glueck, “correctly recognizes that protecting consumer privacy online is ‘fundamental,’ but completely undermines that goal by handing Google the market to the obvious detriment of consumers.”
Google didn’t respond to requests for comment.
Harris said that despite the mounting pressure against the rules, her organization and other consumer advocacy groups have vowed to continue to press their case for broader consumer protections online.
“Trump has put me out of the prediction business, but I will say that privacy advocates will not let this fall by the wayside,” she said. “If these rules are reversed, then we will go down fighting for people’s privacy.”
“The idea behind these rules is to remind consumers that it’s your data, you should be in control of how it’s used. Internet service providers don’t have an automatic right to use it however they want.”
Dallas Harris, a legal and policy fellow at Public Knowledge