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Divisive Broadband Privacy Proposal Clears Key Hurdle

Recently, the Federal Communications Commission (FCC) previewed new broadband privacy rules that would require internet service providers (ISPs) to obtain consumers’ express consent before collecting and sharing data regarding their online activity. I detailed this significant proposal in a related blog post highlighting the contentious nature of the FCC standards, namely the complex regulatory patchwork resulting from inconsistent federal privacy standards. Now, in a 3-2 vote, the FCC has adopted a Notice of Proposed Rulemaking that would establish privacy guidelines for ISPs. The proposed rule will now enter a public comment period, and amendment phase, before a final vote. In the coming weeks, consumer privacy advocates, federal regulators, and communications companies will no doubt weigh in on this controversial proposal.

While privacy advocates have universally praised the FCC’s actions, criticism has been mounting from numerous sources. Already, the National Cable and Telecommunications Association has urged the FCC to adopt a "technology neutral approach by treating companies with access to similar user information the same." And now, the Federal Trade Commission (FTC) has thrown its hat into the ring, displaying a strong degree of skepticism regarding the likelihood of the new regulation actually benefitting consumers.

Last week, FTC Commissioner Maureen Ohlhausen criticized the FCC’s privacy proposal in a speech delivered at the Free State Foundation's annual telecom policy conference. The proposed FCC rule has garnered praise from consumer privacy advocates However Ms. Ohlhausen asserted that “opt-in mandates unavoidably reduce consumer choice.” She went on to state that consumers do not necessarily want their ISPs to refrain from collecting data without opt-in consent. Similarly, she noted that the FCC proposal is too restrictive in that it will prevent ISPs from using data in new and novel ways simply because the use of that data was not anticipated at the time of the consumer’s opt-in. In short, Ms. Ohlhausen warned that ISPs will be stifled in terms of data collection in a way that harms their ability to generate benefits to the consumer, and which raises costs for businesses and consumers alike.

As long as there is a misalignment of the privacy rules separately promulgated by the FCC and FTC, there will be a perceived lack of fairness with regard to the regulation of data collection. Broadband providers will advocate for regulations similar to technology companies like Facebook and Google, who arguably have more flexibility in collecting the same type of information from consumers who frequent their websites. In the race to obtain advertising revenue, ISPs will certainly be concerned about falling behind.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.