FCC Will Regulate Cable, Wireless Companies on Data Privacy

In a shift in the status quo, the Federal Communications Commission will take over the Federal Trade Commission’s power to regulate Internet access providers regarding customer privacy. The FCC already proposes new rules to shield users from unwanted use of their Internet data. Impacted cable and wireless firms are protesting that the rules would target them unfairly, putting them at a disadvantage against Internet service firms such as Facebook and Google, which will continue to be regulated by the FTC.

The Wall Street Journal notes that privacy advocates have long argued that the FTC is “hamstrung by limited legal authority,” particularly in its ability to impose fines. Customer data plays a leading role in digital advertising, and regulations will hamper cable and wireless providers from fully exploiting a market now worth tens of billions of dollars annually.

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This is the latest skirmish between FCC chairman Tom Wheeler and the Internet access providers, in a battle that also recently included net neutrality and the FCC’s effort to “open up the market for pay-TV set-top boxes.”

The FCC could take a preliminary vote on the new privacy rules as early as this month’s commission meeting. New rules are likely to require companies to explain more clearly to customers how their data is handled and provide them with opt-in/opt-out choices for various data uses, as well as establish new standards for data security.

Internet service providers are worried that any new rules could open the door to ever-more rigorous regulations. “Despite objections and concerns I have about the FTC, which are significant, it’s still a far saner regime” than the new FCC system is likely to be, said TechFreedom president Berin Szoka, who heads the market-oriented think tank.

Those advocating consumer privacy counter that, because Internet providers have access to so much more data than Google and Facebook, they need different rules. “The larger and deeper the data set, the more able I am to target you personally,” explained Public Knowledge executive Harold Feld. But privacy expert/former Obama administration adviser Peter Swire isn’t so sure, referring to a recent study showing that Internet service providers have access to less data than assumed.

Even those companies not under the purview of the FCC are concerned that the FTC might tighten its own rules, “in a sort of copycat response.” WSJ calls a recent FCC settlement with Verizon over its use of super-cookies as a “possible foreshadowing of what is to come.”

Related:
FCC Proposes Privacy Rules for Internet Providers, The New York Times, 3/11/16