Is the FCC Ducking the Real Fight on Web Privacy?

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Chairman Tom Wheeler's proposed opt-in rules target ISPs, but aggrieved parties say Google and Facebook should be the ones called out.

Federal Communications Commission Chairman Tom Wheeler's opt-in plan to protect the privacy of broadband users has been met with strident opposition from Internet service providers, industry groups, and academia. Direct Marketing Association VP of Advocacy Chris Oswald called the provisions in the rules fact sheet an “inappropriate overreach” and a “step backward at a time when government should be accelerating—not curtailing—job growth and innovation.”

Yet, most of the criticism of Wheeler's proposed rules—to be voted on at an open meeting of the Commission on March 31—calls them unfair and aimed in the wrong direction. In a blog last week, AT&T's regulatory SVP, Bob Quinn, held that the FCC picked on ISPs in an effort to go one better than the FTC—the ISPs' regulator until the Title II order handed that authority over to the FCC. Some groups, Quinn contended, have “asserted that ISPs (as opposed to companies such as Google) are the real leaders of targeted advertising and...that the Federal Trade Commission is, in essence, incompetent at policing privacy.”

Quinn pointed out that the FTC's privacy regime, which focuses on data transparency, disclosure, and consumer choice, was held up as a paradigm by U.S. negotiators in its Privacy Shield negotiations with the European Union. “The U.S. government went to great lengths to highlight to their EU counterparts that privacy enforcement by the FTC was equal to or stronger than privacy enforcement in Euorope,” Quinn wrote.

The “Why not Google or Facebook?” argument also got a boost from former W3C Tracking Protection Working Group co-chair Peter Swire. A few weeks ago the current Georgia Tech business school professor released a paper called “Online Privacy and ISPs,” holding that broadband providers such as AT&T and Verizon account for but a fraction of a typical user's online activity in a burgeoning multichannel world. “By 2014, 46% of mobile data traffic was offloaded to WiFi networks, and that figure will grow to 60% by 2020,” the report noted.

It goes on to point out that non-ISPs dominate cross-channel tracking by mining insights from social networks, search engines, email, and mobile apps. “The 10 leading ad-selling companies earn over 70 percent of online advertising dollars, and none of them has gained this position based on its role as an ISP,” the Swire report said.

A coalition of Internet associations including the American Cable Association, the Internet Commerce Association, and the Consumer Technology Association were more lawyerly in making a similar point in a letter to Wheeler last month. “Any FCC framework for Internet service providers,” it read, “should be reflective of the deception and unfairness standard, consistent with the existing protections consumers receive when they engage with other companies in the Internet ecosystem.”

The harshest assessment of Wheeler's privacy plan, however, emanated from the office of FCC Commissioner Michael O'Rielly. “The ‘fact' sheet demonstrates that the FCC is doubling down on its misguided and broken Net Neutrality decision by imposing troubling and conflicting ‘privacy' rules on Internet companies, as well as freelancing on topics like data security and data breach that are not even mentioned in the statute,” O'Rielly said in a written statement.  “This direction does not surprise me given this agency's reckless approach to an important topic, especially where it clearly lacks expertise, personnel, or understanding.”   

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