FCC Commissioners Sharply Divided on Expected Privacy Rules for ISPs
LAS VEGAS -- FCC commissioners expressed sharp disagreement last week on an expected NPRM on broadband providers’ privacy obligations under new net neutrality rules (see 1509090061). Similar to the February vote on the order itself, Chairman Tom Wheeler appears to have the support of Commissioner Mignon Clyburn on the NPRM, with Commissioners Mike O’Rielly and Ajit Pai in opposition. FCC officials say the NPRM is likely to circulate for the agency’s October or November meeting.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
“This is another frontier that we opened up inadvertently as a result of the open Internet order,” Pai said at CTIA. The FTC doesn't have jurisdiction over common carriers, and by reclassifying ISPs under Title II of the Communications Act, the FCC essentially “deprived” the FTC of some of its regulatory authorities, he said.
The four commissioners other than Wheeler spoke Thursday on a panel hosted by CTIA President Meredith Baker. Commissioner Jessica Rosenworcel didn't weigh in on the privacy rules. Industry officials told us they expect her to support the NPRM, giving Wheeler the necessary third vote.
The FTC “actually does have expertise when it comes to protecting consumer privacy,” Pai said. “Their staff has worked on these issues for many, many years,” he said. “We, by comparison, have relatively little expertise in doing this sort of thing.” Pai said it's hard to figure out exactly what the FCC will do. “It looks like later this fall … we are going to be tackling the issue of privacy and setting forth” what ISPs “can and must do” to protect privacy, he said.
“There’s a problem here,” Pai said. Edge providers, not just ISPs, have personal information from customers, he said. “A number of edge providers, some of whom you know … their entire business model is predicated on the monetization of personal information.” ISPs could face one set of regulations by the FCC, while edge providers are regulated differently by the FTC, he said. “That could create all sorts of distortions in terms of the marketplace.”
“I agree with my colleague,” O’Rielly said. “I’m extremely concerned where we’re going to go.” The privacy rules have the potential to “disrupt” the “Internet experience” of consumers, he said. “That is only bad, in the long term.”
Guidance released by the FCC Enforcement Bureau says the bureau expects ISPs to adopt privacy protections “in keeping with the tenets of core basic, privacy protections,” Pai said, quoting from a guidance document. “I have no idea what that means. No one knows what that means.”
Both Republicans cited a recent TerraCom and YourTel America order by the bureau as a harbinger of things to come. The companies agreed to jointly pay a $3.5 million civil penalty and take steps to improve their data security practices, as part of an order and consent decree resolving an investigation of alleged Lifeline USF customer privacy violations (see 1507090035).
“I’m concerned also about consumer vulnerability,” Clyburn countered. The FCC and the FTC have complementary “and oftentimes overlapping” jurisdiction, she said. ISPs store very sensitive information about consumers, she said. “We have other carriers that have very sensitive information about all of us,” Clyburn said. “You expect a cop on the beat to be vigilant. I’m not going to apologize for the Enforcement Bureau and the FCC endorsing … clear expectations we have of providers that hold sensitive information.”