ISPs Have Growing Ability To Monetize Subscriber Data, CDD Says

“As consumers have grown to rely on many screens to view digital content, Verizon, Comcast, Google, AT&T, Time Warner, and others have incorporated powerful layers of data collection and digital marketing technologies to better target individuals,” the report said. “A vast storehouse of consumer data is now being added to the trove of ‘advanced,’ ‘addressable’ and online information already gathered by cable and telephone ISPs.”

ISPs have formed partnerships with data brokers, offering them insights into online and offline behaviors, CDD said. ISPs are also making use of “state-of-the-art ‘Big Data’ practices,” including programmatic advertising, that “significantly threaten the privacy of subscribers and consumers,” CDD said.

Technological advances mean the threat is growing, the report said. Superfast computers analyze subscriber information using algorithms and other predictive tools “to decide in milliseconds whether to target us for marketing and more,” CDD said. “Through digital dossiers that merge all of this information, we can be bought and sold in an instant -- to financial marketers, fast-food companies, and health advertisers, for example -- all without our knowledge.”

ISPs play a central role in helping advertisers tie together different devices, for example a mobile phone with set-top box use, for cross-device targeting, CDD said. “The ability of an ISP and others to identify and target us regardless of what digital device we use has effectively erased any privacy safeguards we may have enjoyed previously when we switched between devices.” The group said that, for example, in acquiring mobile-marketing-data company Millennial Media, “Verizon gained access to customer data gathered by more than 60,000 apps, including ‘location, social, interest, and contextual' information.”

"While there are important distinctions between what an ISP and a Google or Facebook does, there are also largely shared business practices and a similar overall objective: to gather and generate revenues from individuals’ information and their daily interactions," CDD said. The group encouraged the FCC to take a deep dive into ISP business practices in the NPRM, looking at all the ways ISPs gather and use consumer information today. The FCC should also address the data-targeting relationships ISPs have formed with leading digital marketing companies, the report said.

“In addition to threats to privacy, there are practices that use data that can discriminate or harm vulnerable consumers, which should also be addressed by the FCC -- such as the targeting of low-income households for loans through the use of video, the role of ethnic/racial data used in a digital profile, and how data about or involving children and adolescents are used for digital marketing purposes,” CDD said.

ISPs “are committed to protecting their consumers' privacy, and give consumers choice as to if and how their data is used,” responded USTelecom Senior Vice President Jon Banks. ISPs were long subject to the same FTC oversight as the rest of the Internet ecosystem “and consumer privacy was protected consistently throughout that ecosystem,” Banks said. It’s “curious” CDD seems to be asking the FCC to impose tougher obligations “only on ISPs but is not pushing for the same consumer protections when it comes to other companies that have long used similar and more detailed data to generate enormous advertising businesses,” he said. “Consumers deserve consistent privacy protections as they use the Internet.”