AT&T/Time Warner Deal Seen Raising Privacy Questions as FCC Heads Toward Rules

The deal could result in "more effective advertising," Time Warner CEO Jeff Bewkes said on CNN's New Day Monday. “People are going to see that more of the cost of content can be borne by advertising and the experience of television can be better." AT&T CEO Randall Stephenson said in an interview on CNBC that one of the deal's big advantages is that the telco ISP would be able to provide additional data to Time Warner, and advertisers, about what consumers are watching.

“If AT&T and [Time Warner] don’t publicly come out now and say they support the current privacy proposal of Chairman Wheeler, they are shooting themselves in the regulatory foot,” said Center for Digital Democracy Executive Director Jeff Chester in an interview. “The biggest obstacle this deal has is over data -- how it is collected, whether competitors big or small can easily access and use it over multiple devices, and whether consumer privacy is protected.” If AT&T doesn’t support the privacy rules, it should expect “a growing avalanche of opposition” from state attorneys general, civil rights and consumer groups and others, Chester said. “The FCC has not adopted any new privacy rules," an AT&T spokesman said. "We look forward to reviewing once adopted/released."

A lawyer who represents ISPs said AT&T/Time Warner raises interesting questions in light of the proposed rules. There would be some advantages to having access to all that data at the same company, the lawyer said. “However, the new FCC privacy rules are expected to restrict at least some sharing of the ISP customer data between affiliates. What kind of consent and which kinds of data remains to be seen, so hopefully AT&T isn’t betting the farm on too favorable of an outcome for ISPs here.”

But Roger Entner, analyst at Recon Analytics, said the deal shouldn't affect the privacy proceeding since Time Warner’s use of customer data isn't under FCC jurisdiction.

“Information about TV viewing is best obtained from DVRs, video-streaming services such as Netflix and devices like Roku,” said Richard Bennett, network architect and free-market blogger. “The merger could produce economies of scale, access to broader advertising networks, and other benefits for AT&T, but it's hard to see consumer harm from it.”

The FCC posted more filings on the privacy rules Monday in docket 16-106. Most made oft-repeated points. Among them, public and consumer groups reported on a meeting with Wheeler asking him not to make major changes to the rules. “Privacy Advocates urged the FCC to stand firm on its proposal to categorize web browsing and app usage histories as sensitive,” said the filing on the meeting including Chester, representatives of the American Civil Liberties Union, Common Sense Kids Action, Consumers Union, Public Knowledge and others. “The sites visited and apps used by consumers indisputably contain information that consumers consider highly private,” the groups told Wheeler, aides including Gigi Sohn and Ruth Milkman, Wireline Bureau Chief Matt DelNero and other staffers.

“As other commenters in this proceeding have demonstrated, there is no basis to include all web browsing history and all app usage in the category of sensitive information for ISPs,” NCTA officials said in a meeting with an aide to Commissioner Jessica Rosenworcel. “Such information is widely used today throughout the Internet ecosystem based on the sensitivity of that information -- not on the assumption that all such information is sensitive.”