FCC's Pai seeks early vote to shelve new privacy rules, likely pleasing AT&T and Verizon

Ajit Pai (FCC)
FCC Chairman Amit Pai

The new FCC Chairman, Ajit Pai, continued his push to roll back the regulatory agenda of the previous administration, asking his fellow commissioners to vote against privacy rules slated to be implemented this week.

The FCC voted 3-2 along party lines in October to subject all internet service providers—including wireless service providers such as Verizon and T-Mobile—to privacy rules. Those rules would have essentially prohibited ISPs from sharing customer data with third parties unless customers have opted in to such programs, which could be a significant roadblock for operators that are increasingly looking to digital ad revenues as service margins in the traditional wireless business decline.

Wireless carriers have vocally opposed the rules, claiming they tilt the balance in favor of companies such as Google and Facebook, which provide web-based services but aren't primarily ISPs. Those companies are subject to the rules of the FTC rather than the FCC.

The argument clearly resonates with the new chairman, who enjoys a 2-1 Republican majority on the Commission after replacing Tom Wheeler, who stepped down just ahead of Donald Trump’s inauguration.

“Chairman Pai believes that the best way through protect the online privacy of American consumers is through a comprehensive and uniform regulatory framework,” the FCC said in a prepared statement. “All actors in the online space should be subject to the same rules, and the federal government shouldn’t favor one set of companies over another. Therefore, he has advocated returning to a technology-neutral privacy framework for the online world and harmonizing the FCC’s privacy rules for broadband providers with the FTC’s standards for others in the digital economy.”

The new rules could have a significant impact on wireless carriers—particularly Verizon and AT&T, which are moving aggressively to build digital media empires in which advertising will play a major role.

Pai asked his fellow commissioners to hold an emergency vote and shelve the new rules before they take effect March 2nd rather waiting for its previously scheduled meeting March 23rd. Republicans in Congress are hoping to pass legislation to repeal the rules, but any law would have to be passed within 60 days of when the rules are implemented, which helps explain Pai’s haste.

“If Commissioners are willing to cast their vote by March 2nd, then the full Commission will decide the stay request,” the FCC announced. “If not, then the Wireline Competition Bureau will stay that one element of the privacy rules pending a full Commission vote on the pending petitions for reconsideration consistent with past practices.