AT&T, Verizon argue for ad-supported business models, while FCC mulls new privacy rules

The FCC is looking to establish new rules for telecom, cable and wireless operators in an effort to curb how they can use their customers' Internet data. Predictably, mobile operators aren't happy about it.

As The Wall Street Journal reported, the FCC may discuss rules as soon as this month aimed at helping protect consumers "from potentially unwanted use of their Internet data by the providers, many of whom are looking to boost profits by using customer data to sell more targeted advertising online." While such concerns were once primarily focused on fixed-line broadband companies, U.S. wireless operators are increasingly looking to monetize consumer data in a saturated smartphone market.

The proposed rules are likely to require companies to be more transparent about how they leverage sensitive data, the Journal reported, and to increase customers' ability to opt out of data-sharing programs.

But while FCC Chair Tom Wheeler has yet even to announce his plans, major mobile carriers are already blasting efforts to expand the FCC's oversight of providers' customer-data policies. Those efforts are particularly unfair, some providers claim, because they wouldn't apply to Internet-services businesses such as Facebook or Google, which don't bear the costs of operating nationwide networks.

"In the 1980's telecommunications industry, when companies were required by law to stay in their lanes, it might have made sense to have rules that applied only to one set of providers in an industry. But that was 30+ years ago, and we are long past that stage in U.S. communications policy," AT&T's Bob Quinn wrote on the carrier's Public Policy Blog. "Limiting ISP's ability to compete with ad supported business models -- which are overwhelmingly favored by consumers -- is bad for consumers and ultimately bad for broadband investment in this country. But time and time again, the FCC appears to want to place its thumb on the scale in favor of Internet companies and against the companies that invest in broadband infrastructure in this country."

Verizon also publicly took issue with the FCC this week, saying its recent $1.35 million settlement with the agency isn't a signal that its stance has softened regarding the adoption of new privacy rules. The nation's largest wireless operator agreed to pay the fine and adopt a three-year compliance plan for use of "super cookies," a technology that involves inserting an undetectable and undeletable tracking ID into subscribers' mobile Internet browsing activity.

"Last, this settlement does not change what we think the right policy should be in the FCC rulemaking," Verizon Chief Privacy Officer Karen Zacharia wrote on the company's site. "Any broadband privacy framework adopted by the FCC should be flexible enough to permit carriers to innovate and compete while providing customers the information they need to make privacy-related decisions."

For more:
- see this Wall Street Journal report

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