FCC moves forward with privacy rules for ISPs

A divided FCC voted Thursday to move forward with proposed rules for mobile and fixed-line Internet service providers (ISPs) to protect consumers' privacy.

The Commission voted 3-2 along party lines to consider requiring ISPs to ask consumers to opt in to any sharing of their data with third parties and to disclose their data-collection and data-sharing policies. The rules would also strengthen disclosure requirements when data breaches occur.

Democrats own a one-vote majority on the Commission.

FCC Chairman Tom Wheeler initially proposed the rules a few weeks ago. A final vote will be held following a public comment period on Wheeler's proposal.

Proponents say the rules are necessary to provide more transparency to ISPs' policies regarding consumer data. More transparency is necessary, they claim, because ISPs have access to an enormous amount of customer data, including when they're online and their browsing and search histories. And mobile carriers have access to their users' location.

All that data is extremely valuable to marketers looking to target their campaigns as accurately as possible.

Backers also note that any new privacy rules would apply only to ISPs.

"They do not apply to the manufacturers of wireless phones, they do not apply to the developers of operating systems, nor do they apply to websites," Commissioner Jessica Rosenworcel said.

Indeed, the FCC has consistently claimed that its purview doesn't extend to "edge providers" that provide content, applications or services over the Internet. Which is why it won't investigate Netflix, which last week admitted to degrading the quality of its content for Verizon and AT&T but not for T-Mobile and Sprint because the nation's two smaller carriers do not charge overage fees.

But Republicans on the Commission took issue with the new privacy rules targeting only ISPs but not Internet companies like Facebook or Google. Not only are the proposed rules overly broad and burdensome, Commissioner Ajit Pai said, they're unfair.

"Selectively burdening ISPs, who are nascent competitors in online advertising, confers a windfall on those who are already winning," Pai said. "The FCC targets ISPs, and only ISPs, for regulation."

And CTIA voiced its dissent too, saying the proposed rules "would actually make it more complicated for consumers to exercise control over their personal data." The mobile industry group once again praised the FTC's privacy rules, which have "protected consumer privacy while allowing for innovation across the Internet, and applies to all companies in the broadband space, not just ISPs."

For more:
- see the FCC's proposed rules (PDF)

Related articles:
 Moody's: FCC's new privacy rules will hurt AT&T and Verizon's chances to compete with Facebook, Google
Mobile industry questions FCC's jurisdiction over proposed privacy rules, warns of market 'uncertainty'
AT&T, Verizon argue for ad-supported business models, while FCC mulls new privacy rules
Verizon to pay $1.35M to settle FCC investigation over 'super cookies'

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