Four things the FCC & FTC got wrong in their Washington Post Op-ed


Four things the FCC & FTC got wrong in their Washington Post Op-ed

April 4, 2017

In case you missed it, FCC Chairman Ajit Pai and FTC Chairman Maureen Ohlhausen co-authored a piece justifying their effort to eliminate consumer privacy online, and offered an explanation as to why this action is for the greater good. While it is comforting to read that the heads of both the FCC and FTC have full confidence in their government to do what is best for us, I myself am a little more skeptical. Below are the top four (yes, there are more) points being overlooked amidst the general public and industry outcry against their effort to repeal online consumer privacy protections.

1. Congress created this so-called “chicken-little” response

Perhaps what is most shockingly lost on the FCC and FTC, as well as this Congress, is that THEY created the backlash that lead to this weak response. Their decision to push through legislation without allowing time for public discussion created a fearful response leading to consumers buying VPN services, such as VyprVPN, in unprecedented numbers. Anytime a government – in any country – removes privacy rights with no public debate and little justification, you can expect the this type of response. What these government bureaucrats didn’t consider was that the virulent reaction came because people weren’t previously aware their privacy was at risk. Where was this op-ed before the bill was passed?

2. FTC does not currently have the authority to enforce privacy regulations on ISPs

I agree with Chairman Pai that when the FCC turned Internet access into a common carrier service in 2015 the FTC lost all jurisdiction under the “common carrier exception” in the FTC statute. FCC privacy rules were necessary if we wanted federal oversight due to common carrier status for ISPs.

That is why the FTC statute will have to be changed to give their authority back. The problem is that until FTC statute is changed OR Internet access is no longer common carrier, there is a hole in federal privacy regulation. Internet services (such as Facebook or Google) are subject to FTC rules but ISPs (such AT&T or Verizon) are not.

But that does not mean there is no protection at all. The FCC rules preempted state law. When the FCC rules went away so did this preemption, meaning states can pass their own privacy laws for ISPs since state law can now operate again. State attorneys-general and entrepreneurial trial lawyers can – and will – start bringing cases. Federal agencies can often get “captured” by the large lobbying influence of ISPs, and their rules would be weaker than what would happen if state common law, state consumer law and the prospect of large damage awards from court actions provided more privacy protection for consumers.

3. The same rules should NOT apply to ISPs and Internet services equally

I do disagree with Pai on one major issue. He says the same rules should apply to ISPs and Internet services equally. The ISPs don’t make the argument that removing FCC oversight is good for consumers, they make the argument that it is good for them so they can collect private user data just like Facebook and Google do, and then sell it to others.

But these are two different services, with different issues. Internet services are competitive. Internet access is not. Yes, Google is dominant. So is Facebook. But, consumers have a choice of many Internet services, while most consumers today have a choice of one or two Internet services at their home. It is a duopoly situation (at best) for many Americans. Internet access is a fundamental service required by all citizens in today’s modern world and they need more choices. Internet services, however, are not fundamental and various services come and go. Yesterday it was Myspace, today it is Facebook, and tomorrow it will be something else.

4. Open Internet is the real privacy solution, not the FTC

We have long said that Internet access should not be common carrier. Instead, the FCC should allow open access to the last mile of the Internet into a consumer’s home and let independent ISPs back into the market. If that happens, competition will lead to more consumer choice, including ISPs that emphasize privacy as a reason to buy their service. Consumers could vote with their wallet and chose:

  • “Privacy ISP” – respects privacy but perhaps costs more
  • “Marketing ISP” – collects data but is cheaper
  • “Just Internet ISP” – provides Internet access but little else
  • “Full Featured ISP” – provides email, storage, and other services

Let the consumers pick the winner and losers. The Republicans in Congress will posture that there is competition in the ISP market, but how many more decades of data do we need to prove that we don’t have effective broadband competition in America? Until we have more ISP choice for consumers the argument cannot be made that the same rules should apply to all Internet services, including Internet access.

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