By Jonathan Spalter
April 4, 2016 at 5:00 am ET
Last week, the Federal Communications Commissionventured into uncharted territory with a proposed new privacy framework for America’s digital consumers. Internet users want — and deserve — to know their private information is safe and secure, but we also want – and deserve – privacy regimes that are as smart as the consumers they are designed for – in other words that are simple, uniform, nimble, and do the job efficiently without imposing double standards.
Unfortunately, and despite its best intentions – the FCC’s proposed framework seems more like the regulatory equivalent of Microsoft’s ill-fated Zune MP3 player: it is just plain kludgy, confusing, and seems designed by and for government lawyers rather than human beings.
Worse, the proposed rules impose unique requirements only on one discrete corner of our interwoven digital ecosystem – Internet service providers – and create an unprecedented role for the Commission to dictate broadband providers’ information practices. All of this put together will hurt the wireless consumer experience and undermine consumer privacy rather than protect them.
Let’s unspool this in sequence.
Prior to the FCC’s reclassification of broadband, Internet providers have operated under the Federal Trade Commission’s (FTC’s) privacy framework, which also governs the privacy practices of all other types of Internet services and providers that handle consumer data. Under that regime, a single, flexible standard is applied across these various parts of the Internet ecosystem to ensure that consumer data is uniformly protected, meaning wireline and mobile broadband providers are held to the same privacy standards as companies like Amazon and Facebook.
But now, mid-game, the FCC is seeking to become a new privacy referee on the Internet field. This new ref comes with an entirely different set of rules that will be applicable to only some of the players in the game. It is not simply that Internet companies like SnapChat and Apple would have different privacy rules, standards and oversight than other Internet companies like Sprint, AT&T or Verizon. For example, under the FCC’s new framework, Google – and its customers – would have to navigate two separate and conflicting sets of privacy standards overseeing its Google Fiber and Google Search services.
If, as some are predicting, the D.C. Circuit vacates the FCC’s Title II reclassification decision for mobile providers, but not fixed providers, it will be even more confusing as privacy practices of the wireless Google Fi service could be under the jurisdiction of the FTC, subject to the same regime as Google Search, while Google Fiber would be governed by FCC rules. That’s bad for consumers and bad for competition. This regulatory “pile-on” by the FCC not only risks confusing our nation’s technology innovators and consumers, it also seems to fly in the face of the Administration’s broader objective, as President Obama explained just recently, “to make government as dynamic and modern as America itself.”
If the Commission continues to move forward, it must adopt a flexible framework that is harmonized with the current FTC regulations. Consumers need clarity and transparency so they can make informed decisions about what information they share online.
To help consumers understand the rules and feel confident that their sensitive information is protected, policymakers must ensure that all players on the field abide by the same rules. Inconsistent and clunky privacy regulations for broadband companies will not only be confusing to consumers, but will not keep pace with the rapid innovation inherent to our vibrant wireless broadband sector.
The decision to heighten privacy restrictions on broadband providers is grounded in the misguided assumption that broadband providers have broader access to consumer information than other types of players in the wireless ecosystem— a conjecture that simply does not hold up when one takes a closer look at how the modern day consumer accesses the Internet.
In his recent paper, “Online Privacy and ISPs,” privacy expert Peter Swire analyzes how different types of companies access and use consumer information. The study concludes that ISPs do not have comprehensive or unique access to user’s online activity. On the contrary, Swire highlights that broadband carriers are often more limited in their ability to access consumer data than other online players.
The stakes have never been higher for consumers, or for the U.S. mobile economy that is racing to lead the world in this wireless revolution. A recent report by Moody’s warns that Internet providers could be severely handicapped in their ability to compete with other digital advertisers under a new restrictive FCC framework. The report clearly found that unless the FCC aligns their new privacy framework with the existing FTC framework, the additional burdensome rules would put Internet service providers at a distinct competitive disadvantage.
Particularly ominous was Moody’s findings on how such rules would stifle the future of mobile video, a driving force for consumer choice and competition.
Just ten days ago, Netflix – one of the companies loudly screaming for increased Internet regulations for service providers – was exposed for throttling video streams to millions of unsuspecting customers. This instance is a good reminder to policymakers that when rules apply unequally to just one sliver of the marketplace, consumers can easily slip through the safety net.
The FCC says it is building its new framework on the three core principles of choice, transparency and security. The absolute best way to ensure these values are implemented and protected is for the FCC to advance smart, flexible rules that avoid confusion, promote transparency and support continued innovation. What consumers need is a uniform gold standard for our nation’s privacy policies – not a double standard.
Jonathan Spalter is chair of Mobile Future. He has a long track record building innovative technology, mobile, Internet, and research companies in the U.S, Asia/Pacific, and Europe, both in the public and private sectors.