How Bad is the FCC Pause on Privacy Rules?

Photo by kentoh

By now, you may have encountered a handful of headlines stating that the new, Trump-appointed FCC Chairman Ajit Pai has temporarily halted new privacy rules passed under Obama’s Chairman Tom Wheeler.  As a general takeaway, you’re also likely to see statements like “Republicans favor corporations over consumer privacy,” and as with all things under the Trump imprimatur, trust is not going to be the default position for many of us. But, then, viewing every issue through the lens of Trumpism is also another way of distorting reality, making ourselves bananas, and failing to compartmentalize issues, which is almost always necessary.

On the subject of consumer privacy and the FCC, any criticism that Wheeler’s policies favored companies like Google and Facebook over other companies should be at least considered.  As readers know, I and others criticized Wheeler’s so-called “set-top-box” proposal as an attempted hand-out to Google at the expense of television creators.  So, when this story about privacy broke, I wasn’t prepared to take every headline at face value just because Pai is a Republican in the Trump administration. He was in the FCC before the election and would likely still be there regardless of who became president.

Let me jump to the main point here:  we consumers want and deserve control over the gathering, selling, and use of our data.  We do not have this control yet. There is no comprehensive, uniform body of law that is adequately protecting privacy in cyberspace for American citizens.  And these facts are central to Pai’s criticisms of Wheeler’s rules of October 2016.

With the adoption of NetNeutrality—another topic for another day—the FCC was empowered to regulate ISPs like AT&T and Verizon in the same way it regulates telephone carriers.  As a result, it was then empowered to establish rules for these ISPs regarding the manner in which they may gather and use consumer data.  This is fine in principle, but critics, including Pai, argued that these FCC rules were not consistent with the rules set by the Federal Trade Commission, which apply to data gathering and use by companies like Google and Facebook, referred to here as “edge providers.”

Because the ISPs hope to compete in online advertising with the “edge providers,” they argued that the disparity in rules creates an unfair advantage for the likes of Google in the market. And that’s when I will at least give these critics some benefit of the doubt. Because as much as I may admire President Obama on a wide range of topics, his administration consistently tilted in Google’s favor across many areas of governance.

In his dissenting opinion regarding the FCC rules now on hold, Pai quoted the Electronic Privacy Information Center in rebuttal to Wheeler’s assertion that providers like Google and Facebook only see a “slice” of our data:

The FCC describes ISPs as the most significant component of online communications that poses the greatest threat to consumer privacy. This description is inconsistent with the reality of the online communications ecosystem. Internet users routinely shift from one ISP to another, as they move between home, office, mobile, and open WiFi services. However, all pathways lead to essentially one Internet search company and one social network company. Privacy rules for ISPs are important and necessary, but it is obvious that the more substantial threats for consumers are not the ISPs.

That certainly jibes with my own experience as a consumer. Regardless of how I get online—whether at home, through my mobile device, or via my local coffee house WiFi—all of my substantive activity occurs on web platforms.  So, yeah, I think privacy rules governing ISPs and “edge providers” should be both robust and consistent. But are they either robust or consistent?

That’s the nitty gritty we’re going have to try to follow in the coming months; and the task is not made easier when editorials fall into the trap of reporting this matter as Republican = corporate favoritism and Democrat = consumer protection.  When it comes to the interests of the Big Data companies, that narrative just does not hold up.  Chairman Pai’s core complaint about Wheeler’s FCC privacy rules is that the providers with the most detailed view of our data (.e.g. Google) would have far more lenient governance than the providers who have less insight into our private lives (e.g. Verizon). So, to the extent that Pai is correct in this assessment, I have to agree that consumer protection is best served by consistent rules governing the entire internet ecosystem.

Stay tuned. Much more to follow I’m sure.

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