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The FCC has dropped another shoe in its ongoing effort to regulate Internet service providers as if they were phone companies.
The series of changes, which grew out of the FCC’s assertion of the power to declare that ISPs now fall under Title II of the Communications Act, are currently coming in quick succession as FCC Chairman Tom Wheeler finds new ways to regulate the Internet and its ISPs.
This time, Wheeler has announced that he’s circulating a proposal to his fellow Commissioners suggesting that the FCC begin regulating how ISPs use customer information. Basically, the proposed changes would allow ISPs to use customer information for billing and for additional sales of services to customers, but require that those customers opt-in for personal information sold to third parties.
In a fact sheet provided by the FCC concurrent with the privacy proposal, Wheeler said that he was focusing on three areas: choice, transparency and security.
The idea is that consumers should have the choice of what information to share, that ISPs be transparent as to what’s happening with customer data and that they protect that data. These are all actually good ideas, but the problem with them is that nowhere in the Communications Act has the FCC been given the authority to regulate privacy.
In fact, if there is an agency with the charter to protect privacy, it’s the Federal Trade Commission, but the problem is that by reclassifying the Internet under Title II the FCC has removed the ability of the FTC to regulate privacy on the Internet.
However, the FCC is claiming that responsibility because of an obscure rule in Title II that prevents phone companies from stealing each others’ customer data, the agency suddenly has the power to regulate privacy.
By now, you may be asking yourself how it is that the Commission is exercising this power when it’s not specifically given the power under the Communications Act. The answer apparently is that the FCC gave itself the power and then interpreted the language under Title II to back it up.
As you might suspect, not everyone is in favor of this sudden power grab.
“The ‘fact’ sheet demonstrates that the FCC is doubling down on its misguided and broken Net Neutrality decision by imposing troubling and conflicting ‘privacy’ rules on Internet companies, as well as freelancing on topics like data security and data breach that are not even mentioned in the statute,” FCC Commissioner Mike O’Rielly writes in his statement objecting to the action.
He calls the action “reckless” and says that the Commission clearly lacks the expertise, personnel or even the understanding of this action.
“Their authority to make privacy rules all comes from the reclassification to Title II,” Doug Brake telecommunications policy analyst with the Information Technology and Innovation Foundation, told eWEEK.
FCC Attempts New Power Grab With Privacy Regulation Proposal
“The law is specifically is Section 222 of the Communications Act, but this was written with telephone networks in mind. This was designed to prevent the baby bells from taking competitor’s information and using it in marketing,” he said.
“That’s different information, a different network, and the people were telephone providers,” Brake said. “The FCC is trying to repurpose the statute now that they’ve put broadband into the same rules as telephone networks. Whether it’s legally permissible, that’s sure to be challenged,” he said.
Of course, the whole reclassification move by the FCC has already been challenged and the hearings have been held. The U.S. Court of Appeals in Washington is expected to announce its ruling on those challenges to the legality of the Open Internet rule before the court ends its term in June.
The challengers were some major interests in the Internet ranging from US Telecom to the CTIA. A number of observers have said that the FCC is likely to lose its case in regards to wireless Internet access, but that the situation in regards to wired Internet is less clear.
“If the FCC prevails on the Open Internet case regarding the reclassification of broadband, then the FCC can do anything it wants about broadband and consumer protection,” said Berin Szoka, president of TechFreedom, a non-partisan think tank. Szoka is one of those who thinks the FCC’s Open Internet order will lose when it comes to wireless Internet access.
Szoka said that the FCC is essentially duplicating work of the Federal Trade Commission, which actually has the authority over those items. “Finally, what begins today as regulation of broadband providers will eventually grow to include other Internet companies, too—if only through the power the FCC has claimed to regulate all communications companies via Section 706 of the Communications Act,” Szoka said.
“A sector-specific privacy rulemaking for broadband providers is misguided,” Brake said in a prepared statement. “Under the FTC’s enforcement of best practices and broadband provider policies, privacy protections are already well balanced with other values, such as cost, usability, or innovation. Moreover, a sector-specific rulemaking ignores privacy-protecting technologies like encryption and virtual networks, and the fact that all major broadband providers already allow consumers to control how their information is used.”
At this point, the FCC’s ability to actually enforce its privacy rule is in limbo and will remain that way until the courts rule on whether the Open Internet move is within its authority.
The FCC moves to reclassify the Internet and to regulate privacy do make one thing very clear. What’s really missing is a legislative environment that defines what the FCC can do in regards to the Internet, and what it can’t do. Until Congress does something, the FCC will continue to absorb the power it wants and there’s not much to limit it.
Sadly, the ability of Congress to act on anything during this election year is seriously compromised.