The House Just Voted to Wipe Out the FCC's Landmark Internet Privacy Protections

By Brian Fung, The Washington Post

29 March 17

ongress sent proposed legislation to President Trump on Tuesday that wipes away landmark online privacy protections, the first salvo in what is likely to become a significant reworking of the rules governing Internet access in an era of Republican dominance.

In a party-line vote, House Republicans freed Internet service providers such as Verizon, AT&T and Comcast of protections approved just last year that had sought to limit what companies could do with information such as customer browsing habits, app usage history, location data and Social Security numbers. The rules also had required providers to strengthen safeguards for customer data against hackers and thieves.

The Senate has voted to nullify those measures, which were set to take effect at the end of this year. If Trump signs the legislation as expected, providers will be able to monitor their customers’ behavior online and, without their permission, use their personal and financial information to sell highly targeted ads — making them rivals to Google and Facebook in the $83 billion online advertising market.

The providers could also sell their users’ information directly to marketers, financial firms and other companies that mine personal data — all of whom could use the data without consumers’ consent. In addition, the Federal Communications Commission, which initially drafted the protections, would be forbidden from issuing similar rules in the future.

Search engines and streaming-video sites already collect usage data on consumers. But consumer activists claim that Internet providers may know much more about a person’s activities because they can see all of the sites a customer visits.

And although consumers can easily abandon sites whose privacy practices they don’t agree with, it is far more difficult to choose a different Internet provider, the activists said. Many Americans have a choice of only one or two broadband companies in their area, according to federal statistics.

Advocates for tough privacy protections online called Tuesday’s vote “a tremendous setback for America.”

“Today’s vote means that Americans will never be safe online from having their most personal details stealthily scrutinized and sold to the highest bidder,” said Jeffrey Chester, executive director of the Center for Digital Democracy.

Supporters of Tuesday’s repeal vote argued that the privacy regulations stifle innovation by forcing Internet providers to abide by unreasonably strict guidelines.

“[Consumer privacy] will be enhanced by removing the uncertainty and confusion these rules will create,” said Rep. Marsha Blackburn (R-Tenn.), who chairs the House subcommittee that oversees the FCC.

Policy analysts said the deregulatory effort may be the first of several that could alter the future of the Internet. Although regulators under President Barack Obama had moved to limit the power of Internet providers — by restricting what they could do with customer information and curbing their ability to block websites or slow down certain types of content — momentum appears to be moving in the opposite direction.

For example, consumer advocates fear that Congress or the FCC’s new Republican chairman, Ajit Pai, may seek to roll back the agency’s rules on net neutrality — the policy that forbids Internet providers from blocking content they don’t like or charging websites a fee to reach consumers over faster Internet speeds. Industry analysts said Tuesday that the FCC is also poised to deregulate the $40-billion-a-year industry for data connections used by hospitals, universities and ATMs.

Tuesday’s vote is a sign that Internet providers will be treated more permissively at a time when conservatives control the executive and legislative branches. That could be a boon for companies such as Verizon and Comcast as they race to become online advertising giants.

Internet providers have historically made their money from selling access to the Web. But now these providers are looking to increase their revenue by tapping the vast troves of data their customers generate as they visit websites, watch videos, read information and download apps.

Industry backers say that allowing providers to use data-driven targeting could benefit consumers by leading to more relevant advertisements and innovative business models. AT&T, for instance, used to offer Internet discounts to consumers in exchange for letting the company monitor their browsing history. With Tuesday’s vote, such programs could see a return, and be marketed as a way to access cheaper Internet — although consumer groups have criticized these plans as a way for providers to charge customers a premium for their privacy.

Tuesday’s vote took aim at FCC rules that were approved in October over strident Republican objections. At the time, the agency’s Democratic leadership argued that consumers deserved the same privacy protections governing legacy telephone service. As more Americans turn to the Internet to find jobs, do homework and seek education, the agency said, consumers needed new protections to keep pace with technology.

But industry advocates said the FCC’s rules defined privacy far too broadly. The industry favors the interpretation of another agency — the Federal Trade Commission — that does not consider browsing history or app usage data to be sensitive and protected.

But the FTC does not have the authority to punish Internet providers that violate its guidelines. That is because of a rule that leaves oversight of those companies to the FCC.

As a result, Tuesday’s vote may release Internet providers from the FCC’s privacy regulation, but the FTC would also be unable to enforce its own guidelines on the industry without new authority from Congress.

“One would hope — because consumers want their privacy protected — that they would be good actors, and they would ask permission and do these nice things,” said Rep. Mike Doyle (D-Pa.) in a House committee hearing Monday. “But there’s no law now that says they have to, and there’s no cop on the beat saying, ‘Hey, we caught you doing something.’ ”

Pai, the FCC chairman, called the legislation “appropriate” and blamed his Democratic predecessor for executive overreach. He also said that responsibility for regulating Internet providers should fall to the FTC.

“Moving forward, I want the American people to know that the FCC will work with the FTC to ensure that consumers’ online privacy is protected though a consistent and comprehensive framework,” Pai said. “The best way to achieve that result would be to return jurisdiction over broadband providers’ privacy practices to the FTC, with its decades of experience and expertise in this area.”

Pai has said that his agency could continue to bring lawsuits against firms that are alleged to have violated consumer privacy, even if the FCC privacy rules were to be repealed.