FCC vote could be game changer for Internet privacy

Privacy victory for consumers: FCC to require Web providers to seek permission to monitor, share personal info

Nearly all discussion of the federal rules for high-speed Internet service approved Thursday has focused on net neutrality — the idea that all online content be treated the same.

Largely overlooked has been another part of the regulatory change: Privacy.

This could be a game changer, requiring Internet service providers to seek customers' permission before monitoring or sharing personal information.

"Potentially, this could apply to every Web request you make," said Marc Rotenberg, head of the Electronic Privacy Information Center.

"If the same safeguards that now apply to phone services are applied to broadband, this could have major implications for Internet service providers," he said.

At issue is Section 222 of the Communications Act. It requires that telecom companies protect customers' "proprietary information," such as how you use their services.

It defines such information as relating to "the quantity, technical configuration, type, destination, location and amount of use of a telecommunications service subscribed to by any customer."

It also applies to information "that is made available to the carrier by the customer solely by virtue of the carrier-customer relationship."

In the context of telephones, for which the provision was created, Section 222 is relatively benign. It empowers a telecom company to market different services to you based on, say, how many long-distance calls you make.

In the context of the Internet, however, Section 222 takes on more sweeping significance, covering almost everything you might do online, from the sites you visit and searches you perform to the things you buy.

"Clearly, where you go and what you do on the Internet qualifies as proprietary information under the law," said Ryan Calo, an assistant law professor at the University of Washington who specializes in Internet privacy. "This potentially covers a lot of ground."

The Federal Communications Commission voted 3 to 2 on Thursday to reclassify broadband Internet service as a telecom service, rather than an information service, under Title II of federal communications laws.

This gives the agency a stronger hand in protecting consumers and ensuring a level playing field for content providers. Comcast, for example, won't be able to charge Netflix a higher fee for faster delivery of its content to users.

FCC Chairman Tom Wheeler made clear that the FCC's goal isn't to dictate rates or other terms to cable and phone companies. He pledged not to interfere with broadband prices or meddle in other basic business decisions.

As I recently reported, there's nothing new about this. The FCC reclassified wireless voice service in 1993 and vowed the same light touch that it's promising for broadband.

And guess what? The number of wireless devices in use went from about 16 million then to more than 335 million today.

"The Internet is simply too important to allow broadband providers to be the ones making the rules," Wheeler said Thursday.

"This is no more a plan to regulate the Internet than the 1st Amendment is a plan to regulate free speech," he said. "They both stand for the same concept: openness, expression and an absence of gatekeepers telling people what they can do, where they can go and what they can think."

A fact sheet on the broadband rules published by the FCC this month said the agency would not enforce provisions of the Communications Act that are deemed inappropriate for the Internet.

However, the fact sheet was clear that Section 222 would be enforced to protect consumer privacy. No other details were provided.

Matt Wood, policy director for the digital-rights group Free Press, said it's likely the FCC eventually will limit the provision's effect on Internet service providers to avoid yet another legal battle with telecom companies. Phone and cable companies already are preparing to sue the agency over net neutrality.

"The fact that the FCC left it on the table is a good thing," Wood said. "But it's not the end of the discussion."

Mark Wigfield, an FCC spokesman, said Thursday's vote gives the agency "the authority to adopt new rules to define how 222 applies to broadband." Details, he said, "will be worked out in the future."

As currently written, the provision essentially would mean that Internet users no longer would be required to opt out of having personal information shared with others. Instead, broadband providers would be required to ask customers to opt in for such data sharing.

Cable and phone companies will fight aggressively to maintain an opt-out standard for customer privacy. They know that relatively few people go to the trouble of opting out, which gives the telecom industry a powerful advantage.

But it's possible a new degree of transparency could be introduced to privacy issues.

Take, for instance, what AT&T is doing with its high-speed GigaPower broadband service, currently available in a handful of cities.

The company charges a base price of $70 a month. But that includes having AT&T snoop on your browsing and using the data to help marketers target you with ads.

If that's not your cup of cyber-tea, AT&T will allow you to pay an extra $29 monthly to stop it from spying on you.

"We offer our customers some of the fastest Internet speeds available and do so in a way that ensures they have a clear choice," said Georgia Taylor, an AT&T spokeswoman. "Since we began offering the service more than a year ago, the vast majority have elected to opt-in to the ad-supported model."

Personally, I think charging Internet users a privacy premium is repugnant. Why should anyone have to pay more to keep their personal information to themselves?

However, AT&T may be on to something, said Calo at the University of Washington. The company's data sharing program is clearer under the new pricing policy, he said, and he agreed with AT&T that its customers can choose for themselves how intrusive they want the company to be.

"It may be that AT&T figured out what the FCC planned to do and has gotten ahead of the market," Calo said.

Maybe. Or maybe it just figured out a new way to shake people down.

Under Section 222, though, AT&T's approach appears to meet the letter of the law. So don't be surprised if, along with net neutrality, we see more privacy premiums in the future.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.

Copyright © 2016, Los Angeles Times
88°