Consumer Confidential With David Lazarus
Column

Want cheaper Internet access? Hand over your privacy

It seems a simple enough proposition: Would you agree to receive marketing pitches in return for a discount on your high-speed Internet service?

Telecom heavyweight Comcast made just such a case last week in a filing with the Federal Communications Commission. The company defended what it called “a bargained-for exchange of information for service,” which it said “is a perfectly acceptable and widely used model throughout the U.S. economy.”

And that’s true. You can spend less on a Kindle e-reader from Amazon if you agree to see “special offers” when you turn on the device. Your free use of online search engines, email and other services is subsidized in part by an acceptance of marketers peeking at your browsing habits.

But privacy advocates are starting to worry about a society of privacy haves and have-nots. That is, keeping one’s personal info under wraps or avoiding incessant intrusions from advertisers would be a privilege enjoyed only by those who can afford it.

They cite the example of AT&T’s super-fast GigaPower broadband service, which is being gradually rolled out nationwide. GigaPower costs $70 a month if you agree to let AT&T and its marketing pals look over your shoulder as you traverse the Web. If not, the monthly cost is $100.

“There should be a baseline level of privacy protection for everyone in this country,” said Dallas Harris, a policy fellow at the digital-rights group Public Knowledge. “No one should have to give up privacy just because they can’t afford it.”

The FCC is considering sweeping rules governing Internet privacy. Service providers would be blocked from sharing customers’ personal information without prior consent, and would be required to disclose in plain English what information they collect and how it may be used.

The FCC’s proposed rules stop short of preventing two-tier pricing such as for AT&T’s Gigapower, also known as “pay for privacy.” But FCC Chairman Tom Wheeler suggested to reporters last week that the door still may be open for tightening the regulatory screws.

"I would hope that privacy doesn't become a luxury item," he said.

In its filing, Comcast argued that doing away with pay-for-privacy discounts “would harm consumers by, among other things, depriving them of lower-priced offerings.”

Sena Fitzmaurice, a Comcast spokeswoman, told me the FCC’s proposed requirement that customers give advance permission for their data to be shared — an “opt-in” as opposed to the current “opt-out” — would put Comcast at a disadvantage. A pay-for-privacy arrangement, apparently, would remedy that by creating an opportunity for increased revenue.

“The FCC’s extreme and unprecedented opt-in proposal … requires us to consider how to create additional choices that would allow us to compete in this ecosystem and benefit customers,” Fitzmaurice said.

A spokesman for Charter Communications, owner of Time Warner Cable, declined to comment. No one at AT&T and Verizon got back to me.

Privacy advocates say that pay-for-privacy doesn’t create additional choices for consumers. It denies some people a basic right.

“This is especially the case when it comes to lower-income consumers,” said Harris at Public Knowledge. “Many can’t afford to pay an extra $20 or $30 per month to protect their privacy.”

Lee Tien, senior staff attorney for the Electronic Frontier Foundation, said another problem with pay-for-privacy is that it relies heavily on the honor system.

“Even if you pay extra for privacy, you can’t know what they’re actually doing,” he said. “You can’t know if they’re still using your information for some kind of marketing purpose. It’s very difficult to know if you’re getting what you paid for.”

I’m conflicted. I agree with those who say all consumers are entitled to privacy. On the other hand, I was happy to pay less for a Kindle with special offers. I accept that increasingly intrusive ads are the price I pay to splash in the digital wading pools that are Facebook and Twitter.

Chris Hoofnagle, an Internet law professor at UC Berkeley, said Comcast’s filing last week should serve as a reminder that the broadband Internet industry is different. These companies aren’t selling a luxury. They’re selling a necessity.

“What Comcast is saying is somewhat akin to the water authority offering a discount for less purified water,” Hoofnagle said. “It is time to conceive of broadband as a utility, one that needs to satisfy basic standards for quality, which include freedom from unwarranted surveillance.”

This seems like the right approach. Treated as utilities, broadband service providers would be entitled to a fair and reasonable profit, accommodating industry growth and innovation. But they wouldn’t be able to gouge or exploit consumers.

If, as Comcast says, this is all about providing additional choices, this would do it. All customers would be guaranteed a basic level of privacy protection. But those open to having their data shared would be able to receive a meaningful discount.

In other words, privacy wouldn’t come at a premium. Marketers would be paying you for the privilege of accessing your personal info.

“There shouldn’t be different rules for different people depending on who you are,” said Kim Keenan, president of the Multicultural Media, Telecom and Internet Council, an advocacy group. “Privacy is privacy.”

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.

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