While Privacy Rights Uncertain, Pai Seeks Unified Approach

While Privacy Rights Uncertain, Pai Seeks Unified Approach


Technological convergence and industry consolidation have spurred internet service providers to become leading content companies. The same forces are transforming search engines and social media applications into innovators at broadband deployment.  All the while, questions abound regarding the ways consumer privacy can and should be protected online.

Ten days prior to the November 2016 Presidential election, then-Federal Communications Commission Chairman Tom Wheeler, spearheaded a partisan (3-2) vote on new privacy rules which subjected internet service providers like AT&T, Verizon, and Comcast to sweeping new regulations separate and different from those faced by edge companies like Google, Facebook, and Amazon, which fall under the jurisdiction of the Federal Trade Commission. On March 1, one day before Wheeler’s privacy rules were set to take effect, current FCC Chairman Ajit Pai issued a temporary stay on those rules while the Commission receives additional comments and feedback on petitions for reconsideration of the relative harms and benefits created by the FCC’s pending privacy rules.

In issuing the stay, Chairman Pai seeks to harmonize the approach toward privacy protection online, regardless of whether consumers are dealing with ISPs or edge providers.  In a joint statement released with Acting FTC Chair Maureen Ohlhausen, Chairman Pai declared both the FCC and FTC “are committed to protecting the online privacy of American consumers. We believe that the best way to do that is through a comprehensive and consistent framework. After all, Americans care about the overall privacy of their information when they use the Internet, and they shouldn’t have to be lawyers or engineers to figure out if their information is protected differently depending on which part of the Internet holds it.”

There is a simple maxim when it comes to the ways in which the internet is monetized: “if you aren’t paying, you’re probably the product”.  Although most online applications and services use and monetize private consumer information in order to support their business models, some supporters of the FCC rules believe that ISPs should have a heightened threshold for the ways in which they handle consumer information online. Others, who oppose the rules think that ISPs and edge providers should be governed by and adhere to the same standards.

In a recent oped for The Hill, Javier Palomerez, President and CEO of the U.S. Chamber of Commerce said, “Consumers deserve to confidently know what information about their online behavior is being tracked. At the same time, businesses, especially small and medium sized firms, need affordable and well-targeted online advertising to find new customers to survive and grow. For diverse companies serving minority communities or audiences, effective tools tailored to their customers are especially important.”

Calling on Congress to withdraw Wheeler’s discordant privacy rules and asking the FTC and FCC to implement a unified framework, Palomerez noted that for “businesses who depend on affordable access to a competitive online advertising marketplace, the regulations dramatically narrowed options and favored incumbents, driving up prices for online advertising and making it especially hard for niche advertisement services that provide products and services to minority communities to survive. That doesn’t help consumers. And for the diverse and minority-owned businesses we represent, it’s a disaster.”

Over the coming weeks, the FCC will field comments on the petitions for reconsideration. Congress is also considering whether to intervene. Time will tell whether the ultimate privacy rules shaping the internet ecosystem will hew to today’s converged reality in which ISPs and edge providers have equal access to consumer information. Certainly, consumers expect their information to be treated the same regardless of who holds it – whether that expectation will be met with a supportive regulatory regime remains an unsettled question.