The Open Internet Order Means That The Federal Communications Commission Now Regulates Broadband Internet

TechLawLogy™: eDiscovery and Privacy Blog

Ian Ball
Thursday, 28 April 2016

The implementation of the Open Internet Order reclassified broadband internet service providers as common carriers under Title II of the Communications Act. The reclassification is significant because common carriers are largely exempt from the authority of the Federal Trade Commission (FTC). Therefore, broadband internet service providers will now be subject to the authority of the Federal Communications Commission (FCC). This transition of authority means that the regulatory future of broadband internet service providers is unclear. One of the main issues the industry is concerned with during this transition is how the privacy of consumers that use broadband internet access services will be regulated.

The Telecommunications Industry Wants the FCC to Give Broadband Internet Service Providers Flexibility in Implementation of Consumer Privacy Regulations

Faced with an uncertain future, several telecommunications trade associations have united in an effort to deliver a message to their new boss, the FCC. The group’s message calls for the FCC to provide a regulatory system that protects consumer privacy, as well as gives flexibility for providers to implement and update their practices as public opinion and technology changes with time. Flexibility for providers in such a technological based medium is important because technology advances at an exponential rate, and it is possible for required practices to quickly become outdated or obsolete. In order to provide flexibility, the group asked the FCC to articulate the goals but not the methods that the broadband internet service providers must employ to achieve those goals. This super group of telecommunications trade associations recommends a framework based on four privacy principles: transparency, respect for context and consumer choice, data security and data breach notification. Specifically, the group asserts, the FCC should put policies in place that are based on how information is used and how sensitive that information is, instead of regulating the type of entity keeping consumer information and how that information is obtained. The group claims, consumer information is important to them because it can be used to learn in order to develop increased customer choice and service customization. In other words, the group believes that increased privacy regulations will hamper innovation. The FCC is already the regulatory authority for phone, cable and satellite companies. As the authoritarian over these industries, the FCC has actively enforced matters related to the privacy of consumers that use those services. Therefore, the group’s concern that the FCC will implement stricter enforcement measures is well taken.

Is There Tension Between the FCC and the FTC Over Internet Privacy?

It is possible for a single device to fall under both FCC and FTC enforcement. If the FCC and the FTC have different approaches to consumer privacy, then providers and consumers of that device will experience confusion due to a combination of fragmented regulatory regimes and having to follow a patchwork of regulatory requirements. FTC Commissioner Maureen K. Ohlhausen alluded to this when she expressed her fears that the FTC’s flexible approach to privacy enforcement will be pushed aside by restrictive rules from the FCC over broadband internet service providers. Other FTC commissioners have downplayed the problems that have been suggested will stem from the FCC’s involvement. It is important to note that in November 2015 the FCC and the FTC released a memorandum of understanding in order to formalize how the FCC and the FTC will coordinate consumer protection efforts. The possible tension between the FCC and the FTC only makes the regulatory future of internet privacy even more unclear. This, of course, makes complying with the law a challenge, absent guidance from legal counsel. Consumers and companies that rely on broadband internet service providers should pay close attention to this developing situation. Not only is their privacy at stake, but the ripple effect may be felt by everyone in the Internet ecosystem. For example, additional enforcement may mean broadband internet service providers incur extra costs, which will only increase the cost of their services. And those costs will ultimately be pushed downstream to consumers. If you are concerned about the effects the FCC may have on internet privacy or how this may affect your business, please Contact Us.

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