UPDATED 21:53 EST / APRIL 05 2017

INFRA

FCC chairman says broadband competition doesn’t justify strict privacy rules – and critics howl

Strict privacy rules for Internet service providers are not needed because the broadband market is more competitive than the search engine marketplace, Federal Communications Commission Chairman Ajit Pai and acting Federal Trade Commission Chairman Maureen Ohlhausen argued in an opinion piece in The Washington Post Wednesday.

Most Americans who have few choices for home Internet service will probably be scratching their heads at such a claim, but Pai and Ohlhausen instead focused on the wireless broadband market, which is much more competitive with carriers like Verizon Communications Inc., AT&T Inc., Sprint Corp., T-Mobile USA Inc. and others vying for consumers’ business.

Because of this competition among wireless carriers, Pai and Ohlhausen reckon that it isn’t fair that ISPs are subjected to different rules than companies such as Google Inc. and Facebook Inc. “For example, according to one industry analysis, Google dominates desktop search with an estimated 81 percent market share (and 96 percent of the mobile search market), whereas Verizon, the largest mobile broadband provider, holds only an estimated 35 percent of its market,” Pai and Ohlhausen wrote.

While the two chairmen may be right about the mobile broadband market’s competitiveness, the same can’t really be said for home Internet, however. On the face of it the market may look fairly competitive, with the largest ISP, Comcast Corp., serving less than 35 percent percent of American consumers. But critics were quick to point out on Twitter that Pai and Ohlhausen’s op-ed completely neglects to mention that in many homes, people are only given one possible choice because ISPs generally don’t like to tread on each other’s toes.

Still, Pai and Ohlhausen chose to ignore this fact, instead saying the level of competition in wireless meant it came as no surprise “that Congress decided to disapprove the FCC’s unbalanced rules.”

Pai and Ohlhausen also made the rather questionable claim that ISPs cannot glean many insights about consumers’ web browsing activity anyway, in direct contrast to the FCC’s conclusion under the previous Obama administration that they can indeed see all unencrypted Internet traffic that goes in and out of consumers’ homes.

Under FTC rules, companies such as Google and Facebook are required to offer consumers a way to opt out of personalized advertising based on their Web browsing history. The FCC rules that were proposed last year would have compelled ISPs to adhere to similar guidelines preventing them from using, selling or sharing consumers’ browsing histories without first obtaining their consent.

Those rules were repealed before they came into effect following a vote by the U.S. House of Representatives. President Donald Trump has since confirmed that vote. But Pai and Ohlhausen insisted the rules simply aren’t necessary to protect consumers: “Let’s set the record straight: First, despite hyperventilating headlines, Internet service providers have never planned to sell your individual browsing history to third parties,” they wrote. “That’s simply not how online advertising works. And doing so would violate ISPs’ privacy promises.”

ISPs, including Comcast, AT&T and Verizon, attempted to make the same point last week, issuing statements that said they don’t sell their customer’s Web browsing histories. Yet all three companies lobbied hard for the government to eliminate the FCC’s new rules, which would have required them to obtain their user’s consent before using their browsing data. It should be noted that all three companies also operate their own advertising networks to serve up personalized ads based on customers’ information.

To safeguard consumer’s privacy rights, Pai and Ohlhausen said they’ll start “working together to restore the FTC’s authority to police ISPs’ privacy practices” – something that was taken away in 2015 when the FCC decided to reclassify ISPs as common carriers in order to implement net neutrality rules.

However, critics argue such a move would mean the FCC will reverse that classification, simultaneously killing off net neutrality rules, which prevent ISPs from blocking or throttling Web traffic and charging companies for their traffic to be prioritized.

Pai and Ohlhausen didn’t even mention net neutrality in their post, but insisted there’s a “need to end the uncertainty and confusion” that was created with that reclassification. “In short, the Obama administration fractured our nation’s online privacy law, and it is our job to fix it,” they wrote. “We pledge to the American people that we will do just that.”

Photo: Pixabay

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