Battle over internet privacy regulations resurfaces

Actions taken by the Federal Communications Commission’s (FCC) new Republican chairman, Ajit Pai, on Wednesday reversing Obama-era laws regarding internet privacy have sparked continued controversy over online privacy.

According to an article in The Hill, Pai took measures to block the data security rule, which requires internet service providers to do more to protect their customers’ data, right before it went into effect.

The rule was approved by the agency late last year under then-chairman Tom Wheeler, a Democrat, and is part of a group of expanded rules regarding broadband privacy. Other rules specify the requirement that internet providers get consumers’ approval before using their data for advertising or other purposes.

Lawmakers and regulators are now questioning how much authority the FCC should have over internet companies. They’re also wondering whether the government is doing enough to protect consumers’ data from rampant hacking by making sure that broadband providers are doing their part.

The data security rule was blocked because it “places unfair burdens on broadband providers and subjects them to stricter privacy regulations than web companies like Facebook and Amazon,” say opponents of the rule, who also believe that it infringed on the Federal Trade Commission (FTC), which was equipped with its own privacy mandates.

Democrats and consumer advocates were up-in-arms over the reversal. “The upshot is that a rule would have gone into effect today that would have made sure consumers’ personal data would be protected,” attorney Gigi Sohn, former counsel to Wheeler, told reporters. “It wasn’t exactly a very burdensome requirement, either; they just had to take ‘reasonable’ measures. But now [consumers] are completely and totally unprotected.”

In a joint statement with Federal Trade Commission acting chairwoman Maureen Ohlhausen, Pai vowed to work on new privacy rules that will apply equally to service providers and internet companies. “We believe that the best way to do that is through a comprehensive and consistent framework,” they said on Wednesday.

The Hill noted that FCC privacy rules passed under the Obama administration came from the landmark net neutrality regulations. “The FCC reclassified service providers as common carriers under net neutrality, which prohibits broadband providers from treating web traffic to certain sites differently,” according to the article, which then noted that conservatives (Pai included) believed that such reclassification would set the stage for further regulations, including the privacy rules.

Part of the reason conservatives were so upset with Obama’s new FCC rules was because they completely changed the way federal agencies usually handle privacy — the FTC normally dealt with enforcement actions. When he was a Republican commissioner in the minority, Pai explained that this was the reason he had voted against the FCC privacy rules last year.

A federal judge then ruled last August that the FTC had no authority over the FCC to regulate internet providers, which made the issue even worse. However, Pai has said the rule will be on hold until the FCC figures out how to handle internet privacy issues.

“But some observers point out that the FCC still has authority to act on privacy issues against service providers that it treats as common carriers,” noted the report, adding, “If Pai chooses not to use that authority and the FTC is restricted because of the court decision, they worry customers will have no one looking out for them.”

Supporting Pai’s efforts to scale back the privacy rules, Randolph May, president of the Free State Foundation told reporters that Congress should “remove the so-called common carrier exemption, and then the FTC would have authority over all of the providers in the internet ecosystem.”

Pai and Ohlhausen did say on Wednesday that they are concerned over an enforcement gap, stating, “Two years after the FCC stripped broadband consumers of FTC privacy protections, some now express concern that the temporary delay of a rule not yet in effect will leave consumers unprotected. We agree that it is vital to fill the consumer protection gap created by the FCC in 2015, and today’s action is a step toward properly filling that gap.”

They also emphasized that it matters how the gap is filled. “It does not serve consumers’ interests to create two distinct frameworks — one for Internet service providers and one for all other online companies,” they stated.

Pai and Ohlhausen stated that they believe the FTC should have jurisdiction over privacy, but what happens next is up in the air. “We still believe that jurisdiction over broadband providers’ privacy and data security practices should be returned to the FTC,” they said, noting that the FTC is expertly equipped to handle these important subjects. “All actors in the online space should be subject to the same rules, enforced by the same agency.”

H/T: The Hill

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