Consensus Unlikely on ISP Privacy Rules, Based on History, Experts Say

Consensus on privacy rules for ISPs is unlikely and the FCC will have to step in said attorney James Halpert, who represents ISPs and others, and John Simpson, Consumer Watchdog privacy project director, on a segment of C-SPAN’s The Communicators taped Tuesday. The FCC is expected to vote on a privacy NPRM at its March 31 meeting (see 1603030066). An announcement is expected as early as Wednesday, industry officials told us.

Halpert and Simpson worked together on a failed attempt by NTIA to force consensus on short-form notice guidelines for mobile apps. “What I found in the process was that a number of the privacy advocates … really did not want to tackle just that problem” and weren't really interested in consensus, said Halpert, lawyer at DLA Piper. Consumer advocates wanted opt-in privacy rules and not a compromise, he said. “It’s much harder to come up with deals on every broad question; it’s easier on narrower questions.” Working out an agreement on ISP privacy is “feasible” but would take several years and regulators won’t want to wait, he said.

The multistakeholder process “may sound good,” Simpson said. “To really get something done, I think you need to have a formal rulemaking.”

Both privacy experts said they hoped there won’t be the same kind of politically charged battle on privacy as there was on net neutrality. “I think this is a little bit more complicated of an issue from a public policy perspective,” Halpert said. “I’m hopeful we’ll work toward finding solutions that really are practical, consistent and clear to consumers” and based largely on FTC rules, he said: “There is, I think, a middle way here.”

“There is considerable disagreement” over the rules, Halpert said of the expected FCC rulemaking. “One can take the view that the Internet ecosystem is one whole entity, that ISPs are a particular player in that. Fundamentally in the world of Internet advertising, for example, ISPs are a very small player in that market right now.” ISPs are concerned “they would be discriminated against,” Halpert said. ISPs are required by the FCC’s net neutrality order to carry all traffic that goes across their networks, he said. “Then they uniquely would be prohibited from participating in the Internet marketplace” in which they're “very, very small players,” he said.

Simpson said the FCC needs to protect the personal data of consumers. ISPs collect data from their customers when they plug into a network, he said. “The idea is that you ought not to be able to use that data for purposes other than completing a network transaction unless the person gives permission for that to happen.” Consumer Watchdog was one of the groups that signed a letter to the FCC Monday calling for robust privacy rules (see 1603070049). The average person is very concerned about Internet privacy, Simpson said Tuesday.

Consumer Watchdog believes the privacy rules also should apply to edge providers, like Google and Facebook, though that's not the subject of the expected rulemaking, Simpson said. He conceded it will be tough for the FCC to wrap up final rules by the end of the Obama administration. “It will be very interesting to see if they can get that done,” he said. “It’s important that they do the notice … as soon as they possibly can.”

There is a strong possibility the U.S. Court of Appeals for the D.C. Circuit will overturn at least part of the net neutrality order, Halpert said. “There’s a pretty good chance" the court will hold against reclassification of wireless carriers, he said. “If that’s the case, then we would see an even more fragmented rule and probably a fair amount of confusion.” If that happens, the FTC would regain authority over privacy rules for wireless carriers while the FCC would have oversight of wireline companies, he said.

Former FCC Commissioner Michael Copps, now at Common Cause, urged the next president, whoever is elected, to quickly convene a White House Conference on the Future of the Internet to examine privacy and other issues. “Invited would be a cross-section of the nation: representatives from both the private and public sectors: policy thinkers, innovators, business people, academics, journalists, diverse public interest advocates, minority groups, and others,” Copps said in a blog post. It should also include average citizens. “This is a job too big for any one agency to undertake, including even the Federal Communications Commission where I worked for many years,” he said. “Only the White House can convene this council and give it the credibility it needs to function.