Advertisers Push Back on FCC Broadband Privacy Plan

Ask Congress to flex its oversight muscle

The major associations representing billions of ad dollars have called on Congress to exercise its oversight to protect consumers and the economy from the FCC's proposed broadband privacy regulatory framework.

That came in a letter to the chair and ranking member of the Senate Commerce Committee—John Thune (R-S.D.) and Bill Nelson (D-Fla.), respectively—who are presiding over an FCC oversight hearing Sept. 15 at which all the commissioners are scheduled to testify.

In the letter, they say that the FCC's Notice of Proposed Rulemaking (a final order has yet to be voted) would "create restrictions that are unnecessary, overly burdensome, and outside the FCC's statutory authority."

FCC Democrats led by chairman Tom Wheeler have proposed new rules, including requiring broadband subs to affirmatively agree to sharing their information with third parties for marketing purposes.

Wheeler told a Senate Judiciary Subcommittee panel back in May that his broadband privacy proposal was an effort to extend traditional network privacy protections to the internet and not a grab of new authority.

The advertising trade groups say the FCC would be creating new restrictions on data collection that is central to "economic success and consumer benefits."

The FCC is adopting rules after its reclassification of internet access service as a Title II common carrier, which meant that they were no longer under the regulatory oversight of the Federal Trade Commission.

ISPs and advertisers have called on the FCC to adopt a similar approach as the FTC, which tailors its oversight to the sensitivity of information and has no opt-in requirement. The FTC's oversight was generally limited to enforcing voluntary privacy commitments under its false and deceptive practices authority.

The associations said again in their letter that the FTC approach of enforcing voluntary self-regulation is the appropriate approach, and point out, as have others, that the FCC would be creating a "different and problematic" regulatory regime—with the FTC regulating edge providers (Google, Yahoo), data collection and information privacy under its enforcement of voluntary standards, while the FCC would regulate ISPs under its stricter, rule-based-approach, a criticism the National Cable & Telecommunications Association has also leveled.

Wheeler has made it clear that he saw a difference between edge provider and ISP privacy practices and not just the fact, he says, that the FCC does not have jurisdiction over the former.

"Most of us understand that the social media we join and the websites we visit collect our personal information, and use it for advertising purposes," Wheeler told the Judiciary subcommittee back in May. "Seldom, however, do we stop to realize that our ISP is also collecting information about us. What’s more, we can choose not to visit a website or not to sign up for a social network, or we can choose to drop one and switch to another in milliseconds. But broadband service is fundamentally different. Once we subscribe to an ISP—for our home or for our smartphone—most of us have little flexibility to change our mind or to do so quickly."

Wheeler has long fingered ISPs as the gatekeepers of the internet.

The advertisers also call the FCC proposal an overreach that would undermine the ad-supported internet.

They also say restricting data use to an opt-in consent standard is too restrictive and unjustified.

The FCC also wants to establish timetables for ISP notification of security breaches, but the ad groups say that would conflict with state notification regimes and that the FCC should defer to Congress to establish a national standard for breaches and security measures. 

Signing on to the letter were the American Advertising Federation, American Association of Advertising Agencies, Association of National Advertisers, DMA, Electronic Retailing Association, Interactive Advertising Bureau, National Business Coalition on E-Commerce & Privacy, Network Advertising Initiative, U.S. Chamber of Commerce.