Academics Give FCC Broadband Proposal Failing Grade

Say commission has not done its homework on impact of privacy regs
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A half dozen academics joined with the International Center for Law and Economics (ICLE) to take eloquent aim at the FCC's broadband privacy proposal, saying the commission is putting "new wine in old bottles."

They want it to drain the bottles and start over.

The FCC, having inherited broadband customer privacy oversight from the Federal Trade Commission when it reclassified ISPs as common carriers, has proposed new bright-line rules that would require ISPs to get permission from their subs before sharing information with third parties.

In comments to the FCC, they said the commission was trying to "shoehorn the business models of a subset of new economy firms into a regime modeled on thirty-year-old CPNI rules designed to address fundamentally different concerns about a fundamentally different market."

Like many opponents of the FCC's proposed rule-based model, they favor the FTC approach of tailoring privacy protections to the type of information—more for sensitive personal information like social security numbers and health of financial records, less for less sensitive information, as well as a case-by-case approach, though still under broadly applicable rules—rather than bluntly prescriptive rules, as it suggests the FCC is proposing.

"Few, if any, regulators have adopted an 'opt-in' privacy regime for non-sensitive data such as the FCC proposes," they argue. FTC staffers have similarly advised the FCC to take a more flexible approach that tailors protections to the sensitivity of data, or a "privacy by design" approach.

They say the FCC approach makes no sense in the current economy, "in which firms from different segments of the economy fluidly enter each other’s markets and effectively compete in a separate, cross-sector, informatics and advertising market."

Opponents of the FCC plan, including ISPs, share the concern that they will be under a more restrictive regime than the Googles and Facebooks and Netflixes of the world, who do not have to get users to opt in to data collection and sharing.

ICLE says that edge providers and ISPs both need competitively neutral rules and the FCC has made no case for why discriminating between ISPs and edge providers makes sense for either the industry or consumers. They also argue the FCC has done no analysis of the impact of its rules.

FCC chairman Tom Wheeler argues that web surfers are not tied to a particular website as they are to a network provider. He has consistently identified ISPs as the player with the incentive and ability to engage in anticompetitive conduct.

Joining in the filing were Babette Boliek, Pepperdine School of Law; Adam Candeub, Michigan State University College of Law, Justin (Gus) Hurwitz, Nebraska College of Law; Daniel Lyons, Boston College Law School; Geoffrey Manne, International Center for Law & Economics ; Paul Rubin, Emory University Department of Economics.

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