FCC Privacy Plan Harms Consumers: Commissioner O’Rielly

Sept. 21 — The Federal Communications Commission’s “specious” broadband privacy proposal would increase costs for broadband internet service providers and would harm consumer choice in sharing their data, FCC Commissioner Michael O’Rielly said Sept. 21.

The FCC’s proposal would establish rules for broadband providers, such as AT&T Inc. and Verizon Communications Inc., that would require consumers to opt in for the collection and use of certain subscriber information. The privacy rule proposal followed the FCC’s 2015 reclassification of internet service providers as common carriers—telephone companies and other broadband providers—under Title II of the Communications Act (63 PRA, 4/1/16).

O’Rielly, one of two Republican FCC commissioners, criticized the broadband privacy plan because it would impose new mandates and burdens on broadband internet providers that other commercial providers don’t face. For example, consumers often bargain away their consumer data to other commercial providers, such as credit card companies, airlines and grocery stores, for price discounts and service upgrades, he said in a statement.

By limiting the bargaining process, “the government would be dictating private contract terms that couldn’t be deviated from even if both parties found benefit in doing so,” O’Rielly said.

Additionally, if the plan is adopted there will be a “discriminatory prohibition on broadband companies” who collect consumer data, O’Rielly said. Broadband providers “will divert capital, resources and innovation to other investments” if the broadband privacy proposal is successful.

At the end of the day, the FCC shouldn’t “prohibit private data exchanges that benefit consumers in the form of lower prices, greater service or more features and functions,” he said.

The FCC didn’t immediately respond to Bloomberg BNA’s calls and an e-mail requesting comment on O’Rielly’s statement.

Wheeler Confident

At a recent Senate Commerce, Science and Transportation Committee hearing, FCC Chairman Tom Wheeler said that he is “confident” that the proposal will be finalized by the end of 2016, even with pushback from Republican legislators (134 PRA, 7/13/16), telecommunications companies and cable service providers and trade groups.

Although detractors have said that the more stringent rules may usurp the Federal Trade Commission’s regulatory authority over consumer privacy and that the proposal may create more consumer confusion and necessary burdens for internet service providers, Wheeler argued that his plan would bring broadband privacy rules in line with other FCC rules that have been used for years for traditional phone service providers (92 PRA, 5/12/16).

Source: FCC Privacy Plan Harms Consumers: Commissioner O’Rielly