What a mess for consumers.
On the issue of broadband privacy, President Obama’s Federal Communications Commission took a federal consumer privacy regulation situation that wasn’t broken, self-servingly broke it with Title II, and left it broken for over a year. Two weeks before the election, the agency finally advanced a “fix” that made most everything worse for everyone but the FCC.
Consider how the FCC has ill-served American consumers with its self-serving, dysfunctional broadband privacy regulations. For over a decade, the Federal Trade Commission was America’s unified federal privacy regulator for most every industry including broadband, regardless of technology or business model.
With no evidence of a problem that the FTC’s privacy or consumer protection oversight of broadband companies was inadequate, in early 2015 the FCC reclassified broadband as a 1934 telephone service so it could apply outdated rules, including outdated analog privacy authority, on ISPs.
The FCC reclassified broadband as a common carrier, knowing it would trigger a statutory FTC authority exemption for common carriers, which practically meant the FCC unilaterally fired the FTC as America’s privacy regulator of ISPs, so the FCC unilaterally could hire itself for that job.
The previous FCC put its regulatory turf ambitions over consumers’ interests.
In doing so, the FCC self-servingly ignored the law of unintended consequences, and made the FTC vulnerable to a lawsuit that has overturned the FTC’s overall consumer protection authority over common carriers.
This meant the previous FCC’s lust for more jurisdictional authority and power, completely neutered its sister agency’s consumer protection power over newly Title II-regulated ISPs.
That FTC consumer protection authority can and will be restored instantaneously when the FCC Open Internet order is officially overturned, by either the FCC, Congress or the Supreme Court.
To recap, in asserting Title II authority, the FCC regulated in another area where it had no evidence of any ISP problem; it offered a Title II privacy solution for a privacy problem that did not exist; and it badly broke the FTC privacy and consumer protection situation that existed before the FCC unilaterally seized regulatory power from the FTC.
On top of that regulatory turf debacle, the FCC’s privacy solution made matters even worse, meaning more complexity, confusion and chaos for consumers.
That’s because who and what the new FCC broadband privacy rules cover and don’t cover by whom is perversely driven by the arbitrary way the FCC decided what was a utility regulated telecommunications service and what was not.
When the FCC was finalizing its Open Internet order, over the best judgment of the FCC’s legal team, the FCC ceded to a last-minute petition from Google, which wanted the FCC to legally split the Internet effectively into two different halves, upstream communications traffic and downstream communications traffic.
As a result of that arbitrary distinction, the FCC would be responsible for utility regulation of the upstream communications traffic half of Internet service coming from the consumer to “edge providers” (Google, Facebook, Amazon, Netflix, etc.), while the FTC apparently would be responsible for the downstream communications traffic half coming from the edge providers to the consumer.
If that is not confusing enough, the FTC and FCC privacy regulatory models – consumer opts-out vs. consumer opts-in – are completely different, requiring opposite and hence confusing actions and responsibilities for consumers.
Most nonsensical of all for consumers is that for all the information an ISP must keep confidential, no other company on the planet needs to keep it confidential.
Any representative or senator that is trying to make sense of this issue need only ask one question: How does it protect consumer privacy when the FCC makes an ISP treat some consumer information as confidential, but allows every other company in the world to treat that same information nonconfidential?
In sum, Congress should officially disapprove this FCC regulatory mess, because American consumers deserve better from their government.
Scott Cleland served as deputy U.S. coordinator for international communications and information policy in the George H. W. Bush administration. He is president of Precursor LLC, an internetization consultancy for Fortune 500 companies, and chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.
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