After Congress repealed the FCC’s broadband privacy rules two weeks ago, new FCC chairman Ajit Pai promised the American people that he would ensure that the personal information they give to their ISPs would continue to be protected. Pai said that he planned to work with the Federal Trade Commission to “restore the FTC’s authority to police internet service providers’ privacy practices.”
But this plan will not only fail to provide effective broadband privacy protections, it will come at the cost of eliminating the FCC’s net neutrality rules that prohibit ISPs like Comcast and AT&T from picking winners and losers on the internet. And there’s a real chance the FTC actually won’t be able to regulate ISPs at all.
How the FTC can police internet providers
The FTC currently lacks the legal authority to oversee any unfair and deceptive ISP practices, including privacy, because of a part of the Federal Trade Commission Act known as the “common carrier exemption.”
A common carrier is a service that carries traffic without discrimination or interference, like telephone service. Prior to 2002, the FTC didn’t police either telephone companies or ISPs. In 2002, a determination by George W. Bush’s FCC that ISPs were not common carriers brought them within the scope of the FTC’s authority. Then, the Obama FCC’s 2015 decision to reclassify ISPs as common carriers put ISPs back under FCC oversight — the decision that also enabled the FCC to adopt the strongest-ever net neutrality rules as well as protect consumers from fraudulent billing, price gouging, and other harmful ISP practices.
Pai’s plan is to kill net neutrality
The only way Pai can restore the FTC’s authority over broadband would be to reverse the FCC’s 2015 decision reclassifying ISPs as common carriers. If that happens, the net neutrality rules and the FCC’s ability to protect consumers and competition in the broadband market would no longer be valid.
As reported by several news outlets, this is exactly what Pai plans to do.
In place of the net neutrality rules, ISPs would commit to several (but not all) net neutrality “principles” in their terms of service — no discrimination, no blocking, no “harmful” paid prioritization. (Which is interesting, since the Wheeler FCC has found that paid prioritization is inherently harmful.)
Placing these commitments in their terms of service would give the FTC the ability to bring an enforcement action if an ISP did not live up to those promises. Some reports even suggest that Pai would make these fundamental changes without first providing an opportunity for public input.
Nilay Patel has explained why such a plan is, in his words, “nonsense”: terms of service change all the time; there are hundreds of small rural ISPs that are unlikely to be covered by this pledge; the FTC can only bring so many enforcement actions, and so on. Another name for the Pai Plan might be “Just Trust Us.” Hardly a comforting thought in a market where ISPs face little competition and serve as the sole gatekeeper to the internet.
Pai’s plan will also get rid of privacy protections
And despite his promises, the Pai plan won’t restore the privacy protections the FCC’s rules would have provided. The now-canceled FCC rules would have prohibited an ISP from selling, sharing or otherwise using your browsing history and applications usage unless you affirmatively gave permission for that use. The FTC’s legal framework does not require affirmative opt-in consent for browsing history and app usage. A provider would only have to let you opt-out — something that consumers rarely do and which companies routinely make it hard to do. And importantly, while the FCC’s rules would have protected consumers before they were harmed, the FTC can only act after harm has already occurred.
Even worse, because of a recent decision from a Federal Appeals Court in California, the FTC can’t prohibit the vast majority of ISPs from sharing or selling your personal information at all. That decision says that if a company provides a common carrier service, the FTC cannot enforce its laws against any of its services, even if they are non-common carrier services like video or online news. So ISPs that also provide mobile or fixed telephone service — which is pretty much all of them — would be completely exempt from FTC oversight. If the case stands (it is currently on appeal), then the Pai plan will deprive consumers of both net neutrality and broadband privacy protections.
I think the Trump FCC should keep the FCC’s 2015 net neutrality and ISP classification decision intact. At a bare minimum, however, the FCC should not start a proceeding to reverse them unless and until the 9th Circuit decision is reversed.
A remarkable letter sent to Pai by 50 Republican House members on Friday demonstrates the political perils of leaving consumers’ personal information unprotected. Despite the fact that just two weeks ago the House voted to repeal the FCC’s broadband privacy rules, these House members urge Pai to continue to protect consumer privacy until such time as he completes his plan to repeal net neutrality. The letter, sent on the day before member of Congress have to face angry voters during recess, should serve as a cautionary tale. The American people wanted the freedom to decide how their ISP uses their personal information — they didn’t want Congress to give it to giant internet providers.
Similarly, the American people want the freedom to decide where to go and what do with their internet connection. They don’t want the FCC to give it to giant internet providers. If the past several days are any indication, if net neutrality is threatened, Americans will once again make their voices heard.
Gigi Sohn served as Counselor to former FCC chairman Tom Wheeler from November 2013 to December 2016.