Privacy

Why is the FCC protecting and facilitating online advertising monopolies?

How can the FCC square its “competition, competition, competition” PR mantra with its regulatory plans for applying new anticompetitive privacy rules only on ISPs and not the “edge” online advertising monopolies -- Google and Facebook?

Simply as it relates to online advertising, the FCC’s new proposed Title II privacy rules would require ISPs with existing advertising businesses, or those planning to enter, compete, and grow in the online advertising market, to be subject to a new and special, privacy opt-in, consumer-consent framework where they alone in the marketplace would have to secure users’ advanced permission to use a majority of their data for advertising purposes.  

[Note: This was submitted to the FCC for Reply Comments on the Title II Privacy NPRM]

The FCC’s Open Internet order and proposed Title II privacy rules divided what was unified.

For privacy, it broke what was working. Confused what was clear. Complicated what was simple. Unprotected what they sought to protect. Created more costs than benefits.

Since the Internet’s beginning the FTC has had privacy authority over information services.

For the decade since the FCC classified cable, wireless, and DSL broadband as an information service, and for the entire smartphone era where consumers became familiar with online privacy issues and regulation, the FTC was the sole unified regulator for protecting American consumers’ privacy.

In a 2014 filing to the FCC, the FTC explained why the FTC was better positioned to protect consumer privacy and data security than the FCC, because the FTC had national direct statutory authority to protect all consumers under: Section 5 -- that proscribes “deceptive” or “unfair” business practices; the Fair Credit Reporting Act (FCRA); and the Children’s Online Privacy Protection Act, (COPPA).

Are the FCC’s set-top-box proposed rules really about unlocking the set-top-box to competition or are they really about advancing Google and Public Knowledge’s real agenda – forced unlocking of the licensing and copyright protections of the underlying video programming that generates ~$200b in annual revenues?

In response to the FCC Chairman’s request for an alternative approach to the FCC’s current AllVid proposed rules, the Pay TV coalition has proposed an app-based solution that solves all of the FCC’s publicly-stated problems with cable set-top boxes.

The evidence increasingly proves that Google, Apple, Facebook, and Amazon, companies collectively known as “GAFA,” are the dominant consumer-technology, “edge” platforms/incumbents in their respective communication sector markets of: information, smartphones, social media, and ecommerce.

The evidence below shows Google, Apple, Facebook, and Amazon to clearly be the emerging dominant communications incumbents of the 21^st century communications sector ecosystem and that an apparent FCC assumption that “edge” companies cannot be a competition problem is both naïve and erroneous.   

Despite the FCC’s “competition, competition, competition” policy mantra, this GAFA dominance reality has not kept the FCC from slavishly favoring the dominant GAFA incumbents, as “insurgent” upstarts deserving of special FCC treatment and protection, in all of the FCC’s current major communications policy revamps it is making without Congress: i.e. its Title II Open Internet Order; its Title II ISP-only privacy rules; its AllVid set-top box rules; and its implicit wireless policy of favoring spectrum sharing and unlicensed spectrum over spectrum auctions and licensing. 

With due credit to "Ripley's Believe it or Not!^®,"so much odd and bizarre is happening at the FCC in the "name" of “privacy” that the topic calls for its own collection of: "Believe it or Not!^®" oddities.

Title II Privacy Proposed Rules

The FCC claims consumer privacy is important, but preempted existing FTC privacy regulation of broadband providers before they had any replacement privacy protections in place, so U.S. broadband consumers have been left without any federal privacy protection for over a year! 

Summary: It is rare for an FCC proceeding to be so wrong-headed and ill-conceived that it has seven huge flaws. Tellingly this one does.

1. The FCC is trying to force-fit inherently-irreconcilable, telephone closed-ecosystem privacy rules into its opposite -- a broadband open-system Internet.

2. This approach is so convoluted and confusing there is no way for an average consumer to understand what part of their privacy is or is not now protected by the FCC and what part is or is not protected by the FTC.

3. For privacy, the FCC’s Title II decision has been perversely subtractive in eliminating all FTC broadband consumer privacy protections, during the year-plus period while the FCC tries to figure out what FCC consumer privacy protections will be.  

If you are online, you can’t escape Google’s myriad of ways it tracks you, but you can leave your ISP.

A famous 2009 Google Blog post boasted that: “Google is not the Hotel California — you can check out any time you like and you CAN, in fact, leave!”

Since Google chose that apt metaphor, and boasted about how easy Google makes it to “check out” your private data and “leave” to a competitor, lets test if you can ever “in fact leave” Google-Eye’s pervasively invasive online surveillance -- from a privacy perspective.

But first, why is this point a relevant exercise for people who care about privacy at this particular point in time?

Right now in the U.S., the FCC is trying to justify differential treatment of ISPs and dominant edge platforms like Google in its Title II privacy proceeding and its AllVid set top box proceeding, by claiming that ISPs are more “sticky” and harder to leave than dominant edge platforms like Google.

Why does the company that by far collects the most private information that the FCC claims it wants to protect, and that also has the worst consumer privacy protection record with the FTC, (Google), get 99% exempted from the telecom and cable privacy protections expected of telephone, broadband, cable and satellite providers?  

Is it the same reason, that the edge platforms with much more gatekeeper power and private data collection opportunity than ISPs somehow warrant no FCC privacy regulation? (See info-graphic here; explanation here.)

The epic flaw in the FCC’s Title II privacy NPRM is that it purports to best protect consumers’ private information by only regulating broadband providers’ use of that private information, while emphatically protecting dominant edge platforms from FCC privacy regulation when they use that same FCC-regulated private information indiscriminately without consumers’ meaningful knowledge or consent.

Yes you read that right.

Apparently the FCC thinks it is more important to protect dominant edge platforms from FCC privacy regulation, than it is to protect consumers’ private information.

The issue of privacy lays bare the FCC’s contorted and arbitrary logic of both its Title II cleave that only ISPs can be gatekeepers, and that the goal of net neutrality, protecting dominant edge platforms from ISP interference, is logical and appropriate to apply to privacy. If it was, that would perversely mean that the purpose of the FCC’s privacy rules should be to protect edge providers’ businesses, not consumers’ privacy.  

If you want to see a visual representation of this problem, please see the attached one-page graphic here.

The FCC’s just-passed, 3-2 unequal ISP privacy policy spotlights how badly the FCC has lost its way.

In prioritizing the equality rights of inanimate digital bits above the equal protection and equal opportunity rights the American people enjoy under our constitutional republic, the FCC is discriminating in favor of open cronyism over equal consumer protection and equal competitive opportunity.

Moody’s Investors Service has done everyone a service in exposing the FCC’s Title II reclassification and privacy policy for what it really is – arbitrary unequal treatment under the law.

When the FCC proposed these ISP privacy rules three weeks ago, Moody’s called the FCC’s proposal as it saw it in a Sector Comment March 14 entitled: “FCC’s broadband privacy proposal credit negative for linear TV and wireless providers – Over half a trillion in rated debt affected.”