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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.

FCC’s AllVid NPRM Is Anticompetitive, Anticompetitive, Anticompetitive

WASHINGTON D.C. – The following quotes are based on NetCompetition’s submitted comments on the FCC’s AllVid NPRM and may be attributed to Scott Cleland, Chairman of NetCompetition:

“Think for a moment. Would anyone think it “pro-competitive” if a government agency mandated an “Unlock the Big Box Stores” ruling so that WalMart, Target, or Best Buy could no longer install effective doors, locks, security guards or anti-theft devices on their store perimeters to protect the value of their inventory, all so that Google, Amazon, or eBay could take it for free and then profit from selling it online?”

“The companies that comprise the ~$200b pay TV industry are the video programming functional equivalent of Big Box stores, and the FCC’s AllVid NPRM is the functional equivalent of a looters pardon.”

“Consider how the FCC’s “Unlock the Box” looters’ mantra is profoundly anticompetitive and destructive.

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.” 

“Contradiction contradiction contradiction,” rather than “competition competition competition,” would be a more accurate description of what the FCC’s apparent arbitrary AllVid set-top-box proposal produces.

Contradiction #1: FCC rules cable competitive in 2015, but not in 2016.

In June 2015, the FCC ruled “that cable operators are subject to… "Competing Provider Effective Competition”” exempting cable from regulations, but in the spring of 2016, the FCC tentatively concludes that the ancillary cable set-top-box market is not competitive warranting maximal regulation.

Less is not more. That’s real “common sense.”

When one’s actions demonstrably create a worse rather than better outcome net-net, like the FCC’s new Title II ISP privacy policy does, others would justifiably consider it a mistake.

While the FCC obviously complied with President Obama’s call for regulating broadband as a Title II utility, the FCC obviously ignored President Obama’s 2011 call  for a 21^st century regulatory system, where he said we are “making it our mission to root out regulations that conflict, that are not worth the cost, or are just plain dumb.”

Let’s consider how the FCC’s new privacy policy fails this President Obama stated standard for “modern” regulation.

When the FCC reclassified broadband to be a Title II telephone utility last year in its Open Internet Order, the FCC trumpeted one of the great net benefits would be increased consumer privacy protection.

Looking backwards makes it hard to see what’s right in front of you.

Looking backwards at 1934-era Title II telephone utility law, the FCC concluded in its 2015 Open Internet Order that only broadband providers could be “gatekeepers” warranting net neutrality regulation to “protect and promote the “virtuous cycle” that drives innovation and investment on the Internet.”

That’s because the FCC is apparently oblivious to the very different 21^st century communications “gatekeepers” right in front of them that command dramatically more potential “gatekeeper” market power than any broadband provider.

The FCC should listen to what one 21^st century communications provider, which commands well over a billion social and communications users globally, has to say about the dominance of edge platforms.

What’s a consumer to think about what the FCC’s responsibility is for their privacy protection?

Let me try to explain to a consumer what the Federal Communications Commission (FCC) arbitrarily has done, and apparently intends to do, for consumer internet privacy protection going forward.    

By way of background, for the first decade of the Internet when consumers used dial-up technology, the FCC was responsible for protecting consumers’ private network information from commercial use without their permission.

For the second decade of the Internet when consumers came to use broadband technology, the FCC ceded its dial-up-Internet privacy protection authority to the Federal Trade Commission (FTC) which became responsible for consumer privacy protection from unfair and deceptive practices consistently across the entire American Internet ecosystem, regardless of who interacted with consumers’ private information.

Last spring, in order to assert legal authority to enforce net neutrality to protect edge providers from potential traffic discrimination in the FCC’s Open Internet Order, the FCC incidentally clawed back some privacy authority over Internet communications -- over the FTC’s strong objections.

Net neutrality absolutists are overreaching yet again in their push for a practical FCC ban of ISP zero rating offers under the FCC’s case-by-case “General Conduct Standard” review, by claiming violations of the “bright-line rules” in the FCC’s 2015 Open Internet Order against blocking, throttling and paid prioritization.

The problem here is that net neutrality absolutists, in exploiting the political pejorative power of the word ‘discrimination,’ have politically oversold their Title II net neutrality policy as “bright-line” ‘non-discrimination’ bans, implying no discrimination allowed, when Title II actually only bans “unjust and unreasonable discrimination.”

This is a distinction here with a huge difference; and it apparently is giving the net neutrality absolutists fits. They want to imagine that Title II prohibits their absolutist ‘no discrimination’ frame when it clearly does not.

They want to find a technical “gotcha” in every zero-rating or sponsored data offering, no matter how unreasonable their conclusion, so they can politically ask it be banned by the FCC under their concept of what a ‘no discrimination’ principle should be.

While the PR cover story of the FCC’s AllVid proposal may be about more consumer choice and competition to reduce the cost of cable set-top boxes, don’t be fooled.

In announcing it, the FCC Chairman admits there’s already consumer choice aplenty: “American consumers enjoy unprecedented choice in how they view entertainment, news and sports programming. You can pretty much watch what you want, where you want, when you want.”

And the AllVid proposal is not about saving consumers money.

If it were, the FCC would not be shunning the obvious, best and cheapest solution of replacing the need for a set-top box entirely, by modernly and naturally transitioning them to the sector norm of easily-downloadable, cheap/free apps.

Square peg meet round hole.

The FCC is poised to try and force-fit inherently-irreconcilable, telephone closed-ecosystem privacy rules into a broadband open-system Internet. Good luck with that.

Expect the FCC to have fits trying to successfully craft workable, non-arbitrary, and legally-sustainable Title II broadband privacy rules in the year ahead.

It is a problem of the FCC’s own making.

In arbitrarily applying Title II telecommunications rules to only the ISP half of Internet communications, while politically exempting the entire edge half of Internet communications in its Open Internet order, the FCC has ensured that information that was proprietary and controllable in the closed telephone world becomes public and uncontrollable in the open Internet world.

Horses meet open barn door.

Net neutrality activists wrongly imagined that Title II was all-purpose-regulatory-authority to impose “the strongest possible” Open Internet rules they wanted, like bans on paid prioritization, zero rating or usage based pricing, despite decades of Title II and court precedents that determine many types of economic price discrimination and pricing flexibility to be just and reasonable.