FCC Chairman Intends to Block Controversial New Privacy Rule

Last Friday, Federal Communications Commission (FCC) Chairman Ajit Pai announced his intent to block a controversial new privacy rule that was adopted under the Obama administration and intended to protect consumer information from disclosure by broadband Internet providers.

In October 2016 the FCC adopted a rule that limits how Internet providers such as Verizon, Comcast, and Charter Communications can use personal consumer data. The rule requires that the providers obtain users’ affirmative consent via an opt-in agreement before sharing certain sensitive data such as browsing history, geographic locations, or the content of communications. For data not specifically identified as sensitive, the rule permits providers to share the data as long as they provide users with a mechanism for opting out and choosing not to have their data shared. The rule applies only to broadband service providers, however, and not to other key Internet companies like Facebook and Google, which are separately regulated by the Federal Trade Commission.

The opt-in and opt-out scheme has been hotly contested since its adoption by a 3–2 vote last year. Two FCC commissioners dissented from that decision, including the new Chairman, Ajit Pai. Opponents of the rule argue that online privacy should be governed by a uniform standard which applies the same rules to all Internet companies and that singling out broadband providers for particular regulation is unfair. They also argue that the rule adds further complexity to what is already a confusing patchwork of state and federal privacy laws. Proponents of the rule respond that broadband providers should be subject to heightened regulation because of the large volume of consumer information they handle and because consumers face such limited choices among service providers that they may not be able to switch to a different service provider to avoid privacy concerns.

Internet providers should keep a careful eye on the issue to see how the situation develops. For companies across all industries, the FCC tussle is a reminder of how rapidly the law of privacy is evolving and of consumer privacy’s continued prominence in the minds of regulators and the public.

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