10/27/2016

Broadband Providers Will Need Permission to Collect Private Data - The New York Times

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TECHNOLOGY

Broadband Providers Will Need
Permission to Collect Private Data
By CECILIA KANG

OCT. 27, 2016

WASHINGTON — Federal officials approved broad new privacy rules on Thursday
that prevent companies like AT&T and Comcast from collecting and giving out
digital information about individuals — such as the websites they visited and the
apps they used — in a move that creates landmark protections for internet users.
By a 3-to-2 vote, the Federal Communications Commission clearly took the side
of consumers. The new rules require broadband providers to obtain permission from
subscribers to gather and give out data on their web browsing, app use, location and
financial information. Currently, broadband providers can track users unless those
individuals tell them to stop.
It was the first time the F.C.C. has passed such online protections. The agency
made privacy rules for phones and cable television in the past, but high-speed
internet providers, including AT&T and Verizon Communications, were not held to
any privacy restrictions, even though those behemoth companies have arguably one
of the most expansive views of the habits of web users.
The passage of the rules deal a blow to telecommunications and cable
companies like AT&T and Comcast, which rely on such user data to serve
sophisticated targeted advertising. The fallout may affect AT&T’s $85.4 billion bid
for Time Warner, which was announced last week, because one of the stated
ambitions of the blockbuster deal was to combine resources to move more forcefully
into targeted advertising.

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10/27/2016

Broadband Providers Will Need Permission to Collect Private Data - The New York Times

“There is a basic truth: It is the consumer’s information,” Tom Wheeler, the
chairman of the F.C.C., said of the necessity of protecting internet users who want
more control over how companies treat their private information. “It is not the
information of the network the consumer hires to deliver that information.”
Privacy groups applauded the new rules, which they said brought the United
States more in line with European nations that have moved aggressively to protect
their citizens’ online privacy.
“For the first time, the public will be guaranteed that when they use broadband
to connect to the internet, whether on a mobile device or personal computer, they
will have the ability to decide whether and how much of their information can be
gathered,” said Jeffrey Chester, executive director of the Center for Digital
Democracy.
The outcry from industries that depend on online user data was also swift. Cable
lobbying groups called the rules a result of “regulatory opportunism,” while the
Association of National Advertisers labeled the regulations “unprecedented,
misguided, counterproductive, and potentially extremely harmful.”
Even with the new rules, online privacy remains tricky. Many people have been
lackadaisical about what information they give up online when they register for
websites or digital services. The convenience of free services like maps also appeals
to people, even though they give companies access to personal information. And
some people unknowingly forgo their privacy when allowing apps or other services
to track their location or follow their browsing across websites.
The F.C.C. rules also have their limits. Online ad juggernauts, including Google,
Facebook and other web companies, are not subject to the new regulations. The
F.C.C. does not have jurisdiction over web companies. Those companies are instead
required to follow general consumer protection rules enforced by the Federal Trade
Commission. That means Google does not have to explicitly ask people permission
first to gather web browsing habits, for example.
AT&T, Verizon and Comcast will also still be able to gather consumers’ digital
data, though not as easily as before. The F.C.C. rules apply only to their broadband

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10/27/2016

Broadband Providers Will Need Permission to Collect Private Data - The New York Times

businesses. That would mean data from the habits of AT&T’s wireless and home
broadband customers would be subject to the regulations, but not data about AT&T’s
DirecTV users or users of the HBO Now app, which would come with the merger
with Time Warner, for example.
The companies also have other ways to collect information about people,
including the purchase of data from brokers.
AT&T, which has criticized the privacy regulations for internet service
providers, would not comment on how the rules would affect its proposed purchase
of Time Warner. But it emphasized the benefits of ads that allow for free and
cheaper web services.
“At the end of the day, consumers desire services which shift costs away from
them and toward advertisers,” said Robert W. Quinn Jr., AT&T’s senior executive
vice president for external and legislative affairs. “We will look at the specifics of
today’s action, but it would appear on its face to inhibit that shift of lower costs for
consumers by imposing a different set of rules on” internet service providers.
Comcast said that the rules were not needed and that the F.C.C. did not prove
that broadband providers were hurting consumers.
For over two decades, internet service providers “and all other internet
companies have operated under the F.T.C.’s privacy regime and, during that time,
the internet thrived; consumer privacy was protected,” said David L. Cohen,
Comcast’s senior executive vice president.
Major broadband providers will have about one year to make the changes
required by the new rules; the companies must notify users of their new privacy
options in ways like email or dialogue boxes on websites. After the rules are in effect,
broadband providers will immediately stop collecting what the F.C.C. deems
sensitive data, including Social Security numbers and health data, unless a customer
gives permission.
The new rules are among a set of last-ditch moves by Mr. Wheeler to make the
F.C.C. a stronger watchdog over the broadband industry. Since he was appointed

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Broadband Providers Will Need Permission to Collect Private Data - The New York Times

F.C.C. chairman in 2013, he has tried to open the cable box market in an effort to
promote streaming videos, among other actions. Mr. Wheeler is entering what are
probably the last few months of his tenure at the agency, as he is not expected to be
reappointed by whoever becomes the next president.
The F.C.C. proposed the broadband privacy rules in March. That followed the
reclassification of broadband last year into a utilitylike service, a move that required
broadband to have privacy rules similar to those imposed on phone companies.
Once the rules were proposed, the F.C.C. immediately faced a backlash. Cable
and telecom companies created a lobbying group called the 21st Century Privacy
Coalition to fight off the regulations. The group is led by Washington heavyweights
like Jon Leibowitz, the former chairman of the F.T.C., and former Representative
Mary Bono Mack, Republican of California. Henry A. Waxman, former chairman of
the House Energy & Commerce Committee and a Democrat, was also hired by the
21st Century Privacy Coalition and wrote an op-ed article in The Hill to protest the
rules.
Even some web companies protested the proposed rules. Google said in
comments filed to the F.C.C. this month that the regulations should not include web
browsing, because that does not necessarily include sensitive personal information.
“Consumers benefit from responsible online advertising, individualized content,
and product improvements based on browsing information,” wrote Austin Schlick,
Google’s director of communications law.
In the end, the objections had little effect on the F.C.C.
“Hopefully, this is the end of what has been the race to the bottom for online
privacy, and hopefully the beginning of a race to the top,” said Harold Feld, senior
vice president at Public Knowledge, a nonprofit public interest group.

© 2016 The New York Times Company

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