Yesterday, the U.S. House of Representatives voted to approve S.J. Res 34, a resolution that invalidates privacy rules enacted by the Federal Communications Commission last December. The rules imposed common carrier privacy restrictions on broadband providers. Opponents of the Commission’s rules argued that the agency best suited for enforcing privacy protections on the internet is the Federal Trade Commission, an agency that arguably has over 100 years of consumer protection policy experience under its belt. Consumer concerns about online privacy are best addressed by a uniform set of rules, opponents argue.
The Commission’s push into the online privacy protection arena only confuses consumers and probably creates an opportunity for forum shopping on the part of edge providers, like Google, who also have a broadband transmission component as part of their business model. Google could argue that it is a web portal dedicated to search one minute, and then the next minute, argue that its broadband provider the next because of its Google Fiber offerings.
I suspect that Google wants to stay in the web portal box, especially given its less than enthusiastic push into the broadband delivery world. Google Fiber has been cutting back on its broadband deployment initiatives, in part because of cost, but I would also suspect in part because of the increasing potential for nosy regulators to interfere with the company’s business model.
In the most recent decades of the digital universe, the FTC has brought the likes of Facebook and Google to the carpet on consumer protection issues. I think their credibility as a consumer protector is beyond dispute. There are two things I like about the House’s actions that go beyond privacy.
First, removing the rule signals that the State wants to see broadband access providers compete with internet search and content providers in the third-party data space. Consumers and progressives who have been gung-ho about prohibiting certain uses of personal data by their broadband access providers have apparently let Google and Facebook off the hook when it comes to those companies using and selling everything from data contained in Google Mail to pictures posted on Instagram to “likes” posted on Facebook. Advocates targeting broadband access providers give the impression that broadband access providers should not be allowed to play in the data trade markets, much less play on the same playing field if they are allowed to.
S.J.Res 34 tells the market otherwise. It recognizes that for online advertisers there is a benefit from having additional players in the data trade markets that can get their products before more eyeballs or offer more detailed insights about prospective consumers.
Second, S.J. 34 signals the Commission to get back to its primary mission: spectrum management. Spectrum is a natural resource whose distribution and use is regulated by the State. Private firms are licensed to put this resource to its best use; creating products and services that use spectrum, selling these products and services to consumers, and keeping then profits minus the costs of holding a spectrum license. The State gets its tribute from spectrum fees and taxes. The more spectrum that can be allocated to firms that put spectrum to best use, the more proceeds to the State. As a resource manager, this is where the Commission’s energies need to be focused.
S.J. 34 is one of the rare moments where Congress, unbeknownst to it, remembered its primary mission.