Time for broadband providers and Facebook to call a truce

Americans talk too much. They give up too much information on themselves. Right now, I am writing this post in a Krispy Kreme joint where a worker on break is sitting on my right yacking personal business on her smart phone. At the same time a customer is walking out of the store providing details on her travel itinerary including where she is to be picked up from and the color of the vehicle that will scoop her up.

Walk into the Kroger here in the West End Atlanta and you will gather a lot of opinions on the seemingly high prices and the budgetary stresses consumers are under. The U.S. Departments of Labor and Commerce would have a field day gathering so much consumer information.

And as the news that Bill Cosby has been convicted of sexual assault sits atop the “what’s trending” columns of social media, it will be impossible to avoid all the amateur legal and sociological assessments of the former “America’s Dad.”  Fans of Hugh Beaumont and Robert Young may be blowing sighs of relief that these two now sit alone at the top of the perch.

The current political environment provides much fodder for political commentary particularly on social media. The current occupant, as David Horowitz has observed, has had a seven second honeymoon post inauguration and is providing the left plenty to talk about. I don’t consider rumor about his wife, his philandering with prostitutes, or his fast food meal plan true political news. It is noise and in American politics that noise has become the new baseline. It is the surprise that pops out of the baseline that interests me. That is true information. How valuable those noises are is another matter.

Whether noise or baseline, Facebook is collecting and analyzing this user output, ascertaining as much user behavior as possible in order to offer up the user on an advertiser’s menu. This business model, at least in the short term, is working for Facebook as the social media firm is seeing an uptick in users and revenues. According to The Wall Street Journal, the number of Facebook users jumped to 2.2 billion while quarterly revenue jumped to $11.97 billion. It’s quarterly per share profit came in at $1.69, up from $1.04 a year ago. As I write this, Facebook shares are up 9.06% after today’s trading.  All this, according to The Journal, over a tumultuous 17 months of allegations that the company allowed Russians to abuse its platform and that its lax privacy practices allowed third parties to use its subscribers’ private data against the company’s privacy practices.

Some users have managed to share their opinions about Facebook’s privacy practices even as they continue to share cat videos, vacation schedules, and religious and political views. Facebook has been instrumental, as a supporter of net neutrality rules, in convincing some of these users to push the Federal Communications Commission to subject internet service providers (ISPs) to 20th century telephone rules in order to enforce management transparency and privacy protections for broadband subscriber data. The irony. How things have changed since the FCC passed onerous net neutrality rules in 2015 not only to see them overturned late last year but now to have Facebook be subjected to rules onerous enough to damage its business model.

Facebook could, in my opinion, do one of three things. It could continue with business as usual, taking a chance that continued user and revenue growth will buffet it against the threat of onerous regulation. On a second path it could call a truce with ISPs and together convince Congress to pass a statute containing a consumer bill of rights that provides for protection of data while codifying net neutrality principles of transparency   in network management, no blocking, and no throttling. The third path, would be market-based, where Facebook introduces a tiered service where subscribers that want added privacy protections would pay Facebook for insuring no third-party use of information.  Facebook could also “purchase” subscriber data in exchange for not using subscriber data beyond activities related to providing a better customer experience. That promise not to use customer data beyond the need for managing the CX should be equal to the very onerous telephone rules that Facebook would like seen applied to ISPs.

I would recommend Facebook go the middle route. It would ensure, in my opinion, a seamless application of privacy throughout the internet, something that past FCC chairman advocated for and the net neutrality posse cheered on.

Facebook is learning the hard way that American democracy has its spillover effect. To call for a democratized internet means Facebook must do its part to bring it about.

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