A market-based, voluntary open internet, privacy regime is doable

The best protection on the internet is self-protection and a self-protection regime does not have to be implemented via any additional government rules. Rather, for a subscriber to broadband access services provided by an internet service provider, the subscriber should avail themselves of the opportunity to enter into voluntary agreements as to the level of privacy and open internet protections they wish to purchase. The discussion regarding the confusing legal verbiage of written terms and conditions offered to a broadband access subscriber by an ISP should raise the question, “Would transparency best brought about if negotiation of agreements were more bilateral in nature?”

Before delving in any further to the primary question, let me attempt to dispose of one other question that arose in your mind when I posed the first question. “Do people have time to negotiate an agreement for broadband access services?” My response: “Why not?”

Advocates for net neutrality rules captured in the Federal Communications Commission’ 2015 Open Internet Order argue that broadband is now an essential part of the life of the individual and that today’s economy is robust because of high-speed access to the internet. Broadband access, the advocates would argue, should be treated like a utility service given its importance in sustaining the household.

Some would argue that broadband access does not arrive to the level of human necessity, no matter what a number of international organizations have argued.  Among those in disagreement with the “broadband equal to a utility” argument is FCC member Michael O’Rielly, who on a number of occasions has clearly expressed that people do not need broadband to live.  Mr O’Rielly is not alone in his assessment. His two other Republican colleagues, FCC chairman Ajit Pai and FCC member Brendon Carr also agree that 20th century treatment of a competitive 21st century technology such as broadband should not be regulated as a utility.

But for the sake of argument, let us say that broadband access arises to the level of a utility service. If it is that important to life, why would you not negotiate its terms and conditions?  During a negotiation for broadband access, more than likely the ISP would offer some canned language describing minimum services with a list of add-ons and opt-ins for the subscriber to voluntarily agree to. The ISP may offer different tiers of service where each tier provides various levels of privacy protection, transparency, and options for download and upload speeds. If technology permits, there could even be allowance for traffic from chosen websites that receive priority.

In the end, a subscriber’s willingness and ability to pay for different tiers of service will determine the level and amount of privacy and openness she receives on the internet.

I think an answer from the second question provides an answer to the first. Negotiating terms and conditions of service should lead to more transparency because the consumer had a direct hand in creating her services package.  The subscriber would have first hand knowledge about the amount of privacy protection she has bargained for.  But the direct hand in negotiating agreements requires the subscriber’s willingness to educate herself on how her product works. This is a level of knowledge that consumers fail to obtain because they may consider gaining that knowledge to expensive and time consuming. Hence their love for consumer protection agents. They can punt the responsibility of an alleged important, utility style service to them.

Why is net neutrality a partisan issue and how is it negatively impacting privacy rules?

Net neutrality shouldn’t be a partisan issue. The internet isn’t a government agency even though a number of governments around the world would like to restrict their citizens access to it and regulate the content that flows through it. If the internet, as it is viewed in the United States, is a means by which liberty, equality, and democracy intersect and are expressed, then shouldn’t the Republican and Democratic wings of Congress unite on those three pillars of American society?

Is there any contention in the area of liberty as it pertains to the internet?  It does not appear that way. The left replaces the word “liberty” with “freedom” and sticks pretty close to the traditional wording of the open internet, meaning no blockading of consumer access to the legal content of a website.

The right would agree with the left that consumers should be able to access the legal content of their choice. This issue goes to the fundamentals of conservative philosophy, liberty.

Regarding equality, I see contention. On the left, equality on the internet means that traffic from one website is treated the same as traffic from another website. A broadband access provider should not be allowed to throttle a site’s traffic prior to delivering the traffic to a consumer. The principle of equality would also hold, according to left internet philosophy, regarding the issue of paid prioritization. Paid prioritization occurs when a content provider pays a broadband provider for the privilege of special treatment of its traffic. The broadband provider may provide the content provider with “faster lanes” or some other privilege that grants that content deliverer’s traffic some priority over other traffic.

The right may not necessarily disagree that paid prioritization grants a one provider an advantage over another. Whether that advantage is fair or merely a valid business decision is the question and if the decision to provide priority to one type of service versus another is reasonable, then why not?

Prioritization occurs every day. Take the example of packages sent via a common carrier such as the post office. A consumer of postal services has an option of paying to send mail via regular mail or by priority mail, getting his package to its final destination within the next one or two days. The content of the mail may be such that rush delivery is of the essence.

Taking a flexible approach to prioritization may be in keeping with varying demands of different applications. In its recommendation for bipartisan legislation on net neutrality, the Information Technology & Innovation Foundation noted that:

“Legislation should allow clear flexibility for traffic differentiation for applications that require it, avoiding an overbroad flat ban on prioritization, while clearly prohibiting anticompetitive conduct. Legislation should put some restrictions on paid prioritization to limit the potential for abuse, such as a simple ban on exclusive dealing or a requirement
to offer similar terms to all customers.”

Finally, the left has made vigorous arguments that broadband access providers have the potential to threaten democracy on the internet because of their technical capability to block and throttle traffic. This potential bad behavior would restrict a consumer’s ability to choose or produce the content of her choice.

While conservatives may empathize with the self-expression argument, I would expect a two-pronged rebuttal. First, since broadband access and the internet (for the most part) is a private, commercial enterprise, there is no state action intervening in a citizen’s right to participate in the political process. That alone should make the concerns about democracy moot. Second, it is not in a broadband provider’s best business interest to discourage the use of its network. The more users and more traffic exchanged, the greater the revenues and profits and lower the operational costs of the network.

Given the heightened concern over the last two years about privacy on the internet, the left and right wings of Congress should use the need to bring certainty to privacy as a catalyst for closing the philosophical gaps in the vision for the internet. Privacy is being placed on the backburner which is unfortunate because while most consumers are fine for the most part with the internet as it is (growth in ecommerce is one such indicator of the internet’s health), codifying net neutrality principles, general principles that the left and right agree with, in the form of a statute plus providing bright-line rules on privacy and privacy enforcement will bring certainty to consumers of broadband services as to a safer internet and certainty to broadband providers that wish to continue investment absent the nightmare that a back-and-forth that the current regulatory framework creates.

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.

Opt-in, Opt-out policy appropriate for addressing online privacy

In May 2017, U.S. Representative Marsha Blackburn introduced H.R.2520, the Browser Act, a bill designed to provide consumers with some control over the use of their personal information. Specifically, consumers that use broadband access services or websites or applications providing subscription, purchase, account, or search engine services are provided, depending on the sensitivity of personal information, the choice to opt-in or opt-out of policies used by these services to manage consumer information.

For sensitive information, opt-in approval must be expressly granted by the consumer. Sensitive information includes:

  • financial information;
  • health information;
  • information about children under the age of thirteen;
  • social security numbers information;
  • information regarding a consumer’s geo-location;
  • web browsing information: or
  • information on the history of usage of software programs or mobile applications.

Consumers must be provided the opportunity to give opt-out approval for non-sensitive information.

Mrs Blackburn’s intent with the legislation is to equalize broadband access providers and edge content providers under the eyes of the Federal Trade Commission, the federal agency responsible for consumer protection and anti-trust law enforcement. In my opinion, this is not a far off from former Federal Communications Commission chairman Tom Wheeler’s goal of openness and transparency throughout the entire internet ecosystem; from consumer to broadband access provider to websites provided by edge providers.

What Mrs Blackburn’s bill also does is address information asymmetries, where edge content providers are viewed as having more knowledge on the value of consumer information that they extract from websites than the consumer does herself. The consumer cannot answer the question, “Is the value of the information I receive from online, x, greater than the value of the information that I give up, p, where that information is private?

It is not readily apparent whether H.R.2520 was also designed to save the consumer from asking this question: ” Why should I pay for an economic good i.e. privacy that isn’t Google’s to sell in the first place?”

Professor Caleb S. Fuller of Grove City College describes privacy as an economic good, something that the consumer wants more of. Most consumers are not willing to pay to protect this good, even though they know that firms like Google are collecting this information for free. For example, according to Professor Fuller’s research, 90% of Google’s users know that their “mouse droppings” are being tracked.While 29% of Google’s users don’t mind being tracked, 71% do. Their reasoning, according to Professor Fuller includes the fear of price discrimination based on their information; the receipt of spam advertising; the risk of identity theft; and the “dis-utility in just not knowing who knows what.”

One equitable solution, in my opinion, would be for Google and other edge providers to pay their subscribers to provide private data. Google could provide an offering schedule based on the sensitivity of the information it wishes to purchase. Consumers would have to consider the value of the privacy they give up in exchange for the value obtained from accessing web content. I wouldn’t expect every consumer to sell their data. Google will wisely set limits on its offers and a significant portion of consumers unable to get a price they want will settle for the old private data for access exchange that they have been conducting for two decades.

The opt-in, opt-out policy mitigates the work that the consumer should put in to determine the value of her data, but gives her the final say over how her private data can be used. Unfortunately this is also the down side where the market won’t be used to truly determine the real value that can be sold.