Broadband Privacy: The Folly of Sector-Specific Rules

ITIF report rejects calls for the FCC to regulate broadband privacy differently than the rest of our digital economy.

Emboldened by recent pressure from “broadband populists” and enabled by its ill-advised classification of broadband as a common carrier service under Title II of the Communications Act, the Federal Communications Commission (FCC) is considering the unprecedented step of regulating broadband privacy. Such regulations would be a mistake. The calls for rigid, paternalistic regulation from advocacy groups like Public Knowledge and New America Foundation are flawed; they systematically ignore the benefits of data innovation, downplay the advantages of industry best practices and the flexible Federal Trade Commission (FTC) framework, overstate risks, and understate customers’ control over their privacy. Moreover, regulating ISP privacy under Title II would result in the opposite of the FCC’s stated goals under Section 706—slower rates of new broadband deployment and adoption.

Deviating from the historical privacy protections of the Federal Trade Commission (FTC) framework would significantly disrupt ongoing dynamic competition in innovative new uses of Internet data, ultimately slowing the rate of growth of broadband deployment and adoption and also degrading the broadband users’ online experience. Yet broadband populists hope to do just that, not in the name of protecting privacy as they claim, but as yet another tactic in their overarching strategy to turn the broadband industry into a heavily-regulated utility like gas or water, or, better yet, make the government be the sole provider of broadband services.

Asymmetric regulation to cut off potential revenue streams that could be reinvested in new networks or used to provide price discounts is just one more tactic in their broader strategic fight to shrink private-sector broadband. Also pushing for expansion of rules are privacy activists, who see an FCC rulemaking as an opportunity to maneuver around Congress, and take a tactical step towards their endgame of a European-style privacy regime for the United States, which if implemented, would lead to reduced, not more ICT innovation. Rather than pursue heavy-handed privacy rules and expand the scope of its utility-style regulation, the FCC should leave broadband privacy up the FTC and refocus on its core mission: supporting the expansion and advancement of America’s communications networks.