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Congress overturns Obama-era Internet privacy protections

by on31 March 2017

All customer generated web traffic is now accessible to advertisement firms

On Tuesday, the US House of Representatives voted to wipe away the Obama-era FCC’s landmark Internet privacy protections that limited what ISPs could do with information such as customer browsing habits, app usage history, location data, and social security numbers.

On a party-line vote, House Republicans exempted ISPs such as Verizon, AT&T and Comcast of protections approved last year that would prevent selling customer information, such as browsing history and frequent sites, to targeted advertisement agencies for a profitable return on investment.

According to the vote, and if President Trump signs the legislation as expected, providers will be able to monitor their customers’ online behavior and use personal and financial information to sell highly targeted advertisements. The ruling would give ISPs more equal with social media giants Google and Facebook in the $83 billion online advertising market.

Providers could also be able to sell user information directly to marketers, financial firms and other companies that mine personal data, often without a terms of agreement or any type of service consent. In addition, the FCC would be forbidden from issuing similar rules in the future.

Currently, many search engines and streaming video sites already collect usage data on their customers. But the reason for concern is that if ISPs are enabled with the same leverage, they are able to collect and transmit significantly more information about a user’s activities that spans their entire web browsing traffic history.

According to federal statistics, it is far more difficult to switch ISPs than it is to switch streaming video service providers, because many regions only contain two to three broadband options.

Supporters of Tuesday’s repeal have argued that the privacy regulations stifle innovation by forcing Internet providers to abide by “unreasonably strict” guidelines. House Rep. Marsha Blackburn (R-Tenn), who chairs the House subcommittee on the FCC, has said that “consumer privacy will be enhanced by removing the uncertainty and confusion these rules will create”.

Meanwhile, policy analysts have said that the deregulatory effect may be “the first of several” that could significantly alter the playing field on the internet. One example that consumer advocates cite is that Congress or the new FCC’s Republican Chairman may roll back the agency’s rules on network neutrality by enabling “zero-rating” practices, or sponsored data streams for particular service providers.

Providers may charge customers a premium for their privacy

The other example cited by consumer groups is that ISPs could eventually charge customers a premium to retain confidentiality over all generated web traffic. For its GigaPower fiber-to-the-home Internet access plan, AT&T charges an additional $29 per month to allow customers to opt out of the reach of its privacy-abolishing “Internet Preferences” program.

For the past few years, however, it has also offered the reverse for less privacy-conscious individuals – offering customers discounted Internet rates in exchange for letting the company monitor browsing histories.

Historically, most ISPs have made business profits by selling access to the Web. But now, providers are looking to increase their revenues by entering the large digital advertising market that leaves consumers openly vulnerable to having web traffic information collected while visiting websites, watching videos, streaming live conferences, and downloading applications and content.

Industry backers have argued that allowing ISPs to use generated web traffic data for targeted advertisements allows their customers to benefit by leading to more relevant advertisements and innovative business models. These groups obviously take the stance that consumers will be enticed by discount programs like AT&T’s “Internet Preferences” option in exchange for permission to sell their browsing history to third-party partnering companies.

As it stands, the industry currently favors the interpretation of the FTC, which holds that internet browsing history and app usage data are not “sensitive or protected” information. The agency currently does not have authority to restrict providers from violating its guidelines, due to a rule that rather loosely leaves ISP oversight with the FCC.

FCC seeks to deregulate $45 billion data market for hospitals, universities, ATMs

Internet analysts and consumer advocates are also concerned about the FCC’s potential to deregulate the nation’s $45 billion Special Access Market for phone and broadband services, currently dominated by AT&T, Verizon, CenturyLink and others. The proposal is a blow to companies like Sprint, who backed a plan under the Obama-era FCC that would have cut business data prices but was never approved. FCC Chairman Ajit Pai has said the commission will vote April 20th to reform the rule that will “relax unnecessary regulation,” but will preserve those necessary to prevent anti-competitive price increases.

The easing of regulatory restrictions means a gradual uptake in power for major ISPs that consumer groups like Public Knowledge and Consumer Federation of America have said “will drain consumer pocketbooks of tens of billions of dollars per year”.

Sprint, on the other hand, says that this small handful of companies will be responsible for straining economic growth by using anticompetitive tactics to ensure small businesses, schools and libraries never have access to more competitive options like its own.

Last modified on 31 March 2017
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