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FCC Attempts New Power Grab With Privacy Regulation Proposal

NEWS ANALYSIS: The proposal by FCC Chairman Tom Wheeler sounds good and it contains some good ideas, but it would be more helpful if the move was actually legal.

The FCC has dropped another shoe in its ongoing effort to regulate Internet service providers as if they were phone companies.

The series of changes, which grew out of the FCC's assertion of the power to declare that ISPs now fall under Title II of the Communications Act, are currently coming in quick succession as FCC Chairman Tom Wheeler finds new ways to regulate the Internet and its ISPs.

This time, Wheeler has announced that he's circulating a proposal to his fellow Commissioners suggesting that the FCC begin regulating how ISPs use customer information. Basically, the proposed changes would allow ISPs to use customer information for billing and for additional sales of services to customers, but require that those customers opt-in for personal information sold to third parties.

In a fact sheet provided by the FCC concurrent with the privacy proposal, Wheeler said that he was focusing on three areas: choice, transparency and security.

Further reading

The idea is that consumers should have the choice of what information to share, that ISPs be transparent as to what's happening with customer data and that they protect that data. These are all actually good ideas, but the problem with them is that nowhere in the Communications Act has the FCC been given the authority to regulate privacy.

In fact, if there is an agency with the charter to protect privacy, it's the Federal Trade Commission, but the problem is that by reclassifying the Internet under Title II the FCC has removed the ability of the FTC to regulate privacy on the Internet.

However, the FCC is claiming that responsibility because of an obscure rule in Title II that prevents phone companies from stealing each others' customer data, the agency suddenly has the power to regulate privacy.

By now, you may be asking yourself how it is that the Commission is exercising this power when it's not specifically given the power under the Communications Act. The answer apparently is that the FCC gave itself the power and then interpreted the language under Title II to back it up.

As you might suspect, not everyone is in favor of this sudden power grab.

"The 'fact' sheet demonstrates that the FCC is doubling down on its misguided and broken Net Neutrality decision by imposing troubling and conflicting 'privacy' rules on Internet companies, as well as freelancing on topics like data security and data breach that are not even mentioned in the statute," FCC Commissioner Mike O'Rielly writes in his statement objecting to the action.

He calls the action "reckless" and says that the Commission clearly lacks the expertise, personnel or even the understanding of this action.

"Their authority to make privacy rules all comes from the reclassification to Title II," Doug Brake telecommunications policy analyst with the Information Technology and Innovation Foundation, told eWEEK.

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