FCC Broadband Privacy Rule On Hold, Likely Dead

The new Federal Communications Commission (FCC) Privacy and Data Security Rule for broadband internet access service (BIAS) providers (Privacy Rule) was set to start phased implementation on March 2, 2017. We have previously detailed what the Privacy Rule would require and when in prior blog posts available here and here. However, on March 1, 2017, the new Republican majority issued a temporary stay of the Privacy Rule, in a joint statement from Acting Federal Trade Commission (FTC) Chairwoman Maureen K. Ohlhausen and FCC Chairman Ajit Pai posted here.

This Privacy Rule stemmed from the FCC's 2015 Open Internet Order, which may also be subject to revision under the new administration. The FCC's Open Internet Order applied Section 222 of the federal Communications Act to BIAS providers for the first time. This order gave the FCC jurisdiction over BIAS providers such as internet service providers (ISPs), but the FCC declined requests to take jurisdiction over edge networks (online service providers that do not offer internet access but offer services that look like a communications provider, such as Facebook, Google and Yahoo). As a result, the FCC took jurisdiction over the BIAS industry - which had previously been regulated by the FTC - on matters of privacy and data security, among other things. This essentially split the internet industry between the two regulators.

Under the Privacy Rule, the FCC took a far more restrictive approach to regulation of privacy and data security than the FTC has taken. This is largely due to the FCC having much greater rule-making and consumer protection authority than does the FTC. For instance, under the Privacy Rule, it would become much more difficult for BIAS providers to provide interest-based advertising and other services that take advantage of big data. For example, the Privacy Rule would have required BIAS providers to obtain consumers' express consent to the use of service data for such purposes, whereas edge networks and other non-BIAS companies under FTC...