The Information Age and Internet Regulation

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By Prabhjot Minhas

Last March, the future of the Internet hung in the balance. This March, it looks like the future of cable and tech companies will too.

In 2015, the U.S. Federal Communications Commission (FCC) voted to keep an “open and free” internet with the release of the Open Internet Order. The order protected the principles of net neutrality, or the idea that Internet service providers (ISPs), like Comcast, Verizon, and Time Warner, should treat all online content the same. The decision meant that companies could not buy faster access to consumers, or paid prioritization, and that ISPs could not slow data speeds for other content.

The 2015 ruling was welcomed by millions of Americans and the President, who stated that the order “will protect innovation and create a level playing field for the next generation of entrepreneurs.” The decision essentially created equality among all online content, whether that content be from a multi-billion-dollar corporation or a first-time blogger.

The FCC ruling also designated ISPs, broadband and mobile, as “common carriers” and “telecommunications services” under Title II of the Communications Act of 1934, a change from the 2002 FCC ruling that classified them as “information services.” While the Open Internet Order’s main goal was to establish net neutrality, it’s now having implications on other Internet-related issues.

For example, the reclassification gave the FCC more regulation power over ISPs, but it also paved the way for the newest Internet regulation battle – ISP data collection. The Verge, a technology news website, describes how the “new fight is taking shape around a relatively overlooked portion of the ruling.” The issue specifically concerns Section 222 of the Communications Act, which states that “every telecommunications carrier has a duty to protect the confidentiality of [customer] proprietary information.” This section, brought upon ISPs due to the reclassification, brings into question how much data ISPs can collect about customers and what they do with that data.

In an Internet full of targeted ads and ad-tracking, consumer data collection is a profitable business. Anyone who’s ever looked up items on the Internet has been target of Internet advertising. One moment you’re looking at the latest pair of shoes and the next moment you see those same shoes in an ad on the side of the page. Google, which is not considered a carrier, has developed targeted advertising into a half-a-trillion-dollar business, and in 2013, 91% of its revenue came from advertising.

Google is able to target advertising by assigning cookies, tiny text files saved on a user’s browser, to IP addresses, an identifier assigned to a machine on a network. Cookies allow Google and other websites to save user preferences and data, which are later used by applications like DoubleClick to target advertising by finding browsing patterns and preferences.

Similarly, ISPs have a “unique ability” to collect data, as all activity on the Internet has to pass through a user’s ISP router first. ISPs are able to track user data by assigning IP addresses to users and logging all online activity, like the time and date of website visits, ads and links clicked, and the amount of time spent on a site. These logs, while anonymous, can be retained for months by ISPs. With all that data on hand, ISPs would like to keep sharing in those advertising profits, but, due to the new reclassification, they may have a new set of rules to play by.

When the issue of data collection came up, cable companies didn’t sit idly by. On Thursday, February 11, seven of the largest cable lobbying groups in America sent a joint letter concerning the data debate to the Chairman of the FCC, Tom Wheeler. The letter called for the FCC to “act in a manner consistent with the…framework by the [Federal Trades Commission] FTC.” This FTC framework has been described as “basically stand[ing] back and impos[ing] meager fines on anyone who does anything really egregrious.”

Policy affecting consumer data is a major concern for cable companies because, depending on the FCC’s interpretation of Section 222 of the Communications Act, the advertising business may not be as lucrative for ISPs anymore. Currently, ISPs aren’t allowed to share and sell consumer data without permission and must strip all data of personally identifiable markers. However, Section 222’s vague wording raises questions about the amount of data that can be collected and how exactly that data can be used. Without a stricter policy enacted by the FCC, ISPs could “experiment with data-mining programs similar to those…at online ad companies,” raising issues of consumer privacy.

Privacy concerns stem from that fact that all online activity goes through ISPs, giving them consumer data indicating location, interests, and financial and medical information. And, unlike services like Google, consumers are not able to easily opt out of tracking. With such large amounts of data, ISPs can create extensive behavioral profiles and user information stores. This information could then be analyzed to estimate age, gender, and income of users, posing security risks for consumers, should the information fall into the wrong hands. While ISPs claim to share only data removed of personally identifiable makers, what exactly does “personally identifiable” mean? When analytics can create a fairly accurate image of the consumer based on the loads of data available, is the information truly unidentifiable? This is especially concerning since other of forms of anonymized data, like credit card data, have been found to be fairly easy to identify. With advertising developing into such a lucrative business, not limiting ISP data collection could put consumer privacy at risk for company profits.

But, data collection has its benefits too. Data collection by ISPs and services like Google provide a more personalized online experience. It gives consumers segues to information and products that they could potentially want. Also, If ISPs are limited in data collection, whose to say companies that similarly collect data, like Google, won’t be next? If stricter rules were to apply Google, the company could potentially lose much of its main source of revenue, possibly leading the company to change its business model and start charging for its previously free services.

The FCC Chairman, Tom Wheeler, also weighed in on the issue on March 10, 2016, through a post titled, “It’s Your Data: Empowering Consumers to Protect Online Privacy,” on The Huffington Post. His post focused on what ISPs owe to consumers more than what ISPs should be allowed to do with consumer data. He mentioned that laws regulating phone companies, which protect telephone data and limit the amount that phone companies can sell and use consumer data, should be applied to data collected by ISPs. In the outlined proposal, Wheeler wrote that ISPs should provide consumers an opt-in and opt-out option for different data collection, tell consumers how that data is used, and securely protect consumer data. The Chairman also made clear that this proposal applied to ISPs only, not websites or government and law enforcement issues. Wheeler ended the post with a call to consumers, stating, “The bottom line is that it’s your data. How it’s used and shared should be your choice.”

FCC Commissioners are scheduled to “vote to comment” on the proposal on March 31. Should the proposal be passed by the Commissioners, it will be open to a public comment process for interested parties.


(Photo Credit: New York Times)
(Photo Credit: New York Times)

Regulations concerning the internet aren’t going anywhere. They will keep rearing their head in our increasingly data-driven and online world. This most recent data collection debate has the potential, like the net neutrality issue, to fundamentally change our online experience. The lobby groups’ letter and Wheeler’s proposal are just the start of what looks to be another landmark FCC case, and we should expect to hear more in the coming weeks.

The American people should also take heed of how issues related to Internet regulation increasingly affect our lives. Whether someone is using the web to schedule an appointment or stream the latest episode of Game of Thrones on their smartphone, Internet regulation is an issue people should be aware of. The battles have just begun.

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