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March 30, 2017

The Allegation That Congress Destroyed Your Internet Privacy Is Fake News

 

You have been lied to about “your browsing history being sold to the highest bidder.” That was fake news pushed by special interest groups taking advantage of easily duped social media.

One clear message from the last election is that voters want a clean break from the heavy-handed regulatory overreach of the Obama administration. Congress intends to overturn as much Obama administration overreach as possible, and it’s in that context that Congress overturned the Federal Communications Commission’s (FCC) pending privacy regulation. But there’s been a lot of confusion, so let’s explain.

Originally, consumer internet privacy was handled by the federal agency specifically designed and empowered to protect consumers: the Federal Trade Commission (FTC). The FTC has legislative authority and decades of agency expertise in consumer protection, including privacy protection.

That is, until the FCC under then-Chairman Tom Wheeler usurped the FTC’s authority as part of its ideological campaign to heavily regulate the internet.

One of Wheeler’s first moves was to hire Gigi Sohn, who has spent the better part of her career crusading for the de facto nationalization of broadband providers. Gigi seems to see ISPs as the root of all evil in the communications marketplace, and once Wheeler hired Sohn as his special policy advisor, the regulations came fast, furious and unhinged from empirical data or marketplace considerations.

As part of their crusade, Wheeler and Sohn went far beyond the net neutrality demands of most activist groups and completely reversed previous FCC policy by reclassifying broadband under the same regulations governing the old analog phone networks, which themselves barely exist anymore.

This ill-advised move had the effect of calling into question much of the FTC’s ability to enforce its privacy regime over broadband providers. So the FCC, not Congress, was responsible for disruptions in federal privacy protections.

Then the FCC doubled down on its mistakes by creating its own new, poorly designed privacy regulations that were inconsistent and uncoordinated with existing FTC rules and practices. And the FCC regulations focused on ISPs rather than on edge providers—i.e., companies that people interact with directly, such as Facebook—even though edge providers gather far more personal data than do ISPs. This, of course, was consistent with Wheeler’s and Sohn’s view that ISPs are somehow inherently culpable for every imagined or perceived problem in the communications industry.

The FCC’s privacy regulations also departed completely from long-established “opt-out” privacy expectations and instead adopted an onerous “opt-in” standard, which would completely preclude innovation and experimentation in making advertising more tailored and personalized for consumers.

This is why groups like IPI urged both Congress and the FCC itself to throw out the Wheeler privacy regulations, which Congress did.

Importantly, as the Competitive Enterprise Institute has pointed out, there remain numerous and overlapping federal and state privacy protections for consumers. And, of course, the FCC regulations were pending—they had not yet even come into effect themselves. How does it feel to have been lied to?

As a participant on the internet, your privacy is at no greater risk as a result of Congress’ actions. But freedom and innovation were at risk, because of out-of-control, power-grabbing agencies like the FCC under Wheeler. Thankfully now we’re on the path to restoring sanity in internet regulation.


 

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