Ad Industry Petitions FCC To Jettison Its Privacy Rules

Advertising trade groups are seizing the political moment in a bid to dismantle the Federal Communications Commission’s recently passed broadband consumer privacy laws.

With the commission on the cusp of a Republican majority – Chairman Tom Wheeler has said he’ll step down on inauguration day – the writing could be on the wall for the FCC’s controversial regulations.

On Tuesday, an alphabet soup of ad orgs filed a joint petition for reconsideration to the FCC, arguing that the broadband-centric privacy rules are onerous, unnecessary, unfair and unconstitutional. January 3 was the deadline to submit reconsideration requests. [Read the petition here.]

“These rules were not justified, and they go beyond the authority of the FCC,” said Dan Jaffe, the ANA’s EVP of government relations. “And even if the FCC had the authority, the action they took is an enormous overreach, in particular requiring an opt-in for all browser activity and app usage history.”

Petition signees include the Association of National Advertisers, the 4As, the American Advertising Federation, the Interactive Advertising Bureau, the Network Advertising Initiative and the Data & Marketing Association (which is what the Direct Marketing Association is calling itself these days).

And they’ll probably get their wish, if recent events are any indication, said Mike Bloxham, SVP of consulting firm Frank N. Magid Associates.

“Everything we’ve seen since the election suggests that the new administration will be inclined to support the call for loosening or even scrapping the FCC regulations,” Bloxham said. “The industry is likely to get what it wants, and sooner rather than later, and it will be good for the digital economy.”

While the sentiments expressed in the petition are nothing new – after the rules passed in October, the DMA’s senior VP of advocacy, Emmett O’Keefe, called them “bad for consumers and bad for the US economy” – the timing of this most recent petition is noteworthy.

The new administration is just a little over two weeks away from settling in, and key members of president-elect Trump’s transition team are no friends to net neutrality.

If net neutrality gets the ax, that could call into question the FCC’s reclassification of broadband providers as common carriers, which is what gave the commission its authority to pass its ISP privacy regs in the first place.

When Wheeler officially resigns on January 20, Republican commissioners will outnumber Democratic commissioners 2 to 1. In early December, the Senate denied Democratic commissioner Jessica Rosenworcel another term.

Remaining Republican commissioners Ajit Pai and Michael O’Rielly have made no secret of their disdain for the broadband privacy rules. At an FCC meeting in March, O’Rielly called the commission’s jurisdiction over ISPs “imaginary authority,” and in December, Pai said that the FCC needs “to fire up the weed-whacker” to deal with the “regulatory underbrush.”

But scrapping the ISP privacy rules won’t be easy, said Dallas Harris, a policy fellow at consumer advocacy group Public Knowledge.

For one, “ISPs and marketing companies are making the exact same arguments that were rejected by the FCC during the rulemaking process,” she said, and “if the commission was to view these petitions simply on the merits, they would be rejected.”

That said, the Republican majority FCC could use the petition as “a vehicle to delay the significant privacy protections granted to consumers last October, when the rules were passed,” Harris said.

And that could create a regulatory vacuum, she said. Even if the FCC uses the petition as a cudgel to repeal the privacy rules, the Federal Trade Commission wouldn’t automatically regain its jurisdiction over ISPs. When the FCC successfully reclassified ISPs as a telecommunications service in February 2015, it effectively removed them from the FTC’s jurisdiction.

“There would be absolutely no regulation surrounding how ISPs can use their customers’ data,” Harris said. “Privacy advocates will fight to maintain these protections and will make it clear to the public that Republicans have made stripping their privacy rights a top priority.”

And it’s a general public, Bloxham acknowledged, that is growing both less tolerant of data collection and “increasingly savvy with regard to technology and their true value within a data-driven economy.”

“The more companies can leverage consumer data, the more important transparency and trust will become,” he said. “And in the same way that ad blockers have come about as a response to user dislike for online ads, it’s not hard to envisage someone bringing some kind of ‘data blocker’ to market for those who don’t like their data being used without a greater sense of control than they currently have.”

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