On Monday, the House of Representatives, following similar action last week by the Senate, voted to disapprove a Federal Communications Commission rule on internet privacy.
The 400-page order had been rushed to completion by Obama-appointed FCC Chairman Tom Wheeler in October on a 3-2 party-line vote.
Among other things, it established a set of online privacy rules for internet service providers like Verizon and AT&T that differ substantially from the rules governing other major internet firms like Amazon or Google.
Congress was correct to reject the different rules as anti-consumer, anti-competition, and anti-internet.
The congressional action has led many to conclude that the sky is falling in the online privacy world, naturally causing many consumers to worry about protecting their online information.
But in reality, little will have changed if the disapproval is signed by the president and these flawed rules are rescinded. Most online firms in fact are covered by longstanding rules crafted by the Federal Trade Commission, as were broadband providers until three years ago.
The next step for Congress should now be to restore the FTC’s authority over these firms, removing the FCC from the process and putting all firms under the more sensible privacy rules that other firms follow.
No one, of course, actually likes the idea of anyone looking at data on their personal internet use, such as their browsing history or geographic location.
But many also like the benefits of such shared data, such as making internet shopping easier though targeted advertising or by providing alternative revenue streams to keep consumer fees low. Some firms even offer explicit discounts for consumers that share their data.
The recent FCC rule being rescinded conflicts with longstanding policies on online privacy, long enforced by the Federal Trade Commission, which is the agency that normally deals with such issues.
Until recently, the Federal Trade Commission rules—which use an “opt out” method under which nonsensitive data may be shared unless consumers specifically object—applied equally to all internet firms, internet service providers included.
This changed in 2015 with the FCC’s decision to reclassify internet service providers as “common carriers” under the Communications Act. The reclassification was made in order to give itself legal authority to impose so-called “net neutrality” rules on ISPs.
But the seemingly arcane change had another consequence: It removed the Internet service providers from FTC oversight on their online privacy practices.
The FCC then moved into the regulatory vacuum it had created, producing its own substantially different rules for the group of internet firms over which it has authority.
The result was a double-head privacy regime for internet firms, one for those under the FCC’s purview, and another—less restrictive—for everybody else.
That may be a benefit if you are in the second camp, especially since several of your biggest competitors will have been handicapped. But it’s not so good for everybody else.
Fortunately, Congress has seen through this FCC gambit and has “disapproved” the rule. President Donald Trump should move quickly to sign the bill into law.
But it should not end there. Congress should also adopt legislation to eliminate the Federal Communications Commission’s self-made jurisdiction over the matter, and charging the Federal Trade Commission with enforcing clear and reasonable guidelines for protecting consumer privacy rights on the web.
