FCC Chairman: Regulators to Undo Obama’s Damage on Internet Privacy

WASHINGTON – Federal Communications Commission Chairman Ajit Pai on Wednesday said that the FCC hopes to restore the strength of internet privacy laws, which the commission believes the Obama administration fractured.

Pai’s comments came two days after President Trump repealed the FCC’s broadband privacy rules passed in October. The rules would have required that internet service providers, or ISPs, ask before collecting sensitive information – such as Social Security numbers and information about finances, health and location.

Public backlash erupted last month when the repeal bill passed in the House and Senate. Opponents attacked Republicans who sided with the ISPs, claiming they were allowing private consumer information to be blindly sold to third parties.

Speaking at the Hudson Institute, Pai pointed to his April 4 op-ed in the Washington Post penned with Acting Chairman of the Federal Trade Commission Maureen Ohlhausen titled “No, Republicans didn’t just strip away your Internet privacy rights.” The two chairmen argued that there has been a “wildfire of misinformation” surrounding the repeal, and added that service providers have no plans to sell individual browsing histories to third parties. Pai and Ohlhausen said the repeal clears the way to reestablish privacy laws that the Obama administration dismantled.

In 2015, the FCC approved a set of net neutrality rules with the purpose of blocking ISPs from throttling speeds of websites for financial gain. The change meant that ISPs were now classified as public utilities, which stripped the FTC of its authority over online privacy and moved the responsibility to the FCC, which had no experience in governing the issue. This change created a gap and regulation, and the FCC saw about filling it by creating the new internet privacy rules it adopted in October.

“[W]e’ll be working together to restore the FTC’s authority to police ISPs’ privacy practices,” the op-ed reads. “We need to put the nation’s most experienced and expert privacy cop back on the beat, and we need to end the uncertainty and confusion that was created in 2015 when the FCC intruded in this space.”

Pai said Wednesday that the bottom line is simple – the FCC thinks that consumers have a uniform expectation of privacy when they go online, regardless of the classification of the entity that handles their information.

“We want that information to be protected in a consistent and comprehensive way, and so the Federal Trade Commission prior to 2015 had done a good job of making sure the online economy protected consumers,” he said.

Pai also announced that the FCC plans to establish a new Office of Economics and Data to weigh in on the issue of internet privacy. The goal, Pai said, is to have a working group develop a plan of action to be submitted for commission review by this summer. The FCC then hopes to have the office operating by the end of the year, with economists and data experts recruited from around the agency.

When asked how the FCC plans to staff the office with the existing federal hiring freeze and the administration’s desire to trim the federal workforce long-term, Pai said that will be one of the working group’s tasks.

“That is one of the core questions that the working group is going to have to talk through – where to draw economists and data analysts from,” he said. “We already have a really amazing staff of economists and statisticians that are sprinkled throughout the agency.”

The OED, he said, will provide economic analysis for rulemakings, transactions and auctions. It will also manage the FCC’s data resources and conduct long-term research to improve commission policies.

“The FCC should use its economists and data experts, drawing on best practices and data management and analytics, to ensure that well-informed decision-making is the norm, not simply a box to check, and I believe the best way to do this is to put a single office in charge of making sure that that happens,” he said.

Pai noted that this is not the first time the FCC has tried to establish an OED. The FCC formed a Competition Division in 1990s, which existed for four years before it dissolved.

“I realize that this is not the first bite that a chairman has tried to have at the apple,” Pai said. “This has been a longstanding issue. What I would say is that I’m very committed to heightening the importance of economic analysis at FCC.”