June 2016

The House Communications Subcommittee, Chaired by Rep Greg Walden (R-OR), held a hearing examining the Federal Communications Commission’s proposed privacy rules. The hearing follows up on a letter sent to FCC Chairman Tom Wheeler regarding the agency’s proposed privacy and data breach notification requirements for broadband Internet service providers (ISPs). The Federal Trade Commission (FTC), the traditional federal privacy regulator had its jurisdiction removed when the FCC reclassified broadband as a common carrier. The FCC’s proposed rules would create a separate set of rules governing only ISPs and not other parts of the Internet ecosystem, creating confusion and harming competition.

“Today’s hearing is a direct result of the FCC’s premeditated efforts to supersede the Federal Trade Commission’s successful, enforcement-based approach to consumer privacy with its own predetermined vision of what consumers want and how the Internet should function,” said Chairman Walden. “A robust record of comments warns of higher costs, stifled innovation, and fewer service offerings. None of these are risks we should be willing to take or consequences we are willing to put on American consumers. We should be encouraging competition, not slowing it down with burdensome and inconsistent regulations." House Commerce Committee Chairman Fred Upton (R-MI) concluded, “These rules simply miss the mark. By singling out broadband providers, the FCC is feeding unbalance into the Internet economy. Until recently, the entire Internet ecosystem successfully operated under the enforcement-based privacy protections of the FTC model and I fear this new approach will reduce competition in the flourishing Internet marketplace.”

[Commentary] Recently, Commissioner Ajit Pai of the Federal Communications Commission dropped a telecommunication bombshell: the agency’s Lifeline program, much venerated in Washington circles but often derided outside the beltway, may be wasting nearly $500 million annually on fraudulent accounts. This announcement should be alarming, given the FCC’s extensive efforts in recent years to reduce waste in the federal universal service fund. It should also cast doubt upon the wisdom of the agency’s 3-2 vote earlier in 2016 to expand the program without hard budgetary limits, rather than designing a new universal service system to serve the broadband age.

[Daniel Lyons is an associate professor at Boston College Law School]