Privacy Order Would Hike Broadband Prices

[Commentary] On Oct 27, the Federal Communications Commission adopted a Report and Order purporting to “protect the privacy of customers of broadband and other telecommunications services." The rules require consumers to affirmatively opt-in before Internet-service providers (ISPs) can collect "customer proprietary information," which applies to information that the ISP "acquires in connection with its provision of telecommunications service."

As FCC Commissioner Michael O'Rielly discussed, because ISPs need consumer information in order to offer targeted benefits, these regulations simply raise the costs for ISPs to engage in online advertising, zero-rated programming or other targeted consumer offerings. Consumers who choose not to opt in will be confused because edge providers will continue to collect their information and sell it to ISPs. And it's likely ISPs will increase the price of broadband service to cover the costs of purchasing consumer data from edge providers.

[Michael J. Horney is a research associate at the Free State Foundation.]