Congress Sends Repeal Of Obama-Era Privacy Rules To The White House

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Congress has sent repeal legislation (S.J.Res. 34) to the White House to undo the Federal Communications Commission (“FCC”) broadband privacy rules adopted in October 2016 that would have required cable and wireless companies that are Internet Service Providers (“ISPs”) to take more stringent steps to protect consumers’ personal data.  On Tuesday, March 28, 2017, the House of Representatives (the “House”) voted 215-205 to repeal the rules, which would have obligated ISPs to obtain consent before using certain consumer data for advertising and internal marketing, as well as to strengthen protections against hackers.  Last week, the Senate voted 50-48 to reverse the rules.  The repeal now awaits President Trump’s signature. 

The Obama-era rules had not yet taken effect; the new FCC Chairman Ajit Pai led the FCC to stay the rules’ implementation in a 2-1 vote on March 1, 2017.  After that vote, Chairman Pai and Federal Trade Commission (“FTC”) Chairman Maureen K. Ohlhausen explained in a joint statement that, because the FTC already has authority to regulate the data security practices of ISPs, the new FCC broadband privacy rules would have unfairly subjected ISPs to stricter privacy requirements than edge providers (other companies and platforms on the Internet, like Netflix), who are also regulated by the FTC. 

After the House vote, Chairman Pai applauded the decision of Congress to overturn “privacy regulations designed to benefit one group of favored companies over another group of disfavored companies.”  He added that the FCC’s Open Internet Order of 2015, which reclassified ISPs as Title II common carriers, “created the problem we are facing today,” and that, moving forward, “the FCC will work with the FTC to ensure that consumers’ online privacy is protected though a consistent and comprehensive framework.”

Republicans in the House and Senate agreed that the FCC broadband privacy rules would have been overly burdensome and confusing.  “[Consumer privacy] will be enhanced by removing the uncertainty and confusion these rules will create,” said Rep. Marsha Blackburn (R-Tenn.), who chairs the House subcommittee that oversees the FCC.

But Democrats were disappointed with the vote to repeal the rules, arguing that the rules would have protected consumer privacy, and without them, ISPs are able to sell consumer data to advertisers.  House Minority Leader Nancy Pelosi (D-Calif.) said in a statement before the vote Tuesday, “Your broadband provider knows deeply personal information about you and your family – where you are, what you want to know, every site you visit, and more.  They can even track you when you’re surfing in a private browsing mode.  You deserve to be able to insist that those intimate details be kept private and secure.”

The repeal legislation uses the Congressional Review Act, which allows Congress to revoke recently passed legislation.  Although Senator Ed Markley (D-Mass.) has promised to introduce a bill to instruct the FCC to reinstate the broadband privacy rules, if the current legislation is signed by President Trump, it will forbid the FCC from passing similar regulations going forward.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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