FCC Privacy Rules Repealed – Before Becoming Effective

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On April 3, 2017, President Trump signed Senate Joint Resolution 34 (SJR 34), which effectively repealed not-yet-in-effect Federal Communications Commission regulations designed to limit use of customer information by broadband service providers and provide enhanced privacy protections for customers of those service providers. The FCC regulation, titled “Protecting the Privacy of Customers of Broadband and Other Telecommunications Services” (81 Fed. Reg. 87274) had been promulgated during President Obama’s Administration and would have imposed requirements on broadband providers with respect to treatment of customer data, including provision of privacy policies, customer consent for certain information collection and use practices, implementation of “reasonable” information security practices, and notification of information security breaches.

Opponents of SJR 34 generally see the repeal of the FCC’s regulation as a major loss for consumer privacy – allowing for continued use of broadband customer information even in the absence of explicit consent, arguing, for example, that providers could sell browsing histories. (Notably, major providers Comcast, Verizon, and AT&T have indicated that they will not sell individual browsing histories.) The law’s supporters note that the regulation would have imposed especially harsh requirements on broadband providers, as compared to relatively established, but comparatively relaxed rules in place for other online service providers, which have been established under the jurisdiction of the Federal Trade Commission and state laws.

Prior to the enactment of SJR 34, Federal Trade Commission Chairwoman Maureen K. Ohlhausen and Federal Communications Commission Chairman Ajit Pai issued a joint statement indicating a shared commitment to the protection of consumers’ personal information and arguing that jurisdiction over the privacy and information security practices of broadband providers should be returned to the FTC, which had been the applicable regulator until 2015, as “the nation’s expert agency with respect to these important subjects.” Following passage of SJR 34, Chairman Pai issued another statement supporting the law and providing an assurance that “the American people to know that the FCC will work with the FTC to ensure that consumers’ online privacy is protected though a consistent and comprehensive framework.” These statements provide a strong indication that broadband providers should look to the regulatory actions and statements of the Federal Trade Commission to guide their decisions.

Some might speculate that SJR 34 may signal a more business-friendly approach to regulation in the privacy space during the Trump Administration. However, SJR 34 has generated considerable discussion in political and technological circles, and raises issues that will likely remain open for debate for the foreseeable future. Broadband providers, as well as other service providers would be wise to keep a careful eye on future actions and statements from the FTC with respect to treatment of consumer information.

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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