To the surprise of almost no one but to the consternation of many, the FCC partially stayed the previous FCC’s 2016 ISP privacy Order, scheduled to take effect on March 2, 2017. Specifically, the Commission stayed the portion of the Order, requiring ISPs to obtain consumer consent before using precise geo-location, financial information, health information, children’s information and web browsing history for advertising and internal marketing. The Commission took this action because Chairman Ajit Pai believes it places an unfair privacy burden on ISPs, one not shared by edge providers. As the Commission stated in a statement released on February 24, 2017:

Chairman Pai believes that the best way to protect the online privacy of American consumers is through a comprehensive and uniform regulatory framework. All actors in the online space should be subject to the same rules, and the federal government shouldn’t favor one set of companies over another. Therefore, he has advocated returning to a technology-neutral privacy framework for the online world and harmonizing the FCC’s privacy rules for broadband providers with the [Federal Trade Commission’s] standards for others in the digital economy. Unfortunately, one of the previous administration’s privacy rules that is scheduled to take effect on March 2 is not consistent with the FTC’s privacy standards.

The decision now gives the Commission time to review the petitions for reconsideration of the Privacy Order that were filed on January 3, 2017 by eleven parties.

Importantly, the Commission s does not take action at this time on Petitioners’ request for stay of other provisions of the Privacy Order, specifically the new notice requirements, customer approval requirements, and data breach notification requirements. Those issues will be decided as the Commission reviews the reconsideration petitions.

Democrats and consumer advocates are furious. For example, Sen. Ed Markey believes that ISPs should have more stringent privacy requirements that edge providers because they are the gatekeepers of the Internet.  While Matt Wood, the President of Free Press, a consumer advocate group stated on February 24, 2017:

Chairman Pai’s suspension of the data-security rules under the broadband-privacy order show his clear intention to undermine the broadband-privacy rules in their entirety. Despite the rules’ passage in a 3–2 vote, Pai has elected to suspend these orders on his own authority, showing his disregard both for agency procedures and for consumers whose private information is left more vulnerable. It's relevant that Pai is staying whatever rules he can before they take effect. What he’s doing today with regard to internet users’ privacy protections is a clear signal that he intends to reverse every other protection in due time, if he can. It’s also a tragedy that Chairman Pai is willing to ignore his own statutory mandate and delay common-sense rules that protect internet users from cable-company abuse while pretending that he's just chasing after a more comprehensive privacy law that’s outside of his agency’s congressional jurisdiction. Like his supposed love for transparency, his love for the rule of law has proved pretty hollow since Trump named him chair. The race-to-the-bottom mentality that Pai espouses may play well to the industries supporting him, but people will understand that his fake promise of better rules tomorrow just means stripping away all protections today.

But as Berin Szoka of TechFreedom a conservative think tank noted in a March 1st opinion piece on the Hill website:

Staying the privacy rules in the interim won’t leave consumers unprotected because the FCC can enforce Title II of the Communications Act directly, on a case-by-case basis. That’s not some crazy Republican idea. That’s how the Democratic FCC handled privacy over the last two years — at least, before the formal regulations were issued in October. Back in May 2015, the FCC explained that it would do case-by-case policing of Section 222. That’s the provision of Title II that speaks directly to privacy issues. In fact, the FCC has even broader powers under Section 201(b) — to assure that all practices of Title II common carriers are “just and reasonable.” Staying the Broadband Privacy Order just means the new Republican FCC will use these powers to keep a watchful eye on privacy.

The FCC’s action is a temporary salve to protect ISPs until the FCC (or Congress) can remove the Title II telecommunications classification for broadband Internet access service. That will ensure that all Internet players including ISPs and edge providers are regulated by the FTC. However, because undoing that classification is such a lengthy procedure (involving a new proceeding), in the interim the new FCC will continue to chip away at net neutrality one link at a time. The game plan is clear, and net neutrality advocates know it. Expect the opposition to be both loud and vociferous.

By Andy Regitsky, CCMI