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FCC Privacy Order Fails to Address Serious Issues Raised During Comment Period

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Lenard and Wallsten Urge Commission to Reconsider Order

March 6, 2017 – The Federal Communications Commission should reconsider its Privacy Order as it fails to address serious concerns raised during the comment period, state Lenard and Wallsten in comments filed today with the Commission.

Lenard, Technology Policy Institute Senior Fellow and President Emeritus, and TPI President Scott Wallsten, state that the Order “offers no evidence demonstrating that it would yield net incremental benefits over the FTC’s rules or even that the Commission attempted to make such a determination.” Therefore, it is impossible to claim the rules are beneficial.

Lenard and Wallsten also identify additional problems with the Order. Specifically:

  • The Order does not show that ISPs have access to more, and more sensitive, data than do edge companies. The Commission notes consumers’ ability to easily switch search engines while stating consumers cannot easily switch ISPs. However, the Order does not acknowledge that more than 80 percent of Internet users report using the Internet at multiple locations.
  • The Order inappropriately dismisses the privacy-enhancing effects of encryption by pointing out that much encrypted traffic is video from a single company, while ignoring the overall trend in a rise in the use of encryption.
  • The Order continues to imply that privacy concerns harm broadband adoption, yet ignores the empirical evidence contradicting this claim. The Order also does not acknowledge that if its claim were true it would apply equally to edge companies.
  • The Order ignores the costs of creating entry barriers into the nearly $80 billion digital advertising market. Entry barriers are likely to keep prices higher for advertisers by giving them fewer choices. This will disproportionately affect smaller firms and new entrants.

“Privacy concerns are real and data breaches happen. But those factors do not mean that stricter rules necessarily yield higher net benefits,” Lenard and Wallsten conclude. “For all these reasons, the FCC should take this opportunity to reconsider the privacy Order.”

The comments are available on the TPI website.

Contact: Amy Smorodin, 202-828-4405, asmorodin@techpolicyinstitute.org

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at http://www.techpolicyinstitute.org/.