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FCC Privacy Order Improvements Illusory

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Wallsten Submits Analysis of Privacy Order Fact Sheet

Contact: Amy Smorodin
(202) 828-4405

October 17, 2016 – The “fact sheet” released by the Federal Communications Commission concerning its upcoming privacy Order shows the FCC may have introduced new problems in its effort to improve the rules, explains Technology Policy Institute’s Scott Wallsten in a letter filed today with the Commission.

Scott Wallsten, Technology Policy Institute President, identifies several outstanding issues revealed by the fact sheet. “One apparent improvement includes recognizing that not all data are equally sensitive. The Commission, however, giveth with one hand and taketh away with the other. The fact sheet fails to acknowledge levels of data sensitivity and instead classifies almost all information as sensitive and therefore subject to opt-in rather than opt-out.” This effectively removes any benefits of the classification system.

He continues, “Another apparent improvement is the Commission’s decision not to ban broadband plans that include financial incentives related to privacy. However, the fact sheet seems to imply that ISPs may need approval from the Commission to use such plans.  Requiring regulatory approval for new business models is likely to reduce experimentation, and reducing the number of potential methods of paying for service is likely to harm consumers.”

Wallsten also ascertains that there are fundamental problems that still plague the privacy Order despite the changes revealed in the fact sheet. “First, the FCC continues to argue that ISPs should be subject to stricter privacy regulations than other industries not within the FCC’s purview despite the lack of evidence supporting that argument and the potential effects on competition.” Second, the Chairman’s fact sheet fails to acknowledge there is a trade-off between data restriction in the name of privacy and the benefits the data can produce.

The comments are available on the TPI website.

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/.