Sohn Says FCC Would Lose Badly if It Tried to Regulate Internet Edge Privacy
The FCC "definitely didn't have the authority" to regulate Internet edge privacy, said Gigi Sohn, a former counselor to previous Chairman Tom Wheeler and now a government fellow at Open Society Foundations. She called it "ironic" that Republican commissioners -- in opposing broadband privacy rules that targeted ISPs -- warned that the FCC might eventually regulate edge privacy practices. She also disputed the views of others who said the FCC could use its Telecom Act Section 706 authority to regulate the edge. "We'd get thrown out on our behinds if we did that," she said at the State of the Net conference Monday, the same day Ajit Pai said he was designated chairman (see 1701230058). "We regulate networks, not edge," she added. "Networks are our jurisdictional sweet spot."
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Sohn said web browsing was the biggest debate during the FCC privacy rulemaking, and specifically whether it should be considered "sensitive," requiring ISPs to give consumers "opt-in" rights, or "nonsensitive," allowing ISPs to follow "opt-out" procedures that put the onus on consumers. Opt-in, which the FCC adopted, "seemed to be a bridge too far for ISPs," said Sohn, who expects the new Republican-run commission to roll back that rule "at a minimum." That wouldn't make her happy, she said, but "it would be better than rolling back the whole thing." FCC Republicans have talked about repealing the agency's reclassification of broadband authority under Title II of the Communications Act, on which the privacy rules were based.
The FCC shouldn't have required ISPs to have opt-in for web browsing, said Larry Downes, project director at Georgetown University Center for Business and Public Policy, one of three other speakers on the panel. He said it's problematic that both the FTC and FCC are regulating the internet privacy ecosystem, even if their protections get harmonized. He said he would prefer to see FTC oversight of Internet privacy, but said a 2016 ruling of the 9th U.S. Circuit Court of Appeals in favor of AT&T further undermined FTC jurisdiction over common carrier activity (see 1608290032). Steptoe & Johnson tech lawyer Markham Erickson said dual agency Internet privacy jurisdiction was "not very helpful," and agreed the 9th Circuit panel ruling was a hurdle.
Trump FCC landing team member Mark Jamison said the problem is that as long as the broadband is classified by the FCC as a Title II service under current law, it has exclusive authority over broadband ISPs as common carriers. Jamison is also director of the University of Florida's Public Utility Research Center.
Congress should repeal the statutory bar on FTC regulation of common carriers, said Sohn. She said she disagrees that consumers are confused by having both the FTC and FCC engaged in Internet privacy oversight. She said other sectors such as banking and aviation have various regulatory authorities, and communications is also critical.
Jamison, Sohn and others agreed the FCC needs more engineers and economists and fewer attorneys. "We have way too many lawyers," she said. "It's bureaucracy, more bureaucracy." She said it's "extremely frustrating" that the commission had to rely on outside experts as much as it did.
Jamison earlier in the day said the FCC shouldn't be bipartisan, but not for the reasons people might imagine. "It’s not because, as our former president famously boasted, 'Elections have consequences,' and now Republicans are in charge. It’s also not because the agency should just do the right thing, regardless of who disagrees," he wrote in a blog post. "It's because in an independent regulatory agency like the [FCC], political alliances should be left at the door. That has not been the case the past few years and now is the time for change."
The agency can't be apolitical, but it "needs to be close," Jamison wrote. "How can the agency regain its footing? The work will begin with the three remaining commissioners, each of whom has expressed a dedication to ensuring that the agency has the right focus and relationships. As former chairman Reed Hundt did, they will need to protect the staff from political pressures and enable the staff to perform expert analyses according to their abilities."
Jamison said the commission should favor technical over political analysis. "Staff tilts heavily towards lawyers, which outnumber economists about ten to one and outnumber engineers about two to one. The practical effect of this is that legal and political mindsets dominate the staff, no matter how bright and talented the attorneys might be. Furthermore the agency is organized along outdated industry lines -- wireline, wireless, and media -- a structure that promotes a silo mentality, and facilitates capture by particular industry players and law firms," he wrote. "An expert FCC would be organized along bureaus of economics, engineering, etc. rather than outdated industry silos. Such a change would raise the profile of expert analysis, providing the commissioners with more diverse staff opinions and greater substance for decision-making."
He also urged Congress to repurpose the FCC mission. "A statutory change should direct the agency to focus on managing radio spectrum and, if needed, subsidies for broadband in rural, high cost areas where affordability is an issue," he wrote. "It should restrict the agency from engaging in ex ante regulation except in the case of actual monopoly, and when a rigorous cost-benefit analysis, followed up with evaluations, demonstrates that ex ante regulation improves outcomes for customers. Absent a statutory change, the commission itself can use its authority to forebear from regulation wherever there is competition and means test its subsidies."