Why So Sensitive, FCC?

by Mike Wendy on October 19, 2016

The following letter regarding the FCC’s proposed Internet privacy rules was sent to the Commission by MediaFreedom yesterday:

October18, 2016

Marlene H. Dortch
Federal Communications Commission
445 12th St., SW
Washington, DC 20554

Re: In the Matter of Protecting Privacy of Customers of Broadband and Other Telecommunications Services, WC Docket No. 16-106

Dear Ms. Dortch:

As the Commission works to finalize its new rules governing ISP use of customer data, MediaFreedom urges the FCC to take pause and reconsider its latest plan. There are better, more flexible options to balance the interests of consumer privacy and competitive innovation than what the Commission has currently proposed. One such option favored by MediaFreedom would be for the FCC to more closely accord its privacy regime with that of the FTC. This model has worked for consumers and the Internet ecosystem. The FCC would do well to adopt and/or adapt to it.

The Chairman claims that his newly proposed Section 222 framework is “in harmony” with a more FTC-like approach toward addressing Internet privacy matters. But the Chairman’s new restrictions for “sensitive information,” which will require restrictive opt-in approvals for ISPs (only) to use customer data such as web history and app usage, bear little resemblance to the FTC’s process. Web history and app usage (among other information) represent the lifeblood of the Internet’s data economy. Competing in this space is all important. The FTC’s framework would allow use of web history and app usage by ISPs. But the FCC’s proposed opt-in rule effectively bans ISPs from using that data, thus foreclosing a viable marketplace option. Instead of opening competition, which is generally thought of as pro-consumer, the Chairman’s proposal actually limits it to the benefit of only one powerful constituency – billion-dollar, Silicon Valley edge companies, which will not be covered by the Commission’s privacy regime.

What is even more perplexing is that when viewed in the context of the FCC’s Open Internet Order / Net Neutrality rules, one is hard-pressed to understand how FCC prohibitions on ISP curation of their communications networks – i.e., prior-restraint proscriptions, bans on free association, and outright denial of editorial discretion – foster a sustainable growth environment for ISPs and the Internet as a whole. Quite simply, the FCC’s Net Neutrality rules have all but neutered these freedoms contrary to the Constitution and economics. By essentially stripping ISPs of their way to make a reasonable profit from their investments, the FCC is undermining the very “virtuous circle” policy it purports to advance through its Section 706 / Net Neutrality / Title II / Internet Privacy rules.

While other challenges abound in the proposed rules, we would like to reiterate our central recommendation made in our initial 16-106 comments and replies that the Commission should follow a more purely FTC-like case-by-case, opt-out framework for balancing privacy and marketplace interests. Though Congress could have directed the FCC to create a rulemaking in Section 222 to effectuate its text, a specific rule is not mandated by the Telecommunications Act of 1996. The short of this is that the FCC has a good amount of flexibility in tailoring its privacy protection process. Consequently, it strains credulity to accept the hyper-regulatory result presently proposed by the Commission to address the “problem” of ISP use of customer data. Other less restrictive, more competition-friendly avenues clearly exist. They must be taken.

To this end, MediaFreedom urges the FCC to reconsider its current proposal, bringing it truly in harmony with the FTC approach and marketplace expectations. This model has worked for decades, protecting consumers while also allowing competition and growth in the Internet ecosystem to flower.

Respectfully submitted,

Mike Wendy
President – MediaFreedom.org
Alexandria, VA


I think we should celebrate the bias we see in big media, as recently revealed in leaks of e-mails between numerous big media operatives and a certain 2016 presidential campaign.

We get it. Many there want that candidate to win. And, it appears they’re willing to go to great lengths to coordinate, help, tip the scale, offer counsel, sandbag the opposition, etc. to ambulance her across the finish line first.

We don’t often see that “private position” because it would pierce the veil of disinterest ostensibly needed in the practice of journalism. But heck, if they want to practice like this – like it’s a corrupt propaganda wing for a campaign or a party – great. That’s their schtick.  Of course, maybe it should be called PR instead of news / journalism. Still, I don’t have to consume it if I don’t like or trust it.

All platforms present curation challenges, which is uniquely the job of the owner of the press to address. Importantly, the First Amendment instructs Uncle Sam to stay out of those determinations.

Even if they’re biased. And, they always are.

They must be.

Bias – at its base, the ability of communications networks to favor some content over others – is a feature of the First Amendment, not a bug.



Telecom regulators around the world grapple with the concept of zero rating of broadband data and other forms of free Internet data. From an economic perspective, this question is not new. Finding ways to compensate content makers and stimulate adoption are as old as the media itself. This series looks at key questions for regulators to consider whether it is necessary and worthwhile to investigate offers for free data in the marketplace. It is based on a companion article explaining the questions, background, and reasoning from how to address from economic, competitive, and net neutrality perspectives. The conversation includes Roslyn Layton of Aalborg University (Copenhagen, Denmark) and Bronwyn Howell of Victoria University of Wellington (New Zealand), noted experts in the topic.

See the companion paper here.

A Guide to Zero Rating Offerings for Regulators, Adjudicators from Mike Wendy on Vimeo.


As parties filed briefs to request a rehearing of the FCC’s Open Internet / Net Neutrality Order this month, the anti-property group Free Press – which believes the FCC Order needs no further inquiry – made this rather blithe assertion:

…[Those asking for a rehearing] should give up their foolish quest to overturn rules that do no harm to their business… (Emphasis added)

Really? The Order, which hammers Depression-era, Title II utility regulation to “grow” networks, poses no harm to ISPs or the marketplace? Not even a smidgen?

Well, if that’s so, then why is this happening:

Free Press says it wants all these flavors of competition, but the rules it supports can't support that. Who'd thunk?

Free Press says it wants all these flavors of infrastructure competition, but the rules it promoted can’t support that.

  • Economist Hal Singer has observed that the 12 largest ISPs decreased their investment by 8% in the first six months of this year compared to the same time in 2014 (before Net Neutrality became law).
  • Seems Google is finding that wiring communities with fiber is a tough business.  To better address this (reality), it will start using a less costly hybrid fiber-wireless approach in the cherry-picked localities it has chosen to “wire” with broadband.  Reports have it that Google Fiber’s financial outlook appears so questionable that the fiber division has been ordered to halve its workforce down to 500 employees.
  • Major telcos / ISPs have been reducing their workforce at a pretty good clip since the Order went into effect. Sprint cut 8% of its workforce, or 2,500 workers, earlier this year. CenturyLink just announced it will soon layoff 3,500 employees. And, AT&T this week said it will let go of “an undisclosed number” of managers by year’s end. Other industry leaders, too, have hinted that similar reductions are in the offing.
  • Post enaction, instead of vigorous network infrastructure investment, we’ve seen either a mad dash to obtain content-oriented properties, or efforts to solidify content-oriented positions among the largest ISPs. Some recent examples: AT&T bought DirecTV for $9 billion; Verizon bought AOL for $4 billion, and intends to buy Yahoo for $5 billion; and, Charter acquired Time Warner for $65 billion.
  • This May, the FCC approved the purchase of MPVD behemoth Cablevision by French conglomerate Altice for $18 billion. There are a number of reasons why, but, as Dow Jones reported then, the company’s founder Chuck Dolan saw “certain industry developments, such as utility-style ‘net neutrality’ regulations…as negatives for the future, making it a good time to cash out…” (Emphasis added)
  • Finally, while others see it as a golden opportunity, both Sprint and Google have chosen not to participate in the FCC’s 600MHz spectrum auction, eschewing the (extremely limited) chance to obtain that “beachfront” wireless spectrum, which is ideal for mobile broadband services.

If Title II harms no one, then the infrastructure business should be off the hook with investment and activity.

Instead, it looks like the major players are doing just the opposite.

Of course, why wouldn’t they? With the confiscatory regime we have in this FCC, it makes sense to either duck-and-cover (especially on the regulated side), or put one’s assets where the possibility of higher returns have a stronger chance of being made (which, not surprisingly, tend to have fewer regulatory burdens). As to the latter, that’s the stuff that drives growth and innovation. Not Depression-era regulations that were only ever designed to protect stasis.

Who’da thunk?

Apparently, not Free Press or the FCC.

No harm there for the consumer and the marketplace, right?

Um, right.


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