FTC Launches Probe Into Telecom Privacy Issues. But Whether They'll Act Is Another Matter Entirely

from the words-are-but-wind dept

This week the FTC announced that it would be launching a broad privacy investigation into a sector that's somehow been forgotten during our collective, justified obsession with Facebook: telecom. According to the full FTC announcement, the agency will be collecting data from all manner of broadband providers and wireless carriers to take a look at how these companies "collect, retain, use, and disclose information about consumers and their devices." From the announcement:

"The FTC is initiating this study to better understand Internet service providers’ privacy practices in light of the evolution of telecommunications companies into vertically integrated platforms that also provide advertising-supported content. Under current law, the FTC has the ability to enforce against unfair and deceptive practices involving Internet service providers."

The problem, of course, is that an inquiry doesn't necessarily mean the agency will actually do anything about the problems. The FTC's authority over telecom is limited, and is historically confined to whether something can clearly be proven to be "unfair and deceptive" under the FTC Act. That was the entire reason that telecom lobbyists convinced the Trump administration to effectively obliterate tailored FCC authority over telecom, and shovel it to an FTC that critics (like former FCC boss Tom Wheeler) say is already over-extended and lacks the authority to adequately police broadband.

When it comes to telecom, the FTC's "unfair and deceptive" standard usually falls short.

In the field of net neutrality, for example, telecom operators have long hidden their unfair, anti-competitive behavior behind claims that it was essential for the "health and integrity of the network." Like when AT&T blocked Facetime on iPhones just because it wanted to force folks on to more expensive wireless plans. Or when Comcast, AT&T, and Verizon began implementing arbitrary and unnecessary usage caps and overage fees to "manage congestion" they were later forced to admit didn't exist. Restrictions that don't apply to their own services, but apply to customers if they use competing services like Netflix.

Unlike Facebook, telecom has spent decades lobbying DC and tailoring its most deceptive and anti-competitive ideas to carefully skirt the line on regulatory scrutiny. And the FTC, tightly constrained by its mandate over telecom, hasn't done a particularly good job policing it. Hopefully this inquiry signals a shift in that tendency, but an inquiry shouldn't be conflated with substantive action -- until there's actual, substantive action. That said, there's so much we don't know about what your ISP and wireless carrier is doing with your data that shining a brighter spotlight on the problem should prove beneficial.

While Facebook has received well deserved heat for its bottomless privacy scandals, the recent fixation on "big tech" has obscured the behavior of telecom companies and their own legendarily bad behavior on the privacy front.

This is a sector that has charged users more for privacy, pondered giving worse customer service to users with lower credit scores, sold private user location data to any nitwit they could find, and have even been busted covertly modifying user data packets to track user behavior online -- without disclosing it or providing opt out tools. Telecom's bad behavior is every bit as terrible as the Facebook scandals that have justly captured nationwide attention.

Yet despite being pioneers in the field of terrible privacy practices and monopoly power, telecom is often somehow excluded in conversations about "fixing big tech," privacy, and even monopoly power. Some of that's by design. As we've noted previously, telecom lobbyists have been spending the last few years piling on the vilification of big tech, urging the government to regulate the Silicon Valley giants telecom wants to compete with in the online ad space, while hoping you'll ignore that the sector just got done obliterating government oversight of its own, equally problematic business practices.

Not only did the telecom sector convince the FCC to effectively neuter itself, it convinced Congress to kill off modest FCC privacy rules before they could take effect in March of 2017. Those rules simply required that ISPs be transparent about the kind of data they're collecting and selling and provide an easy way to opt out of more sensitive (financial, location) data collection. Those rules would have gone a long way in protecting consumers from the ugly location data scandals that have plagued wireless carriers in recent years.

Some FTC Commissioners seem aware that to police telecom, you'll need both the FTC and FCC working in functional concert:

Yet somehow, there's still widespread belief that blind deregulation of predatory telecom monopolies leads to Utopian outcomes. But absent of government oversight or competition, companies like Comcast and AT&T don't magically begin innovating or behaving nicely. They instead double down on even worse behavior. That's been proven time and time again by telecom history and Comcast's very existence, yet it's a lesson we culturally refuse to learn as we approve merger after merger, gut government oversight, then stand around dumbfounded as to why the broadband sector is such a monumental shitshow.

In the conversations about "big tech," much of this reality has been lost. Even among the well-intentioned like Elizabeth Warren, you'll notice that telecom receives nary a mention. But with the FCC's authority over ISPs demolished by lobbyists, antitrust enforcement constantly falling flat on its face, and limited competition, telecom's domination of both the content and the conduit (AT&T/Time Warner, Comcast/NBC Universal) poses unique problems that shouldn't be forgotten in the quest to protect competition, the open internet, and consumer privacy.

Telecom's privacy dysfunction and anti-competitive tendencies touch every layer of the internet, and these companies have every intention of following Facebook and Google's lead in the online ad space. If you're really interested in "fixing tech" and shoring up consumer privacy, forgetting about the natural monopolies at the heart of the internet is a monumental mistake.

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Filed Under: fcc, ftc, privacy, telcos
Companies: at&t, verizon