Federal regulators have approved new rules that will curb the ability of Internet service providers to collect data about users — including app usage, browsing history, mobile location data and more — for advertising purposes. The decision essentially reverts the current “opt-out” policy to opt-in, where users would need to grant express permission to ISPs.
The rules passed in a 3-2 vote by the Federal Communications Commission this morning. "It's the consumers' information," said FCC Chairman Tom Wheeler. "How it is used should be the consumers' choice. Not the choice of some corporate algorithm."
The agency said it created the rules after it reclassified broadband last year into a service like a utility. Chairman Tom Wheeler argued that while it’s true the FTC doesn't have regulatory authority over ISPs, now that they are classified as "common carriers," they should have privacy rules similar to those imposed on phone companies.
ISPs lobbied against these rules claiming they would deny broadband providers the same opportunity Internet companies have to participate in the digital advertising market. But Wheeler sees things differently: “The network sees everything I do. A website sees what I do on that website. If I don't like the privacy practices of a website, I can say I don't want to go to that website. But I don't really have too much choice in my broadband provider.”
The move is a blow to the pending mergers between Verizon and Yahoo as well as AT&T and Time Warner, seeing those deals are in part built around the opportunity to break into the targeted-advertising market to create new revenue streams.