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  • Is Title II The End Of The Road For Free Apps?

    The Federal Communications Commission could extend its newfound regulatory control over the Internet to data and privacy issues, potentially threatening the availability of free online content.

    A provision contained in Title II of the Communications Act, which the FCC recently used to reclassify broadband providers as public utilities, could limit the ability of Internet service providers (ISP’s) to produce the targeted online advertising that is responsible for many free web services, such as mobile apps and social media. (RELATED: FCC Votes in Favor of Net Neutrality)

    At a recent event hosted by the Federal Communications Bar Association, FCC Enforcement Bureau Chief Travis LeBlanc “said the commission soon will begin to consider the ‘scope’ of the neutrality order’s privacy rules for ISP’s,” particularly with regard to the use of consumer data to produce targeted online advertising, reports Washington Internet Daily.

    “We have to think hard about the privacy regime for a converging world,” LeBlanc said, pointing out that Google plans to use consumer data from its search engine and other offerings to produce targeted ads for its upcoming TV service, and asking the audience to “consider the implications of having the same targeted ads on Gmail and Google TV.”

    “The big takeaway here is that the FCC, by reclassifying Title II, is putting a huge cloud of uncertainty over the entire online advertising industry and the free content it funds,” Net Competition Chairman Scott Cleland told The Daily Caller News Foundation, adding, “Title II is an enormous risk to the online advertising industry, period.” (RELATED: Congress Questions FCC Chief About ‘Secret Meetings’ With White House Over Net Neutrality)

    At issue is Section 222 of Title II, which “requires telecommunications carriers to not use Customer Proprietary Network Information (CPNI) … for marketing unless they have the express consent of the user,” Cleland said, explaining that online advertisers would face the same restriction should courts decide they are common carriers subject to Title II.

    “It’s clear that ISP’s have to get permission,” he noted, but “what the FCC and courts will be deciding going forward is if it captures everyone else. Online advertisers for years have been taking this sensitive private data and using it without permission.”

    Cleland indicated that privacy protections could be one of the few bright spots of Title II, saying, “What good is Section 222 if the world can abuse it, and only ISPs have to abide by it? This is probably an unintended consequence, but it’s still a legal consequence, and under the Constitution, people have equal protection under the law.”

    TechFreedom President Berin Szoka, however, disagreed with that assessment, telling TheDCNF that, “targeted advertising is what drives the entire free Internet,” so any regulations limiting its use would be harmful to consumers of online content. (RELATED: FCC Commissioner Demolishes Net’s New Rules, in 3 Quick Points)

    “It will have real costs, and some of those costs may be privacy costs, actually,” he added, because “what you end up doing is perversely creating a system where an advertiser has to track you more in order to track your consent.”

    “At the end of the day, the reason online advertising is so important is that this is the alternative to government funding of media,” Szoka said, pointing out that in Europe, government funding has generally led to government control.

    “Advertising is essential to the free and independent media,” he asserted, but the industry “can’t continue with the ‘dumb’ and untargeted model it formerly had.”

    Follow Peter Fricke on Twitter

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