Antitrust Not Sufficient for Net Neutrality, Say Brill, McSweeney
LAS VEGAS -- Antitrust regulation alone can't fully address net neutrality, said FTC Democratic Commissioners Julie Brill and Terrell McSweeny Wednesday on a CES panel. CEA Vice President-Regulatory Affairs Julie Kearney moderated the panel, which saw bipartisan agreement that the FTC's common-carrier exemption barring it from regulating telecom companies should be removed if broadband is deemed a Title II service. Speaking earlier in the day at the show, FCC Chairman Tom Wheeler confirmed that the agency is moving to deem broadband a Title II Communications Act service (see 1501070054). Other FCC commissioners also debated net neutrality on a panel (see 1501080032) just before the FTC one.
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Republican Trade Commissioner Maureen Ohlhausen said if Wheeler reclassifies broadband, she hopes he recommends an end to the FTC's common-carrier exemption. The FTC has recommended that the FTC Act be changed to that end. That broadband isn't now deemed a common-carrier service means the FTC can bring enforcement actions, Ohlhausen said, saying last year's U.S. Court of Appeals for the D.C. Circuit ruling against FCC net neutrality rules upheld the transparency requirement (see report in the Jan. 15, 2014, issue). McSweeny said she wants the FTC "to be deferential to the expertise of the FCC in how they’re conducting their business," but thinks the common-carrier exemption "is no longer reflective" of the market. "The FTC needs to be able to protect consumers wherever they are." Brill would be "very concerned" about antitrust authority alone overseeing net neutrality, she said. "It is not going to be able to take care of all of the problems that may arise in the net neutrality world."
There also was bipartisan agreement that data security likely will be the No. 1 issue affecting the FTC during this Congress. Ohlhausen expects Congress to examine if data security legislation can be passed: "Every day, you’re reading about a new data breach." She favors a "process-based approach" that "asks a company to consider what data do you have, how do you share it" and how it handles instances of unauthorized access. With her "primary focus" being on data security, McSweeny said there are "substantial risks." It's "something that is calling out for additional guidance," and she may support a process-based approach, said McSweeny. With a "wide range of security practices" for mobile devices, more discussion is needed, she said. "We need to continue to provide resources and help for people who are trying to address data security in their products."
Privacy may loom large in consumers' minds, panelists agreed. If they don't get "important information about how their [personal] information is used," they won't trust those products and use will decline, said Brill. She said she has been telling companies that "we do need to be thinking seriously about notice and choice privacy and transparency controls." Notice provisions will apply to the Internet of Things, she said. "The question is how they will apply." While an approach that tells consumers how their information will be used and gives them a chance to not have it shared "has an important place," Ohlhausen said a use-based approach may be more practical in some cases. "We need to think about how do we continue to provide some consumer protections" with a use-based approach when it might not be readily possible to give consumers notice and choice, which could mirror some current FTC authority, she said.
"We have all these bits of information that will be collected through all these devices,” which may be collected after a user provides personally identifiable information under a notice-and-choice model, Ohlhausen later told us. Such pieces of data can be used to personalize content and for other purposes, she said. A threshold would be if a substantial harm would result from using such personal information that already has been collected, said Ohlhausen.
The U.S. need not resemble Europe on privacy, Ohlhausen told the audience. She doesn't think more rules are needed, and sought "regulatory humility." Some say there are fewer rules on privacy in the U.S. than in Europe, but America has sector-specific rules governing things including consumer proprietary network information, she said. U.S. rules "are different" from Europe's, "but I don’t believe they are weaker." "To have a lot of rules that aren’t really enforced, I'm not sure that makes consumers any better off."
The FTC may finish by year's end a study on patents and patent assertion entities (PAE), said Brill in response to a question from Kearney, who said CEA was eager to see the report and is concerned about what she called "patent trolls." PAEs own patents and may sue those they believe infringe on them unless the users pay a fee. Finishing the FTC report in 2015 is "sort of an aspirational date," Brill said. "We’re very eager to do a good job that also is a quick job." Even without the study in hand, she said, Congress should look at patent issues, including giving recipients of PAE letters threatening legal action more information. Some letter recipients "are facing enormous litigation costs," and some legislators want to look at "these extreme costs being placed on consumers or small businesses," said Brill. "There is certainly room for movement now, in addition to looking at it after our study is out."