Results tagged “online advertising”

June 19, 2017 12:48 PM

Rep. Marsha Blackburn Exposes Hypocrisy on Broadband Privacy

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                                                     photo credit: Gage Skidmore Marsha Blackburn via photopin (license)

As noted previously, the FCC's "broadband privacy" rulemaking was really a shadow war, fought by third party advocacy groups funded by the Internet giants, like Google, Facebook, and others.  The recent legislative battle to repeal the FCC Privacy rules was no different.  Yet, within the past month, Rep. Marsha Blackburn (R-TN) "introduced the Balancing the Rights of Web Surfers Equally and Responsibly ("BROWSER") Act of 2017 to protect the online privacy of Americans."  In doing so, Blackburn has revealed what these previous "privacy" battles have been about: protecting the Internet giants' commercial advantage in the online advertising market. 

"Broadband Privacy" Is Not Online Privacy

Remember the flood of news stories fueled by interest-group-manufactured outrage about how Congress didn't care about your privacy online?   The ostensible basis for this outrage was that Congress used its authority under the 1996 Congressional Review Act to eliminate the Wheeler FCC's efforts to further advantage the biggest online advertisers (i.e., Google and Facebook) under the guise of "protecting" the privacy of ISP customers.  

Commonly omitted from those stories--and the legislative debate as well--was the fact that the FCC's "privacy" rules did not apply to consumers' information online, but only regulated the ISPs' use of this information (on a non-user-specific basis) to compete with Google/Facebook for online advertising revenue. Yet, at the first mention of using the CRA to repeal the FCC's ISP-specific rules, Rep. Frank Pallone (D-NJ) stated, "[c]onsumers should not have to worry about their financial, medical and other personal information begin shared without their permission." 

Likewise, after the Senate voted to repeal the Wheeler Commission's privacy rules (on March 23), Sen. Edward Markey (D-MA) issued this statement:

The American public wants us to strengthen privacy protections, not weaken them. We should not have to forgo our fundamental right to privacy just because our homes and phones are connected to the internet.

Reading these statements, one might reasonably assume that Congressman Pallone and Senator Markey care, generally, about protecting your personal information--regardless of who is collecting and selling that information.

However, after the CRA was adopted by the House, and the FCC's ISP-specific rules were repealed, Sen. Markey pivoted away from consumers, and their general online privacy, and toward his most important constituents--the Internet giants.  Rather than work toward legislation that would create online privacy rights for consumers, Markey instead declares his intention "to introduce legislation that directs the FCC to reinstate strong broadband privacy rules." (Emphasis added)  On April 6th, Sen. Markey did exactly what he promised, and introduced legislation that would merely direct the FCC to impose its prior regulations on ISPs. 

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The PR Campaign: Chicken-Little Meets Michael Corleone

As FCC Chairman Pai noted, the FCC's 2015 rules were driven by "hypothetical harms and hysterical prophecies of doom."  This was fueled by the Internet giants that fought the CRA legislation by using their surrogate groups to successfully plant similarly-exaggerated, chicken-little stories through friendly media outlets, such as Motherboard and DSL Reports.   

The media frenzy they created essentially promoted hysterical speculation without regard for facts.  My personal favorite is "Internet Activists Plot 2018 Electoral Revenge Against Republican Sellouts," from Motherboard.  The article, cites the "usual" sources (the tech giants' third party advocacy groups), and prominently features a picture of House Communications & Technology Subcommittee Chair Marsha Blackburn (R-TN) as the putative target for this "electoral revenge" (which subsequently occurred when Silicon Valley-funded Fight for the Future put up a misleading billboard in Rep. Blackburn's district).

Like the Silicon Valley advocacy groups he loves to cite, Motherboard tech policy contributor, Sam Gustin really doesn't like Rep. Blackburn.  Whether through a subconscious desire to appeal to the sexist bias of its Silicon Valley idols, or purely unintentional, Motherboard's privacy articles provide a good illustration of what the NY Times calls "sexist political criticism" that uniquely plagues strong female politicians, through its practice of always introducing Blackburn by immediately putting her character/competency in question.

For example, in this article the Senate sponsor of the CRA repeal of the FCC broadband privacy rules, Sen. Jeff Flake (R-AZ) is introduced simply as "the Arizona Republican."  Rep. Blackburn, however, is introduced as "the Tennessee Republican who has received colossal sums of campaign cash from the telecom industry."  The reader is left to imply that Rep. Blackburn--as opposed to Sen. Flake--is either corrupt, or only interested in furthering her personal ambition; though she and Sen. Flake are described as doing the exact same thing.

Haters Gonna Hate

When Rep. Marsha Blackburn introduced the BROWSER Act (that would re-apply the FCC's rules to ISPs as well as the Internet giants), one would have expected the self-proclaimed "consumer online privacy" groups to immediately declare victory.  None of the Internet giants' big 3rd party advocacy groups (EFF, Free Press, New America's OTI) has even commented on privacy since Blackburn introduced her bill--except for this press release by Google-supported Public Knowledge, to "clarify" that it "did not support" Blackburn's bill, as a Boston Globe article had reported.  If you hadn't noticed so far, this issue was never really about consumers.  

Rather, as the Washington Post's Brian Fung explains, the issue was always about politics and money.  Ironically, to improve consumers' privacy rights online would be for Democrats to cede the privacy issue for the election.  Worse still, it would put Democrats on the wrong side of their core "Silicon Valley" constituency; the tech giants. Thus, Rep. Frank Pallone seems to have moved past his concerns about consumers' personal information, given that Rep. Blackburn has exactly 0 Democratic co-sponsors of her Browser Act.

Consequently, the tech giants' media outlets--so aggressively pro-privacy when it was just an ISP/Republican issue--have been largely silent on Blackburn's bill.  Motherboard's Gustin has written nothing on privacy since his "plotting revenge" article.  DSL Reports' Karl Bode--with his characteristic tin-foil hat logic (see, e.g., "AT&T Fools Entire Media With Giant Gigabit Fiber Bluff" arguing that AT&T's ultra-fast "Gigapower" Internet service is a PR hoax)--faults Blackburn for introducing a bill that "she knows won't pass."   Advocate journalist Bode quickly concludes that Blackburn, of course, knows that her bill won't pass because--back to Gustin's only biographical point--she's in the pocket of ISPs, and they won't like the bill, because they...and her...are just, you know, evil.

What Is Privacy Worth?

Google, and Facebook, et al., were mad enough, when Congress eliminated the regulatory barriers to entry that the Wheeler FCC had imposed on ISPs, but to give consumers any  control over the heretofore unfettered ability of the online ad giants to use and monetize personal consumer data was more than they could handle. So, the web giants now argue, according to the Business Insider, that if consumers are in control of their privacy, "Facebook won't be free."  

This statement calls to mind the laughably-superficial reasoning, by Public Knowledge President Gene Kimmelman, as to why the proposed AT&T/Time Warner combination should be regarded with greater suspicion than other firms also competing for consumers' leisure attention, like the Internet platform giants.  Kimmelman dismisses the Internet giants as "competitors" to traditional content, because "none of them charges me $200/month to access their online content." (See, 12/07/16 Senate Judiciary Committee Hearing  at 2:21:50-2:23:30)

Sen. Jeff Flake perceptively identifies the flaw in this logic, asking witness Mark Cuban if it matters who is actually "paying" when considering whether firms compete in the same market for consumers' attention.  Cuban succinctly observes that, "if you're not paying for content, you are the content." Hearing video at 2:23:44 (emphasis added).  Cuban's point is that online consumers are giving the platform giants something these companies can readily exchange for cash--their personal information. 

The Internet giants' argument (and that of their surrogate groups) rests on the notion that consumers' personal information is of little value, and therefore the content that the consumer receives from the platform giants is a great deal.  Yet, if the Internet giants' services are indeed valued more by consumers than the consumers value their own privacy, then what's the harm in letting consumers decide how they wish to pay--in terms of  cash or personal data--for these services?  

The beauty of Blackburn's bill is that it gives consumers the right to make that decision, and for this she deserves more credit than she's gotten.  Let's hope that at least some Democrats agree this is a choice that should be returned to consumers.


November 18, 2016 3:37 PM

Wheeler's FCC: Decisionmaking by Political Favoritism

An independent, "expert agency," like the FCC, is at its most effective when it is focused on keeping the industries it regulates running smoothly, in the interests of consumers, by filling policy "potholes."  On the other hand, nothing incites partisan rancor like addressing "problems" that look a lot more like ideological crusades, rather than good faith efforts to address genuine consumer grievances.  

Under Chairman Tom Wheeler, the FCC became a battlefield for "proxy wars" pitting business interests against each other in the name of ideology--that, itself, was a disguise for transparent political favoritism.  These battles were fought not by the traditional strength of evidence and argument, but instead through PR campaigns, produced social media outrage, and 3rd party Hessians claiming the "public" or "progressive" interest mantle. This approach has devalued the deliberative process and the role of  the majority and minority commissioners in driving consensus at the expert agency.

A Regulatory "Pothole"

A good example of a regulatory "pothole" is the agency's response to rapid adoption of VoIP technology by consumers in the early 2000's.  Though VoIP calls were a cheaper substitute for PSTN calls in most respects, because VoIP calls didn't use the PSTN, consumers could not access E911 service.  

After some well-publicized tragedies, the FCC quickly focused on this specific issue (out of a larger number of issues) in its already-pending 2004 VoIP NPRM.  Acting quickly, and unanimously, the FCC issued an Order in 2005, adopting some interim measures to: 1) better inform consumers of the limits of nomadic VoIP services, and 2) to ensure that "interconnected" VoIP providers quickly became able to offer E911 service to their customers by terminating calls through CLECs.  

But, if the VoIP 911 matter was an example of interested stakeholders (carriers and public safety/law enforcement) forthrightly putting their interests on the table, and the FCC balancing those interests to find the best solution for consumers, the FCC's recent Broadband Privacy Order provides a good illustration of the exact opposite type of proceeding. 

Broadband Privacy ≠ Internet Privacy

The Commission's classification of broadband Internet access service as a "telecommunications service," in its 2015 Open Internet Order, in turn, allowed the FCC to define what information, with respect to this service, it would define as "customer proprietary network information" ("CPNI") under Section 222 of the Act.  Section 222 defines CPNI as, essentially, information that the service provider knows by virtue of providing a telecom service to a customer, and requires the carrier to obtain customer permission before selling the customer's CPNI to a third party.  

The Interent Service Providers ("ISPs") argued that consumer Internet usage information is not information uniquely held by the ISP, in the way that CPNI was uniquely in possession of a telecommunications carrier in 1996 (when Congress wrote the law).  See, e.g., AT&T Comments pp.9-30.  Rather, the primary market for consumers' internet usage information is the online advertising market. , in which the ISPs do not possess sufficient unique, or valuable, consumer information to even possess a measurable share of the market.

Indeed, consumer Internet usage information is "monetized" in the online advertising market--a market in which almost 2/3's of all revenue, and 90% of growth since 1Q 2015, is controlled by Google and Facebook!  Significantly, the online advertising market is also one in which no ISP even possess a measurable share of the market.  Not surprisingly, according to Princeton University researchers, Google and Facebook account for all of the top 10 third party trackers on the Web

 The ISPs explained that, despite the FCC's rhetoric in its NPRM about consumer "privacy,"

[n]o matter what the Commission does in this proceeding, major actors in the Internet ecosystem will continue to track and use all of the same information the proposed rules would keep ISPs from efficiently tracking and using.

See, e.g., AT&T Comments at p. 35 (emphasis added).  Thus, they argued, the FCC's proposed rules would not enhance consumer privacy, but merely foreclose competition in the online advertising market.

Party Participation vs. Proxy Participation

Given the competitive significance of the FCC's proposed rules, you might think the record in this proceeding would pit edge providers and ISPs against each other, with each side trying to show why the ISPs do/don't possess some unique information about their customers that is worthy of rules protecting its disclosure.  If this was your guess, you'd be half right; the ISPs definitely showed up with their best information/arguments.  

On the other side, though, neither Google/Alphabet, nor Facebook appears in any search of this docket.  Yet, the FCC had no trouble finding support in the record for its contention  that it is the ISPs from whom consumers' information needed protection, and not the two dominant firms in the business of collecting and selling that information.  If you look through the Order, you'll see that a majority of the support the FCC cites is supplied by parties with ties to Google, Facebook, or other edge providers.

For example, the Electronic Frontier Foundation (cited 45 times in the Order) is a frequent advocate for, and recipient of funding from, both Google and Facebook.  We've discussed Public Knowledge (56 cites) here before, but it and other groups that the Commission cites frequently, like the Center for Democracy & Technology (61 cites),  and the New America Foundation Open Technology Institute (72 cites) are also supported by Google.  The Commission also cited a paper filed by Upturn, which is a legal/policy advocacy group, whose involvement was sponsored by the Media Democracy Fund (supported by edge providers Microsoft and Tumblr.) 

Even groups with names as innocuous as Consumer Federation of America/California, Consumer Watchdog, and National Consumers League are groups for which Google discloses support.  Academics, as well, may have more than an "academic" interest.

Princeton University Professor, Nick Feamster comments, but doesn't disclose that he has received $1.6  million from Google over the past 5 years.  Other Princeton faculty members filed comments similar to Feamster's.  And, in May, Princeton's Center for Information Technology Policy, of which Feamster is Acting Director, was a co-sponsor, along with Google-funded Center for Democracy and Technology, of a policy conference on the topic of "broadband privacy."  The Google Transparency Project notes that 5 of the 7 panelists at the event had received support from Google.   

You Need Not Be Present to Win

The reasons behind some parties' participation doesn't mean that their advocacy/arguments were wrong, but the FCC woud have benefited more from a direct exchange between both sides with first-hand knowledge of the consumer information they track.  And, why weren't Google and Facebook in the record, making these points, themselves? 

One reason could have been that more information about these firms' dominance in online advertising came out over the summer, including a paper by one of the Princeton academics in this proceeding, noting that Google and Facebook controlled all the top 10 third-party trackers.  Another reason for Google's absence may have been that it went back on its self-imposed ban on using consumers' personally-identifiable information in its web tracking, according to this ProPublica report

Would it have been embarrassing for the leading edge providers to ask the government for protection from competition?  Maybe, but consumers deserved the ability to transparently see which side--between two interested parties--the government was choosing, and why.  

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The FCC's leadership has been willing to undertake ideological crusades for the sole purpose of advantaging politically-favored firms.  The transparent nature of the FCC's actions ensure that they will quickly be undone by a subsequent Commission.  The legacy of such leadership leaves only acrimony among the majority of Commissioners trying to put consumers first.  Hopefully, the next FCC will  learn from history.