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Congress Moves to Strike Internet Privacy Rules From Obama Era

Republican lawmakers and the new chairman of the F.C.C., Ajit Pai, have said the privacy rules were onerous and unfairly strapped regulations on telecom carriers, but not on web companies such as Facebook and Google that also provide access to online content.

“It is unnecessary, confusing and adds another innovation-stifling regulation,” Senator Jeff Flake, Republican of Arizona, said this month when he introduced the resolution to overturn the rules using the Congressional Review Act procedure that lets Congress overrule new agency regulations.

The Senate’s vote was a victory for giant telecommunications and cable companies. The F.C.C. chairman under the Obama administration, Tom Wheeler, had declared that broadband would be regulated more heavily, by categorizing the service in the same regulatory bucket as telephone services, which are viewed as utilities.

That move acknowledged the importance of the internet for communications, education, work and commerce and the need to protect online users, Mr. Wheeler had said.

Under the internet privacy rules that Mr. Wheeler passed, apart from broadband providers having to ask permission to track browsing and other online activities of a user, the companies were also required to use “reasonable measures” to secure consumer data against hackers. The privacy rules were scheduled to go into effect at the end of this year

Broadband providers had balked and ramped up lobbying against the rules. Comcast and other broadband providers created the lobbying group 21st Century Privacy Coalition, led by a former Federal Trade Commission chairman, Jon Leibowitz, to defeat the broadband privacy rules.

“We appreciate today’s Senate action to repeal unwarranted F.C.C. rules that deny consumers consistent privacy protection online and violate competitive neutrality,” the cable industry lobby group, NCTA-The Internet & Television Association, said in a statement on Thursday.

With Republicans now in charge across the government, AT&T and Comcast are also poised to benefit from further deregulation. Since the presidential election, the companies have pushed the new Republican-led F.C.C., lawmakers and the White House to roll back net neutrality, the requirement that broadband providers give equal access to all content on the internet, saying the rules hamper their ability to invest in new networks and jobs.

The F.C.C. chairman, Mr. Pai, has also talked with Republican allies in Congress about privacy and broadband classification. Mr. Pai has already chipped away at more than a dozen regulations, including aspects of net neutrality and the program, known as Lifeline, that provides subsidies for broadband users in low-income households.

Consumer groups warned that internet users would suffer from the changes. The Federal Trade Commission, the consumer protection agency, is barred from overseeing broadband providers, so without the F.C.C. privacy rules, the federal government will be a weaker watchdog over internet privacy, supporters of the regulations said.

“Senate Republicans just made it easier for Americans’ sensitive information about their health, finances and families to be used, shared and sold to the highest bidder without their permission,” said Senator Edward J. Markey, Democrat of Massachusetts.

Democrats had taken to the Senate floor on Wednesday and Thursday to warn that without the rules, broadband providers will now have free range to peer into their customers’ lives. A company like AT&T or Sprint can tell the time people wake up by when they check the clock on their phone, or see where users go to lunch or whom they visit. By tracking a user’s browsing of medical websites, a carrier can also determine if that person might have an illness.

The Senate’s action also signaled a philosophical shift on tech regulation. Lawmakers and Mr. Pai have said regulations should be created only when there is proof of harmful activity. They also argue that the telecom industry competes with internet firms such as Facebook and Google for access to online content, so any rules should also include those companies. Republicans have said the F.T.C. should be the watchdog for all online privacy.

But Democratic regulators have said the key difference is that consumers do not have many choices for broadband access, which makes them vulnerable to data collection by internet service providers.

“Subscribers have little or no competitive choice as to which provider to use,” said Terrell McSweeny, a Democratic commissioner of the F.T.C. Yet broadband providers “know our identities, and their position gives them the technical capacity to surveil users in ways that others cannot.”

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Broadband Providers Will Need Permission to Collect Private Data

Privacy groups applauded the new rules, which they said brought the United States more in line with European nations that have moved aggressively to protect their citizens’ online privacy.

“For the first time, the public will be guaranteed that when they use broadband to connect to the internet, whether on a mobile device or personal computer, they will have the ability to decide whether and how much of their information can be gathered,” said Jeffrey Chester, executive director of the Center for Digital Democracy.

The outcry from industries that depend on online user data was also swift. Cable lobbying groups called the rules a result of “regulatory opportunism,” while the Association of National Advertisers labeled the regulations “unprecedented, misguided, counterproductive, and potentially extremely harmful.”

Even with the new rules, online privacy remains tricky. Many people have been lackadaisical about what information they give up online when they register for websites or digital services. The convenience of free services like maps also appeals to people, even though they give companies access to personal information. And some people unknowingly forgo their privacy when allowing apps or other services to track their location or follow their browsing across websites.

The F.C.C. rules also have their limits. Online ad juggernauts, including Google, Facebook and other web companies, are not subject to the new regulations. The F.C.C. does not have jurisdiction over web companies. Those companies are instead required to follow general consumer protection rules enforced by the Federal Trade Commission. That means Google does not have to explicitly ask people permission first to gather web browsing habits, for example.

AT&T, Verizon and Comcast will also still be able to gather consumers’ digital data, though not as easily as before. The F.C.C. rules apply only to their broadband businesses. That would mean data from the habits of AT&T’s wireless and home broadband customers would be subject to the regulations, but not data about AT&T’s DirecTV users or users of the HBO Now app, which would come with the merger with Time Warner, for example.

The companies also have other ways to collect information about people, including the purchase of data from brokers.

AT&T, which has criticized the privacy regulations for internet service providers, would not comment on how the rules would affect its proposed purchase of Time Warner. But it emphasized the benefits of ads that allow for free and cheaper web services.

“At the end of the day, consumers desire services which shift costs away from them and toward advertisers,” said Robert W. Quinn Jr., AT&T’s senior executive vice president for external and legislative affairs. “We will look at the specifics of today’s action, but it would appear on its face to inhibit that shift of lower costs for consumers by imposing a different set of rules on” internet service providers.

Comcast said that the rules were not needed and that the F.C.C. did not prove that broadband providers were hurting consumers.

For over two decades, internet service providers “and all other internet companies have operated under the F.T.C.’s privacy regime and, during that time, the internet thrived; consumer privacy was protected,” said David L. Cohen, Comcast’s senior executive vice president.

Major broadband providers will have about one year to make the changes required by the new rules; the companies must notify users of their new privacy options in ways like email or dialogue boxes on websites. After the rules are in effect, broadband providers will immediately stop collecting what the F.C.C. deems sensitive data, including Social Security numbers and health data, unless a customer gives permission.

The new rules are among a set of last-ditch moves by Mr. Wheeler to make the F.C.C. a stronger watchdog over the broadband industry. Since he was appointed F.C.C. chairman in 2013, he has tried to open the cable box market in an effort to promote streaming videos, among other actions. Mr. Wheeler is entering what are probably the last few months of his tenure at the agency, as he is not expected to be reappointed by whoever becomes the next president.

The F.C.C. proposed the broadband privacy rules in March. That followed the reclassification of broadband last year into a utilitylike service, a move that required broadband to have privacy rules similar to those imposed on phone companies.

Once the rules were proposed, the F.C.C. immediately faced a backlash. Cable and telecom companies created a lobbying group called the 21st Century Privacy Coalition to fight off the regulations. The group is led by Washington heavyweights like Jon Leibowitz, the former chairman of the F.T.C., and former Representative Mary Bono, Republican of California. Henry A. Waxman, former chairman of the House Energy & Commerce Committee and a Democrat, was also hired by the 21st Century Privacy Coalition and wrote an op-ed article in The Hill to protest the rules.

Even some web companies protested the proposed rules. Google said in comments filed to the F.C.C. this month that the regulations should not include web browsing, because that does not necessarily include sensitive personal information.

“Consumers benefit from responsible online advertising, individualized content, and product improvements based on browsing information,” wrote Austin Schlick, Google’s director of communications law.

In the end, the objections had little effect on the F.C.C.

“Hopefully, this is the end of what has been the race to the bottom for online privacy, and hopefully the beginning of a race to the top,” said Harold Feld, senior vice president at Public Knowledge, a nonprofit public interest group.

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