Last Thursday the U.S. Senate voted 50 to 48 to dismantle rules enforcing internet privacy protections, an outcome that is expected to be repeated (and therefore made into law) when the House of Representatives votes this week. The existing rules were created at the end of President Obama’s second term, in October 2016, under former FCC (Federal Communications Commission, the main regulatory agency) chairman Tom Wheeler, and were scheduled to go into effect at the end of 2017.

Under the new rules, operators will not have to ask users’ permission to track their browsing habits, and will be allowed to share and sell data about consumers to retail companies and mobile and web advertising providers. They will also be freed from the mandate to take “reasonable measures” to guard consumer data against hacking, as they would have been required to do under the Wheeler rules.

Tarifica’s Take

These regulatory changes, which are almost certain to go through, are in line with the Trump administration’s aggressive anti-regulation approach, as spearheaded by the new chairman of the FCC, Ajit Pai, a Trump appointee. Pai has argued that the existing rules are unfair to operators, which would be regulated while internet companies such as Google and Facebook would not. The new rules would level the playing field. Operators would benefit by monetizing customer data and metadata, deriving revenue directly from selling it to commercial entities.

While this will be good news to operators, a note of caution should be sounded. Consumer advocate and privacy groups have decried the new rules, and operators should be aware of the need to balance revenue opportunities and business freedoms with customer satisfaction. It has been shown that customers may not mind having at least some of their data or metadata shared, as long as there is transparency about it. On the other hand, if customers feel that something secretive is going on, they will be much less receptive. Taking the new regulatory climate as carte blanche to disregard customer sensibilities would be a big mistake.