New FCC Chairman Moves to Roll Back Privacy Rules for Internet Service Providers

Ever since the presidential election and the replacement of former Obama administration FCC Chairman Tom Wheeler with former Republican commissioner and now Chairman Ajit Pai, communications industry and privacy policy observers of all stripes have expected the new FCC to roll back much or all of the agency’s pre-election (October 2016) privacy Order and its sweeping new rules for Internet service providers (ISPs) and traditional telecommunications carriers alike.

In particular, many of the new Order’s data security provisions had been scheduled to take effect on March 2, 2017.  As minority commissioners last October, Chairman Pai and fellow Republican commissioner Mike O’Rielly strongly dissented to the new privacy regime, which passed on a strict party-line vote.

On February 24, the new FCC began to answer this question, issuing the following statement:

"Chairman Pai believes that the best way to protect the online privacy of American consumers is through a comprehensive and uniform regulatory framework. All actors in the online space should be subject to the same rules, and the federal government shouldn’t favor one set of companies over another. Therefore, he has advocated returning to a technology-neutral privacy framework for the online world and harmonizing the FCC’s privacy rules for broadband providers with the FTC’s standards for others in the digital economy. Unfortunately, one of the previous administration’s privacy rules that is scheduled to take effect on March 2 is not consistent with the FTC’s privacy standards. Therefore, Chairman Pai is seeking to act on a request to stay this rule before it takes effect on March 2. If Commissioners are willing to cast their votes by March 2, then the full Commission will decide the stay request. If not, then the Wireline Competition Bureau will stay that one element of the privacy rules pending a full Commission vote on the pending petitions for reconsideration consistent with past practice.”

In translation, Chairman Pai hopes to stay (and, presumably, eventually replace) the October 2016 rules, probably in their entirety, in favor of a regime that replicates the FTC’s privacy framework for telecom carriers -- and cedes to the FTC entirely with respect to ISPs, which Pai hopes to de-classify as telecom common carriers through other upcoming actions to reverse the Wheeler FCC’s 2015 Open Internet (a/k/a “Net Neutrality”) Order.

In order to grant the pending stay petitions, all three sitting commissioners, including Democrat Mignon Clyburn, must agree to vote.  If Commissioner Clyburn withholds her vote, Chairman Pai will direct the agency’s Wireline Competition Bureau to stay the data security rules before they would take effect on March 2, and schedule a formal Commission vote on pending petitions for reconsideration of the October Order at an upcoming FCC agenda meeting.