1 00:00:00,200 --> 00:00:04,000 Speaker 1: Just before the November election, the Federal Communications Commission finalized 2 00:00:04,080 --> 00:00:06,760 Speaker 1: rules that would have required Internet service providers to get 3 00:00:06,800 --> 00:00:10,640 Speaker 1: approval from customers before using or selling data about their 4 00:00:10,680 --> 00:00:14,440 Speaker 1: web browsing and abuse. But Congressional Republicans have now approved 5 00:00:14,440 --> 00:00:17,239 Speaker 1: a resolution that would block those rules from ever taking effect. 6 00:00:17,600 --> 00:00:20,760 Speaker 1: The measure is now awaiting Donald Trump's signature. It would 7 00:00:20,760 --> 00:00:22,880 Speaker 1: help A T and T, A T and T and 8 00:00:23,000 --> 00:00:26,560 Speaker 1: Comcast compete in the online advertising market, but it has 9 00:00:26,600 --> 00:00:30,000 Speaker 1: alarmed privacy advocates who say it licenses big phone and 10 00:00:30,040 --> 00:00:33,520 Speaker 1: cable companies to spy on Americans. With us to talk 11 00:00:33,560 --> 00:00:37,040 Speaker 1: about this is Fred Campbell. He's the former chair of 12 00:00:37,080 --> 00:00:40,560 Speaker 1: the FCCS Wireless Bureau and now the director of Technology, 13 00:00:40,600 --> 00:00:44,400 Speaker 1: which advocates for market oriented solutions to tech issues. And 14 00:00:44,520 --> 00:00:48,560 Speaker 1: Catherine Sandoval, she teaches communications law at Santa Clara University 15 00:00:48,760 --> 00:00:52,000 Speaker 1: School of Law. Thank you both for joining us. Katherine, 16 00:00:52,080 --> 00:00:54,360 Speaker 1: can let's start at a pretty basic level. Just give 17 00:00:54,400 --> 00:00:57,320 Speaker 1: me the basic explanation of the state of the law 18 00:00:57,440 --> 00:00:59,680 Speaker 1: right now. So if I'm I'm on the Internet and 19 00:00:59,720 --> 00:01:03,120 Speaker 1: I do the search for something, how much privacy can 20 00:01:03,160 --> 00:01:06,920 Speaker 1: I expect in what I do? Well? Thank you very 21 00:01:06,959 --> 00:01:11,080 Speaker 1: much for the invitation UM, So the f SEC rules 22 00:01:11,160 --> 00:01:14,400 Speaker 1: that would have increased protections and privacy had not fully 23 00:01:14,440 --> 00:01:19,160 Speaker 1: gone into effect because of the requirements of Federal Register publication. 24 00:01:19,480 --> 00:01:24,240 Speaker 1: And then there's which often results in a delay. So essentially, 25 00:01:24,319 --> 00:01:31,000 Speaker 1: under our current today privacy rules actually consumer privacy rules 26 00:01:31,040 --> 00:01:35,280 Speaker 1: are very much up in the air, and that's what 27 00:01:35,360 --> 00:01:38,120 Speaker 1: this f SEC will would have addressed. It would have 28 00:01:38,720 --> 00:01:43,840 Speaker 1: created basically the obligation for the Internet service providers, the 29 00:01:43,840 --> 00:01:46,720 Speaker 1: ones that you use to get onto the Internet, to 30 00:01:47,000 --> 00:01:51,520 Speaker 1: require your consent before they could do things like sell 31 00:01:51,600 --> 00:01:56,880 Speaker 1: your search history and sell other personally identifying information up 32 00:01:56,920 --> 00:02:02,520 Speaker 1: to and including social security numbers. So this repeal resolution 33 00:02:03,080 --> 00:02:08,080 Speaker 1: would repeal the rules that the SEC adopted and then 34 00:02:08,520 --> 00:02:12,000 Speaker 1: UM and then basically we would go back to having 35 00:02:12,120 --> 00:02:16,560 Speaker 1: no regulation in place at a federal level because of 36 00:02:16,600 --> 00:02:21,240 Speaker 1: some decisions that effectively also block the Federal Trade Commission 37 00:02:21,480 --> 00:02:26,120 Speaker 1: from regulating uh certain Internet service providers that also service 38 00:02:26,200 --> 00:02:30,560 Speaker 1: telecommunications companies. That that creates a problem that will have 39 00:02:30,680 --> 00:02:35,480 Speaker 1: to be worked out as well. And Fred the bill 40 00:02:35,560 --> 00:02:39,280 Speaker 1: seems to view a consumers data as property of the 41 00:02:39,320 --> 00:02:44,800 Speaker 1: Internet providers. How do the Republicans justify allowing Internet providers 42 00:02:44,840 --> 00:02:50,080 Speaker 1: to sell your personal information. Yeah. So to be clear, 43 00:02:50,160 --> 00:02:54,000 Speaker 1: I think the congressional resolution was really about one issue, 44 00:02:54,080 --> 00:02:57,120 Speaker 1: and that's this opt in versus opt out. So the 45 00:02:57,320 --> 00:03:02,880 Speaker 1: FTC regulated both UH edge providers that's Google, Yahoo and 46 00:03:02,919 --> 00:03:07,079 Speaker 1: the like and I s ps UH bowls under its 47 00:03:07,120 --> 00:03:11,800 Speaker 1: privacy framework up until you know, last year, last fall, 48 00:03:12,040 --> 00:03:17,000 Speaker 1: and the SPC hasn'tly applied an opt out approach, which 49 00:03:17,040 --> 00:03:21,440 Speaker 1: means I think can opt out of their data being collected, 50 00:03:21,480 --> 00:03:24,080 Speaker 1: but the default is is that it can be collected 51 00:03:24,080 --> 00:03:26,720 Speaker 1: and used. What the SEC did it was very different. 52 00:03:26,960 --> 00:03:30,760 Speaker 1: Is it took one part of the Internet ecosystem, the 53 00:03:30,800 --> 00:03:33,200 Speaker 1: I s p s, and decided to treat them differently 54 00:03:33,240 --> 00:03:37,520 Speaker 1: than the FTC. U. It said, UH, with respect I 55 00:03:37,720 --> 00:03:41,480 Speaker 1: sps only, there's gonna be an opt in requirement. UM. 56 00:03:41,640 --> 00:03:47,200 Speaker 1: That's that's what the SCC did. That Congress just um overtoned. 57 00:03:47,640 --> 00:03:52,400 Speaker 1: You know, I sp are still subject to basic statutory 58 00:03:52,440 --> 00:03:56,280 Speaker 1: authority privacy protections that are in the Act, and that 59 00:03:56,280 --> 00:04:03,400 Speaker 1: would still apply. What's the justification for having to I 60 00:04:03,440 --> 00:04:05,280 Speaker 1: think most people don't even know how to opt out. 61 00:04:05,360 --> 00:04:11,080 Speaker 1: What's the justification for this? The main justification is stair 62 00:04:11,120 --> 00:04:15,760 Speaker 1: holness and competitiveness. UH, there are companies out there, Google 63 00:04:16,320 --> 00:04:20,240 Speaker 1: which currently collect third party web browsing data through their 64 00:04:20,320 --> 00:04:25,440 Speaker 1: double quick subsidiary from UHI of the top one million sites. 65 00:04:25,800 --> 00:04:28,800 Speaker 1: They do that. If you visit the New York Times, 66 00:04:28,839 --> 00:04:32,239 Speaker 1: for example, which has a relationship with double click, uses 67 00:04:32,240 --> 00:04:36,400 Speaker 1: them for their ad server. UM, Google can track which 68 00:04:37,000 --> 00:04:39,720 Speaker 1: articles the consumer reads on the New York Times and the 69 00:04:39,680 --> 00:04:43,000 Speaker 1: the combined that data with its own user data, which 70 00:04:43,080 --> 00:04:45,560 Speaker 1: is you know, search data on Google dot com and 71 00:04:46,040 --> 00:04:49,240 Speaker 1: it's Gmail and all of its obser This is UH, 72 00:04:49,279 --> 00:04:51,640 Speaker 1: and it does this targeted ads. The I s p 73 00:04:51,800 --> 00:04:54,359 Speaker 1: s would like to compete in that market, which is 74 00:04:54,440 --> 00:04:57,000 Speaker 1: you know worth up was of eighty billion dollars at 75 00:04:57,040 --> 00:05:00,960 Speaker 1: this point, UH and having a different set of requirements 76 00:05:00,960 --> 00:05:04,560 Speaker 1: on and that makes it harder for them to compete UM. 77 00:05:04,600 --> 00:05:09,600 Speaker 1: And given the Doogle's Double Click ad serving subsidiary has 78 00:05:09,839 --> 00:05:13,000 Speaker 1: about seven five percent of that market, you know, it 79 00:05:13,000 --> 00:05:15,560 Speaker 1: has a dominant market share. You know, the competition in 80 00:05:15,600 --> 00:05:18,520 Speaker 1: this in the ad online ad market would be a 81 00:05:18,560 --> 00:05:21,920 Speaker 1: good thing for consumers. And they'd be no worse than 82 00:05:22,360 --> 00:05:25,680 Speaker 1: UH with respect to i SC data collection than they 83 00:05:25,680 --> 00:05:29,640 Speaker 1: are with respect to data collection by Google and other 84 00:05:29,640 --> 00:05:32,520 Speaker 1: ice providers. I'm Greg store in Washington with June Grasso 85 00:05:32,560 --> 00:05:36,040 Speaker 1: in New York. We're talking about Republican move to block 86 00:05:36,640 --> 00:05:41,120 Speaker 1: what would have been Federal Communications Commission rules to require 87 00:05:41,160 --> 00:05:44,200 Speaker 1: Internet service providers to get approval from their customers before 88 00:05:44,240 --> 00:05:47,840 Speaker 1: they use data about their web browsing or abuse. Our 89 00:05:47,920 --> 00:05:51,640 Speaker 1: guests are Fred Campbell, former FCC official, and Catherine Sandoval 90 00:05:52,040 --> 00:05:56,480 Speaker 1: of Santa clar University's School of Law. Katherine um Fred 91 00:05:56,600 --> 00:06:00,640 Speaker 1: was talking a moment ago about I'll probably simplify this, 92 00:06:00,720 --> 00:06:04,039 Speaker 1: but basically, had this FEC rule gone into effect, we 93 00:06:04,080 --> 00:06:07,080 Speaker 1: would have ended up in a world where Internet service 94 00:06:07,120 --> 00:06:10,800 Speaker 1: providers had one set of rules and search engines had 95 00:06:10,839 --> 00:06:13,440 Speaker 1: another set of rules applying to them, and basically there 96 00:06:13,480 --> 00:06:16,960 Speaker 1: would have been more restrictions on those Internet service providers. 97 00:06:17,440 --> 00:06:20,839 Speaker 1: Would that kind of a world have made any sense? 98 00:06:22,360 --> 00:06:25,320 Speaker 1: So what the SEC decided is that they looked at 99 00:06:25,360 --> 00:06:29,280 Speaker 1: the position that Internet service providers occupy in the market. Right, 100 00:06:29,360 --> 00:06:32,760 Speaker 1: you get to search engines or anything else on the 101 00:06:32,800 --> 00:06:36,559 Speaker 1: Internet through an Internet service provider when you first boot 102 00:06:36,640 --> 00:06:39,799 Speaker 1: up and log in and you're accessing the Internet, um 103 00:06:39,839 --> 00:06:43,159 Speaker 1: through whether it's AT and T or an independent like 104 00:06:43,279 --> 00:06:47,880 Speaker 1: Monkey Brains or Verizon or Comcast. UM they are your 105 00:06:48,000 --> 00:06:52,080 Speaker 1: gateway basically to everything on the Internet. So the f 106 00:06:52,160 --> 00:06:56,960 Speaker 1: SEC rules were adopted recognizing that as truly the gatekeepers 107 00:06:56,960 --> 00:07:00,479 Speaker 1: of the Internet that consumers were, we are in a 108 00:07:00,520 --> 00:07:04,760 Speaker 1: different position visa VI their Internet service provider, especially where 109 00:07:04,800 --> 00:07:08,640 Speaker 1: you're looking at having high speed Internet. Most consumers have 110 00:07:08,839 --> 00:07:12,640 Speaker 1: the choice of only one or two providers, and there 111 00:07:12,680 --> 00:07:15,520 Speaker 1: are places many places where really there are only one 112 00:07:15,600 --> 00:07:21,040 Speaker 1: provider um and so you can't really shop around these rules. 113 00:07:21,600 --> 00:07:23,200 Speaker 1: The other thing I'd like to add is that in 114 00:07:23,320 --> 00:07:26,560 Speaker 1: terms of the Futtle Trade Commission rules, because of a 115 00:07:26,600 --> 00:07:28,600 Speaker 1: decision that was made last year in a case called 116 00:07:28,640 --> 00:07:33,720 Speaker 1: FTC versus A T and T Mobility, the FTC uh 117 00:07:33,920 --> 00:07:37,720 Speaker 1: jurisdiction was determined by the Ninth Circuit Court of Appeals 118 00:07:37,760 --> 00:07:40,920 Speaker 1: here in the West, UH that that the FTC had 119 00:07:40,960 --> 00:07:47,120 Speaker 1: limited jurisdiction that basically prohibited the FTC from regulating companies 120 00:07:47,120 --> 00:07:51,520 Speaker 1: that also provide telephone service. What that means is if 121 00:07:51,600 --> 00:07:55,200 Speaker 1: you were accessing the Internet through your mobile phone, the 122 00:07:55,360 --> 00:07:59,040 Speaker 1: FTC would not be able to enforce the rules. It 123 00:07:59,240 --> 00:08:02,880 Speaker 1: raises interest in questions about if you're accessing the Internet 124 00:08:03,080 --> 00:08:06,160 Speaker 1: where you have a package, can the company claim, well, 125 00:08:06,200 --> 00:08:09,840 Speaker 1: really I'm a telephone provider or common carrier, and therefore 126 00:08:09,880 --> 00:08:13,960 Speaker 1: the FTC doesn't have jurisdiction, so it has created lots 127 00:08:13,960 --> 00:08:17,600 Speaker 1: of issues. And really the bottom line here is do 128 00:08:17,800 --> 00:08:22,400 Speaker 1: consumers have a right to know what these companies are 129 00:08:22,440 --> 00:08:25,760 Speaker 1: doing with their information? Uh? And who they're selling their 130 00:08:25,800 --> 00:08:29,000 Speaker 1: information to? Do they have a right to should they 131 00:08:29,000 --> 00:08:33,040 Speaker 1: be able to opt in first before allowing the gatekeeper 132 00:08:33,160 --> 00:08:36,080 Speaker 1: to sell their information? And the last thing I would 133 00:08:36,080 --> 00:08:39,240 Speaker 1: abt is that this bill, this excuse me, this UM 134 00:08:39,600 --> 00:08:43,360 Speaker 1: rule that the f FCC past would have also required 135 00:08:43,520 --> 00:08:46,800 Speaker 1: Internet service providers to take certain steps with regard to 136 00:08:47,360 --> 00:08:51,960 Speaker 1: prevention of data breaches, so that no longer is going 137 00:08:52,000 --> 00:08:57,240 Speaker 1: to be required under the resolution UM. And also this 138 00:08:57,280 --> 00:09:01,240 Speaker 1: particular resolution repealing the rules would mean if the internet 139 00:09:01,280 --> 00:09:05,120 Speaker 1: service providers sells the customers data, it's not a data breach, 140 00:09:05,200 --> 00:09:08,680 Speaker 1: so the customer doesn't have to be notified. Fred Minnesota 141 00:09:08,760 --> 00:09:13,439 Speaker 1: lawmakers have pushed back with votes to tighten privacy protections 142 00:09:13,440 --> 00:09:17,600 Speaker 1: within the state, prohibiting internet providers in Minnesota from collecting 143 00:09:17,640 --> 00:09:22,600 Speaker 1: personal information from customers without their permission. How would that 144 00:09:22,720 --> 00:09:26,320 Speaker 1: bill if it's past, how would it fit in with 145 00:09:26,400 --> 00:09:31,199 Speaker 1: the federal system? Yeah, I mean, my guess is that 146 00:09:31,240 --> 00:09:36,400 Speaker 1: the states are free to adopt their own Junique privacy rules. Uh. 147 00:09:36,520 --> 00:09:40,359 Speaker 1: There's a legal question about whether they would be preempted 148 00:09:41,360 --> 00:09:45,760 Speaker 1: by uh, you know, federal authorities, but I think there's 149 00:09:45,760 --> 00:09:48,400 Speaker 1: some uncertainty around that. In the short term, probably not. 150 00:09:49,400 --> 00:09:52,800 Speaker 1: UM I wanted to address the choice issue that one 151 00:09:52,840 --> 00:09:55,200 Speaker 1: of the things that I thinks to afused people about 152 00:09:55,240 --> 00:09:59,319 Speaker 1: this when I talked about those ad servers Google, Facebook 153 00:09:59,360 --> 00:10:03,560 Speaker 1: and the like. Consumers don't really have any better choice 154 00:10:03,679 --> 00:10:05,719 Speaker 1: there than they have with the I s p s 155 00:10:05,840 --> 00:10:12,080 Speaker 1: because you know, there nearly two million websites that use 156 00:10:12,160 --> 00:10:14,760 Speaker 1: ad servers and want the consumer visits that website. It 157 00:10:14,840 --> 00:10:19,440 Speaker 1: may be your local newspaper, UM or or you know, 158 00:10:19,679 --> 00:10:24,360 Speaker 1: any other standard website out there. They're browsing. Information can 159 00:10:24,400 --> 00:10:27,839 Speaker 1: be collected by uh these ad servers, and there's really 160 00:10:27,880 --> 00:10:31,400 Speaker 1: not because the website has a relationship with the ad 161 00:10:31,440 --> 00:10:37,600 Speaker 1: serving company. But that relationship isn't usually uh you know, 162 00:10:37,920 --> 00:10:42,760 Speaker 1: uh expressly disclosed to the consumer other than in the 163 00:10:42,840 --> 00:10:48,400 Speaker 1: detailed privacy policies on every website. UM. So, really, I think, listen, 164 00:10:48,440 --> 00:10:51,600 Speaker 1: if if the opted versus opt out is such an 165 00:10:51,679 --> 00:10:56,400 Speaker 1: overwhelming concern, I'm surprised that nobody's talked about it, you know, 166 00:10:56,760 --> 00:11:00,240 Speaker 1: for the last twenty years of the Internet's existence. But 167 00:11:00,320 --> 00:11:04,320 Speaker 1: put that aside, going to the Ninth Circuit take case 168 00:11:04,440 --> 00:11:06,320 Speaker 1: that you know, that issue was raised. I think there 169 00:11:06,360 --> 00:11:09,360 Speaker 1: are real issues there, and I think the answer has 170 00:11:09,440 --> 00:11:13,760 Speaker 1: to be, UH, Congress getting involved in doing some legislation 171 00:11:13,800 --> 00:11:17,760 Speaker 1: that makes uh this system rational. You know, that harmonizes 172 00:11:17,840 --> 00:11:20,800 Speaker 1: the rules so that everyone in the industry knows what 173 00:11:20,920 --> 00:11:24,719 Speaker 1: the rules are, UH, and consumers know what the rules are. 174 00:11:24,760 --> 00:11:27,839 Speaker 1: And right now, with this kind of hodge podge makes 175 00:11:27,880 --> 00:11:31,800 Speaker 1: of a court case, UH, taking juristics from here and 176 00:11:31,880 --> 00:11:34,760 Speaker 1: putting it there and there, we're going to have We're 177 00:11:35,120 --> 00:11:36,680 Speaker 1: gonna have to leave it there. I want to thank 178 00:11:36,760 --> 00:11:40,440 Speaker 1: our guest Fred Campbell and Catherine Standerval talking about online 179 00:11:40,440 --> 00:11:43,360 Speaker 1: privacy and a new move to blocks and FEC rules 180 00:11:43,400 --> 00:11:46,640 Speaker 1: that would have protected that online privacy. Coming up, we'll 181 00:11:46,640 --> 00:11:50,880 Speaker 1: talk about the Senate Intelligence Committee investigation of Russia's involvement 182 00:11:50,960 --> 00:11:53,600 Speaker 1: in the election. That's coming up. On Bloomberg Law. This 183 00:11:53,679 --> 00:11:54,280 Speaker 1: is Bloomberg