February 14, 2017
The Association of National Advertisers (the ANA), the American Association of Advertising Agencies (the 4As) , the American Advertising Federation (the AAF) , the Data & Marketing Association (the DMA) , the Interactive Advertising Bureau (the IAB), and the Network Advertising Initiative (the NAI) have together submitted to the Federal Communications Commission a petition for reconsideration of the FCC’s fine agency order entitled Protecting the Privacy of Customers of Broadband and Other Telecommunications
Services, published as a final rule December 2, 2016.
The trade associations challenge the Rule on a number of grounds, including an allegation that the Rule as promulgated is violative of the trade associations’ members’ First Amendment rights. The Rule applies to Broadband Internet Access Service (BIAS) providers and requires that BIAS providers have customers’ approval before sharing certain sensitive data with third parties. The Rule includes, in what the trade associations characterize as a departure, all web browsing and application usage history. The Rule requires opt–in consent from customers’ rather than allow customers to opt-out of such usage.
In their filing for reconsideration, the trade associations rely on U.S. West, Inc. v. FCC, 182 F.3d 1224, 1232 (10th Cir. 1999) and argue that U.S. West requires that the FCC adopt the least restrictive means necessary to regulate commercial speech in order to be in accordance with First Amendment principles and jurisprudence. Specifically, the trade associations assert that the opt-in approach required by the new Rule is not the least restrictive means necessary and that the 10th Circuit’s rejection of an opt-in regime in U.S. West means that requiring opt-in here is not the least restrictive means necessary to protect privacy. The trade associations also argue that U.S. West requires the government to detail the specific privacy interest it is protecting, and that broad statements regarding general privacy interests do not reach the threshold required by the substantial state interest prong of the First Amendment inquiry.
In their petition, the trade associations do not reference later court opinions from the D.C. Circuit which recognized that opt-in regimes were not violative of the First Amendment. In National Cable & Telecommunications Association v. FCC, 555 F.3d 996 (D.C. Cir. 2009), the court specifically noted that the FCC’s decision to require opt-in consent, as opposed to mandating that covered entities provide consumers the opportunity to opt-out of data sharing, was supported by substantial evidence. The FCC found that opt-in consent was more protective of consumer privacy, in large part due to the reality that many people are not aware of the ability to opt-out and often do not understand opt-out notices. This comports with other findings in the realm of behavioral psychology which show that default rules have impact on later behavior by persons faced with choices. Simply framing one choice as the default choice affects later behavior.
National Cable & Telecommunications Association further undermines the trade associations’ arguments because the D.C. Circuit specifically rejected the 10th Circuit’s requirement that the government articulate a specific privacy interest it was protecting. The D.C. Circuit refused to follow U.S. West’s requirement that privacy interests must be stated in terms of protecting consumers from the public revelation of “embarrassing” information. Rather, the D.C. Circuit noted that privacy deals with much more than keeping “embarrassing” details private. Privacy, which is a substantial interest even in the general, also deals explicitly with making determinations for oneself about whether and to whom to disclose private or personal information.