With Washington’s Blessing, Telecom Giants Can Mine Your Web History
With Washington’s Blessing, Telecom Giants Can Mine Your
Web History
Congress’s repeal of FCC privacy rules could be data boon
for Verizon, Comcast, AT&T
By JACK MARSHALL March 30, 2017 6:30 a.m. ET
What if your telecom company tracked the websites you
visit, the apps you use, the TV shows you watch, the stores you shop at and the
restaurants you eat at, and then sold that information to advertisers?
In theory, it’s possible, given the stance Washington is
taking on online privacy.
Lawmakers on Tuesday voted to overturn privacy rules that
required telecom companies to get customers’ permission before sharing their
web-browsing and app usage history with third parties. The White House said
Wednesday President Donald Trump intends to sign the measure into law.
Undoing the rules, which had been adopted last fall by
the Federal Communications Commission but hadn’t gone into effect, is a boon to
Verizon Communications Inc., Comcast Corp. and AT&T Inc., which are all in
the process of building data-driven digital ad businesses to complement the
broadband, wireless and TV services they offer.
The telecom providers had argued the rules put them at a
competitive disadvantage to online ad giants Google and Facebook, which
generally aren’t regulated by the FCC.
Google and Facebook have built huge businesses powered by
reams of data they collect about consumers’ online actions, both on their own
properties and across the web. That trove of information largely explains their
dominance -- combined, they have a roughly 47% share of the global digital ad
market, according to eMarketer.
But online advertising executives say telecom providers
potentially have access to more powerful data than the two tech powerhouses.
Their networks -- both wired and wireless -- could give them a window into
nearly everything a user is doing on the web.
“ISPs like Verizon can now start building and selling
profiles about consumers that include their friends, the news articles they
read, where they shop, where they bank, along with their physical location,”
said Jason Kint, chief executive of digital media trade body Digital Content
Next and a vocal proponent of the rules that Congress voted to repeal.
Though the FCC rules never went into effect, the measure
Congress has approved would give telecom companies far more comfort that they
can construct detailed profiles of their customers’ behaviors and tastes and
share that information with marketers without being punished by regulators.
For example, a wireless provider might track which
websites and apps a consumer uses, in addition to their location, and use that
information to help determine which products they’re likely to purchase.
If a consumer uses the same telecom provider for
wireless, broadband and TV service, the provider could, in theory, track the
majority of that consumer’s online behavior and media consumption.
Now, just because telecom operators won’t be shackled
doesn’t mean they’ll gather and sell every bit of information they have access
to. Consumers who already find targeted ads creepy -- like the kind from
retailers that follow you around after you’ve visited their site -- might not
take kindly to their telecom company tracking their every move.
“They could conceivably sell to the highest bidder
someone’s browsing history, but it’s not clear that that would fly as a
business model,” said Kevin Werbach, a professor at the University of
Pennsylvania’s Wharton School.
In January, major ISPs agreed to abide by a set of
voluntary privacy principles which stated they will give broadband customers
“opt-in consent for the use and sharing of sensitive information as defined by
the FTC”, and “a clear, comprehensible, accurate, and continuously available
privacy notice that describes the customer information we collect, how we will
use that information, and when we will share that information with third
parties.”
Jonathan Spalter, chief executive of USTelecom, a trade
body representing broadband service providers, said in a statement that
Congress’s action “is another step to remove unnecessary rules and regulations
that handicap economic growth and innovation, and moves the country one step
closer to ensuring that consumers’ private information is protected uniformly
across the entire internet ecosystem.”
Consumers who are unhappy with how broadband companies
collect data have few options if they want to switch providers.
“Internet service providers are a distinctly severe
threat to consumer privacy because we have little choice about whether to use
them or not,” said Peter Eckersley, chief computer scientist at privacy
advocacy group, Electronic Frontier Foundation. “If you’re in a small American
town with only one ISP you have literally no choice but to use it.”
Verizon acquired AOL for $4.4 billion in June 2015 and
AOL’s chief executive has pitched marketers on the idea of using Verizon’s data
and AOL’s technology to help show highly-targeted ads to consumers. One idea,
for example, is to use location data to test the effectiveness of ads --
determining how many people who saw an ad for, say, a hotel, subsequently went
to that hotel.
In an emailed statement, a Verizon spokesman said
“Verizon is fully committed to the privacy of its customers. Any elimination of
the current FCC privacy rules will not change that commitment.”
For its part, AT&T has suggested its proposed $85.4
billion acquisition of Time Warner Inc. could result in its data being used to
help target TV advertising, offering competition to Google and Facebook as a
result.
AT&T’s defunct Internet Preferences program collected
web-browsing data from some home broadband customers and charged subscribers
who wished to opt out of collection an additional $29 a month. But the carrier
said in September it was ending both the data-gathering and the fee levied to
avoid it.
AT&T declined to comment.
—Drew FitzGerald contributed to this article.
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