Transcripts For CSPAN2 FCC Commissioners Testifies On Proposed Internet Privacy Rules 20160513

End of privacy enforcement of broadband is a carrier under the Communications Act previously the ftc had successfully been forced privacy against broad band providers except for the Net Neutrality order there would still we doing that they have brought the number of Enforcement Actions the niner a result of privacy violations wondering what justifies the new proposal from the approach and in fact, there are widespread concerns these are in another step in the attempt to become the policeman and of the internet. They also have a number of problematic consequences they will impose unnecessary regulations with the internet ecosystem. Would we have the same internet today with this prescriptive rules if imposed a decade ago . Additionally it is likely they would only confuse consumers to give a false sense of security. There are serious legal questions are they consistent with the First Amendment . We have the chair person and minority members to provide their perspective i think them for appearing here today is senator franken will give his statement in reintroduced of witnesses. Thanks for holding todays hearing on the proposed rules in the important issue of consumers Online Privacy to the commissioners thank you for appearing before our subcommittee. Over a year ago we voted to have a free and open internet it was a very exciting moment for neutrality. That was exciting for a lot of people nearly 3 Million Consumers spoke out to urge the fcc to adopt rules to ensure the internet remains the platform of Free Expression and innovation and Economic Growth the was an exciting moment for me and a highlight of my career in United States senate many colleagues fought for strong rules we thought they should be grounded in the fcc authority under title to to survive judicial scrutiny now that very question is before the d. C. Circuit we concede the decision any day now if we await the ruling the sec has a job to do since the open Internet Order went into effect to promote competition and insure that i am providers with respect to their obligations section 222 of the Communications Act i commend the fcc for starting the necessary process. They have a fundamental right to to transparency to have the capacity to trade on the details of their lives they certainly deserve to know the information is safeguarded now that transparency and accountability should come from those that have Telecommunications Providers like kong casting comcast to at t but also google and facebook and amazon i have repeatedly pressed website operators to ensure customers have more information of the Data Collected about them how the data is shared and used or sold to third parties the sec specifically will use of americans personal information and that is somewhat isis p has easy access to the unscripted online communication and browsing history as well was usage patterns that provides a lot if insight into their daily lives and habits this means comcast knows what ails you if you go to read bin d or experienced a major life event when you buy maternity clothes at target. Com or if your Home Internet connection which may be silent during the day suddenly seized increased use between nine and five comcast can infer you recently lost your job. The isp those the most intimate details of our lives and americans have no choice but to hand over this information or forego access to broadband something we have repeatedly recognized as an essential service in todays world more than 55 percent of americans have just one option of the Broadband Service so they are simply out of luck this is unfair and unacceptable. Todays hearing is an opportunity to think how americans data is collected and used and what we must do to ensure that consumers receive the highest in of protection i look forward to the testimony of our panel. Banks for holding this important hearing. Senator hatch is here and needs to go somewhere else pretty soon. And headed to the white house. Thanks for holding this hearing said need to allow to flourish while also protecting consumers privacy in data security. It is extremely important issue however i have significant concerns of the proposed privacy rules for Broadband Internet Service Providers and i believe the fcc 2015 Internet Order with the Communications Act is as serious overstep this major policy shift with far reaching implications were made by congress it has been effective to protect consumers on the internet but that ftc of regulatory Enforcement Authority wide is the ftc that has less capability and expertise not following the policy regime . It is proposing privacy rules that apply exclusively to Service Providers making it potentially confusing. I am concerned these proposed rules will allow competing entities to have the same data to have some or not all of a completely different system. I am following closely the issue of the set top box rule proposed by an asset ftc. To watch content of the array of smart tv and other devices. Streaming technology from the cumbersome set top box with Consumer Choice to have exclusive jurisdiction over intellectual Property Rights i am concerned about how the proposed set top box affects content. Many believe if it is on the internet must be free to produce video content is not only costly but it requires a Legal Framework to license the content and approaches the ignore the need for licensing to reduce choices and discourage innovation and strongly urge you to keep this in mind when considering the set top box issue and third id like to comment on the Charter Timewarner merger that the sec voted to approve last week with conditions and the senate from the commissions decision on the ground have been paid to do with the merits of any missed transaction rather they are about the government and the internet economy this is not the third time to micromanage the internet executive imposes 17 pages said conditions of directv merger say they have nothing to do with the transaction at hand in characterizing them as the worse tribute because of the capital and a share your concerns in fact, i have been troubled by Commission Actions in my view stunted their authority beyond statutory bounce in those priorities unfortunately i am unable to state to ask questions but i will be submitting something for the record i want to express my gratitude you are willing to be here today i hope we can make headway together i will do everything in my power to make sure it is a framework of a lot. It is custom to swear in witnesses. Please stand. Do your firm the testimony youre about to give is the truth the whole truth and nothing but the truth so help you god . They all answered in the affirmative. Let the record show. I will introduce you together than for opening statements. Chairman reeler the 31st chairman of the fcc in for over three decades has been involved in Telecommunications Networks and services as a policy expert and a businessman prior to joining the sec was the managing director at a Venture Capital and Firm Internet protocol and served as president and ceo of the Strategy Development Investment Company with Telecommunications Services with the largest Electronic Information Service and a graduate of the Ohio State University and a recipient of the alumni panel the commissioner since may 14 between 2007 and 2011 he has held several positions in general counsel serving as the deputy counsel general prior to be commissioner he was the partner in the Communications Practice and has served in all three branches of the District Court serving in a number of roles as well as working as chief counsel of the Judiciary Committee and the commission received his education for he was editor of chicago law review. Sworn in as commissioner for the ftc and designated to serve as the chairwoman march 4th and was litigation partner in before then was the associate is lousy angeles and court in the court of appeals for the ninth circuit and graduated from Harvard Law School where she served as editor of the law review and holds a bachelors degree from Harvard College properly getting well with the man to my far left. Joking. [laughter] commissioner for the ft feet she was a partner where she focused on ftc issues with cybersecurity and served of policy planning where she led the task force in then attorney adviser for former ftc commissioner before she came to the ftc spent five years on the u. S. Court of appeals on the circuit has of law clerk as a staff attorney and graduated with distinction from george mason and graduated with honors from university of virginia it is an effort to get you here so if you start the testimony banality will summarize the testimony of five minutes we will include the longer version for the record. It is as a privilege to be here and our colleagues with the ftc. In 2012 we set forth some key privacy concepts in the report and broad base and networks are in a position to develop a highly detailed profiles of their customers in a manner that would be completely invisible but this is not the first time society has had to deal with a technological challenge to privacy. Making a phone call also generate similar information about the consumer and long ago society dealt with the problems through the fcc rule prohibiting non Network Exploitation of the information created by the consumers used by the following network this policy has been in effect for decades the issues are not new nor is the expertise. Here is an example of how that works when you call air france the phone company is prohibited by fcc rules to sell that information unless the consumer expressly grants permission. It should be the same with their privacy of online information. Going to the web site should be no different than going to the switchboard. Of course, the airline may decide to do something with the consumers information themselves but there has long been a big difference between the information created by the consumers transaction with a third party which is a matter of choice and has note choice but to provide for the network to connect them. Though it welcomes the innovation created by Digital Networks from retaining the of values and rights that have applied to network operations. The information a consumer generates is up property of the consumer. Just because a higher the network to deliver to a service it does not mean it can take ownership and what a trove of information it is . One says they connect wireless and wife bilocation tv viewing calling in text records website browsing a mobile application and other information that we get about you and other customers to buy things that jump out one is nothing on the list is the Networks Information it is the consumers information provided to the network so it can operate and there is no choice this is what we do take it or leave it situation and the ftc privacy report specifically called out this issue for a broad base and Internet Access to say consumers privacy interest are not to be plateresque by such a onesided transaction we respect the networks desire for new revenue for the selling Digital Information created by the network but should not be able to read defined to go from analog to digital we say they can use the information but first get permission from the party whose information is, the consumer they cannot sell something that is not theirs nor should they waved privacy to get service and network need to seek permission of the party whose information is it only applies to network providers. What they do is a transaction separate from the consumer transaction to deliver the call we do not regulate those of the it providers on the edge that includes network affiliates. Never assert jurisdiction into not now. Finally we are in the midst of building a record with this proceeding. We keep for the proposals to focus the debate and the comments but it is a proposal, not a conclusion to ask multiple questions we will build any final proposal for a record established in that regard for further consideration. Figures. Members of the said Committee Thanks for the hearing today to appear before you from the ftc and to give me the opportunity to testify of the proposal to regulate internet privacy. Every day millions of americans toward the freedom it provides one reason is too Light Touch Technology neutral into monetize services of profitability. The cftc deserve significant credit with all on oneacters. With those Enforcement Actions including i sp and the Biggest Companies and so successful from the European Union in to protect against predatory privacy practices. In when theyre reclassified broadband as a public utility now there is a gaping hole of privacy protections how best to do that . To testify before congress to have a uniform expectation of privacy it will not be regulating from i sp. But it decided in march 2016 to target only the isp that is far more evasive than prescriptive in the case by case approach for several reasons it does not make sense the proposed rules would do little to remove the of cause. First and makes no sense to give them greater leeway as you all have access to the save the data social networks they do every show you have streamed in one niche of the marketplace the sec approach to read these and though the upstart for Online Advertising said chief counsel for privacy has explained it earned over 70 percent of advertising dollars and then of them need the the position based on the isp because they have neither comprehensive nor unique access to information of their activity by the end of this year 70 of internet traffic will be encrypted. It is a windfall in the world of Online Advertising. Into carryon to insulate from i sp competition. And signal for the Online Services ended exchange for information as well as programs with Broadband Service in exchange for the web browsing data to tailor a customers add i dont see how denying that is in the interest. Everyone should recognize the decision to be calculating with political choice. To rely on section of the teleCommunications Act and have the power to take any action it believes necessary to break down barriers to be clear dont support the majority of the privacy practices is like eating half of the less some point they will want to come back. Thanks once again for holding this hearing to work with you and your staff. I am pleased to appear before you today. Today we face new challenges to have Consumer Privacy but every post for Research Data is collected about consumers. Paul can offer tremendous benefit with that collection and use is becoming ever more difficult for consumers to control. Study show consumers care about privacy it more control and in a recent survey 91 percent feel they lost control over how their personal information is collected and used by companies. I take it is vital consumers have control over the use of their personal information it is protected appropriately. Over the last several decades the ftc has undertaken numerous lawenforcement policy initiatives to address Consumer Privacy to ensure information is adequately protected. The commission used the primary authority to take action for those with deceptive practices involving the privacy and security of Consumer Information those that protect health and credit information. Our Enforcement Actions address a wide range how Companies Collect and share and use information. And to provide reasonable security and the violations of other telemarketing rules. The enforcement action with the need to protect privacy to safeguard their data in the digital world. The ftc also pursues policy issues to enhance Consumer Privacy. They have posted workshops with the security implications of the Business Model including comprehensive across the ecosystem and device tracking and we have also issued a number of reports that we encourage companies to adopt. Much of the work today builds on recommendation of the privacy report that sets forth privacy principles we believe ought to apply against Business Models. We urge companies to be more transparent about their use of data and implement privacy and security at the outset and to provide consumers a simple and clear way to exercise choice. They have applied these principles and Business Practices including facial recognition and a dab broker practices. We frequently cooperate with other agencies. We have an extensive history of cooperation including at connection of the enforcement to stop unauthorized charges. In 2014 we entered that resulted in hundreds of millions of dollars of consumer redress. We formalize collaboration with the ftc with the memorandum of understanding and earlier this week announcing coordinated studies in that ecosystem. Weve learned how mobile Device Manufacturers provide security updates to address folder abilities. Judiciary subcommittee. Veteran Suicide Prevention was the focus of a hearing on capitol hill today. Representatives from the v. A. And advocacy groups talked about programs to assist veterans and their family members. This House Veteran Affairs Committee Hearing about two and a half h