FCC blocks stricter broadband privacy rules from taking effect

By David Shepardson

NEW YORK (Reuters) - U.S. regulators on Wednesday blocked some Obama administration rules on the eve of implementation, regulations that would have subjected broadband providers to stricter scrutiny than web sites face to protect customers' private data.

The reversal by the Trump administration's U.S. Federal Communications Commission was a victory for internet providers such as AT&T Inc, Comcast Corp and Verizon Communications Inc .

The rules aimed to protect personal consumer data. They would have subjected broadband internet service providers to more stringent data security requirements than websites like Facebook Inc, Twitter Inc or Alphabet Inc's Google unit.

The decision will "provide time" for the FCC and the Federal Trade Commission to devise "a comprehensive and consistent framework" to protect online privacy, the agency said in a statement.

Internet service providers hailed the decision. Consumer advocates objected.

Sena Fitzmaurice, Comcast's vice president of government communications, called it "a sensible, pro-consumer approach" in which "consumers remain protected by the safeguards in place for the past two years." AT&T and Verizon also praised the action.

But Laura MacCleery, a vice president at Consumer Reports magazine, called it "a troubling first step towards unraveling critical, pro-consumer online privacy protections."

The rules would have required internet service providers to obtain consumer consent before using precise geo-location, financial information, health information, children's information and web browsing history for advertising and marketing. For less sensitive information such as email addresses or service tiers, consumers would be able to opt out.

MacCleery said the Consumer Reports had "heard from more than 50,000 consumers who support these rules through petitions and comments directly to the FCC."

FCC Chair Ajit Pai and acting FTC Chair Maureen Ohlhausen in a joint statement said they would work to ensure a consistent privacy framework.

"After all, Americans care about the overall privacy of their information when they use the internet, and they shouldn’t have to be lawyers or engineers to figure out if their information is protected differently depending on which part of the internet holds it," they said. "The federal government shouldn’t favor one set of companies over another," they added.

FCC Commissioner Mignon Clyburn, a Democrat, objected in a statement that the agency "should be the 'cop on the beat'" but instead "is leaving broadband customers without assurances that their providers will keep their data secure."

In October, Republican commissioners including Pai said the rules unfairly gave websites the ability to harvest more data than service providers and dominate digital advertising.

(Reporting by David Shepardson; Editing by Leslie Adler and David Gregorio)