FCC Stay of Privacy Rule Prevents Irreparable Injury to Businesses and Consumers

This week, the Federal Communications Commission (FCC) issued a temporary stay of part of its privacy rule for internet service providers. The Competitive Enterprise Institute (CEI) argues the decision was correct because the FCC’s privacy rule produces poor outcomes for consumers, oversteps its bounds, and unlawfully expands the agency’s authority in an area that is and should be under the jurisdiction of the Federal Trade Commission (FTC).

Ryan Radia, CEI research fellow and regulatory counsel, gave the following statement about the decision:

“The FCC made the right decision in staying the data security provisions of its privacy rule. As several providers demonstrated in their petition to the agency, complying with this burdensome mandate would have caused irreparable injury to businesses and consumers,” said Radia. “The FCC erred in imposing uniquely rigid requirements on broadband companies’ information collection practices, especially given the lack of any evidence that consumers have been harmed by inadequate data security.”

Radia recommends Congress should act swiftly to pass a Congressional Review Act resolution of disapproval to eliminate the privacy rule. Otherwise, the rule faces an uncertain future in the courts, where it will likely be challenged on the grounds that it exceeds the FCC’s authority under the Communications Act.

>> Regulatory comments on “Protecting the Privacy of Customers of Broadband and Other Telecommunications Services” | July 6, 2016

>> Coalition letter supporting a Congressional Review Act resolution of disapproval to eliminate the FCC’s privacy rules