FCC sets aside new Net data privacy rule

The Federal Communications Commission has voted to prevent the Internet privacy rules passed five months ago from fully taking effect.

The agency voted 2-to-1 Wednesday to temporarily stay a data security regulation within the privacy rules, passed in October 2016. That provision, which would have gone into effect Thursday, would have subjected Internet service providers (ISPs) to a different standard than web sites, apps and other Net players.

The Federal Trade Commission has the authority to enforce consumer privacy rules followed by Web sites, apps and other Net destinations. Had the FCC's data security regulation gone into effect, ISPs would have had to adopt more stringent data security requirements than companies under the FTC's regulations.

"“The federal government shouldn’t favor one set of companies over another — and certainly not when it comes to a marketplace as dynamic as the Internet," said FCC Chairman Ajit Pai and FTC Chairman Maureen Ohlhausen in a joint statement. The two agencies will work together to achieve “a technology-neutral privacy framework for the online world,” they said. "Such a uniform approach is in the best interests of consumers and has a long track record of success.”

When the rules were passed more than four months ago, the commission was chaired by Tom Wheeler, a Democrat, and the new rules passed by a vote of 3-2 with Republican commissioners Ajit Pai and Michael O'Rielly voting against them. Pai, who is now the FCC chairman, said at the time the FCC's rules created "an unlevel playing field" and could confuse consumers with different privacy regimes across the Net.

FCC Chairman takes a swing at net neutrality

Privacy rules were addressed by the FCC after its passage of 2015's net neutrality rules resulted in ISPs being reclassified as "common carriers," an action that moved them out of the FTC's authority.

Commissioner Mignon Clyburn, a Democrat who voted against the stay, said the action now leaves consumers with only voluntary privacy protections. "If a provider simply decides not to adequately protect a customer’s information and does not notify them when a breach inevitably occurs, there will be no recompense as a matter of course," she said.

Consumers have growing concerns about the security of their personal information online as several high-profile breaches came to light in 2016 including two at Yahoo and others at Myspace and LinkedIn. A September 2016 Pew Research Center report found that more than nine out of 10 adults (91%) agree or strongly agree consumers have lost control of their personal data and its use.

The FCC, FTC and Congress could use the stay to standardize consumer privacy protections on ISPs, web sites and apps with "a lasting, forward leaning set of privacy protections for all online," said Debra N. Diener, a former privacy official at the Department of Homeland Security and Internal Revenue Service in an opinion piece in The Huffington Post earlier this week.

However, some in Congress aim to repeal the FCC's privacy rules in their entirety, while weakening the FTC's authority, said Chris Lewis, vice president of public interest group Public Knowledge. "Americans must resist this total assault on their right to choose to keep their personal communication information private," he said in a statement. "It has been a core value of communications networks since the early days of telephone service and should not be removed in the internet age.”

The Data & Marketing Association called the FCC's vote "a good first step in rolling back these requirements." The DMA and other advertising groups petitioned the FCC in January asking the agency to reconsider the rules, saying the FCC had overstepped its authority and unduly burdened ISPs.

"We look forward to continued action on the part of Chairman Pai and the FCC to ensure that the modern digital economy can continue to create the innovative products consumers enjoy and rely upon without the burden of unnecessary regulations," said Emmett O’Keefe, the group's senior vice president of advocacy, in a statement.

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Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.