Some Regulatory Shorts

FCC_New_LogoAs to be expected our regulators stay busy regulating. Not all of their decisions have widespread impact, but it’s always worth keeping an eye on what’s going on.

WiFi Blocking: The FCC continues to come down on hard on those in the hospitality industry that would stop people from using their own hot spots in or near hotels or other gathering places. You might recall, last year the FCC fined Marriott for blocking access to guests using their cellphones for WiFi. Marriott is one of those chains that charges extra for WiFi and so they were operating jammers that interfered with the ability of a smart phone to act as a hotspot.

The FCC continued with that theme and recently fined M.C. Dean $718,000 for blocking WiFi at the Baltimore Convention Center. They also fined Hilton Worldwide $25,000 for “apparent obstruction of an investigation” in the case. In August the FCC fined Smart City Holdings $750,000 for using technology at 28 convention centers that blocked cellphone and wireless routers from acting as hotspots.

As somebody who travels and who generally finds hotel WiFi to be inadequate, this is a welcome move. But it’s even more so for groups that rent space in a convention center. Some of those locations charge 6 digits for use of a convention center’s WiFi system, and the FCC is telling the hospitality industry that it is never okay to block WiFi.

Do Not Track Requests: The FCC voted earlier this month to not require web sites to honor Do Not Track requests. The group Consumer Watchdog had petitioned the FCC asking them to force companies to honor such requests. Today web sites can voluntarily honor privacy requests, but only a handful of large web sites do so. The group had hoped that since the FCC had elected to regulate privacy practices for ISPs as part of the net neutrality rules that they might carry this forward to the web.

But the FCC declined to make such a ruling. They said that they are not in the business of regulating ‘edge providers’, meaning the companies that offer web content. I keep an eye on privacy and use web sites that don’t track people whenever I can like the Duck Duck Go search engine. But I am leery about the FCC getting into the business of regulating the behavior of web service providers. When you look at some of the consequences of such actions it’s not necessarily good for anybody. Even in England, which we always assume is a lot like us, the government has proscribed a large list of web content that is off limits unless people opt into them. I personally am glad the FCC doesn’t want to cross that line. I think back to all of the wasted effort they spent on the ‘seven dirty words’ on TV and radio and don’t think we need a repeat of that.

The FCC and Privacy. In what seems like an extreme order, the FCC just fined Cox Communications $595,000 for a security breach that exposed the records of 61 customers. That’s almost $10,000 per customer.

This is the first such privacy ruling by the FCC since this was always under the purview of the Federal Trade Commission until the FCC asserted primary responsibility for regulating ISPs as common carriers. I find the order to be puzzling. The breach was apparently due to a hacker. Cox self-reported the breach and said that they had processes in place that found the breach quickly and that limited it from happening to a larger number of customers. To me that sounds like what companies are supposed to do and I’m not sure that any company these days can be completed immune from hackers. I know we won’t know the details of exactly what Cox did wrong, but it doesn’t feel like this is a case where the punishment fits the crime.

One only has compare this to the way that the very massive data breaches have been handled for companies like Target, J.P. Morgan Chase and a number of other banks, and even from several branches of the federal government. None of them got significant fines and the general thinking is that the market itself provides a lot of punishment in lost business and in the cost of dealing with the data breach. The size of the FCC fine seems out of line, and because of that every ISP ought to be reviewing the way you store and protect customer data. You can’t afford not to, and perhaps that is the message the FCC was making.

 

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