A group of consumer and privacy groups has asked the FCC to begin enforcing customer privacy rules. In the industry this process is called CPNI (customer proprietary network information) when applied to telephone and cable TV.

Now that the FCC has classified broadband as a common carrier service, they have the authority to investigate and regulate broadband privacy issues. This is something that the industry needs. Until now there has been very limited regulation of broadband by the Federal Trade Commission since the FTC authority was drawn only from the Children’s Online Privacy Act. But the FCC now has much stronger authority.

Current CPNI rules for telephone and cable TV are focused to a large degree on billing issues and on protecting private data like social security numbers, credit card numbers or other sensitive customer information. There is also a prohibition against disclosing the details of what customers do with those services – such as the calls they make or the channels they watch. (Of course, I guess we now know that the NSA is immune from the obligation to protect telephone records).

As sensitive as privacy matters are in those areas there are larger concerns with broadband. What people do online is extremely personal and the vast majority of Americans think that details of their online life should not be recorded or sold to others.

There are a whole lot of places that the FCC could go with broadband CPNI over and above the normal protections of billing data. For example, what are the obligations of companies to notify people when there has been a data breach and customer information has been compromised? Should ISPs have to disclose to customers if they use their data for any purposes or sell it to others in any form? And if so, how much do companies have to disclose?

An ISP is in very powerful position with a customer. If they wish to record what a customer does online they know everything that the customer isn’t somehow encrypted. They are the first in line to see outgoing bits and the only one to see all of the incoming bits.

The FCC has already started some internal work on the topic and held a workshop. From there the FCC has a number of options. They can first solicit comment and ideas from the public to see what kinds of sentiments are out there. It seems for almost everything the FCC does there are two sides of opinion, and there will be those that are in favor of very strong rules and those in favor of a very light touch. But the FCC would do well to hear all of these opinions before trying to formulate specific rules.

But they do have the option to go straight to a rulemaking. They could propose specific CPNI rules and let everybody take pot shots at them. I’m suspecting that for something this new and different that they are going to want to hear all sides of the arguments first before developing rules. The FCC also might be slow-rolling this. The whole Title II regulatory process is under appeal in the courts and they might not want to go too far down any path until they feel more secure that the courts believe they have the authority to regulate broadband in this manner.

One thing that we can probably expect from the FCC is that whatever they do is going to apply to ISPs but not to what they call edge providers. That would be all of the companies like Google and Facebook that operate on the web and that are not under the Title II regulatory regime. I know that consumer groups are going to want that kind of protection because I think it’s generally assumed that it’s the edge providers – and not the ISPs – that are using and misusing people’s data today.