FCC

There's a new cop on the internet privacy beat.

In a 3-2 vote Thursday, the Federal Communications Commission passed new rules that for the first time give the agency the authority to police internet service providers, such as AT&T, Comcast and Verizon, that share customers' sensitive personal information with third parties, like advertisers.

The FCC's new rules will require internet service providers to get a customer's explicit consent before they can use or share "sensitive" personal information. What constitutes sensitive information according to the FCC? Browsing history, mobile location data, TV viewing history, call and text message records, and information about what mobile apps you use.

The rules also require service providers to spell out to consumers what data they collect and why. And it requires service providers to notify customers of data breaches.

"It's the consumers' information," not the network's, "unless the consumer gives permission," FCC Chairman Tom Wheeler said during a press conference after the vote. "Internet service providers shouldn't be able to sell something that isn't theirs without your permission."

The FCC's rules come at a time when internet service providers are looking to break into the targeted-advertising market to create new revenue streams for their businesses. AT&T's CEO has highlighted that this strategy is a key driver for its plan to buy media giant Time Warner for $85 billion. It was also a major driver in Verizon's acquisition of AOL and its bid to acquire Yahoo. But it comes amid privacy concerns surrounding the handling of personal data from companies like Yahoo, Google and Facebook.

Critics say the FCC's rules are out of sync with the privacy framework the Federal Trade Commission uses to govern the privacy of companies like Amazon, Facebook and Google, which also collect and share customer information with advertisers and which are not included in the FCC's rules.

The FTC also prohibits companies from selling or sharing sensitive personal information, but it limits that data to things such as health data, financial information, and Social Security numbers. The FCC's rules cover this information but also include web browsing and app usage history.

Critics complain that having two different privacy standards could confuse consumers and will hamstring broadband and wireless providers trying to get into the advertising market to compete against Google and Facebook.

AT&T described as illogical the FCC's stricter approach of requiring internet service providers to get consent for sharing web browsing and app history, since companies like Google, Amazon and Facebook won't be subject to the same requirements.

"The FCC's divergent approach will ultimately serve only to confuse consumers, who will continue to see ads based on their web browsing history generated by edge providers even after they have been told by their service provider that their consent is required for use of such information," said Joan Marsh, AT&T's senior vice president for federal regulatory affairs.

Republican Commissioner Ajit Pai, who voted against the rules, said the agency has now painted itself into a corner, and that it or Congress must find a way to harmonize the two approaches.

"If the FCC truly believes that these new rules are necessary to protect consumer privacy, then the government now must move forward to ensure uniform regulation of all companies in the Internet ecosystem at the new baseline the FCC has set," Pai said in his statement Thursday.

But others praised the FCC's efforts, saying the commission's rules are an important step forward in protecting consumer privacy.

"For the first time, Internet Service Providers will be required to get consumer consent prior to using the sensitive information they collect," said Dallas Harris, a policy fellow at Public Knowledge, a consumer advocacy group that pushed for the privacy regulation. "While much remains to be done to protect consumers online writ large, the commission's rules establish a baseline level of protection for all."