Why Broadband Carriers are a Menace to Privacy

Last week we learned that Verizon, a company that primarily sells access to the internet, plans to acquire Yahoo!, a company that primarily sells eyeballs and advertising over the internet. This deal exemplifies why Americans need to fear abuse by broadband internet providers. It also exemplifies why it’s important that the communications privacy laws currently being implemented at the FCC be properly enforced as soon as possible.

The carriers scream, as they did throughout the network neutrality debate, that the law’s basic privacy protections will inhibit “innovation.” But what kind of innovation, exactly, do we as broadband subscribers have to look forward to? Of course we all want innovation in internet services, whether social networks, news, gaming, and entertainment sites, chat and email services, and many other things. But those are services that send data across the internet. What innovations can Verizon bring us in how it delivers our bits that will bring noticeable benefits to citizens? 

I haven’t been able to get a satisfying answer about what this supposed innovation is likely to do for me as a customer—how, exactly, rules requiring carriers to ask my permission before sharing data about who I’m communicating with will block those carriers from providing some sort of great services that are going to make my life better. Remember, they’re already allowed to use our information for network management purposes.

What’s much more likely is that the only “innovations” we’ll see will consist of mischief of various sorts that will help the carriers but not customers —“innovation” in how they can spy on us more and more thoroughly, and make more and more money from doing so. That’s not the kind of innovation that’s going to help me or you, or that policymakers ought to advance.

The broadband companies are watching companies like Google and Facebook make billions from a business model that involves offering useful communications services to the public over the carriers’ internet wires—and eavesdropping on those communications to sell targeted advertising. The carriers would like a piece of the action, but the only way they can get it is by inserting themselves between us and the online sites and services we want to communicate with. And while we can switch from Google or Yahoo if we don’t like their privacy practices, it’s difficult or impossible to switch internet service providers—and if they’re all spying on us, we’ll have even less control.

The fact is, what people want is simple: they want to be able to exchange data with the parties of their choosing. They want clean, simple, fast, cheap internet service. They want Verizon and Comcast to get out of the way, do their job, and deliver their data without messing with it (violating network neutrality), or spying upon it (violating privacy).

The problem for the carriers is that providing such service is a boring, utility-like function that holds little promise to allow carriers to differentiate their products from each other, other than on raw speed, reliability, and customer service. As the Washington Post put it, “traditional telephone and Internet companies are worried that their businesses are being commodified.” Commodification is a very bad word in the world of Wall Street-financed public companies, which are under enormous pressure to produce dynamic new products and innovations that will allow for soaring profits. As a result, the fast, cheap, reliable, boring connectivity that everyone wants is under constant threat from “innovations” by hungry carriers eager to extract additional revenue from customers. You may want simple, fast internet service, but that’s just a “commodity,” so the carriers want to mess with it.

In short, the threat to our internet privacy comes from the hunger of ISPs not to be what they are: utilities.

Verizon’s purchase of Yahoo should be seen as part of this story. Yahoo boasts an enormous range of content and services, and among its many subsidiaries and acquisitions is the advertising system BrightRoll, which boasts of tracking consumers “across devices” with “165 billion data points, across email, search, apps, user registration, content consumption, TV viewing, and mobile analytics.” Yahoo has absorbed a number of advertising companies, including the likes of BlueLithium and interclick, which specialize in analyzing and segmenting the vast amounts of data advertisers have collected about people.

In the end, Yahoo is an advertising and tracking company. So is Verizon’s other recent acquisition, AOL. Combine this focus with the technological ability the carriers have to monitor the internet activities of every customer, and the need for the FCC’s pending privacy protections becomes clearer than ever.

Nor is Verizon at all unique in this quest. Other internet service providers are, as the Center for Digital Democracy points out in a detailed report on ISP practices, incorporating “powerful layers of data collection and digital marketing technologies to better target individuals.” AT&T, for example, runs a division called AdWorks, which seeks to harness big data for ad targeting, while Comcast has bought ad-technology companies Visible World and FreeWheel Media.

One of the arguments that the carriers and their defenders make is that if they could grab additional income by monetizing customer surveillance, they could invest in infrastructure improvements that would benefit everyone, and/or keep rates low. But what guarantee is there that the additional profits that flow to Verizon, AT&T et al will be invested in infrastructure or in keeping prices low for consumers, rather than simply going to increased profits? Given the poor state of competition in broadband services, we can’t rely on competitive pressures to keep prices low. Nor are profits from customer surveillance likely to be sufficient to inspire other companies to invest the considerable capital required to build parallel internet access infrastructures. But even if they were, we should not throw out centuries of special protection for the privacy of communications, when plenty of other countries have found ways to provide faster, cheaper internet to their populations without doing so.

A parallel argument was made by the carriers with regards to competition. As Brenan Greeley of Bloomberg put it in 2014,

ISPs have spent more than a decade arguing the same basic thing.... The utterly consistent position from the ISPs has been this: Guarantee us a higher income stream from a more concentrated market, and we’ll build out new infrastructure to reach more Americans with high-speed Internet. A decade ago, this argument had at least the benefit of being untested.

In the end, Greeley and others show, the ISPs’ argument was false. U.S. broadband penetration slipped from 10th place worldwide in 2002 to 16th place in 2013, despite starting with enormous advantages in terms of existing copper and cable infrastructure penetration.

Today’s online internet advertising ecosystem is bad enough for privacy. To allow its tracking capabilities to be combined with free-floating carrier surveillance of our fundamental communications networks would be a disaster. It’s more important than ever that the FCC enact its privacy rules in strong form to complete the protections begun through the agency’s network neutrality rulemaking.

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