The Chairman of the Federal Communications Commission (“FCC” or “Commission”) has circulated a notice of proposed rulemaking designed to fundamentally alter the guidelines dictating the online privacy rights of consumers. The full FCC will vote on the proposal at the end of March, at which time, if passed, the public would be allowed to submit comments on these new consumer choice and security requirements.

What are the key components of the proposed FCC online privacy rule?

The proposed rule is meant solely to govern a consumer’s relationship with his or her respective Internet service provider (“ISP”). Generally speaking, the proposal would not prohibit either the collection or use of customer data. Rather, the rule aims to place restrictions on certain uses of customer data by allowing a customer to either opt-out from, or opt-in to, particular uses of his or her personal information. For example, the proposal would not inhibit an ISP’s ability to use customer data in order to bill customers or to ensure that a customer’s email arrives at its intended destination. Likewise, unless a customer affirmatively opts-out, ISPs would continue to be allowed to use customer data to market communications-related services and share data with affiliates that provide communications-related services to market those services. If an ISP wishes to use customer data for any other purpose, the ISP would need to obtain express opt-in consent from the consumer. Finally, the proposal envisions a requirement for ISPs to take steps to safeguard customer information from unauthorized use and disclosure, as well as reporting requirements to federal authorities and affected customers in instances when data has been compromised.

Changing Rules of the Road for Online Privacy

While the FCC’s proposed rule is limited to ISP-use of consumer data, it is not difficult to envision the Commission eventually turning its sights towards regulation of a broader category of entities that collect, use and share various forms of online personal information. Additionally, while the FCC may not yet have extended its reach beyond ISPs, please be advised that the collection, use and sharing of consumer data by all other entities remains of significant interest to the Federal Trade Commission, class action plaintiffs and attorneys general nationwide. As such, it is important to work closely with knowledgeable counsel to craft and implement privacy policies tailored to the needs of your business, and that provide consumers with the information that they require to make informed decisions about their personal data and how it is used.

The ongoing evolution of online privacy law warrants continued attention from Internet attorneys, technology attorneys and those interested in consumer privacy in general.