The new FTC report on privacy: our view

You don’t always hear companies express support when federal agencies call on Congress to pass legislation. But when both the Federal Trade Commission and the White House issued complementary reports focusing on consumer privacy and asking Congress to create new baseline privacy laws, we here at Verizon largely agreed.

Verizon has a longstanding commitment to privacy because it is an important consumer trust issue. We know that consumers will only fully use our products and services if they trust that we won’t misuse their information.

The FTC report acknowledges the importance of preserving the innovation that has been spurred by the Internet and the industries that have helped build the networks and services that make up the Internet ecosystem. It also notes that gathering and using information about consumer activities online has contributed to innovation and the delivery of better products and services. At the same time, the FTC emphasizes that these activities should not be conducted at the “expense of consumer privacy.”

We do not agree with all of the FTC report’s findings. For example, the FTC suggests that consumers have little choice once they select a broadband provider. Yet, in a recent post, I offered clear evidence that consumers have choices and the evidence is in the number of consumers who are switching providers.

At Verizon, we work in this interconnected market every day. We are a global solutions provider, serving customers with a secure, global, IP-based network that spans six continents and 159 countries, 4G LTE mobile service, and a 100% fiber-optic FiOS network. And as everything becomes digitally connected – homes, cars, buildings, streets and cities – we are creating innovative products that employ our networks to conserve energy, deliver health care, and improve the environment.

In order for our customers and our society to reap the benefits of these technologies, we must protect consumers in an ecosystem that is evolving more quickly – and is more sensitive to consumer demand – than any other in history. So the White House and FTC have set out a flexible yet multi-layered approach that rewards good actors. Both support the enactment of baseline privacy legislation – essentially a set of principles dealing with everything from transparency to consumer choice – that companies would implement through their own publicly available privacy policies and procedures. The FTC would be the enforcement agency for all players in the ecosystem, intervening only when an investigation shows companies have failed to live up to their commitments.

It will take some time for Congress to consider privacy legislation. In the meantime, the White House and FTC encourage companies to implement best practices that will give consumers greater control over their information. These practices form a framework that is intended to assist Congress as it considers privacy legislation.

The FTC does two more things in the Report that advance consumer protection in a practical manner. First, it recognizes the importance of not favoring one type of technology over another, saying that a “technology neutral” approach is the best path forward. In the Internet space, the same technology can be used for different purposes – good and bad – so making rules about technological tools themselves rarely works. Instead, successful policies make the consumer the focus, looking at the harm that has been done, and finding ways to protect consumers from the harm– no matter which tool was used. This way the consumer is always protected.

Second, the FTC says it will work through the Department of Commerce multi-stakeholder process to come up with sector-specific best practices – a method that allows the government, consumer groups, and industry to create consensus around how to deal with fast-changing technologies that impact consumer privacy.

At a hearing in the House of Representatives on March 29^th, FTC Chairman Leibowitz said he thinks the right privacy policy would set a standard that protects consumers in a way that does not hinder innovation. We agree.