• by Wendy Davis , Staff Writer @wendyndavis, May 21, 2015

Broadband providers might want to draw on data about subscribers' Web activity in order to serve them targeted ads, but the Federal Communications Commission is reminding carriers to proceed with caution.

“The Commission has found that absent privacy protections, a broadband provider’s use of personal and proprietary information could be at odds with its customers’ interests and that if consumers have concerns about the protection of their privacy, their demand for broadband may decrease,” the FCC's enforcement bureau said in guidance issued this week.

Now that broadband is considered a “telecommunications” service, providers generally are obligated to protect users' confidentiality -- the same as companies that offer telephone service.

At the same time, the FCC has said that the specific privacy regulations that were crafted for telephone service don't necessarily make sense for broadband.

The agency is in the process of forging new broadband-specific regulations, but doing so could take a while. In the meantime, the FCC's enforcement bureau says it will examine whether providers take “reasonable, good-faith steps” to protect consumers' privacy.

“By examining whether a broadband provider’s acts or practices are reasonable and whether such a provider is acting in good faith ... the Enforcement Bureau intends that broadband providers should employ effective privacy protections in line with their privacy policies and core tenets of basic privacy protections,” the FCC said.

The guidance didn't mention any carriers by name, or any particular technology. But the FCC already said it's looking at Verizon's use of “supercookies” for ad-targeting purposes. The agency also is expected to examine AT&T's decision to charge some Gigabit fiber customers an extra $29 a month to avoid receiving behaviorally targeted ads.

For their part, broadband providers have made no secret of their dislike for the net neutrality rules, including the new privacy obligations.

Last week, a coalition of trade groups, AT&T and CenturyLink asked a federal appellate court to stay portions of the net neutrality order -- including privacy requirements. AT&T and the others said in court papers that they will suffer financial loss due to uncertainty over how the new rules will be implemented.

“Today, broadband providers can lawfully use information about customers’ Internet access services and usage to develop customized marketing programs that benefit both the provider and its customers,” AT&T and the others say in their court papers. “The FCC’s reclassification creates significant uncertainty as to what the new rules of the road will be for broadband -- and whether existing practices will subject providers to liability.”

The groups add that AT&T estimates it would lose up to $400 million by temporarily stopping its ad-targeting initiative in order to implement “consent mechanisms based on its guess as to content of future FCC rules.”