• by Wendy Davis  @wendyndavis, March 10, 2016

Internet service providers would have to obtain consumers' consent before drawing on their Web-surfing data for behavioral targeting, under a proposal unveiled today by Federal Communications Commission Chairman Tom Wheeler.

"Every broadband consumer should have the right to know what information is being collected and how it is used," Wheeler said Thursday in a piece published on the Huffington Post. "Every broadband consumer should have the right to choose how their information bits are should be used and shared."

The proposal calls for broadband providers to obtain consumers' opt-in consent before using data about them for ad purposes -- unless the ads are related to other communications services. Using data in order to market consumers other communications services requires only opt-out consent.

That carve-out appears fairly limited. For instance, if Verizon wanted to market its wireless service to a customer who already subscribed to Verizon FiOS, Verizon would only need that customers' opt-out consent, according to a senior FCC official.

The proposal also calls for comment on questions surrounding how ISPs should obtain consumers' consent, including whether they can charge customers lower fees if they agree to behavioral advertising. AT&T currently takes that approach in some areas where it offers Gigabit service.

Wheeler obviously rejected some of the conclusions put forward by privacy expert Peter Swire, who said in a report last week that broadband providers no longer have a comprehensive view of consumers' activity due to factors like the growth of encryption.

"An ISP handles all of its customers’ network traffic, which means it has an unobstructed view of all of their unencrypted online activity -- the websites they visit, the applications they use," the FCC said in a fact sheet issued Thursday. "Even when data is encrypted, broadband providers can still see the websites that a customer visits, how often they visit them, and the amount of time they spend on each website. Using this information, ISPs can piece together enormous amounts of information about their customers -- including private information such as a chronic medical condition or financial problems."

The agency added that consumers' relationships with ISPs are different from relationships with Web sites or apps. "Consumers can move instantaneously to a different Web site, search engine or application. But once they sign up for broadband service, consumers can scarcely avoid the network for which they are paying a monthly fee," the FCC stated.

The FCC will vote on March 31 about whether to move forward with the proposal by seeking comments on it.