Washington's decision to unravel Obama-era privacy rules on Comcast Corp., AT&T Inc. and other large internet service providers throws consumer protections into legal and regulatory uncertainty, experts say.
The Senate and House voted to repeal the harder privacy rules last month, shifting broadband privacy oversight to the Federal Trade Commission from the Federal Communications Commission.
It's a big win for telecom companies, as personal information is viewed as a multibillion-dollar resource to be monetized for targeted advertisements, more so because a pending court case brought by AT&T has so far successfully challenged the authority of the FTC over "common carriers" such as AT&T or Comcast's high-speed internet business.
"There's a lot of moving pieces and potential loopholes to escape regulation, so that there is no cop on the beat until the court or Congress clarifies this," said Matthew Schettenhelm, government and litigation analyst with Bloomberg Intelligence.
"It's bit of a shell game," he said of shifting privacy oversight from one federal agency to another.
Sensitive to consumer concerns over privacy after their big political win, telecom companies say that they will not sell internet browsing histories and that consumer information is as safe as it was before the Obama-era laws were repealed.
"We do not sell our broadband customers' individual web browsing history," Comcast said in a blog post Friday. "We did not do it before the FCC's rules were adopted and we have no plans to do so."
Comcast also said that it complies with federal laws that include the Communications Act, the Children's Online Privacy Protection Act, and the Electronic Communications Privacy Act. The Philadelphia company noted that state attorneys general can enforce privacy laws.
AT&T, in a blog post also on Friday, said the idea that repealing the rules "suddenly eliminated consumer privacy protections is just plain wrong."
The political rhetoric over broadband privacy reflects both the supercharged political atmosphere in Washington, with a Trump administration that has vowed to chop away at regulations on business, and the financial stakes for telecom and internet companies over personal data.
Many viewed the Obama-era privacy curbs on broadband companies as the FCC's giving Google and Facebook a competitive advantages over Comcast and others. The internet companies could easily glean personal information to target ads, but Comcast and legacy telecom companies could not.
But internet companies had second thoughts about a government-offered competitive advantage. If consumers came to expect personal privacy on the internet because of the rules on broadband firms, the expectation could be transferred to search engines and social media platforms, which would severely hurt their businesses.
Representatives of Google, Facebook, and others "were in the meetings in favor of this" in early 2017, a Washington telecom source who was not authorized to speak publicly on the discussions said last week. "They thought it was problematic with the direction that the government was taking on privacy," he said.
"What really concerns companies is shrinking the pool of data that companies like Google and Facebook have been so good at monetizing," Schettenhelm said. "The fear that the bar might be raised for them outweighed the competitive advantage."