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As the Fall begins, data broker, ISP investors should keep ears open for new rules

Posted September 23rd, 2015 in data brokers and tagged , , , by Alton Drew

This article discusses the possibility of the Federal Communications Commission writing a privacy rule component for its net neutrality rules.  The FCC may consider the issue of “super cookies”, a technology that allows a broadband provider to inject unique code into a consumer’s mobile traffic; and whether internet service providers should be able to price discriminate between consumers who allow data to be shared and those who don’t.

FCC chairman Tom Wheeler, according to the article, is considering rules for issue this fall. So far the FCC has not issued any notices for proposed rule making or an inquiry seeking comments.

Investors in data brokers should stay abreast of additions to net neutrality rules.  Internet service providers will like to enhance their ability to collect and distribute consumer data to data brokers with the use of techniques like deep packet inspection.  The FCC did not address deep packet inspection in great depth during the promulgation of its net neutrality rules. Net neutrality rule language doesn’t refer to deep packet inspection but given consumer privacy concerns raised by advocacy groups, this technique may not stay on the back burner for long.

And while the Federal Trade Commission has been at the forefront of probing data brokers, including a recommendation to Congress that legislation regulating the collection of data be drafted, the FTC itself has not come out with any new rules.


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Would more transparency on the part of data brokers be good for investors?

Posted September 9th, 2015 in big data, Broadband, data brokers and tagged , by Alton Drew

I came across an article in The Wall Street Journal about “device fingerprinting.” Device fingerprinting is information collected about a remote computing device for the purpose of identification. Data brokers use fingerprints can be used to fully or partially identify individual users or devices even when cookies are turned off.

Back in 2014, the Federal Trade Commission produced a report addressing the lack of transparency in the data broker industry.  While the report does not explicitly use the term device fingerprinting, the FTC does describe web crawling on particular websites containing public information and the use of application programming interface among the methods used to collect information.  Based on its description, device fingerprinting appears to take its place among these collection methods.

The FTC has recommended that Congress pass legislation that would provide consumers with access to the information data brokers collect on them.  It was also recommended in the report that consumers be allowed to opt out of a data brokers collection efforts. For further transparency, the FTC also recommended that a central website listing data brokers and describing their data collection policies be created.

In March 2015, Senator Ed Markey, Democrat of Massachusetts, introduced S. 668, the Data Broker Accountability and Transparency Act of 2015.  The thrust of the bill appears to focus on the accuracy of the data collected and shared; the transparency about why information is being collected; and the ability of the consumer to review the information collected and requesting that information not be used for the purposes collected.

It would be surprising to see the bill go beyond these three main restrictions.  Congress has shown over the past two decades a wariness about regulating commerce on the internet.  Regulating broadband, the on-ramp that gets the consumer to the information superhighway is one thing.  Regulating the actual commerce moving on that highway is a different story.

Ironically, it would especially put net neutrality advocates in a tight position between so called openness and privacy.  It is the open network architecture of the internet that allows for apps to capture information from websites and transmit the information to third-parties for packaging and analysis.  This is the openness that net neutrality types were advocating for. The millions of Americans who supported the open internet campaign may not like the result of net neutrality, that their privacy may have been put in some jeopardy.

S. 668 has been in committee for six months and shows little sign of moving to a vote much less the floor.  Since the language of the bill does not necessarily sound the death bells for the data broker industry, even if it passes and compliance costs increase, the increase in demand for data that the industry provides may offset these costs.