May 1, 2017

FTC's McSweeny: Unwinding net neutrality favors "gatekeepers"

Kim Hart, author of Cities

Rebecca Zisser / Axios

These days, FTC Commissioner Terrell McSweeny is thinking a lot about data — How it can be delivered to consumers without gatekeepers, how it is safeguarded from hacks in the explosion of connected devices, and how tech companies collect and sell it.

Why she matters: In its proposal to unwind the 2015 net neutrality rules, the FCC wants to shift the responsibility of policing internet service provider behavior to the FTC. McSweeny's also keeping a close eye on the data security implications of the fast-growing Internet of Things ecosystem, including connected cars. Here are excerpts from our conversation:

What's your reaction to the FCC's proposal to dismantle key parts of the 2015 net neutrality rules?

I'm concerned that, on balance, it favors incumbent, enormous business interests that already have a huge amount of power and are the gatekeepers, at the expense of the little guy and the entrepreneur and the consumer. It's not clear to me what rights entrepreneurs would have if they're concerned about discriminatory practices. That's a big gap.

The FCC suggests the FTC can police ISP behavior and privacy practices through its power to act against unfair and deceptive practices. Would that work?

It's not clear to me how consumers will detect whether the promises being made to them to not block content, not throttle content to not discriminate against content are actually being adhered to. It's even hard for competitors to know what's going on on their networks.

There's an additional problem with relying on an enforcement-only approach: Enforcement takes time. It can take years to detect, investigate and prosecute a harmful practice. If you've got the next YouTube and you're trying to scale that platform by connecting consumers to content, but you can't ever get to the consumers because you can't pay the gatekeepers — at the end of the day, there isn't really a remedy for that kind of harm...especially after a long period of time has passed. That's the concern underpinning why the FCC enacted open internet rules to begin with.

Regarding broadband privacy, what's next?

The ball is in Congress's court. They took the step, wrongly in my view, to use the CRA to take the FCC out of the privacy business, without giving the FTC the jurisdiction to pick up the slack. Right now, we can't even hold the ISPs to the same standards that we're holding the Googles and Facebooks and Amazons and other platforms of the world. And consumers are the ones who are standing in the yawning chasm of no privacy.

What worries you the most about the fast-expanding Internet of Things market?

Consumer trust is essential for adoption, which is essential for demand, and demand drives innovation....I worry that because IoT expansion is happening so quickly, relying on an enforcement-based approach, especially on data security, is not going to yield enough good data practices. Companies selling devices are under a lot of pressure to deliver cool gadgets inexpensively, and there isn't a lot of information about their security practices. That's why you see these very insecure IoT devices being exploited in ways that are increasingly dramatic.

I worry consumers are going to see nuisance ransomware attacks on their IoT, where they're going to get [a message demanding that they] pay $50 in bitcoin in order to turn on "Game of Thrones." Those kinds of attacks are going to feel very intimate to people in a way that will shake consumers' trust. I keep hoping for comprehensive data security legislation. In the absence of it, we are bound to have some pretty nerve-wracking incidents affecting peoples' daily lives.

Are you concerned about companies like Google, Facebook and Amazon becoming too dominant, especially with the amount of consumer data they have access to?

I have concerns about concentration, full stop. The mere existence of very large player isn't in necessarily regarded by competition enforcers as harmful. What we get concerned about is if the power of those monopolies is foreclosing competition in other markets or is in other ways harming consumers and competition.

As a competition enforcer, I also appreciate that it's important to not lose sight of the microeconomics of markets, and markets can be very different depending on the products and competitors within them. I eschew generalizations when it comes to data because data are not monolithic. It is one element of a digital economy and needs to be understood properly by competition enforcers and regulators, but is impossible to generalize.

Go deeper

George Floyd updates

Protesters gather north of Lafayette Square near the White House during a demonstration against racism and police brutality, in Washington, D.C. on Saturday evening. Photo: Jose Luis Magana/AFP via Getty Images

Tens of thousands of demonstrators have been rallying in cities across the U.S. and around the world to protest the killing of George Floyd. Huge crowds assembled in Washington, D.C., Philadelphia and Chicago for full-day events on Saturday.

Why it matters: Twelve days of nationwide protest in the U.S. has built pressure for states to make changes on what kind of force law enforcement can use on civilians and prompted officials to review police conduct. A memorial service was held for Floyd in Raeford, North Carolina, near where he was born. Gov. Roy Cooper ordered all flags to fly at half-staff to honor him until sunset.

Updated 4 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 11:30 p.m. ET: 6,889,889 — Total deaths: 399,642 — Total recoveries — 3,085,326Map.
  2. U.S.: Total confirmed cases as of 11:30 p.m. ET: 1,920,061 — Total deaths: 109,802 — Total recoveries: 500,849 — Total tested: 19,778,873Map.
  3. Public health: Why the pandemic is hitting minorities harder — Coronavirus curve rises in FloridaHow racism threatens the response to the pandemic Some people are drinking and inhaling cleaning products in attempt to fight the virus.
  4. Tech: The pandemic is accelerating next-generation disease diagnostics — Robotics looks to copy software-as-a-service model.
  5. Business: Budgets busted by coronavirus make it harder for cities to address inequality Sports, film production in California to resume June 12 after 3-month hiatus.
  6. Education: Students and teachers flunked remote learning.
Updated 7 hours ago - World

In photos: People around the world rally against racism

Despite a ban on large gatherings implemented in response to the coronavirus pandemic, protesters rally against racism in front of the American Embassy in Paris on June 6. Photo: Julien Mattia/Anadolu Agency via Getty Images

Tens of thousands of people have continued to rally in cities across the world against racism and show their support this week for U.S. demonstrators protesting the death in police custody of George Floyd.

Why it matters: The tense situation in the U.S. has brought the discussion of racism and discrimination onto the global stage at a time when most of the world is consumed by the novel coronavirus.