Comcast supports higher prices for customers who want Web privacy

As the Federal Communications Commission debates new privacy rules for Internet service providers, Comcast has urged the commission to let ISPs offer different prices based on whether customers opt into systems that share their data and deliver personalized ads.

Comcast executives met with FCC officials last week, and "urged that the Commission allow business models offering discounts or other value to consumers in exchange for allowing ISPs to use their data," Comcast wrote in an ex parte filing that describes the meeting. (MediaPost covered the filing yesterday.)

AT&T is the biggest Internet provider offering such a plan. AT&T's "Internet Preferences" program reroutes customers' Web browsing to an in-house traffic scanning platform, analyzes the customers' search and browsing history, and then uses the results to deliver personalized ads to websites. With Internet Preferences enabled, AT&T customers can pay as little as $70 per month for 1Gbps fiber-to-the-home service, but those who don't opt into Internet Preferences must pay at least $29 a month extra.

Comcast hasn't rolled out an Internet Preferences-like service, but it could do so in the future. A Comcast spokesperson declined comment this morning when Ars asked about the company's plans.

Comcast said in its filing that "such a prohibition would harm consumers by, among other things, depriving them of lower-priced offerings, and as FTC Commissioner [Maureen] Ohlhausen points out, 'such a ban may prohibit ad-supported broadband services and thereby eliminate a way to increase broadband adoption.' A bargained-for exchange of information for service is a perfectly acceptable and widely used model throughout the US economy, including the Internet ecosystem, and is consistent with decades of legal precedent and policy goals related to consumer protection and privacy."

Comcast also argued that "the FCC has no authority to prohibit or limit these types of programs." Comcast explained this line of reasoning in more detail in a previous filing. As long as customers provide consent, then the statutory requirements in Section 222 of the Communications Act are met, Comcast argued. "The statute does not authorize the FCC to determine whether the customer is actually making a good choice," Comcast wrote.

The FCC's proposal, as we've written, would require fixed and mobile Internet providers to seek permission from customers before using their private information for certain marketing purposes. ISPs could only share a subscriber's Internet usage habits with advertising companies or other third parties if the subscriber opts in to such usage, and they would not be able to serve targeted ads to customers based on their Web browsing habits without first obtaining opt-in consent.

The FCC tentatively voted for the plan in March in a Notice of Proposed Rulemaking that asks the public for comment. Among other things, the NPRM asks whether the FCC should expand its proposed rules to ban or limit offerings of "financial inducements" in exchange for erosion of privacy.