Your Internet service provider knows an awful lot about you.
Whether you use Comcast (NASDAQ:CMCSA), Charter Communications (NASDAQ:CHTR), another big-cable player, or have one of the telcos, like AT&T (NYSE:T) or Verizon (NYSE:VZ), as your ISP the company has access to a whole bunch of information. Whether it be your visits to adult websites (in your defense, you were there for the articles), or your secret shoe-shopping habit, and really anything else you might not want publicly known.
Currently ISPs and wireless carriers can share any information they glean from your non-encrypted browsing with advertising companies if they choose to do so. This practice, which is widespread, explains why if you do a web search for smartphones, Red Sox tickets, or pretty much anything else, you start seeing ads on the sites you visit for products related to your search.
That's smart marketing by Comcast, Charter, Verizon, AT&T, and the rest the ISPs and wireless carriers and some people would actually want the practice to continue because it delivers a better Internet experience for them. But, of course, some users don't want their search for say a divorce lawyer or maybe ointment for a personal itch to be widely shared or influence what ads they say.
Those people, and others who simply don't like the idea of sharing their browsing info with third parties may soon have a way to stop it from happening if a new proposal from Federal Communications Commission (FCC) Chairman Tom Wheeler moves forward.
What is Wheeler proposing
The chairman, who started as a cable-industry lobbyist, but has since become a fairly maverick FCC leader who does not hesitate to take on the companies that once paid his salary, wants ISPs and wireless providers to ask for permission before sharing your personal data. If, for example, Comcast, Charter, AT&T, Verizon, or any of the others wanted to share your usage data with a third party or serve its own targeted ads based on that behavior, it would require customers to opt in.
"Your ISP handles all of your network traffic," Wheeler wrote in a Huffington Post blog post. "That means it has a broad view of all of your unencrypted online activity -- when you are online, the websites you visit, and the apps you use. If you have a mobile device, your provider can track your physical location throughout the day in real time. Even when data is encrypted, your broadband provider can piece together significant amounts of information about you—including private information such as a chronic medical condition or financial problems -- based on your online activity."
Wheeler noted that his actions have precedent as the "information collected by the phone company about your telephone usage has long been protected information," he wrote. "Regulations of the Federal Communications Commission limit your phone company's ability to repurpose and resell what it learns about your phone activity."
Now, he wants those rules extended to cover ISPs and wireless carriers, and his proposal could be voted on as soon as March 31, Ars Technica reported, though final approval is not expected until later in 2016 after a public comments period.
ISPs don't like this
As you might imagine, Wheeler's proposal has not been well-received by the companies it intends to regulate.
"We are disappointed by Chairman Wheeler's apparent decision to propose prescriptive rules on ISPs that are at odds with the requirements imposed on other large online entities," said the National Cable & Telecommunications Association, Ars reported. The NCTA, headed by former FCC Chairman Michael Powell, counts all the top ISPs as members.
What happens next?
During the Wheeler administration, FCC proposals have generally fallen on party lines and the Democrats, led by the chairman, have a three to two edge. That likely means that some version of this proposal will pass, which is good news for consumers, and bad news for ISPs and wireless carriers.
There will likely be some softening or compromises made, but it's hard to argue against what Wheeler is saying. People should be able to control how their personal information gets used and this proposal will simply return that control to them.
Daniel Kline has no position in any stocks mentioned. He is looking forward to playing virtual reality Pac-Man. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.