Recent regulations will pave way for vital internet reforms

By Javier Palomarez

Saturday, May 13, 2017 | 2 a.m.

If the last election proved anything, it’s that Americans are anxious and want government to do more for the little guy, to lift up small businesses and make the economy work better for ordinary consumers.

And while Americans are still waiting for progress on many of these issues, one notable early success was recent Congressional action to fix the confusing and costly rules that govern internet privacy.

Consumers deserve to confidently know what information about their online behavior is being tracked. At the same time, businesses, especially small and medium sized firms, need affordable and well-targeted online advertising to find new customers to survive and grow. For diverse companies serving minority communities or audiences, effective tools tailored to their customers are especially important.

Unfortunately, the rules of the road for online privacy right now are anything but clear. A rushed effort to push new rules in the last days of the controversial Tom Wheeler FCC confused the issue by creating a patchwork of inconsistent privacy requirements. Figuring out these inconsistent rules would be difficult for everyone who uses the internet and even more so for older internet users and non-native English speakers.

For businesses who depend on affordable access to a competitive online advertising marketplace, the regulations dramatically narrowed options and favored incumbents, driving up prices for online advertising and making it especially hard for niche advertisement services that provide products and services to minority communities to survive. That doesn’t help consumers. And for the diverse and minority-owned businesses we represent, it’s a disaster.

In this kind of noncompetitive market, small businesses have no choice but to accept whatever terms and prices for online advertising that are imposed upon them. Small digital advertising companies that might specialize in diverse audiences or communities simply can’t compete with the giants dominating this industry who are favored by these flawed rules. It’s a one-size fits all world that will inherently cater to the majority, raising costs for our members, and making it harder for them to find new customers and compete.

Indeed, that is why a broad coalition of diverse Chambers of Commerce representing Hispanic, African American, Gay and Lesbian, and Asian and Pacific Islander American businesses recently wrote Congress to warn, “this approach is not sustainable.”

That is why Congress wisely voted to withdraw these flawed and costly rules. While this vote has been mischaracterized as taking away consumer privacy protection, all it did was stop these flawed rules and inconsistent rules from taking effect and freeing up the FCC, the FTC and Congress itself to implement a consistent evenhanded regime to protect consumer’s privacy online while allowing for a competitive online advertising market to thrive.

FCC Chairman Ajit Pai and leaders in Congress like Sen. Dean Heller, R-Nev., who have worked to fashion a better, pro-consumer, pro-competition solution deserve credit for taking a measured step-by-step approach and being willing to rethink a hasty and flawed decision.

In the meantime, consumers remain fully protected by the substantive privacy requirements of the Federal Communications Act, which the FCC has committed to vigorously enforce while it reconsiders its approach. And those requirements are supported by a strong system of state and federal laws and requirements on data security, privacy, and fair practices, including enforcement by state attorneys general.

In addition, virtually all major internet companies have committed to best practices and principles to protect consumer data. Any online business knows it will not succeed if its customers do not have confidence that their data and information will be protected and used responsibly. Advocates crying wolf over calls to reconsider these broken rules aren’t really trying to protect consumer privacy. Rather, they seek to preserve the unfair and uncompetitive status-quo.

Congress, the FCC, and the FTC have an opportunity to take strong aggressive action to make the internet more innovative, more successful, and fairer for small businesses and ordinary consumers alike. In these political times, that’s a win-win opportunity they simply cannot afford to ignore.

Javier Palomarez is president and CEO of the U.S. Hispanic Chamber of Commerce.