Internet providers are still hashing out issues with the FCC. In particular, Comcast is currently defend its “pay-for-privacy” model to the FCC [PDF]. Comcast has even contended that “the FCC has no authority to prohibit or limit these types of programs.”
So what exactly is the “pay-for-privacy” system? Essentially, companies like Comcast offers discounts to customers in exchange for allowing ISP's to use their data. Comcast then floods these customers with various behaviorally-targeted ads. Customers who prefer privacy over pricing are charged a premium.
Several weeks ago a number of lawmakers urged the FCC to ban the “pay-for-privacy” system. They argued that this pricing pyramid is particularly harmful to elderly customers who do not necessarily understand how ISP's work and low-income customers who cannot afford to pay the privacy premium. Members of Congress noted that Comcast’s policies are “counter to our nation's core principle that all Americans have a fundamental right to privacy.”
Comcast argued that the “pay-for-privacy” model actually benefits elderly and low-income customers. They insisted that its “prohibition would harm consumers by, among other things, depriving them of lower-priced offerings.” They noted that this system is commonly used throughout the United States economy.
Comcast also argued that its ensures “through contractual provisions that vendors who handle customer-related data have strong measures in place to protect that customer-related data, and that the vendors are prohibited from using that data for any purposes other than as directed by Comcast.”
The company concurs that opt-in agreements should be required when dealing with sensitive information. This kind of information would include financial, health, and children’s information, Social Security numbers, and precise geo-location information. All other information, however, would be subject to opt-out or, in most instances, “implied” consent. The FCC is currently considering privacy rules that would require broadband providers to obtain consumers' opt-in consent regardless of whether the information was sensitive or not.