Yahoo Finance Why Internet Providers Are Celebrating Friday’s Privacy Rule Rollback
On Friday, the Senate blocked the implementation of rules that would have restricted internet service providers like Comcast and Verizon’s ability to monetize users’ internet browsing history and other data. This doesn’t in itself mark a sea change-the rule in question wasn’t due to go into effect for nearly a year. But it does preempt what would have become a major obstacle to ISPs’ efforts to meld their network services with precisely-targeted advertising.
Most Americans who use services like Facebook or Google are by now familiar, and by and large comfortable, with the basic idea of targeted advertising. ISPs now have (barring some outlier scenarios) the go-ahead to get in on that game, which could become a major new revenue stream-and potentially serious competition for current web-advertising giants.
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There are some technical limits to the data that ISPs can gather. And Google and Facebook, because they gather such detailed personal data, seem likely to retain an overall edge in targeting tailored ads. But internet providers do have some unique advantages-especially those that also provide other data services. Verizon, for example, tracks what TV channels you watch, and both Verizon and Comcast already use such data to tailor ads across various platforms.
The Senate vote clears the path for connecting that data to network providers’ online ad services. Verizon, in particular, has been expanding its footprint there in recent years, with a $4.4 billion acquisition of AOL in 2015 and its in-progress pickup of Yahoo.
What might have looked at first blush like a mere diversification into advertising, then, could now be a unique synergy. A Verizon-owned Yahoo, for instance, could serve browsers with ads targeted based on something close to a viewer’s entire internet usage and TV viewing history, instead of just that gleaned from a closed (though extensive) data-gathering system like Google’s.
That scenario worries privacy advocates-but it’s also a potential nightmare for any business somehow in competition with an ISP. A 2016 report from the Open Technology Institute, for instance, opined that AT&T could track a user’s online interaction with their home security provider-then offer the user incentives to switch to AT&T’s own home security services.
Thanks to Friday’s Senate vote, that future could be just around the corner.
