Are open for business, we are working, were doing the public work, work very well, i think. So there are two current members, im the acting chairman. Im a republican. And i have my colleague, terrell mcsweeny, whos a democrat. But the thing to remember about the ftc is we are generally a bipartisan agency. Were an enforcementoriented agency, so our rules allow us to have a quorum with as few as two commissioners, so that isnt affecting our work. But, of course, we have to Reach Agreement to take action. Fortunately, most of the work that the ftc does is very much focused on real harms to consumers, fraud, we review mergers, we review antitrust issues, and those are areas where there is a lot of agreement. The other thing thats happening, you know, under hi leadership as chairman, ive asked staff to go back and take a look at some of the things that were doing that maybe need to be better focused or perhaps have a more limited impact on business or are our civil investigative demands too broad, have we defined harm sufficiently, are we using our resources to the best advantage for the american public. So im directing that. I believe staff is very support toive of that, and so were moving ahead. Host well, we invited you here on the communicators to talk about Telecom Policy and the ftc, and where is the dividing line between what the fcc regulates and what perhaps the ftc regulates . Guest well, where the dividing line is right now is different than it was before 2015. So the ftc has General Authority for unfair and dective acts or practices be in or i affecting commerce. We dont have authority over common care yores carriers. But previously, Broadband InternetAccess Service hadnt been considered a common carrier service. But that all changed this 2015 in 2015 when the fcc issued its open Internet Order and extended title ii authority over Broadband InternetAccess Service. So since then the ftc has been effectively kind of nudged out of oversight over that part of the internet ecosystem. We still have oversight over edge providers and handset makers and folks like that, but the circle around whos a common carrier got made very much bigger by the fcc through its regulatory action and the open Internet Order. Host does that get confusing . Divisioning . Guest well, i think its confusing for consumers, and im concerned about that. So a consumer whos using the internet may not understand, well, this part of the message is being carried by the isp, so its under one set of rules, and edge provider, they can use this information in a very different way under the ftcs approach. Thats one of my main concerns, is that drawing the lines in this place hasnt really benefited consumers, and its also tilted the Playing Field towards allowing the edge providers to have kind of an easier road than the isps. Host well, lets bring brendan board loan into our conversation, hes with Morning Consult where he covers tech policy. Thanks, chairman ohlhausen, for sitting down with us. So to drill down a little bit on the isp, broadband privacy debate here, when the fcc decided to stay a portion of the broadband privacy rule that they passed last october under the new republican chairman, chairman ajit pai, you and he issued a joint statement saying that the main thing you guys wanted to do was sort of streamline the framework between the fcc and the ftc when it came to broadband privacy. Could you sort of run through what the difference now is . And the fccs broadband privacy framework and sort of why the fccs framework is a problem in your view and the view of chairman pai. Guest so thank you for that question, and i will tell you, the ftc tiled a unanimous p bipartisan comment last year on the fccs privacy rules that pointed out some of the problematic differences between the fcc approach and the ftc approach. But in details in particular, so the ftcs approach to privacy has always been based on consumer perception. How does the consumer expect that data will be used and how sensitive is that data. So, basically, trying to reflect consumer preferences. The fcc, to the very different took a very different approach. Rather than saying, well, whats the type of data and how do consumers feel about it, what entity holds that data . If its an edge provider, those rules dont apply. So thats the basis of my concn, is that consumers dont understand necessarily why their same data in the same chain of, you know, basically communication would have these different protections. My other concern is that it can create a competitive problem, right . So you have everyones trying to compete in the Online Advertising space, and theyre using the same consumer data, and some entities can use that more efficiently than others. So i think thats a problem. And then the other issue is the ftc has been a very, very aboutive cop on the beat for consumer active cop on the beat for consumer protection, for correcting consumers privacy and Data Security. And hi concern was we got, you know, elbowed out of that. So is the protection that the fcc can provide, do they have the expertise, do they have the staff level, you know, knowledge to wring the type and level of enforcement activity that the ftc is well known for bringing. Yeah, yeah. And be theres somewhat, i think, of a Division Within the federal trade commission on this issue was your colleague, commissioner mcsweeney be, i think recently wrote an oped where she said, you know, its great to have one cop on the beat, but at least sort of theoretically, but when it comes to the practice, you know, the ftc is already working and always has worked with regulators in the fcc, the fda, nhtsa and nist to make sure things are regulated properly. What would be your response to that, to say the Regulatory Regime for privacy or really anything works better when other commissions are involved, other regulators are also involved . Guest so im certainly very supportive of working with other regulaing laters, but the fundamental issue here was the fccapproach elbowed the ftc out, right . So it took away our authority to bring the type of oversight and enforcement that the ftcs been well known for bringing in this area. So i think thats where my concern stems from. Its not a problem with coordinating with other agencies, but basically being taken off. Yeah. So the republicans in congress are now working to do a resolution through the Congressional Review Act to, essentially, undo the federal Communications Commissions broadband privacy rule. When it comes to the fcc itself, chairman pai has stayed part of that rule. This is a lot of talk that hes probably going to stay other parts of the rule, and other arguments that they make is that the ftc will be able to pick up that gap. But theres some concern there because there was the ninth Circuit Court case last year between at t and the ftc that came to the decision that the ftc really doesnt have jurisdiction over common carriers when it comes to the, not just the activity that they undergo, but also the, if they have the status of a common carrier, right . Then the ftc has no jurisdiction. I know the ftc, at least under the previous administration, was looking to sort of push back on that court case, but are you concerned that that sort of leaves a gap in coverage on broadband privacy . And there are a lot of people that say if the fcc overturns this rule, t the ftcs going to have their hands tied by the court case. Guest well, you raise a very important issue, and i have been concerned about that, and you should though that the ftc going back many, many years on a wisconsin partisan basis has supported Congress Getting rid of the common carrier exemption. It was put in place when networks were pervasively a regulated monopoly. So in the at t case, the ftc has asked for rehearing en banc of the ninth circuits decision, weve had a lot of amicus briefs filed in support, so i hope theres a chance that the ninth circuit may reconsider the imact of their decision. Because previously, the common carrier decision we had interpreted it as just applying to status, i mean, to activity. So that we couldnt have oversight over an activity, but it didnt, it didnt fence out our authority over the whole entity. But i say i hope that the if we arent able to get the ninth circuit to reconsider, that congress would also consider if its reare drawing the lines, that it give us oversight over common carrier activity in the Telecom Space or even more broadly, because thats what weve asked for all along. Host whats the advantage of the ftc having authority over a common carrier rather than the fcc . Guest well, i hi the advantage i think the advantage is it creates a level Playing Field for not just businesses, but also for consumers, right. So that the same rules apply no matter whos holding your databased on the sensitivity of the data because thats what weve based our entire framework on. Consumers are not really concerned necessarily or maybe not understand like the chain of custody of, you know, of the internet. Their messages are passed back and forth. They care about how sensitive is this data, what promises have been made about it and how are you going to use it. Is it going to be used in a way that will injuree. So i think also the ftc had a lot of expertise in this area. Investigators know how to bring these cases, weve brought hundreds and hundreds of privacy and Data Security cases. So i think we have been a very effective cop on the beat, and id like to see us back there. What happens in the meantime though while this case is still sort of pending, right . You guys have put it en banc before the ninth circuit, but if they decide to take it up and it has to go to the Supreme Court and the fcc privacy rule is overturned either through congress or through the fcc itself, what happens to consumers privacy when it comes to isps in the meantime . Guest so i would say you realize this gap was created in 2015, and weve been operating under that the entire time. I think my understanding is that the fcc has authority under section 222 to bring enforcement actions, and i believe chairman pai has mentioned that the commission, the fcc could act under that provision. And thats on a case by case by sis. Basis. Host Maureen Ohlhausen has a baground as a lawyer and has worked on several different privacy issues including data protection, cybersecurity. She was a partner at wilkinson, barker nauer here in washington, d. C. And spent 11 years on the staff of the federal trade commission. Brendan bordelon is with Morning Consult. Go ahead. Yeah. So chairman ohlhausen, switching gears a little bit here, id like to talk to you about the internet of things, cybersecurity concerns there. I know you spoke about this earlier this week, and you said that your feelings that the ftc is really not primarily a regulator when it comes to mandating best cybersecurity practices for internetconnected devices whether those are thermostat, smart refrigerators, cars, really everything is being connected to the internet these days. So i just want you to sort of expand on your reasoning of why you think the commission is not the best place to regulate these practices and why if not the commission, then really what is the best way to secure these devices . Guest im really glad you asked me that question because i feel that the coverage of my remarks was very incomplete because my point was the ftcs an enforcement authority, ask we have broad enforcement action in the internet of things space. We brought a case several years ago against a Company Called trend net that had an internetenabled camera that allowed anybody with the internet to live feed. And the ftc brought that case. Weve already brought a case against asis which was a router maker for flaws that it had that could affect the internet of things. So i think theres a little bit of a misunderstanding of the difference between being an agency that issues extensive regulations and an agency that enforces the law. So we are definitely enforcing the ftc act there. Were also bringing to bear our policy resources. So we brought we had a workshop on the internet of things and issued a report on it, and we certainly highlighted the need to have good Data Security and cybersecurity practices in the internet of things area. I also think that the ftcs going to continue to pay very close attention as technology develops. Yeah. Host chairman ohlhausen, when you talk about regulatory humility, what do you mean by that . Guest so regulatory humility is my word for understanding the limits that we as regulators or enforcers even have to our knowledge. Its very hard to predict the future, to know where technology is going, to know where the risks might happen and where the been fits also might occur benefits also might occur. So i believe its very important to focus on the harms that are occurring or that we have knowledge that are likely to occur. Were a small agency, we have limited resources, and we should direct our resources towards harms that are currently occurring or likely to occur in the marketplace. And i believe our active enforcement in that says also sends the right signal to businesses to Pay Attention to what youre doing. You dont want to be under investigation and, you know, a lawsuit from the ftc. Its bad for your business, its bad for customers and can be bad for the entire industry. Thats why i believe regulatory humility kind of directs us back to using those resources in a way that gives the most bang for the buck to consumers right now host and youve talked about substantial harms as well in ths in that doing yes. Host is your approach from the former chairman, ramirezs . Guest its not necessarily. We have to show that an act or practice is likely to cause substantial harm to the consumers, that the consumer cannot reasobly avoid, and thats not outweighed to benefits to mpetition and to consumers. So for us to use that authority, we have to show a substantial injury, yes. So going back to our unfair beness statement unfairness statement that identified a variety of harms that could cause substantial injuries, substantial harm, certainly financial, thats kind of the one most easily understood harms, but it also involves health and safety. Weve long interpreted it to involve information about children and, you know, things like, you know, unauthorized surveillance in the home going back to the trend net case can im sorry, to a case called air rends where internet cameras were being turned on for laptops without peoples consent. So i dont think our views of unfairness are different except what i have signaled is that as we continue to have all these new technologies that are collecting and using information in new ways, we need to think hard about what substantial injury is in the Information Age that were in now. So, for example, vizio case, i filed a separate statement where i highlighted that we were, for the first time, saying the collection of individualized viewing data is, can cause substantial injury if its without the consent of the tv owner. So the deception case whiched had a very nice underpinning to it, but this is an issue we need to think hard about and i want to bring in people who are thinking closely on these issues to talk to the commission as we move ahead. Host now, can you and commissioner mcsweeny have a discussion in the hallway, or is it because theres just two of you, you have to send out notice ahead of time . Guest it all fends on what were talking about. [laughter] if were talking about the weather or just general topics, we can definitely talk to each other. But if it involves an issue where we might have something we need to vote on before us, a case or, you know, a rule or Something Like that, then we would need to notify, have a notice that were talking to keep minutes pursuant to the sunshine act. Host what about you and chairman pai over at the fcc, are there any restrictions on your discussions . Guest i think the only ricks, and im just kind of guessing here, would be the fccs ex parte rule, but otherwise we dont make a quorum of anything when i talk to chairman pai, so that doesnt come under the sunshine act. How does the lack of a quorum and in this case just two out of five slots being filled, how does that affect the ftcs ability to operate and make enforcement actions, regulations and anything like that . Guest so we do have a quorum. Pursuant to our statute, we do have a quorum. So thats not a factor. Now, of course, it is i mean, we were constituted as a fivemember commission for a reason s and i think having more commissioners there to weigh in and give different advice and support would be useful, but we are able to proceed. Now there is, you know, certainly the potential that commissioner mcsweeny and i could come to different, you know, views on a matter that we need to vote on, and if there was a deadlock, it means the action doesnt move forward. Obviously, with the republican add managers, the end administration, the end result of a full commission would be a republican majority which given the regulatory outcomes that youd like to see, i think, would be very good for your, for your professional push forward here. Now when do you expect, have you had any conversations with the white house about when more commissioners and nominations are going to be coming down the pike on this . Guest i know that theyre thinking about it, but i also know they have a long list ahead of them. I think the ftc is seen as an agency thats functioning pretty well, so i dont expect we necessarily are seen as the crisis that needs to be sod today. But solved today. But i know they are engaged in figuring out who the next commissioners should be. Theres been a lot of talk amongst conservative groups that seem very eager to take you from acting chairman to full chairman. Is that something that youd be interested in pursuing . And have you heard thinking from President Trump about that . Guest well, ive been very heartened by the support ive gotten from a number of groups, conservative groups, busine