FCC Proposes:Fine for Google Wi-Fi snooping ‘obstruction’

By TheStreet Staf

WASHINGTON — The Federal Communications Commission has proposed fining Google(GOOG_) $25,000 for obstructing an investigation into the company’s collection of data from unencrypted Wi-Fi networks in 2010, according to a published media report.

 Although the FCC has decided there was insufficient evidence to conclude that the data collection violated federal rules, the commission said Google deliberately impeded the investigation, The Wall Street Journal reported Saturday.

The probe looked at whether Google broke rules designed to prevent electronic eavesdropping when its Street View service collected and stored the data from the Wi-Fi networks, the newspaper reported.

The FCC proposed the fine late Friday night, the Journal said.

Google may appeal the proposed fine before the commission makes it final, the Journal said. The company has said that it inadvertently collected the data and stopped doing so when it realized what was going on, the newspaper added.

Shares of Google closed Friday down $26.41 at $624.60.

FCC proposes fine for Google Wi-Fi snooping case ‘obstruction’

By Zack Whittaker

Summary: The U.S. FCC has proposed a $25,000 fine after Google “impeded and delayed” an investigation into collecting wireless payload data from unencrypted Wi-Fi networks.

The U.S. Federal Communications Commission is proposing a $25,000 fine against Google for “deliberately impeded and delayed” an ongoing investigation into whether it breached federal laws over its street-mapping service, the Wall Street Journal reports.

The FCC initiated an investigation in 2010 after Google collected and stored payload data from unencrypted wireless networks as part of its Google Maps Street View service. Its intended use, Google says, was to build up a list of Wi-Fi network hotspots to aid geolocation services on mobile devices through ‘assisted-GPS.

The U.S. followed suit after many European countries, including Germany, which has some of the strictest data protection and privacy laws in the world. But the European nation went one step further and told Google to withdraw its Street View cars from the country altogether.

Google also drew fire from the UK’s data protection agency after it was told it committed a “significant breach” of the UK and European data lawswhen it collected wireless data from home networks. It was audited by the regulator and was told it “must do more” to improve its privacy policies. Google said it had taken “reasonable steps” to further protect the data of its users and customers.

But the FCC stopped short of accusing Google of directly violating data interception and wiretapping laws, citing lack of evidence. The federal communications authority did not fine the company under eavesdropping laws, as there is no set precedent for applying the law against ‘fair-game’ unencrypted networks.

The FCC took the action after it believed Google was reluctant to co-operate with the authorities after the scandal emerged. An FCC statement added that a Google engineer thought to have written the code that collected the data invoked his Fifth Amendment rights to prevent self-incrimination.

Google can appeal the fine. Despite the fine being a mere fraction of the company’s U.S. annual turnover, not doing so until its legal avenues are exhausted would almost be an admittance of guilt.

The search giant eventually offered an opt-out mechanism for its location database by adding text to the networks’ router name. But further controversy was drawn after another Silicon Valley company offered an opt-out only solution.

Facebook also drew fire from the regulators after the U.S. Federal Trade Commission allowed the social networking giant to settle, allowing users to opt-in to its sharing privacy settings, rather than opting-out; seen as a major win for U.S. users’ privacy on the site.

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FCC to approve Net neutrality rules Tuesday


The Federal Communications Commission is set to vote on official Net neutrality rules tomorrow, which the agency claims will provide consumers, service providers, device makers, and application developers clear rules of the road for the Internet.

With the support of all three Democrats on the FCC, the regulation is set to pass. And the vote will mark the next step in what has been a politically charged debate between telephone and cable companies and consumer groups advocating for a free and open Internet.

The five-member commission, which is made up of three Democrats and two Republicans, has been working on developing these official rules of the road for more than a year. In September 2009, Chairman Julius Genachowski suggested adding to the original Internet Openness principles adopted by the commission under former Chairman Michael Powell.

The debate of what should be included in the new rules has raged ever since. Democratic supporters and consumer advocates along with some Internet companies have pushed for more stringent regulations. Meanwhile, Congressional Republicans and major telephone and cable companies have lobbied for lighter regulation.

Genachowski, who offered a preview of the plan earlier this month, has attempted to give each side a little of what it wants in the new rules, but neither camp has said they are completely satisfied. In fact, the two Democrats on the commission, Michael Copps and Mignon Clyburn, have been reluctant to go along with the chairman’s plan because they believe it may be too favorable to major broadband providers. But FCC officials say the chairman has worked closely with these commissioners to satisfy their concerns. And now it looks as though the two Democrats will support the new rules, albeit somewhat reluctantly.

Clyburn released a statement today stating she will vote in favor of the new rules. Copps also said he’d vote for the rules, but in a statement today he noted that he believes things are missing from the order.

“While I cannot vote wholeheartedly to approve the item, I will not block it by voting against it. I instead plan to concur so that we may move forward,” Copps said in a statement.

Meanwhile, Republican Commissioner Robert McDowell, who has long opposed Net neutrality regulation, said in an op-ed for The Wall Street Journal on Monday that the new rules are trying to fix a problem that doesn’t exist.

“On this winter solstice, we will witness jaw-dropping interventionist chutzpah as the FCC bypasses branches of our government in the dogged pursuit of needless and harmful regulation,” McDowell wrote. “The darkest day of the year may end up marking the beginning of a long winter’s night for Internet freedom.”

He went on to say:

“Nothing is broken and needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that Net neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.”

Senior representatives from the FCC held a press conference this afternoon to provide an overview of what the order will actually say. At a high level, there are three provisions that will become official FCC regulation.

The first rule is about transparency. Network operators of both fixed and wireless networks will be required to disclose to consumers, content providers, and device makers information that will be necessary for them to deploy services. In other words, if a broadband network operator is using network management techniques that affect an application or if a wireless broadband network provider doesn’t allow a certain type of application, the service provider must provide information about the requirements for its network.

The second Net neutrality rule prohibits the blocking of traffic on the Internet. The rule applies to both fixed wireline broadband network operators, as well as to wireless providers. But the stipulations for each type of network are slightly different.

For wired networks, operators will not be allowed to block any lawful content, services, applications, or devices on their network. For wireless providers, the rule is somewhat limited and only prohibits the blocking of access to Web sites or applications that specifically compete with a carrier’s telephony voice or video services.

The blocking rule for wireless and wireline networks also includes allowances for reasonable network management. This means that wireline and wireless broadband providers will be able to reasonably manage their networks during times of congestion to ensure every user can adequately access services.

And finally, the last rule applies only to fixed broadband providers. It prohibits fixed wireline broadband providers from unreasonably discriminating against traffic on their network.

Net neutrality zealots have already expressed dismay in Copps’ support of the new rules.

“Internet users across America will have lost a hero if Commissioner Copps caves to pressure from big business and supports FCC Chairman Genachowski’s fake Net neutrality rules–rules written by AT&T, Comcast, and Verizon, the very companies the public is depending on the FCC to regulate strongly,” Jason Rosenbaum, the senior online campaigns director for the Progressive Change Campaign Committee, said in a statement.

But not everyone is upset that a compromise appears to have been reached.

Senator John Kerry (D-Mass.), released a statement today applauding the three Democratic commissioners for reaching a consensus on the rules.

“While he (Commissioner Copps) and Commissioner Clyburn, as well as many of the champions of network neutrality, including myself, would have supported a stricter order, I commend them for rising to the moment and making possible very meaningful progress to preserve the freedom to communicate and compete over the Internet,” he said in the statement. “I also join them in commending Chairman Genachowski for his inclusive, thoughtful, and creative work in bringing parties together, airing all points of view, and finding a principled center.”

The FCC meeting will be broadcast live starting at 10:30 a.m. ET.

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