Federal Trade Commission Ftc Internet Regulation

Wall Street underwent considerable scrutiny following the 2008-2009 recession, and out of this has come several proposed legislative reforms including an anticipated increase to the Federal Trade Commission’s (FTC) authority over the internet.

This advocacy of FTC authority has emerged from the dissatisfaction with independent practices of Internet Service Providers (ISP) and the actions of other companies on the internet.

The specific bill named the ‘Wall Street Reform and Consumer Protection Act of 2009″ (H.R. 4173) was sponsored and introduced to the House of Representatives on December 2, 2009 by Barnie Frank (D) of Massachusetts. On January 20, 2010 the bill moved to the Senate after having been approved by the House.

Subtitle I, Section 4901 of the Senate’s version of the bill includes changes that would Amend the Federal Trade Commission (FTC) Act and allow it to impose regulations upon Internet companies.

The amendment itself consists of the insertion, alteration and replacement of punctuation, words and sentences. Of particular legislative pervasiveness Is the following addition to section 16A of the FTC Act.

“To obtain a civil penalty authorized under any provision of law enforced by the Commission.” (H.R. 4173)

This sentence means the FTC would be able to impose civil penalty as proscribed by the law. The reason why the proposed Wall Street regulation would give the FTC authority over the internet is a matter of politics according to an April 14th CBS report written by Steve DelBianco.(1)

According to DelBianco, the FTC’s commissioner, and groups such as the American Civil Liberties Union’s (ACLU)  advocacy of consumer rights are part of the reason this particular section of the bill has had the support it has.

The Wall Street regulation gives the FTC authority over the internet because it is believed to have had inadequate authority in the past. For example, Internet Service Providers (ISP) have exercised selective traffic discrimination by adjusting speed and volume of specific types of internet usage such as downloading videos.

This is believed by the FTC to be a violation of “Net neutrality” (4) which it hopes to address following passage of the bill. Another power that would come with the bill’s passage is the FTC’s capacity to impose standards on internet advertising.

If H.R. 4173, and specifically Section 4901 of it, is signed into law, the Federal Trade Commission (FTC) will have regulatory authority to interpret, and enforce standard practices on the internet in general.

This power is not in regard to any one specific issue, but rather a generalized broad sweep of regulatory capacity that some fear could give the FTC too much influence (2) in the shaping and evolution of the Internet.

Prior to the passage of such legislation, if it is to pass, ISPs have also enjoyed a large influence on the shaping of the internet. This means another reason behind the Wall street regulatory reform is the giving of FTC authority over the internet for the purpose of shifting the internet’s future away from corporations, or a re-assigning of the internet gauntlet.


1. http://bit.ly/aeKNgg (CBS)
2. http://bit.ly/baRqUE (Independent analysis)
3. http://bit.ly/9EMPdj (H.R. 4173)
4. http://bit.ly/bhHnjP (Washington Post)