Government Report: March 18, 2011

AAF Government Report

March 18, 2011

Clark Rector Jr., Executive Vice President – Government Affairs

Senate Committee Considers Privacy

The Senate Commerce Committee conducted a March 16 hearing on the state of online consumer privacy. The hearings were generally encouraging for advertising, with widespread acknowledgement of the benefits to consumers and companies of online behavioral advertising. Policymakers were also very positive about the Digital Advertising Alliance’s new self-regulatory program. AAF is on the board of the DAA. However, there were still calls for more government involvement and legislative action.

Jon Leibowitz, chairman of the Federal Trade Commission, called the DAA program promising, but expressed concern that it does not go far enough. He renewed his support for a do-not-track mechanism, but said that it could be industry rather than government driven. He said that any do-not-track program should adhere to five principles. It should be universal, easy to find and use, persistent over time, allow a consumer to opt-out of both behavioral advertising and tracking, and be effective and enforceable. AAF believes that the DAA self-regulatory program largely accomplishes these goals.

Sen. John Kerry, D-Mass., used the hearing to announce that he is working with Sen. John McCain, R-Ariz., to draft legislation creating a “consumer privacy bill of rights.” The Senator said that he wants to protect innovation and the open architecture of the Internet, and acknowledged that some degree of information sharing is necessary. However, he also said that while sharing information creates economic opportunities, it also creates opportunities for unethical conduct. He said he believes legislation is necessary to create “baseline protections” for consumers. For example, he said that companies cannot be allowed to provide no protections for consumers, or to change their information protection policies at will.

Lawrence E. Strickling, Assistant Secretary of the Department of Commerce for Communications and Information, National Telecommunications and Information Administration testified that the Obama administration encourages Congress to act. He recommended that any legislation create baseline consumer protections, provide the FTC with the authority to enforce them, and create a framework for incentives to develop codes of conduct and innovations, such as the development of an FTC safe-harbor for approved self-regulatory regimes.

Sen. Claire McCaskill, D-Mo., struck a cautionary note by warning that Congress must be careful to guard against unintended consequences and not “handcuff the good guys without doing anything about the bad guys.”

AAF believes that self-regulation will accomplish most of the policymakers’ goals and provide consumers with significant protections. We are not convinced that congressional action is necessary, but will withhold judgment on specific legislation until we have the opportunity to review specific proposals.

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Net Neutrality Mixed Messages

Following on last week’s subcommittee vote, the full House Energy and Commerce Committee has voted to reverse the Federal Communications Commission’s rules on net neutrality. The resolution will next go the full House. An identical Senate resolution is not expected to move.

Meanwhile, Sen. Al Franken, D-Minn., has said he intends to introduce legislation to amend anti-trust laws and make violations of net neutrality a crime. Sen. Franken is the chairman of a new Senate Judiciary Subcommittee on Privacy, Technology and the Law.

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NPR Funding Targeted

The U.S. House approved a bill to block federal funds for National Public Radio. The vote was part of a largely Republican effort to eliminate federal funding for public media. the measure is unlikely to become law as it is opposed by the Obama administration and the Senate Democratic leadership.

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