Broadband Execs Urge Senate Committee Not to Mandate Privacy Standards for Online Advertising

Executives from AT&T, Time Warner Cable and Verizon Communications urged the Senate Commerce Committee to forgo privacy mandates for online advertising and allow the industry to police itself. The executives testified at a Sept. 25^th hearing, the second hearing the Committee has held to explore the privacy implications of online advertising.

Acting Chairman Byron Dorgan, D-ND, cited a Consumer Reports poll released on Sept. 25^th that 72 percent of consumers are concerned that their online behavior is being tracked and 93 percent think Internet companies should always ask permission before using personal information. Dorgan noted that because little competition exists in the broadband market, it is necessary to ensure that providers protect consumers’ privacy. Nevertheless, Dorgan said lawmakers should wait to mandate privacy standards and allow the industry time to address the issue. Sen. David Vitter, R-LA, said he agreed that the committee needed to proceed cautiously, address bad actors, and be mindful of legislating as technology advances. However, Sen. Amy Klobuchar, D-MN, said that privacy legislation would root out practices of bad actors.

Public Knowledge’s Gigi Sohn told the committee that, although there are many beneficial reasons to monitor customers’ online activities to customize advertising, she was concerned that information gathered through a practice known as deep packet inspection (“DPI”) could be sold to third parties. Sohn likened the online invasion of privacy through DPI to the postal service reading a recipient’s mail. “For the most part, customers are not aware their ISPs are engaging in this behavior.” Sohn cited Comcast and NebuAd for using DPI, and urged the committee to pass privacy legislation. Sohn said the lack of broadband competition, notably in rural areas, is a key reason why legislation governing DPI is needed. At the very least, Sohn called on the committee to amend the Communications Act of 1934 to create a level playing field for cable and ISPs. Cable services are covered by stricter privacy regulations, she said.

Dorothy Attwood, AT&T’s chief privacy officer, stated that her company does not participate in online behavioral advertising and will only engage in it “after ensuring clear and consistent methods to ensure control.” Attwood cited four principles for online advertising: transparency, customer control, privacy protection and customer value. She also said the framework must apply across technologies, not just to ISPs.

Tom Tauke, executive vice president of Verizon Communications, Inc., told the committee that any privacy policy should be centered on meaningful consent. He called “opt in” and “opt out” ineffective in an online environment because customers often click “OK” at the bottom of a page to enter a web site without appreciating what they are signing. As a result, Verizon defines meaningful consent as transparency, affirmative choice and consumer control. Tauke said the advertising industry appears to be interested in establishing a system of best practices.