Although cable companies have quieted their efforts on using behavioral targeting on their broadband ISP subscribers, Congressional and regulatory scrutiny of the the practice is continuing. A House of Representatives subcommittee brought in online privacy advocates for a hearing this week to seek testimony on draft legislation on BT (NYSE: BT), ClickZ's Kate Kaye reported.
Looking to 2002: A draft bill sponsored by Rep. Rick Boucher (D-Va.), the chairman of the House Subcommittee on Communications, Technology, and the Internet, is intended to order companies that gather personal data online to tell users what sort of information they're looking to obtain. They'll also have to detail what they intend to do with users' data and provide clear ways of opting out. As a model, the subcommittee is using a bill drafted in 2002 by Cliff Stearns (R-Fl.). His Consumer Privacy Protection Act, which was never enacted, had most of the elements in the current bill. Clearly, the regulatory climate is considerably different from seven years ago and what seemed dead on arrival in 2002 is very much alive in 2009. More after the jump.
Focus is on search, ad netsnot ISPs: Stearns himself warned lawmakers to tread carefully, since any legislation could make things tougher for struggling online businesses in this dismal economy. However, he did signal an approach that would zero in on the activities of search engines and ad networks, as opposed to cable providers. It was complaints over cable operator Charter Communications (NSDQ: CHTR) proposed test of its ISP broadband customers that ignited Congressional hearings last years.
Opposition gets into place: Reps from AT&T (NYSE: T), the trade group National Cable and Telecommunications Association, and mobile social platform Loopt, all pressed their case for no legislative action. Targeters have tended to argue that they only use a small amount of the data they collect. Of course, if legislation is to be written, they want a hand in crafting it. Leslie Harris, president and CEO of the Center for Democracy and Technology tried to blunt the companies' arguments against pursuing a consumer privacy law, saying, "Just because ISPs or advertising networks may use only a small portion of what is captured and do not retain other information does not diminish the breadth and intrusiveness of the initial data capture." It's not just Congress that's scrutinizing behavioral targeting; the FTC and state legislatures have been aggressively looking at the issue. In the end, Congressional action might be the best thing for the industry, since a patchwork of local laws would only lead to even more headaches for companies over privacy.
By David Kaplan