Lawmakers Examine Privacy Practices at Cable, Web Firms

Lawmakers Examine Privacy Practices at Cable, Web Firms

Lawmakers Examine Privacy Practices at Cable, Web Firms – By AMY SCHATZ
WASHINGTON — Lawmakers took aim at privacy practices of cable and Internet providers Thursday at a House subcommittee hearing, laying the groundwork for the introduction of legislation that could restrict companies’ ability to target ads at consumers online.

The focus of the hearing was on new efforts by Internet providers to collect and share data on consumers’ behavior to target online advertising and by cable companies to target ads at subscribers via their set-top boxes.

Lawmakers are concerned about consumer privacy as cable, phone and Internet companies experiment with Internet-based technologies that pinpoint advertising to consumers in new and more accurate ways. Legislation to impose tougher privacy rules could be coming later this summer.

Key lawmakers in the House and Senate are looking at crafting legislation that would rein in the behavioral advertising practices or at the very least offer more protections for consumers and disclosures.

Already, House lawmakers have announced plans to hold another Internet privacy hearing this summer, focusing more heavily on the privacy practices of Internet companies such as Google Inc. Similar hearings are expected in the Senate Commerce Committee.

One practice drawing significant congressional scrutiny is “deep packet inspection,” a technique already used by most Internet providers. It essentially allows companies to take a peek at the bits of data being sent over their networks. “Its privacy intrusion potential is nothing short of frightening,” Rep. Rick Boucher (D., Va.), chairman of the House Subcommittee on Communications, Technology and the Internet, said at the hearing.

Network operators use the deep packet inspection to sniff out viruses and spam and to identify data that need immediate delivery, like Internet phone calls or streaming video. Hollywood studios have been interested in the technology because it could help them prevent piracy of their movies and TV shows.

Privacy advocates find the practice disturbing, however, because there’s so regulation to prevent Internet providers from abusing the technology and using it to restrict legal Internet services. They raised alarms last year when online advertising firm NebuAd Inc. offered a service to Internet providers that would have targeted ads at subscribers based on deep packet inspection technologies. The uproar prompted Internet providers to drop the idea.

Leslie Harris, president of the Center for Democracy & Technology, a Washington-based public interest group, said that deep packet inspection “poses serious challenges to both the privacy and the openness of the Internet.” She likened it to “postal employees opening envelopes and looking inside.”

AT&T Inc. Chief Privacy Officer Dorothy Attwood testified that many of the concerns expressed by consumers and lawmakers could be eliminated if companies are more open and transparent about the information being collected and how its used and protected. She said AT&T has no plans to use advertising services based on deep packet inspection.

Lawmakers also are looking into new efforts by cable companies to target advertising at consumers via their set-top cable boxes. Six cable companies, including Cox Communications, Time Warnerand Comcast Corp., have formed a joint venture called Canoe Ventures, to develop technology that would allow them to steer specific ads to subscribers based on demographic information.

“The idea is to build a network that would allow [cable operators] to deliver more relevant advertising to the consumer,” said Kyle McSlarrow, president of the National Cable & Telecommunications Association, the cable industry’s lobbying group. “You’d deliver dog-food commercials to customers who have dogs.”

Consumer advocates say such practices are disturbing, and consumers need to know more about what sort of information is being collected about them and have ways of opting out more easily.

“If we can say, “yes, we need advertising and there’s benefit here but we’re going to draw some lines and you’re not going to create these enormous profiles of users,” that’s sustainable,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. “We’re going down a road right now that will lead to collapse.”