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Behavioral Advertising: First Do No Harm

House members came together Thursday to talk about behavioral advertising, pledging to try to strike a balance between the need to give consumers control over their personal information while not knee-capping a business model that supports free Internet service and applications as well as delivering information tailored to a consumer's preferences and interests.

That message was delivered in the opening statements of a joint hearing Thursday of the House Communications, Technology and the Internet Subcommittee and the Subcommittee on Commerce, Trade, and Consumer Protection on Behavioral Advertising: Industry Practices and Consumers' Expectations.

The hearing was scheduled to look at privacy implications of such advertising and was the second hearing on the broader issue of online privacy. The first focused on consumer online privacy, including deep packet inspection. Rep, Rick Boucher (D-VA), chairman of the House Communications Committee, has made online privacy a legislative priority and is currently working on a bipartisan bill he first outlined in B&C.

While at press time the hearing had recessed for a series of votes on the House floor, the lines had been clearly drawn already.

Virtually all the legislators agreed that consumers needed to know who was using their personal information, how it was being used, and with whom it might be shared.

But there remained differences over to what degree surfers needed to opt in, versus opting out, of use of that information, whether industry could be relied on to police itself and who should have jurisdiction over enforcement, the FCC, the FTC, a combination of the two or perhaps some new agency.

There were also calls for applying the same privacy and data collection standards to both ISPs like cable operators and telcos, and search engines like Yahoo! and Google.

Rep. Joe Barton of Texas, ranking member of the Energy & Commerce Committee made it clear that he thought the government needed to step in though preferably as a spur to industry self-regulation.

He cited various levels of private industry involved in online privacy and behavioral advertising issues, from the Verizons and Comcasts of the world, which he said were "trying to act appropriately" to so-called ISP locators whose names he did not know, to "edge" companies like Google and Yahoo.

He said market-based solutions were preferable to mandatory regulatory approaches, and commended Internet companies for their current work on online self-regulations on privacy, he also said that that it was time for Congress to "to bring some law and order" to what is "still a bit of a Wild West area."  That could just mean the sherriff flashing that shiny badge to keep the townsfolk in line.

Boucher, who believes a privacy bill is needed, again assured the witnesses and his fellow legislators that he recognized the value of behavioral advertising, which uses surfer information to target market its goods and services.

He said that protecting consumer privacy would be a spur not a spear to those behavioral advertising efforts by giving consumers confidence to continue to buy online. "I support and benefit from behavioral advertising," he said, saying he buys a "significant number" of items from Web sites that he visits frequently. He also reiterated that online advertising supports much of the content available without charge.

But he also said he thought Congress needed to provide consumers with baseline protections, which would include a clear and defined policy about how information was collected, how it was used, now long it was stored, and what happened to it, including whether it was given or sold to third parties.

Boucher said he was still seeking input on just what information uses should be opt-in vs. opt-out decisions by Web users.

He said he had "no interest in disrupting" the behavioral advertising business model.

That sentiment was shared by ranking Communications & Internet Subcommittee member Cliff Stearns (R-FL). "We want to do no harm here," he said.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.