Senator says Web devices a target of consumer concern

As online privacy fears mount, lawmakers are looking at another potential peephole into the lives of consumers: the television.

4 min read
As online privacy fears mount, lawmakers are looking at another potential peephole into the lives of consumers: the television.

Although the personal computer is still the primary Internet access point, companies are working feverishly to change that, offering entry via all kinds of devices, from televisions to wireless phones and standalone Internet radios.

Those developments have sparked fears that the widening window on the Web could lay consumers' privacy bare to a host of companies offering the new services.

"The idea is to let people watch TV, whether it's Web TV or satellite or cable, in the privacy of their own homes without worrying whether what they're watching is being recorded," said California state Sen. Debra Bowen, D-Marina del Rey.

The new focus on privacy comes amid a firestorm of controversy surrounding online advertiser DoubleClick's intentions to connect anonymous Web surfers with their true identities for the purpose of targeting advertisements. The outcry forced DoubleClick last week to back down on its plans--at least for now--until regulators weigh in on the issue.

Shortly before DoubleClick's troubles came to a head, Bowen introduced a bill aimed at preventing cable- and satellite-TV providers from selling data about what viewers watch. Violators would be subject to a $500 fine.

Bowen said her bill updates protections already available for cable-TV viewers under federal and California laws.

The existing laws don't address the data-gathering practices of satellite-TV companies or of software companies that either have or soon will have the technology to track and record everything that crosses a viewer's set--whether it be wrestling, pornographic films or "The Simpsons."

"It's the same thing that had to happen with wireless telephones," Bowen said. "We had to amend all codes involving the telephone because they applied only to wires and not cell phones. We have to update these laws to cover new technology."

Bowen noted that several software companies, including TiVo and WebTV, have developed set-up boxes that track what customers view. She said the boxes could be used to send customized commercial programming to subscribers, much like DoubleClick wants to send personalized ads to Internet consumers.

TiVo, a Sunnyvale, Calif.-based company that offers digital video recorders and a service that allows people to customize TV schedules, points out in its privacy policy that it won't sell or share data used to create accounts. Viewers also can choose to not be part of any data collection, anonymous or otherwise.

"We believe that Security, privacy issues make Net users uneasywe should be requesting the permission of our consumers for a variety of experiences that they will engage in this new world of personal TV," said Stacey Jolna, vice president of programming and media partnerships for TiVo. "Consumers need to trust the company that's providing these new experiences for them, or they are not going to engage them anymore."

Too early for legislation?
Bowen's bill may be a little ahead of its time, however, as many emerging companies have developed neither the technology nor a sound plan for tracking consumers.

"While I do think its an issue that will warrant scrutiny going forward, the industry hasn't progressed far enough yet," said Leslie Ellis, an analyst with Paul Kagan Associates. But the potential is there, Ellis acknowledged, because advertising revenues in this area "will get large fast."

The California Cable Television Association, a trade group representing about 200 cable systems in the state that serve more than 6.5 million customers, said it wants to take part in Bowen's bill to make sure that cable operators are on a level playing field with satellite providers.

Consumer rights advocates applaud Bowen's bill, calling it a good sign that legislators are finally taking notice of the power companies have to compromise people's privacy.

"It's a step in the right direction," said Marc Rotenberg, executive director at the Electronic Privacy Information Center in Washington, D.C. "Passing privacy laws before the problems occur is a good idea. I don't see any particular need for the bodies to start piling up before seeing legislation."

Perhaps that's what the New York state Senate had in mind when it proposed a sweeping set of laws yesterday protecting the privacy of consumers, drivers and patients--online and off.

The proposed legislation contains restrictions on credit agencies, schools, telemarketers, hospitals, pharmacies and other organizations that gather and use personal information.

One such restriction would prohibit obstetricians from releasing information about their pregnant patients to marketers pushing baby items like formula, clothing and furniture.

The Federal Trade Commission, emerging as the chief enforcer of the Internet, also is looking into regulating the data-gathering practices of brick-and-mortar businesses.

"Lawmakers are increasingly realizing that the privacy issues are not just confined to the Internet," said Deirdre Mulligan, staff counsel at the Center for Democracy and Technology. "Awareness has been heightened by the automation of data, which turns offline businesses into online contenders."