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House privacy bill draws fire from all sides

A draft bill prepared by Rep. Rick Boucher, a Democrat from rural Virginia, is panned by pro- and anti-regulation groups for very different reasons.

Rep. Rick Boucher, a Democrat from rural Virginia, has been unsuccessfully pushing for Internet privacy legislation for a very long time. In 1999, he proposed a bill that would give regulators more power over commercial Web sites, and he cosponsored the Consumer Privacy Protection Act in 2005.

That history probably didn't prepare Boucher for the almost uniformly hostile reception his latest legislative effort, a still-unnamed discussion draft (PDF) regulating data collection efforts, received on Tuesday.

Liberal special interest groups announced they were "disappointed" that Boucher didn't slap even more regulations on Internet businesses. Free-market think tanks panned it for going too far. And industry groups like the Interactive Advertising Bureau said it was far too broad as currently drafted.

"This bill is not the answer," said Michelle De Mooy, a senior associate at the pro-regulation group Consumer Action. "We don't think it effectively protects consumer information online."

Adam Thierer, president of the free-market Progress and Freedom Foundation, was equally skeptical--albeit for an entirely different reason. "By mandating a hodge-podge of restrictive regulatory defaults, policymakers could unintentionally devastate the 'free' Internet as we know it," he said.

The 27-page discussion draft co-sponsored by Republican Cliff Stearns would erect a new set of regulations that Internet companies must follow, along with many non-Internet companies as well (which has already led to fears that direct marketers would be swept in).

Any company or nonprofit organization that collects personal information from at least 5,000 people, including names, e-mail addresses, or U.S. mailing addresses, would not be allowed to "use" or "disclose" the data without consent. Providing a "clear statement" about how the information is used would, however, qualify as consent in many cases.

That was enough to irk groups that lobby for more regulations targeting technology companies. So were the sections of the Boucher-Stearns bill that would prevent individuals from filing lawsuits and would preempt stricter state laws.

"We're very disappointed with the legislation, which relies on notice and opt out, which has proven to be so ineffective," said Susan Grant from the Consumer Federation of America. "It carves out a huge loophole for behavioral advertising. It prevents states from enacting and enforcing stronger privacy protection."

For their part, the politicians behind the draft bill are painting the draft legislation as a work in progress. "I have been working for years to enact meaningful privacy protection legislation and this draft is advancing the process," Stearns said in a statement. "While I may not support everything in the current draft bill, it is important to get the input of stakeholders."

Lending your name to legislation you don't actually support is an unusual move even in Washington, D.C., and Silicon Valley firms were left scrambling on Tuesday to digest the proposal. One big unanswered question: How would it affect behavioral advertising, which accounts for a growing percentage of revenue at companies such as Google and Yahoo?

"The amazing thing about the Boucher legislation is its ability to transport us across time," said Jim Harper, director of information policy studies at the Cato Institute, which supports limited government. "Ten years ago, Congress and regulators thought they knew how to deliver privacy better than markets. We know they don't, but they still think they do."