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Lobbying group acquires Internet Alliance

The powerful Direct Marketing Association adds another tentacle to its Net policy lobbying body with the acquisition of the Internet Alliance trade group.

The powerful Direct Marketing Association added another tentacle to its Net policy lobbying body today with the acquisition of the Internet Alliance trade group.

The 4,100-member Direct Marketing Association (DMA) recognized early on that the Net was changing the way marketers do business, making itself highly visible in the regulatory debates over junk email and consumer online privacy.

The DMA acquired the Association for Interactive Media last October, and now it is expanding beyond the $1.4 trillion direct-marketing business to position itself as a major player in setting the e-commerce agenda on Capitol Hill with the absorption of the Internet Alliance (IA). About 94 percent of the DMA's members are on the Net, and more than half are selling online, according to the association.

The IA was founded in 1982 as the Interactive Services Association and relaunched last year as the Internet Alliance. It has been charged with lobbying on issues as widespread as consumer privacy, content regulation, Net taxes, and spam.

Though it boasts a membership roster of big names such as America Online, AT&T, Bell Atlantic, Citibank, Consumers Union, the Council of Better Business Bureaus, eBay, Hewlett-Packard, and IBM, those companies and groups also belong to a host of other organizations in an effort to get their voices heard by lawmakers. As such, the IA has been operating on a minuscule $1 million budget per year.

"It's been hard to develop the ongoing cash necessary to develop public policy worldwide," said IA's executive director, Jeff Richards.

In addition, although the IA's acquisition by the DMA means its budgetary constraints are lessened, it won't change the fact that the IA has had a hard time bringing the so-called Internet industry together under one umbrella to fight battles on multiple policy fronts.

Still, for the four-person Internet Alliance, which will operate as an independent subsidiary, the deal could be its saving grace.

But, although the DMA and IA seem to be in line on issues such as spam and privacy--both oppose tough legislative regimes and favor industry self-regulation and the use of technical tools instead--the DMA's reputation still could be an ill fit for the IA, Beltway insiders say.

"It's the worst possible match," said one Net industry policywonk, who declined to be named. "It sends the wrong signal, because here is a group that has held itself to be a consumer-focused Net trade association, but now their agenda has been taken over by the DMA, whose whole mission is to bother people."

The partnership is not completely unfounded, however. The DMA and IA have worked together on privacy principles in the past.

The IA's most notable impact may be that it was one of the many trade groups that lobbied for passage of the Internet Tax Freedom Act and, along with the DMA, was a founding member of the Online Privacy Alliance, which promotes Net sites' adoption of voluntary guidelines to better disclose their data collection practices. The IA also is known for rallying action around state legislative efforts.

"It's a natural extension of the effort we've been making to become the preeminent interactive and direct-marketing trade association," said Robert Wientzen, chief executive of the DMA. "The IA has a track record of working with some of the most established Internet players. But we also want to get them into international issues."

However, although it was one of the first groups to set up privacy standards, during Federal Trade Commission privacy workshops in June 1997 and Commerce Department meetings the following year, the DMA was criticized for its members' lack of compliance with voluntary guidelines.

And the IA knows that the DMA's focus is making money, not dealing with content regulations or encryption reform, which are some the IA's main goals.

"The DMA has the vision, as we do, that confidence and trust is the key to making the Net a crucial mass-marketing medium of the 21st century," Richards said. "We'll be truing up our differences."

At the moment any differences between the DMA and IA's philosophies may be moot, however. Some Washington lobbyists say the IA's struggles have caused it to lose its pull with lawmakers, so it will have to rebuild its focus anyway.

"The IA hasn't been a huge player now for quite some time," one lobbyist said. "This is about the DMA positioning itself as the trade association for online commerce."

The two trade groups seem to agree with the latter point--the buyout could ensure the IA's future and give the DMA a stronger hand with Net companies.

"This acquisition will provide IA with the ability to build a successful future for the medium and its users and more support to create an impact on critical issues," the IA's new chairman, Marc Jacobson, who also is senior vice president of corporate development and public policy for Prodigy Communications, said in a statement.