ISPs Pledge Behavioral Ads to Be Opt-In

Government interest in ISP-based behavioral ad targeting appears to be generating significant response from Internet service providers. In the hopes of staving off legislation, representatives of some of the largest ISPs appeared on Capitol Hill today to ensure lawmakers of their commitment to self-regulate consumer privacy requirements.

Though none of the firms currently employ technologies to target advertising based on consumer data gathered through their ISP services, AT&T Services, Time Warner Cable, and Verizon Communications would only do so if users provide “affirmative consent.” In other words, only if users opt-in to such a program would the companies gather their Web interaction data to target advertising.

Telecoms including Verizon, apparently in conjunction with various online ad industry players including search engines and advertisers, are working toward developing best practices for ISP-based behavioral ad targeting, said Thomas Tauke, EVP public affairs, policy and communications at Verizon Communications. Though it is unclear to what extent any discussions among those involved have gone, Tauke said the entities have made “good progress,” and expressed hope that they may come to some consensus by the end of the year.

“At this juncture, we’re not prepared to embrace legislation,” added Tauke. “This technology is developing so rapidly.”

The Senate Committee on Commerce, Science and Transportation convened this morning for a hearing on “Broadband Providers and Consumer Privacy.” The hearing acted as an addendum of sorts to the same committee’s July hearing on “Privacy Implications of Online Advertising,” which ISPs failed to attend despite an invitation from committee member Senator Byron Dorgan of North Dakota.

Both hearings, suggested Dorgan, are part of a learning process for legislators, who are still pondering whether legislation or Federal Trade Commission enforcement capabilities need to be extended to cover ISP-based ad targeting.

“All of this is constructive for us…to understand what is necessary,” said Dorgan, a Democrat. However, he did note, “I do think we need to update our privacy laws” to require similar protections “across platforms.”

Members of the House of Representatives have also expressed an interest in the ISP-based ad targeting practice. In August, several ISPs were asked by a House Energy and Commerce Subcommittee to provide information on their ad targeting activities.

Recognizing the value of online advertising in addition to the need for transparency and disclosure by companies gathering and using online consumer data, Ranking Member Senator Kay Bailey Hutchison of Texas said, “I hope we don’t charge into legislation in this area.”

Her fellow Republican, Senator John Thune of South Dakota said self-regulation is “a preferable solution to us [legislating] in this area.” However, he added any self-regulatory scheme would need to be “comprehensive.”

Though Dorgan agreed there should be no rush to enact new laws, he suggested legislation may be necessary in the future. During the July hearing, Dorgan implied the FTC may need to be given the ability to enforce its proposed guidelines for self-regulation of behavioral ad targeting.

Dorgan cited a new Consumer Reports National Research Center poll showing that 57 percent of consumers think companies are required to identify themselves and state their purposes for data collection and sharing. Over 40 percent said they believed a court order is needed to monitor online activity.

Gigi Sohn, president and co-founder, Public Knowledge, an organization whose mission is to defend consumer rights in the digital age, is already convinced legislators should move forward. Comprehensive legislation is needed, she said.

Rather than applying its guidelines only to personally-identifiable information (PII), Time Warner aims to require affirmative consent from its ISP customers for use of any consumer data to target ads, whether or not it is considered PII. “What we’re proposing is that we would not…use your information, whether or not we could attribute it to you personally, to target online advertising to you,” said Time Warner Cable Chief Strategy Officer Peter Stern.

ISP representatives also stressed the need for universal guidelines for dealing with online consumer data. “Any privacy framework for behavioral targeting must apply to all entities involved,” said Dorothy Attwood, SVP public policy and chief privacy officer at AT&T Services. Unless parties including site publishers and ad technology firms do not abide by the same requirements, she added, “I can’t do anything to prevent that customer from being tracked by other entities.”

“A framework that leaves any provider uncovered would leave all [consumers] unprotected,” affirmed Time Warner’s Stern. He also stated clear and timely notice of what data is collected and how it will be used is also imperative. “And by this we don’t mean fine print, we mean prominent and plain English.”

In the end, said Verizon’s Tauke, privacy protections are not necessarily bad for business. “The worst thing for our industry is if consumers are afraid to use the Internet,” he said.

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