"At a time when citizens expect a widely expanded form of e-government, including social media and commercial Web 2.0 tools, refraining from the use of innovative tools is not an option," the AT&T-backed group wrote in a paper outlining a host of privacy proposals.

Since 2000, the government has had a policy of eschewing so-called "persistent" cookies without prior approval by an agency secretary. But the group contends that the policy no longer makes sense today, when so many sites incorporate social networking features that rely on persistent cookies to identify visitors and store information about them.

Future of Privacy Forum co-chair Jules Polonetsky added that current policy also prevents some government-run sites from using analytics tools that could improve their efficiency. "Isn't it time to update this all-or-nothing policy?" he asked.

The organization also proposed that the government should "establish baseline principles," including limits on data retention, that could potentially set a model for industry sites. "For example," the group wrote, "analytics tools should be required to delete log-files after a defined period of time, cookies should have limited expiration periods and should not be used to store information unprotected, IP addresses should be obscured as soon as possible, and the use of the tools and user options should be transparent and prominently explained."

The digital rights organization Center for Democracy and Technology also supports changing the rules about the government's use of cookies. "Bottom line: federal cookie policy needs to be modernized by allowing government web sites to set cookies and give users the choice to accept or reject the technology," wrote Chief Operating Officer Ari Schwartz in a recent blog post.

But not all privacy advocates agree that the authorities should be able to set additional cookies. "I think we want to keep the government out of the data collection business," said Jeff Chester, executive director of the privacy group Center for Digital Democracy.

He added that the Future of Privacy Forum's proposal did not appear to take into account the significant civil liberties issues at stake when the government--as opposed to private parties--collects information. "The most glaring problem is the failure to recognize that encouraging the government to collect more information about its citizens helps usher in the kind of Big Brother state we'd rather keep as fiction."

This news story is important. I recommend that everyone read it.