• by Dave Morgan , Featured Contributor, April 23, 2009

It's privacy time again. A new era of scrutiny into the consumer data collection and privacy practices of the Internet and cable industries has opened as Rep. Rick Boucher (D-VA), chairman of the House Subcommittee on Communications, Technology and the Internet, held hearings on the issues this morning in Washington, D.C.

What is this all about? Folks in Washington are preparing to increase the scrutiny and regulation of online behavioral advertising. As I have written before, Rep. Boucher is one of Congress' foremost advocates for and experts on technology matters. Over the past two months, he openly discussed his concerns about whether or not online ad and telecommunications companies have been providing consumers with adequate protection of their privacy. The hearings were a first step in the development of legislation to govern how companies capture, store and use behavioral and other data from consumers as they surf the Web and, potentially, how companies will use cable television.

Who was there? Several key industry folks were there today. Among the witnesses were representatives from AT&T, the National Cable & Telecommunications Association (NCTA), the Center for Democracy & Technology (CDT), and the Electronic Privacy Information Center (EPIC).

What did they say? Virtually everyone talked about deep packet inspection, the practice of Internet Service Providers sifting through all of consumers' browsing data, either to manage the delivery of the broadband service, or to capture data to be used for advertising or marketing. This practice drew a lot of negative fire last year when NebuAd debuted its ad service using the technology. The most significant testimony came from AT&T, whose Chief Privacy Officer, Dorothy Attwood, took the position that all behavioral advertising should be "opt-in" -- that it should all require an affirmative consent from each and every consumer. The NCTA representative talked about developments in building advanced TV systems through the consortium Canoe Ventures.

What does this mean for the digital media and marketing industry? Everyone should expect that today's hearing is just a first step in what will be a long process. Clearly, Washington is preparing to move across a broad front on this issue. If industry self-regulatory efforts are going to happen, they'd better happen soon.

What else is out there? Not to be lost in Congress's actions today are the recent strong moves of FTC Chair Jon Leibowitz to make his presence felt on consumer advertising issues. First, Chairman Leibowitz just named a new slate of department heads to the commission, all of whom have strong consumer protection pedigrees. Second, just a few days ago, the FTC moved very quickly and decisively to challenge Kellogg's television commercials that claimed that eating one of its frosted cereals would make children 20% more attentive in school that day. Kellogg's immediately pulled the spots. Leibowitz, like Boucher, had been on record for some time with his concerns about abuses of consumer privacy online and his desire for online ad companies to be more transparent about what they're doing.

It looks like the clock is now ticking for the industry to solve some of these problems before Washington tries to solve them first. It probably won't be pretty. What do you think?