Time Warner: Do-Not-Track Bill, Regs Would Be Premature

Claims policy could prevent innovation, put 'vibrancy' of Internet at stake
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A Time Warner Cable executive warned legislators
Thursday that an online do-not-track regime could have unintended and negative
consequences, not only on targeted online advertising, but on the diverse and
unique Web sites such ads support. But she said if that regime becomes a
reality, it needs to apply to all parts of the Internet ecosystem.

That came in a hearing in the House Energy &
Commerce Committee Consumer Protection Subcommittee Thursday on possible
online 'do not track" legislation.

Asked what the economic impact of do-not-track
would be on her company, hearing witness Joan Gillman, EVP, media sales for
Time Warner Cable, said she did not have specifics, and broadened the answer
beyond economics. "The risk one runs is that there are unintended
consequences of a do-not-track policy in that it prevents companies like ours
from innovating." In addition she said, the "vibrancy" Internet
could also be at stake.

What should be explored, she said, were the
consequences on smaller content providers and service providers, "the
small businesses in and around this ecosystem." She said that, "The
smaller the Web site, the smaller the audience," the more difficult it is
to rely on contextual advertising. Those would be the ads directly related to
the ones on a site being visited.

Gillman said do-not-track should not be considered
in a vacuum, but needs to be part of a larger conversation about consumer
privacy. She said a do-not-track bill would be premature, and that industry
"best practices" self-regulation was the preferable next step. In an
earlier panel, representatives of both the Federal Trade Commission and
National Telecommunications & Information Administration agreed that self-regulation
was preferable, but also agreed among themselves that, to date, it had fallen
short. But neither pushed for legislation, rather they urged industry to step up
and do more.

Gillman said advertising was a key driver of online
applications at "little or no cost," and that the more effective the
ad is, the more revenue there is to fund those services. "Simply put,
advertising is more effective if the message is more relevant," she said.

"Do-not-track raises unique issues," she
said, that make it more complicated than the do-not-call list for
telemarketing. "For instance," she asked, "How would do-not-track
affect consumers' online experience and expectations? Would they receive
more pop-up ads? How would it affect diversity on the Internet? Would it
negatively impact niche Web sites with small but loyal audiences? Would it
prevent new Web sites from launching?"

Taking aim at the suggestion of all those
potential complications was Eben Moglen, Columbia law professor
and Software Freedom Law Center founder, who also likened data trackers to
spies and suggested they should be treated as such.

"I think the attempt to connect the
advertising business model to the importance of vibrant content on the net or
life-changing possibilities of expansion of access to underserved populations
is poppycock," he said, drawing some laughter from the hearing
audience. Moglen said that the purpose of advertisers was to "collect
information concerning the capabilities of the potential buyer and to affect
that buyer's behavior. That is also the definition of what intelligence
services do."

Susan Grant, director of consumer protection at
the Consumer Federation of America, suggested that do-not-track would not
somehow mean the end of the online ad model that supports all that free and
diverse content.

"We're not talking about no
advertising," she said. "There are consumers who might not avail
themselves of do-not-track so would continue to receive tailored advertising.
There are consumers who now and continue to get contextual advertising, which
is based on what they are looking at the time on the Internet, and doesn't
involve following them around and compiling a dossier of what they do and who
they talk to. And consumers find information on the Internet about the products
and services that they want in other ways as well. They do it using search
engines and price comparison Web sites. Behavioral advertising is one part, and
I don't think that doing away with it [she stopped herself and amended the
statement] or, not doing away with it, but giving consumers control over
whether they want to be tracked or not, will create a great economic
upheaval or turn the Internet dark overnight."

Mogen agreed, pointing out that there was already
ad-blocking browser software available and that "civilization had not
collapsed." He said there was "no justification to conclude
"legitimate control of surveillance on the Web in the public interest
would have any effect on the economics of the situation."

While Gillman argued against legislation or
regulation as premature without further study, she said that if that were the
case, any privacy policy should embody two principles: 1) it should focus on
the kind of information that raises privacy concerns and 2) it should be
applied in the same way to all entities.

The issue of do-not-track has been heating up
lately, with the FTC releasing its advisory report recommending some kind
of online "do-not-track" regime, though one preferably imbedded in a
browser rather than a database like the "do-not-call" list for

The subcommittee is chaired by Bobby Rush
(D-Ill.), who introduced an online privacy bill in July that
would require a combination opt-in and opt-out regime for online data
collection, similar to the proposals in the FTC report. But it did not include
a do-not-track element.

Rush's bill was in part a reaction to changes to Facebook privacy
settings and the collection of data from Wi-Fi networks by Google Street
View cars.