New TV technologies raise privacy red flag

Jul 9, 2001  •  Post A Comment

While the advertising and television industries plan for and fret over the coming watershed transition to broadband and various forms of interactivity, a watchdog group, allied with a self-described anti-TV organization, blasted the new technology as a threat to individual privacy and called for legislative and regulatory action to prevent future abuses.
The industry, in turn, dismissed the critics as “reflexive regulators,” which is how a spokesperson for the National Cable & Telecommunications Association put it.
The criticisms come in a report from the Center for Digital Democracy, a Washington-based advocacy group. The report, titled “TV That Watches You: The Prying Eyes of Interactive Television,” surveys the “range of technologies and corporations involved in reshaping American television [and] transforming it into a vast data collection and interactive direct-marketing machine.”
The report singles out many of the biggest players and best-known names in both telecommunications and advertising as being at the forefront of the development and distribution of “invasive ITV applications,” including AOL Time Warner, AT&T, Liberty Media, Microsoft, News Corp., A.C. Nielsen and the biggest advertisers, agencies and both hardware and software developers.
Microsoft, to cite just one example, is singled out in the report as having “partnered” with companies that provide technology to “target viewers with personalized [advertising and program] content based on stored user profiles,” with some of that information “coming from the consumer.”
“We have a very high sensitivity about privacy,” countered Richard E. Belluzzo, president and chief operating officer, Microsoft Corp., who emphasized to Electronic Media that the Redmond, Wash.-based software and media giant has signed on to a European Union directive mandating the terms of data privacy that, among other provisions, calls for a consumer to explicitly “opt in” before a Web site can collect and disseminate the consumer’s personal information. Under an arrangement worked out between the EU and the U.S. government, U.S. companies agreeing to data-collection practices acceptable under the EU directive will “give individuals the opportunity to choose whether their personal information will be disclosed to a third party,” and will give them an “affirmative or explicit choice” before disclosing more sensitive personal data.
Cable in the United States operates under a 1984 law, considered even by the CDD report authors as “one of the most protective of all federal privacy statutes”; that law has both “opt in” and “opt out” aspects.
“[We] are very prescriptive about how information is used,” Mr. Belluzzo said. Asked how Microsoft would act in the coming broadband future, when the technical possibilities will include individually targeted ads, personal data collection and sale of individual databases to third parties, Mr. Belluzzo replied, “There’s a continuum of things you can do, and at some point you enter privacy concerns. We will not enter that point.”
As for the CDD’s call for government regulation, Mr. Belluzzo said, “We do not feel that government involvement is the answer to this.”
Clearly that’s also the position of the cable industry, which considers the Cable Communications Act of 1984 sufficient protection against future abuses. “Our industry already operates under some of the strictest government privacy protections of any industry,” the NCTA’s spokesperson said. The CDD report also calls for strengthening the 1984 law’s penalty and enforcement provisions, and for extending it to cable’s satellite and telephony competitors, to which, the CDD says, the law’s provisions do not apply.
While the NCTA does not take an official position on extending the regulations to cable’s competitors, at least one knowledgeable industry source believes the ’84 act may in fact apply to DBS and DSL providers. But whether it does or not, uncertainty about the legalities-and the possibility of ending up in costly litigation-will keep cable’s competitors from either taking unfair advantage or infringing on consumers’ privacy. “The very fact that there is uncertainty [about whether the law applies to noncable-content providers] means that no one’s doing it, because no one wants to be the [court] test case,” this source said. Indeed, more than one cable industry figure sees the 1984 law’s limitations as a marketing advantage for the cable industry, which can boast that it is “the broadband pipe that protects your rights.”
Also involved in the production of the CDD report were David Banisar, deputy director of Privacy International, and David Burke, British director of Whitedot.org. Mr. Burke, author of a book entitled “Spy TV,” described himself as “anti-television,” saying, “My paranoia is easily matched by the ambition of these men [who want to implement ITV].”
The authors of the report point with alarm at a day not too far off when the Trix cartoon rabbit addresses your kids directly by name and your local politico can target those TV election-eve pitches right to you and your personal hopes and fears.
“You can be sure that politics will be one of the first areas affected by this,” said Mr. Burke. CDD Executive Director Jeff Chester predicted, “This is going to be the prime way folks campaign in the future.”
The report’s authors also warn that your local cable provider will be able to sell data specifically about you to your insurance company, for example, which will allow your insurer to set rates based on whether you have a risk-taking personality, as evidenced by the shows you watch. And they accuse the ad and TV industries of being insufficiently concerned about the potentials for misuse.
“The report raises and addresses some interesting questions,” said the NCTA’s spokesperson, “but its answer, just to kind of reflexively regulate, is premature when you consider cable’s historic experience and sensitivity to privacy issues, not to mention the undeveloped nature of the interactive market. … Whenever the discussion of regulation comes up, capital markets dry up, investment ratings go down … and [it sends] the wrong signal to our friends on Wall Street.”
As for the Orwellian vision of a cartoon pitchman rabbit calling to individual children by name, the NCTA spokesperson scoffed at it as science fiction. “We have a proven track record of sensitivity to customers’ privacy,” the spokesperson said. “Protections are in place. … The [CDD’s examples] are very dramatic worst-case scenarios-[as] if you had the Wizard of Oz behind the headend.”