May 2011

Rep Marsha Blackburn (R-TN) told the Telecommunications Industry Association convention that they were going to have to come up with an online privacy self-regulatory regime or government was going to do it for them.

"[T]hough you dazzle consumers with your ends you also frighten us with your means," she said. "The lifecycle of recent data breaches and the lag time in appropriate consumer notification is a trend that I fear perpetuates industry's "culture of damage control." She warned that government was even now laying out plans to "rush in" with all its "corrosive potential." She also said she wanted the Federal Communications Commission out of the privacy area, and would introduce a bill to repeal some of its authority. While Rep Blackburn isn't looking for an active Federal Trade Commission, she does say that it, not the FCC, should be wielding the authority in that space. She says she is even planning to introduce legislation to repeal section 222 Communications Act, which empowers the FCC to oversee the confidentiality of telecommunications subscribers' proprietary info, and section 631, which is a prohibition on a cable system's disclosure of personally identifiable info without prior consent.

Spectrum from T-Mobile USA and Qualcomm, it seems, is not enough. AT&T Mobility is asking the FCC to approve its purchase of two additional spectrum licenses that cover 700 MHz radio waves in Kansas and Massachusetts.

While such spectrum purchases are relatively common for the nation's largest wireless carriers, and the licenses AT&T is hoping to buy are relatively trivial, the news is noteworthy considering AT&T's seemingly unquenchable quest for airwaves. AT&T late last year announced it would purchase Qualcomm's 700 MHz licenses for $1.93 billion, and in March AT&T announced its intention to purchase T-Mobile USA for $39 billion. Both transactions are pending before the FCC. As for AT&T's most recent grab for spectrum, the carrier plans to use the 700 MHz licenses to bolster both its existing GSM network and its planned LTE network. In its filings with the FCC, AT&T said that it plans to use the Massachusetts license (710-716; 740-746 MHz) to enhance its GSM and UMTS networks in the area, and that it would use the Kansas license (704-710; 734-740 MHz) for its forthcoming LTE network. Knology of Kansas owns the Kansas license, and 700 MHz LLC owns the Massachusetts license. AT&T did not disclose the financial terms of the transactions.

On May 19, 2011, the Consumer Protection, Product Safety and Insurance Subcommittee of the Senate Commerce Committee held a hearing on consumer privacy and protection in the mobile marketplace.

Sen Mark Pryor (D-AK) chairs the Subcommittee. He said, "Consumers continue to lose more control over their personal information, and smart phones are part of this trend as they become more versatile. Until there are basic parameters and best practices in place, I have a real concern this problem will only get worse. The insights of today’s witnesses are helpful in determining where we need to go from here."

Full Committee Chairman Jay Rockefeller (D-WV) said, "As the online world grows and evolves, the consumer privacy issues that we must address become more complex and the stakes get higher. As smartphones become more powerful, more personal information is being concentrated in one place. Consumers want to understand and have control of their personal information. Unfortunately, today this expectation is not being met. The companies here today are leaders in the industry. So today I ask them to lead. I ask them to work with application developers, both large and small, to create better privacy notices and controls that work in the mobile world. This effort should make strong privacy policies and practices for mobile apps the norm, not the exception. I believe consumers deserve a simple, easy-to-use process to stop companies from collecting personal information.”

Sen. John Kerry (D-MA), who has introduced his own comprehensive privacy proposal, took aim at witnesses from Apple, Google and Facebook testifying on Thursday. To Kerry, those companies have contributed vast innovation, while stressing to regulators: "Washington, leave us alone." "But we are in a different place today," Sen Kerry continued. He said that companies like Google, Apple and Facebook need to join companies that have “already come down on the side of common sense, very restrained, simple privacy protections." The companies he listed included Intel, eBay, Microsoft and HP — all of which have endorsed Kerry’s privacy bill.

David Vladeck, the Director of the Federal Trade Commission's Consumer Protection Bureau, said that while mobile technology, such as smart phones, is giving consumers a vast array of new products and services, it also presents new consumer privacy challenges. The FTC supports what's called a "Do Not Track" mechanism and the issues surrounding implementation of Do Not Track for web browsing are the same on mobile devices and computers. Staff also is examining how Do Not Track could be applied to mobile applications. The FTC testimony also notes that children and teens’ use of mobile devices is increasing rapidly.

Bret Taylor, Facebook's chief technology officer, said the company fears that placing tougher limits on the use of consumer data could squelch its network and the rest of the "social Web" because it would inhibit the sharing of information. "Thus, to satisfy people’s expectations, we not only need to innovate to create new protections for individuals’ information," he said. "We also need to innovate to ensure that new protections do not interfere with people’s freedom to share and connect." Taylor said Facebook has "robust privacy protections" and considers those protections when developing new services, a practice known as "privacy by design." But he cautioned that in an era when many people want to share their pictures and other information to get the most out of social networks, Facebook doesn't want to assume that everyone wants a vault around their data. "Of course, privacy by design does not mean privacy by default. As services evolve, so do people’s expectations of privacy. At Facebook, we believe that providing substantive privacy protections means building a service that allows individuals to control their own social experiences and to decide whether and how they want to share information."

Google defended its handling of user data tied to mobile devices using its Android software, telling U.S. lawmakers that the company seeks consent for the collection and use of location information. “Google is also very careful about how we use and store the data that is generated by these services,” said Google's Alan Davidson.

Catherine Novelli, vice president of worldwide government affairs for Apple, told lawmakers that the company doesn't knowingly collect any information on children under age 13. All location data gathered by Apple from iPhones and iPad tablet computers is anonymous and can't be traced to individual users, Novelli said. The information is used to improve the functionality of the devices. “Apple does not track users’ location, has never done so and has no plans to do so,” she said.

Federal Communications Commission member Robert McDowell traveled to Dallas (TX) to speak to the Telecommunications Industry Association about one of his favorite subjects: deregulation.

He noted that FCC rules in the Code of Federal Regulations (CFR) take up 3,695 pages -- that's up from 2,933 pages before passage of the Telecommunications Act of 1996 which, Commissioner McDowell said, was intended to "promote competition and reduce regulation." He called on the FCC to promptly initiate a full and through review of all of its rules: "a comprehensive and sustained effort to repeal and streamline unnecessary, outdated or harmful FCC rules would signal to investors that the Commission takes seriously Congress’s and the President’s calls to deregulate. With the certainty that the Commission will not only refrain from issuing new unneeded rules, but weed out old ones as well, investment capital is more likely to start flowing again."