Inside the Beltway : May 2010


Rep. Boucher Announces Details of Proposed Privacy Legislation
ABM poised to shape bill on behalf of industry

Congressman Rick Boucher (D-VA) kicked off ABM’s 2010 Annual Conference earlier this month by announcing details of draft privacy legislation that would apply to all activities, online and offline, in which advertisers use information collected from consumers to target ads to the consumer's apparent interests. (See Wall Street Journal coverage here.)

In detailing the legislation, Boucher said, "Our purpose is not to interfere with legitimate behavioral advertising, but there is a great deal of concern from Internet users about how their information is being used."

Boucher noted that a recent New York Times article suggested that behavioral advertising was declining, possibly because of regulatory uncertainty; he hoped that his bill would provide certainty and thus encourage the growth of behavioral advertising.

Click here for an executive summary of Rep. Boucher’s bill, which would initially require that all Web sites that collect information from consumers give consumers notice with respect to the information collected, how it is used, who it is shared with, and the circumstances under which it is shared. Consumers would be given control over collection and use practices under an opt-out protocol. Boucher emphasized that, under an opt-out system, the default is that information can be collected and used as described in the Web site's policy.

Boucher said that his proposed bill incorporates what he called "best practices that exist today among those involved in Internet advertising." He noted that Google and Yahoo, for example, currently provide opportunities for consumers to register their choices with respect to targeted advertising. Boucher added that his proposed bill would preempt state legislation on the subject, and would delegate civil enforcement to the Federal Trade Commission.
ABM is poised to play a key role in influencing the proposed privacy legislation, and Boucher is specifically seeking ABM's feedback and support.

As the importance of this issue is critical to our industry's future, ABM has already held several meetings of its Information Policy Committee and membership to inform and enlist feedback that will reflect our industry’s view and help shape the legislation (comments are due June 4).

Last week’s call with accredited representatives explored the bill’s implications, primarily online. Since the bill, as proposed, would also have broad implications offline that may impact members’ events and data businesses, we’re hosting another call this Monday, May 24, at 3:00 PM ET to further explore those offline implications. If you’d like to join the call, please contact Kate Patton




More on the 2011 Exigent Rate Increase for Periodicals

In previous issues of Inside the Beltway, ABM has mentioned the Postal Service’s intent to use its “exigent” rate authority to increase postal rates above the CPI cap, a move that present law allows in the face of "extraordinary" or "exceptional" circumstances, terms that are not explicitly defined.  

Although the Postal Service has not said how large the increase would be, ABM believes that the increase is likely to be in the neighborhood of 5%, with a higher (but still single-digit) increase for those products – unfortunately, like Periodicals – on which its numbers show that it is losing money. The Postal Regulatory Commission has several times declined to force increases for such products but has suggested that its forbearance is not without limits.

The views of the PRC are especially important here, because once the Postal Service files for an exigent increase, which it may do as early as July (so that mailers will have 90 days from the date of the PRC decision to prepare), the PRC's role is more than just "advisory," and it is free to accept, reject or modify the Postal Service's proposal. And because the PRC has been a lot less understanding about the low Periodicals cost coverage (around 76%) than the Postal Service, ABM members are vulnerable.

David Straus, ABM’s Washington counsel and postal expert, has met, and will continue to meet, with the MPA and others to develop an industry position on the upcoming rate increase proposal. We can assume that there will be a legal challenge both at the PRC and, if necessary, in court to the Postal Service's view that the deep recession and the severe drop in mail volume presents the type of "extraordinary" or "exceptional" circumstances Congress had in mind. But, considering that fact that the Postal Service cannot generate the revenue it needs from a reversal of its volume decline, it appears that the exigent increase filing will be moving forward.

In response to the certainty that an exigency filing will be made, the PRC has announced that, even though it is confident that its previously-published regulations covering such situations are adequate, it will hold a "technical conference" on June 16, during which parties will be permitted to discuss procedures for managing the anticipated case. The procedures are crucial, because, by law, the PRC has only 90 days to issue an opinion. 

Straus predicts a 7-8% increase for Periodicals, effective in early January 2011, with rate design changes – such as significant increases in the bundle and container charges – that will tend to make the increases rather uneven, such that very large publications and those that can and do co-mail to create large bundles and containers will avoid the worst of it.




Update on USPS Plans to End Saturday Delivery

As many ABM members are aware, the Postal Service has filed with the Postal Regulatory Commission for an "advisory opinion" on its proposal to end Saturday delivery. The PRC is in the process (from May 10 until June 28) of holding "field hearings" to obtain public input in advance of the more formal hearings to be held later in Washington.

The formal portion of the case will include the following key procedural dates (among a much longer list of procedural steps): July 12-23 – hearings on the 11 sets of testimony already filed by USPS; August 2 – rebuttal testimony (at which time ABM will likely file testimony); September 7-10 – hearings on rebuttal testimony (although the dates are likely to change because they encompass a religious holiday); late September and early October – legal briefs. The PRC will then issue its opinion. ABM’s Government Affairs Committee and Board of Directors are in the process of developing an ABM position on the Postal Service’s proposal.



Advocates Skirmish on Net Neutrality in Wake of Comcast Ruling

Both the Federal Communications Commission (FCC) and several members of Congress are staking out new positions on net neutrality in the wake of the April court ruling that essentially blocked the FCC’s original chosen path for net neutrality rulemaking.
Initially, FCC chairman Julius Genachowski took an aggressive stance in response to the FCC’s defeat in its litigation with Comcast, asserting on May 6, just a month after the ruling, that the FCC was willing to reclassify broadband services, or at least their transmission element, as “common carrier” services subject to the agency’s broad Title II powers. (While the FCC v. Comcast ruling of the District of Columbia Circuit federal appeals court blocked FCC net neutrality rulemaking under the FCC’s ancillary powers, it would not apply to action taken under Title II.)
Genachowski painted his new plan as moderate, because it would apply only certain provisions of Title II to the “transmission” component of broadband access service, while forbearing from regulation non-transmission aspects of broadband services. The broadband industry, however, objects strongly to being classified together with highly-regulated telecommunications services, and its reaction to the Genachowski proposal was swift and negative. 
Several broadband industry allies in Congress, including Republican Senator John McCain and Rep. Cliff Stearns, quickly introduced legislation that would block FCC net neutrality rulemaking under Title II. On the other side of the aisle, a few Democratic members of Congress, including House Speaker Nancy Pelosi, announced that they supported the Genachowski approach.
As attendees of ABM’s Annual Conference may recall, Rep. Rich Boucher (D-VA), chairman of the House Energy and Commerce Subcommittee on Communications, Technology & the Internet, explained in his speech that he hoped to push Congress to enacting compromise net neutrality legislation. 
Boucher told attendees that he felt Congress could create a consensus bill from the core needs of all sides – the need for Internet users (including the content provider industry) to be assured of non-discriminatory treatment, and the need of broadband providers to exercise reasonable network management practices. Boucher would also recognize a right of broadband providers to provide special enhanced services to their own customers over their Internet, so long as those services left a “robust” pipeline for the public. A week after his speech to ABM, Boucher’s similar announcement at a conference sponsored by the Computer and Communications Industry Association was reported widely.
Rep. Stearns, the ranking minority member of Boucher’s subcommittee, praised Boucher for suggesting legislation as an alternative to the FCC’s reclassification approach.  Stearns suggested that the full Energy and Commerce Committee should hold hearings on  net   neutrality  before the FCC moves forward with its reclassification approach.



Technical Specifications Issued for New Behavioral Advertising Icons

Last month, in a critical step toward advancing ongoing (and ABM-supported) industry self-regulation, the Interactive Advertising Bureau (IAB) and the Network Advertising Initiative (NAI) announced their release of the CLEAR (Control Links for Education and Advertising Responsibly) Ad Notice Technical Specifications, a set of common technical standards enabling enhanced notice in online ads. 

These new technical specifications, found here, will allow advertisers and ad networks to begin offering a clickable icon in or near online ads that directs users to additional information about online behavioral advertising and choices about such ads.

The icon-based approach to enhanced consumer notice was outlined in the Self-Regulatory Principles for Online Behavioral Advertising, which were released in July 2009 by a coalition of associations—American Association of Advertising Agencies (4A’s), Association of National Advertisers (ANA), Direct Marketing Association (DMA), Interactive Advertising Bureau (IAB) and the Council for Better Business Bureaus (BBB).

Meanwhile, the IAB also announced recently that it is working with the Council of Better Business Bureaus on enforcement procedures for the self-regulatory process. During the group's annual leadership summit in February, its board of directors and general membership body voted to establish a code of conduct intended to help the government enforce the IAB's privacy guidelines. (Click here for more information on this.)



RESOURCE: ‘Copyright Basics’ Video

Global rights broker Copyright Clearance Center (CCC) has created a free seven-minute video that explains the basics of U.S. copyright law and how it applies to the workplace. The video is an easy and effective way for ABM members to ensure that their employees have a firm grasp on how the law regards intellectual property rights over shared published content. The video, entitled “Copyright Basics,” is available here.



ABM Files Brief, Sides with Publishers on Right to Government Information

Publishers are turning to data to save the b-to-b information game, but is the data industry under attack by lawmakers? Doe v. Reed, currently pending before the U.S. Supreme Court, is poised to restrictively impact media's access to government information in the name of privacy. This is information some ABM members rely on as source material.

ABM has maintained a presence in Washington in order to represent members' interests regarding data and impending privacy legislation. Thus, ABM has recently filed a brief on behalf of the Association and its like-minded partners – including Reed Elsevier, Thomson Reuters and the Software & Information Industry Association, among others – all of whom collect and share data in the interest of both business and the public good.

The brief details ABM's position, that, since public information is by its nature public, overarching legislation written to protect the privacy of that information will hinder business for information industries, as well as delay access to necessary public information for all.

ABM and its co-filers support the Ninth Circuit's decision to uphold the First Amendment's requirement that public information remain public and to apply Washington's public records act in protecting accessibility to that public information. ABM believes that the challenges that this type of broad privacy legislation could pose for the industry are unique, and should be considered as such by Congress. The brief was filed to bring light to the economic and social benefits that public information aggregated and distributed by publishers brings to both business and public interests, as well as to the dangers of potential “delays or unavailability of that information, with potential adverse effects on government, economic, and First Amendment activity.”



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