Congress Will Act On Privacy

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February 01, 2000 (8:25 AM EST)

By Mo Krochmal,

NEW YORK -- One of the leading Democratic Congressmen involved in the Internet said that the nation's law-making body will act on consumer privacy protection this year.

"Congress is hearing the drums; the public is saying privacy is a growing concern," said Rick Boucher (D-Va.), senior member of the House Commerce committee, on Tuesday at the Myers Forum for Interactive Television Development, a trade conference sponsored by the New York-based market researcher here.

With the growth of the Internet, marketers are exploring ways to leverage information technology to gather data to better target advertising messages. The Internet lets data gathering be done quite efficiently and at a depth that cannot be achieved in the physical world. Privacy advocates are concerned that this technical adeptness will strip away protective layers of anonymity online, exposing individuals' information to marketers and crackers.

Boucher said the Internet industry has to come up with recommendations or face the consequences that the financial industry did last year, when Congress appeared ready to impose strict regulations on data privacy.

"The industry is coming to the realization that they need to come forward and say this is an acceptable policy we can live with," Boucher said.

The model that is being built will let users know what information is being collected, to what purposes it will be used, and will allow users to opt out, Boucher said.

The United States itself is under pressure from the European Union, which has very strict guidelines for the protection of personal information. The EU has threatened to halt the flow of data from its members unless the U.S. has a protective data policy. Boucher said that will be answered by industry self-regulation.

"There won't be an interruption of data flow" he said. "But Congress will impose a baseline set of protections this year."

Boucher told an audience of some 300 people attending the television industry conference that he expects Congress to pass regulations that will allow ISPs to sue spammers to protect their business, but won't give end users similar protections.

"If you do that, you quickly begin to violate free speech rights," he said. "You can give an ISP the tools to protect their business and no court is going to disagree with that. But giving individuals that right is a problem."

Boucher said taxes on the Internet are unavoidable.

He said physical world retailers could use technology to finalize bricks-and-mortar transactions through the Internet to avoid paying taxes. Governments would then respond by raising income taxes, he said.

"You are going to pay for it one way or another," he said.

Boucher said Congress is concerned that the telecommunications industry is lagging behind the cable industry in rolling out DSL high-bandwidth connectivity to the Internet.

"It's not happening as quickly as we think it should be," he said.

Congress may lower regulatory barriers to give DSL a boost, he said, but will require better cooperation between the old-line companies and their new competitors.