Congress held several hearings this session investigating the impact of online advertising practices on consumer privacy. On September 25, 2008, the Senate Commerce Committee held the last hearing of the 110th Congress on this issue. Specifically, the Committee examined the impact broadband access providers’ advertising practices have on consumer privacy and considered whether legislation or self-regulation is required to address privacy concerns associated with online behavioral advertising.

I. Congressional Opinion

There was a general consensus among Committee members that a more comprehensive understanding of online behavioral advertising was necessary before introducing legislation. Sen. Dorgan (D-ND) stated that it was premature to determine whether self-regulation with enforcement capabilities or legislation presents the best solution to address privacy concerns. Sen. Hutchison (R-TX) cautioned against legislating in the area of online behavioral advertising before gaining a better understanding of the evolving technology, stating that innovation should not be hindered. She also stated that greater transparency and disclosure are important. Sen. Vitter (R-LA) indicated that any approach should not be technology-specific. Senators Thune (R-SD) and Wicker (R-MS) supported the development of comprehensive self-regulatory guidelines to govern online behavioral advertising.

II. Industry Supports Self-Regulation

AT&T and Time Warner Cable appeared before the Committee indicating that they did not engage in online behavioral advertising. Verizon Communications specified that it does not use deep packet inspection to target advertising to consumers, but rather that its online advertising practices are based on other technologies, such as the use of cookies or ad delivery servers to provide advertising that is limited to Verizon’s own services or web sites. All three witnesses expressed support for a self-regulatory framework for online behavioral advertising that incorporates affirmative opt-in consent, consumer control, transparency, privacy protection, and consumer value. Verizon also stated it supports a best practices framework that includes a certification process for companies demonstrating adherence to their collection and use of information for online behavioral advertising practices. Although Verizon opposed legislation, Verizon expressed support for providing the Federal Trade Commission with authority to take measures against companies failing to comply with a self-regulatory framework.

The three witnesses encouraged all participants in online advertising, including ad networks, publishers, search engines, ISPs, browser developers, and other application providers, to commit to a self-regulatory framework.

III. Witness Calls for Legislation

Public Knowledge (“PK”) expressed support for comprehensive legislation covering the entire Internet ecosystem to address privacy concerns that arise in the online behavioral advertising arena. PK said that consumers rather than the ISPs should have the option to decide what information is sensitive. In addition, PK raised concerns regarding the use of certain technologies employed for advertising purposes.