AAF Government Report

October 22, 2009

Clark Rector Jr., Executive Vice President – Government Affairs

FTC Moves Up Review of Children’s Privacy Law

Federal Trade Commissioner Pamela Jones Harbour has announced that the agency has moved a planned re-examination of the Children’s Online Privacy Protection Act up to 2010. COPPA requires a Web site operator to obtain parental permission prior to the collection of “personally identifiable information” from children under the age of 13. The original date for the re-examination was 2015.

The Commissioner indicated that the review will pay close attention to the content found on wireless devices. Another issue that has raised particular interest is whether the current definition of “personally identifiable information” adequately addresses concerns about child welfare online.

“As technology improves and evolves the commission must do its best to ensure that the regulatory framework and enforcement approaches also adapt,” Ms. Harbor said.

Some observers have pointed out that the Commission must be very careful in efforts to limit access to or by children. The Progress and Freedom Foundation has warned the FTC to be aware of the free speech rights of minors. According to a Foundation statement, “If the FTC expands COPPA by broadening age verification mandates on the Internet, it would, ironically, reduce online privacy by requiring that more information be collected.”
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Net Neutrality Proposal to be Released

FCC Chairman Julius Genachowski has amended his net neutrality proposal in the hopes of gaining the support of the two Republican FCC Commissioners. The Chairman’s new proposal omits tentative conclusions as to necessary steps the Commission must take to preserve net neutrality. The new proposal is believed to exempt online providers of content, services and applications from its requirements.

The proposed rule would bar network operators from discriminatory practices and require them to disclose how they manage their networks. The proposal calls for stepped up enforcement against violators.

The buildup to the Chairman’s proposal has generated intense interest both pro and con from members of the House and Senate. The formal FCC proposal was approved 3-2 in a vote today.
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Consumer Financial Protection Agency Legislation Moves Forward

The House Financial Services Committee approved legislation that would create a Consumer Financial Protection Agency which is intended by its sponsors to protect consumers from unfair financial practices.

The AAF and other marketing associations have worked to narrow the reach of the legislation to have an unnecessary negative impact on the advertising community. As passed by the Committee, the Agency would not have oversight over automobile dealers, lawyers, retailers, accountants, cable companies or real estate brokers. Chairman Barney Frank (D-Mass.) said the exceptions were made to make clear that the Agency would not have oversight over all financial transactions but would just monitor financial products.

The bill does have another provision of concern to the advertising industry. The bill would transfer much jurisdiction over advertising from the Federal Trade Commission, which has extensive experience in that area, to the new agency. It would also greatly, and dangerously, expand the scope of that jurisdiction to include not just false and deceptive, but also “abusive” advertising. As written, it would also seem to make liable any media that ran the advertising.

The bill will next be considered in the House Energy and Commerce Committee. AAF and allied companies and associations are working with committee staff to craft acceptable legislative language.
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AAF Hosts Meet & Greet

On October 22 the AAF hosted a meet and greet for Rep. Bob Etheridge (D-N.C.) and Washington, DC representatives of advertising industry corporations and associations. The representative is a member of the important House Ways and Means and Budget Committees.

Prior to serving in the House, Etheridge worked as the sales representative for a manufacturing company and was the owner of a start-up radio station. He has a strong understanding of the importance of advertising and the harm that would come from any effort to tax or deny the federal tax deduction for advertising. Etheridge stated that most consumers do not appreciate the free broadcast and affordable print media made possible by advertising.

Etheridge revisited the tax deductibility on pharmaceutical advertising discussion that took place in the Ways and Means Committee earlier in the year and expressed satisfaction that the idea was not adopted at the time.
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