Between April 1982 and November 1984 I worked at a Burger King in Tallahassee, Florida. I was a student back then at the Florida State University. The restaurant was located across the street from campus so from time to time I would see some of my friends come into the restaurant to eat. One would think that putting together a Whopper was no big deal but to some people it is, from getting the condiments right to simply trusting the employee who made the sandwich.
I had two schoolmates that were pretty particular about who made their grub. One schoolmate, Charlotte Jones, was very particular about me making her food. One day I was getting off my shift and heading back to Smith Hall. Charlotte was heading to BKs to eat. She saw me heading to the dorm and asked where I was going. I said back to my room. At that point she did an about face and headed back to Smith Hall and made sure that she knew my schedule from that day going forward.
Another schoolmate, Candace Pope, liked her fish sandwich done a particular way. It got to the point that if I saw her coming into the restaurant, I would have her sandwich prepared before she got to the cash register. All I had to do was say, “It’s up.” She would then direct the cashier to the sandwich already made. I was prepared to take care of my friends based on having accumulated data on their buying habits at Burger King. I was able to anticipate their needs.
Fast forward thirty one years and technology is able to do on a massive scale what I was able to do on a micro scale. Today technology allows business to capture information on their consumers, send that information to data brokers and other information gatherers who categorize and prepare that information for use by advertisers. It’s an information trade where broadband networks providing the platform upon which information is traded at light-speed. And part of that information trade takes place in a $120 billion advertising market.
What does this information trade mean for broadband deployment and investment? The information trade creates the value that signals capital to enter the market. Capital, seeing high returns from the trade, will move toward entrepreneurs that build digital mousetraps and to broadband facility providers willing to build the infrastructure upon which the digital data trade winds flow.
Data, information, knowledge have been flowing between people, groups and societies from the time man has been on the planet. My little Burger King example shows how we use business data about consumers every day. What scares people and in particular regulators, is the abundance of it. According to Maria Ogneva, 2.5 quintillion bytes of data is created every day.
A forum hosted by the Federal Trade Commission in September 2014 addressed some of these fears, centering on regulator concerns about consumer privacy and the commercial use of data without consumer permission. Panelists were concerned about how data analytic techniques may be either skewing unflattering ads to minority populations, or populating data bases with incorrect or biased information about consumers based on their buying habits or location where they make their purchases. While only one panelist explicitly mused about regulating data, it was apparent to me that at least some of the panelists were thinking about regulating how data is accumulated, analyzed, and distributed.
The FTC has been recommending that Congress get a bit more aggressive with data brokers, the entities that collect, analyze, and sell consumer data to advertisers. For example, from a summary of a report the FTC conducted on data brokers in 2014:
“As the Report states, ‘In light of these findings, the Commission unanimously renews its call for Congress to consider enacting legislation that would enable consumers to learn of the existence and activities of these data brokers and provide consumers with reasonable access to information held about them by these entities.’ With respect to brokers that sell marketing products, a majority of the Commission had four specific suggestions for Congress:
- Consider giving consumers a way to easily identify which brokers have data about them and where they can go to access it or opt out. One way to do that: A central online portal.
- Consider whether data brokers should have to clearly disclose that they not only collect raw data, but also combine it with other information to draw inferences about people. That’s especially important when it comes to sensitive topics like health conditions.
- Consider requiring data brokers to reveal more about their sources. That would make it easier for consumers to track down and correct the source of inaccurate information (for example, a mistake in a public record).
- Consider whether consumer-facing businesses should have to clearly disclose that they share information with data brokers and to give consumers choices, including opting out. For sensitive data – health information is one example – the FTC is asking Congress to consider legislation to require consumer-facing sources to get people’s affirmative express consent before they collect it in the first place.”
Democrats in the U.S. Senate have taken up the FTC’s call for legislative action. Last March S. 668, the Data Broker Accountability and Transparency Act of 2015, was introduced in the Senate, but given the control Republicans have of the Senate and the House, this bill poses little if any political risk to the data broker industry. The value being brought to the information markets via data brokers continues unhindered by new legislation or regulation. This is good for broadband deployment as well since, as I stated before, the information trade drives deployment of broadband.