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Facebook Investors Take Heed

Posted June 26th, 2012 in Federal Trade Commission, Internet, privacy and tagged , , by Alton Drew

The U.S. Senate Committee on Commerce, Science, and Transportation has scheduled a hearing on how well the online industry is self-regulating consumer privacy concerns. The committee’s chairman, Senator John Rockefeller, said the following:

“In our prior hearing on consumer privacy, both the Obama Administration and the FTC commended recent industry efforts to provide consumers with more privacy protections,” said Chairman Rockefeller. “However, their reports also stated that industry can do more and that federal legislation is necessary. In this follow-up hearing, I intend to closely examine how industry intends to fulfill its recent pledge to not collect consumers’ personal information when they utilize the self-regulatory ad icon or make “do-not-track” requests in their web browsers.”

The hearing is scheduled for 28 June 2012.

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Let Online Video Market Emerge via Light Touch Regulation

The Senate Committee on Commerce, Science and Transportation today held a hearing on the emerging online market. Senator John “Jay” Rockefeller (D-WV) and chairman of the Committee wanted to know how the emerging online video market would impact quality and affordability of online video content. Senator Jim DeMint (R-SC) wanted to see, of course, less regulation in the marketplace so that innovation could thrive.

I was not surprised to see net neutrality raise its ugly head. Barry Diller, Chairman and Chief Executive Officer of IAC raised the issue most prominently as he expressed concern that gatekeepers may try to negatively impact the flow of video between platforms like his or Amazon and the consumer.

I know. Same old arguments we’ve been hearing since Genesis.

What I found interesting was that Mr. Diller also wanted to see light touch regulation when asked about the appropriate regulatory framework for the online video marketplace. He also said that if someone wanted to start their own broadcast network online, no one could stop them simply because of the Internet’s openness.

It’s not like consumers need help getting to the Internet. They have a number of wired and wireless broadband options. There is still the issue of broadband networks being built out to rural and insular communities. The Federal Communications Commission’s modification of the universal service fund is designed to help in that area.

The biggest challenge may be network capacity, specifically spectrum. It’s for this reason why I believe net neutrality proponents will find themselves in a conundrum. They want consumers to have access to all platforms vying for consumer protection, but take issue with two free market methods for obtaining or conserving access to the electromagnetic airwaves: mergers and data caps. The net neutrality types can’t have it both ways.

If Mr. Rockefeller wants consumers to experience affordable access to online video, he and his net neutrality minions will have to accept tier pricing based on data caps. If not, all the “anybody show up and chow down” demand by content providers as well as consumers will result in poor quality of service. Access to the airwaves is finite. Just because it’s invisible doesn’t mean there is a lot of it.