While the privacy bill of rights does not impose any
immediate new obligations on online companies, President Barack
Obama said it was part of a broader plan to give Americans more
control over how their personal data was used on the Internet.

“American consumers can’t wait any longer for clear rules of
the road that ensure their personal information is safe online,”
said Obama.

“As the Internet evolves, consumer trust is essential for
the continued growth of the digital economy. That’s why an
online privacy Bill of Rights is so important.”

Internet giants such as Google and Facebook have been
accused of quietly tracking their customers’ online activities
and then using that data to generate advertising revenue.

Lawmakers have expressed an interest in cracking down on
online tracking, but have done little to curtail the practice.

Internet companies have tried to get ahead of reforms by
adopting privacy policies, but have still come under fire from
Congress and consumer groups for not being upfront about how
they use information on users’ online activities.

The U.S. Commerce Department will work with companies and
privacy advocates to develop “enforceable” privacy policies
based on the bill of rights, said the White House.

While advertising networks associated with Internet firms
including Google, Yahoo! Inc and Microsoft Corp
have agreed to act on “Do Not Track” technology on web
browsers that make it easier for consumers to control tracking.

The Digital Advertising Alliance, a self-regulatory body
representing media and marketing trade associations, said on
Thursday it would immediately begin work to add these
browser-based choices to the set of tools consumers can use to
express their preferences for data collection.

Stu Ingis, the group’s general counsel, said he expected
within nine months for browsers to include a simple, clear
mechanism for consumers to opt-out of all data collection.

The administration said it was highlighting this action by
online advertisers as an example of the kind of progress that
can be made through voluntary action.

BILL OF RIGHTS

Obama’s announcement comes as he hones his strategy for
winning re-election in November. Obama is holding himself up as
a champion of everday Americans who does not impede the business
community’s contribution to economic growth.

The planned privacy bill of rights consists of seven basic
protections consumers should expect from companies.

Consumers would have control over the kind of data companies
collect, companies must be transparent about data usage plans
and respect the context in which it is provided and disclosed.
Companies would have to ensure secure and responsible handling
of the data and be accountable for strong privacy measures.

The bill of rights also calls for reasonable limits on the
personal data that online companies can try to collect and
retain and the ability of consumers to access and ensure the
accuracy of their own data.

While companies can voluntarily choose whether to adopt
these principles, those that do commit could face enforcement
action for straying from the principles.

Federal Trade Commission Chairman Jon Leibowitz said a
failure to meet privacy commitments once adopted could be a
deceptive act or practice, warranting FTC fines or other action.

Still, he expected companies to come on board as strong
privacy protections encourage trust in Internet commerce. “That
in turn fuels growth of the cyber economy and all other uses of
the Internet,” Leibowitz said.

The FTC issued a draft privacy report in December 2010 that
called for more privacy by design, choice and transparency. A
final report is expected soon.

In letters released this week, rivals Sprint Nextel Corp
, T-Mobile USA and MetroPCS Communications Inc
expressed concerns about the spectrum transfer.

Deutsche Telekom AG’s T-Mobile said in its letter
to the Federal Communications Commission that the deals would
result in “an excessive concentration” of spectrum holdings and
are a defensive move to prevent smaller competitors from getting
the airwaves.

No. 1 U.S. carrier Verizon Wireless announced plans on Dec.
2 to pay Comcast Corp and Time Warner Cable Inc
$3.6 billion in a spectrum and marketing deal. Verizon
reached a similar deal with privately held cable operator Cox
Communications, worth $315 million, which was announced in
mid-December.

The FCC is reviewing whether the two deals are in the
public’s interest, while the U.S. Justice Department is probing
the deal for any antitrust concerns.

Verizon Wireless, a joint venture of Verizon Communications
Inc and Vodafone Group Plc, has said it needs
more spectrum to support increased consumer demand for videos
and other services that soak up bandwidth.

“We believe the spectrum purchase is in the public interest,
addressing consumer needs, and putting spectrum to work to meet
growing demand for 4G services,” Verizon spokesman Ed McFadden
said in response to critics.

Wireless carriers have clamored for more airwaves to stave
off a looming spectrum crunch. The growing use of wireless
devices like Apple Inc’s iPad tablet and Google Inc’s
suite of Android-powered smartphones has added to the
urgency to find more airwaves.

AT&T abandoned its bid to buy T-Mobile after the Justice
Department sued to block the deal. AT&T had said it needed the
acquisition to get more wireless spectrum to support increasing
demand for wireless data.

RIVAL CONCERNS

T-Mobile argued in its letter to the FCC that the spectrum
purchase would not bring near-term benefits to Verizon Wireless,
as the company already owns similar spectrum that it has not yet
put to use.

“Rather, the principal impact of the acquisition would be to
foreclose the possibility that this spectrum could be acquired
by smaller competitors,” the company said.

The spectrum buy would be part of broader agreements to
create a joint venture and allow the cable operators to resell
Verizon’s mobile service.

Opponents of the transactions say they would mean that
companies that are rivals in some businesses, like cable and
Internet, would become allies in the wireless business.

T-Mobile and MetroPCS said in their filings that the agency
should deny Verizon’s spectrum deals, and Sprint asked for a
careful evaluation of all the implications.

The deals “would result in widespread collaboration and
cooperation between providers of the only two wireline
ecosystems in vast parts of the country,” Sprint said in its
filing to the FCC.

Lawmakers are also scrutinizing the deals, although they
have no official role in the review.

The Senate Judiciary subcommittee on antitrust, competition
policy and consumer rights is holding a hearing on March 21 to
consider whether the deals pose a threat to competition and
consumers.

The wariness also may maintain the threat of a spectrum crunch that wireless companies have warned will result in dropped calls and slower connection speeds for their customers.

A provision tucked into a payroll tax compromise allows the Federal Communications Commission to auction off some television airwaves and compensate broadcasters from a portion of the proceeds.

About $15 billion of the auction money is marked to fund the year-long extension to payroll tax cuts, meaning that if broadcasters don’t give up the expected number of airwaves, the nation’s deficit figure could swell.

“That’s not to say that there won’t be some, but I would be shocked if there’s some kind of stampede of broadcasters lining up to turn in their TV licenses,” said Dennis Wharton, the National Association of Broadcasters’ executive vice president of communications.

While broadcasters do have the lure of $1.75 billion in potential auction proceeds, they are worried about the unintended consequences that parting with airwaves could have on future innovation, their TV signals and the 46 million viewers that still rely on over-the-air TV.

News Corp, Sinclair Broadcast Group Inc and LIN TV Corp are among the companies that could potentially give up spectrum.

Wharton said broadcasters are less desperate for cash because advertising dollars are starting to flow back into the industry.

Also, broadcasters see a hitch in the FCC’s plans to allow broadcasters to engage in spectrum sharing that would let them part with some airwaves but continue operations.

Wharton said such sharing agreements would limit a TV station’s ability to engage in mobile digital television, where live local broadcasts could be delivered to smartphones, laptops and other mobile devices.

“If stations chose to do that, they’re sort of abandoning what many think is the future of broadcasting, which is to have our programming on a lot of new mobile devices and new platforms,” Wharton said.

BY THE NUMBERS

The FCC has called for repurposing 120 megahertz of TV airwaves for mobile broadband use since 2010, and is targeting channels 31 through 51.

Until now, the agency lacked the congressional authority to divert funds away from the Treasury to give broadcasters a financial incentive to return spectrum licenses.

Broadcasters are alloted six megahertz of spectrum for each channel, which means 20 channels would have to be given up to meet the FCC’s target, affecting some 672 stations nationally, the NAB said.

“I think that is an optimistic projection,” Wharton said.

Paul Gallant, an analyst at Guggenheim Securities, said in a research note late on Thursday that current discussions supported closer to 60 to 80 megahertz of spectrum being made available for auction from broadcasters.

YEARS UNTIL SPECTRUM BROUGHT TO MARKET

Wireless carriers like AT&T Inc, Sprint Nextel Corp, Deutsche Telekom AG’s T-Mobile USA and Verizon Wireless, a joint venture of Verizon Communications Inc and Vodafone Group Plc, have clamored for more airwaves to stave off a looming spectrum crunch.

The growing use of wireless devices like Apple Inc’s iPad tablet and Google Inc’s suite of Android-powered smartphones has added to the urgency to find more airwaves.

The FCC estimates mobile data demand to grow between 25 and 50 times current levels within five years.

The first auction of television spectrum is still likely years away, industry sources said. It will take time for the FCC to develop rules for the new auctions and to seek public comment, as well as for companies to raise capital for bidding.

“The challenges ahead in implementing the legislation and determining whether or not broadcasters will return some of their spectrum cannot be understated,” Medley Global Advisors analyst Jeffrey Silva said.

(Reporting By Jasmin Melvin; Editing by Tim Dobbyn)

With the “explosive growth” in mobile applications in the past few years, “many consumer protections, including piracy and privacy disclosures, have not kept pace” and need to be monitored, the Federal Trade Commission said in a report released on Thursday.

Young mobile app users may unknowingly share their phone number, location and other private details with software developers and advertisers, the report warned, and parents lack the information to protect their children properly.

“Right now, it is almost impossible to figure out which apps collect data and what they do with it,” FTC Chairman Jon Leibowitz said.

With more than 500,000 apps in Apple Inc’s App Store and 380,000 in Google Inc’s Android Market, consumers have topped 28 billion app downloads since the market launched in 2008 with only about 600 apps, the report said.

About 70 percent of children in households with tablet computers used these devices, according to fourth-quarter results from research firm Nielsen.

A survey of apps offered for children from those two largest mobile storefronts found little information on whether the apps collect data or not, according to the FTC report, titled “Mobile Apps for Kids: Current Privacy Disclosures are Disappointing.”

The FTC urged app stores, developers and third parties to beef up their privacy policies and recommended that app developers provide simple disclosures to parents explaining what data is collected and how it is used and shared.

The agency recommended that app stores insist on data collection and sharing information in the same manner they collect pricing and category data from developers.

Google could not immediately be reached for comment. Apple had no comment on the report.

The Association for Competitive Technology, which represents smaller app developers and tech firms, noted that parents, rather than companies, develop most 99 cent apps for kids to help them learn, and that many are unaware of existing privacy regulations.

In a statement, the group said it would work with the FTC to educate and inform well-intentioned app makers.

MOBILE APP BUSINESS MODEL

Jeff Chester, a privacy advocate, said there was no doubt that data was being collected because it is intrinsic to business models in the mobile market.

“The same business practices that we have that threaten privacy online have been migrated over to mobile,” said Chester, who spearheaded the 1998 passage of the Children’s Online Privacy Protection Act by the U.S. Congress.

The act requires websites and online service operators to obtain verifiable consent from parents before collecting, using or disclosing personal information of children.

The FTC said it would continue to review mobile apps directed at children over the next six months to check for violations of the law. The agency warned of possible enforcement actions in the future, including civil penalties of $11,000 per violation.

Chester said it was time for Congress to step in and tame “these wild west mobile data collection practices.”

Data collection on the Internet allows advertisers to target users in a demographic or who are more likely to buy their product. These ads often subsidize Web content, but U.S. regulators have accused Internet companies of compromising user privacy to attract advertisers and increase revenue.

The FTC in September proposed updating its Children’s Online Privacy Protection Rule that gives parents a say over what information websites and other online providers can collect about children under the age of 13.

The proposed changes would make clear that such protections extend to mobile devices.

The report can be found here

(Editing by Richard Chang)

The Federal Communications Commission has called for
repurposing TV airwaves for mobile broadband use since 2010.

Until now the agency lacked the congressional authority to
divert funds away from the Treasury to give broadcasters a
financial incentive to return unused spectrum licenses.

Congressional aides and industry sources confirmed the
inclusion of the auction authority in the payroll bill.

Wireless carriers like AT&T Inc, Sprint Nextel Corp
and Verizon Wireless, a joint venture of Verizon
Communications Inc and Vodafone Group Plc, have
clamored for more airwaves to stave off a looming spectrum
crunch that would mean more dropped calls and slower connection
speeds for wireless customers.

The growing use of wireless devices like Apple Inc’s
iPad tablet and Google’s suite of
Android-powered smartphones has added to the urgency to find
more airwaves.

The first auction of television spectrum is still likely
years away, industry sources said, because of the time it will
take for the FCC to develop rules for the new auctions and to
seek public comment.

The U.S. House of Representatives and Senate are expected to
approve the year-long extension to payroll tax cuts by Friday,
before lawmakers leave for a week-long recess.

Auction proceeds would help legislators meet about half of
the roughly $30 billion in savings needed under the compromise
to extend President Barack Obama’s tax cut for 160 million
workers through Dec. 31.

Recent wrangling over the provision had centered on whether
the FCC would be able to retain its authority to set auction
rules that help smaller or minority-owned firms to compete with
larger companies for spectrum.

The top executives at Sprint Nextel, Deutsche Telekom AG’s
T-Mobile USA and other smaller carriers had pushed
for this flexibility, but AT&T accused them of wanting the FCC
to stack the deck in their favor.

Under the compromise reached, industry sources said the FCC
would not be barred from adopting auction rules that promote
competition.

One source added that the FCC would have to open for public
comment any decision to restrict a company from buying spectrum
in a given market.

The Federal Communications Commission will enforce stricter
rules on so-called telemarketing “robocalls,” mandating that
these autodialed or prerecorded calls can only be placed to
consumers who have already agreed in writing to receive them.

Companies will no longer be able to point to an established
business relationship with a consumer to justify the automated
pitches.

“Consumers have complained to us by the thousands about
annoying robocalls,” said FCC Chairman Julius Genachowski during
the agency’s monthly open meeting.

Robocalls made by charities and political campaigns and
providing information like school closings, flight changes and
prescription refill reminders will not be affected by the new
rules.

The vote cracks down on telemarketers for banks, insurance
agents, phone companies and others who used loopholes in the law
that established the Federal Trade Commission’s Do Not Call
Registry to continue to automatically dial consumers.

“The order we adopt today will require written opt-in, and
it will make it easy for consumers to opt out. We’re closing
loopholes that have allowed robocallers to sneak through,”
Genachowski said.

The FCC said the calls invade consumers’ privacy. The agency
added that the calls often cut into wireless customers’ minutes
as more consumers rely solely on wireless services and do not
have landlines.

All robocalls will also have to include an automated opt-out
option to allow consumers to immediately notify telemarketers
that they no longer want to receive these calls.

The FCC also voted to require Voice over Internet Protocol
services, or VoIP, to report network outages that affect 911
emergency calls.

The reporting requirements are already in place for
traditional carriers, and the vote extends them to the nearly
one-third of residential telephone subscriptions provided
through VoIP services like those of Vonage Holding Corp.

The Federal Communications Commission said it proposed to suspend indefinitely the authority LightSquared was granted to transition its satellite spectrum to ground-based use.

Just minutes earlier on Tuesday, the National Telecommunications and Information Administration, which manages military and government spectrum use, said it found that LightSquared’s planned network would interfere with the global positioning system and there was no practical way to immediately solve the problem.

In a letter to the FCC, NTIA said its conclusion was based on testing and analyses, as well as discussions with LightSquared.

LightSquared had blasted the NTIA’s assessment of its planned network saying the agency relied on flawed conclusions but was not immediately available to respond to the FCC’s action.

Hedge fund manager Philip Falcone has made a huge bet on the startup wireless broadband company, sinking more than $3 billion from his Harbinger Capital Partners hedge fund into LightSquared.

LightSquared has said previously it has just several quarters worth of cash left and its network partner, Sprint Nextel, had given it a mid-March deadline for FCC approval.

(Reporting By Jasmin Melvin; Editing by Tim Dobbyn)

The top executives at Sprint Nextel, Deutsche Telekom
AG’s T-Mobile USA and other smaller carriers took
issue with proposed legislative restrictions that would bar the
U.S. Federal Communications Commission from setting certain
bidding rules in the next wireless spectrum auction.

The letter was sent to the 20-member panel tasked with
crafting a year-long extension to payroll tax cuts for 160
million U.S. workers by the end of February.

The panel is mulling language giving the FCC authority to
auction some airwaves currently held by TV broadcasters to
wireless companies for mobile broadband use. Estimated auction
proceeds are for as much as $28 billion, and could be used in
part as a source of revenue to help pay for tax cuts.

A provision in the current proposed language would prevent
the FCC from restricting those who can bid in the auction.

“Stripping the FCC of its auction design discretion would
disserve the public interest by permitting unchecked
participation by the two largest, best-funded wireless carriers
in future spectrum auctions,” the letter said.

The companies, including Atlantic Tele-Network,
Bluegrass Cellular, C Spire Wireless, Cricket Communications,
NorthwestCell and the Rural Cellular Association, pointed to the
FCC’s track record conducting some 80 auctions that raised about
$50 billion in the last 20 years without such restrictions.

Unchecked participation by top carriers AT&T Inc and
Verizon Wireless, a joint venture of Verizon Communications Inc
and Vodafone Group Plc, would diminish auction
revenues and hurt competition as smaller competitors would be
discouraged from bidding, the companies said in the letter.

AT&T, which has supported the measure removing bidder
restrictions, accused the smaller carriers of wanting the FCC to
stack the deck in their favor.

“What this group proposes could not be called an auction
with a straight face. These companies should be prepared to
compete in a fair and open auction,” Jim Cicconi, AT&T’s senior
executive vice president of external and legislative affairs,
said in a statement.

Wireless carriers have clamored for access to more airwaves
to stave off a looming spectrum crunch that would mean clogged
networks, more dropped calls and slower connection speeds for
wireless customers.

The FCC has called for repurposing TV airwaves for mobile
broadband use since 2010, but lacks the Congressional authority
to divert funds away from the Treasury to compensate television
broadcasters for giving up some of their airwaves.

The communications regulator has said the bidding provision
being considered would handcuff its ability to preserve
competition in the wireless market.

A lawsuit by the Electronic Privacy Information Center
alleged Google violated a settlement agreement reached with U.S.
regulators last March that requires consent from the user if
Google collects information under one privacy policy and then
changes the policy.

The group is asking the U.S. District Court for the District
of Columbia to issue a temporary restraining order and a
preliminary injunction compelling the U.S. Federal Trade
Commission to enforce the consent order.

“The Court must act now to prevent irreparable injury to
EPIC and the public,” EPIC said in its court filing.

Google, whose offerings include its flagship search engine,
Gmail, YouTube and Google+ products, announced last month that
it was unifying its numerous product-specific privacy policies.

The company stressed in subsequent announcements that the
changes would not allow for any new or additional data
collection and said that most of its product-specific policies
already allowed information to be shared across product lines
when users were signed onto their Google accounts.

“We’ve undertaken the most extensive notification effort in
Google’s history to ensure that users have many opportunities to
learn about the changes,” a Google spokesman said in a
statement.

When the new policy comes into effect on March 1,
information from most Google products will be treated as a
single trove of data, which the company could use for targeted
advertising.

EPIC’s lawsuit argues that Google misrepresented its privacy
practices by not disclosing the benefits advertisers would reap
from access to the consolidated data of users.

The aggregated data would allow advertisers to better target
their ads, “and therefore Google’s new business practices
increase the commercial value of a given user’s data,” the court
filing said.

The group also challenged Google’s claim it is not
collecting any new information. Aggregated data would give
advertisers access to information about users that they were not
privy to before, such as logged-in users’ YouTube search
histories, EPIC said.

“Thus, Google will share new or additional information with
third-party advertisers without first obtaining ‘express
affirmative consent’ from Google users,” EPIC charged in court
documents.

EPIC said the court must act to protect Internet users and
prevent, “the hazard that consumers will obtain relief under a
FTC order, only to be left without recourse if the Commission
fails to enforce its order.”

An FTC spokeswoman said: “The FTC takes compliance with our
consent orders very seriously and always looks carefully at any
evidence that they are being violated.”

The Google spokesman said the company had not seen the
filing so could not comment on the specifics. He added:
“Protecting people’s privacy is something we think about all day
across the company and we welcome discussions about our
approach.”

Google, taking heat from lawmakers, said last week that the
unified privacy policy would not take away the control its
customers have over how data is collected and used.

U.S. regulators are already looking into whether the company
manipulates its search results to favor its own products, among
other issues.

A latecomer to Washington, the social networking site is joining scores of powerful technology companies such as Microsoft Corp and Google Inc that have political action committees (PACs) used to raise funds for donations to political campaigns or causes.

The Facebook PAC, officially registered in December, last year raised just above $170,000, predominantly from Facebook’s own executives and employees, according to its filing with the Federal Election Commission (FEC).

Co-founder and newly minted billionaire Chief Executive Mark Zuckerberg gave $5,000, and so did investors Marc Andreessen, James Breyer, and Peter Thiel. Thiel last year also contributed to a so-called Super PAC Endorse Liberty that supports Ron Paul.

Facebook PAC also received $5,000 from Erskine Bowles, another member of the board of directors who was U.S. President Bill Clinton’s chief of staff and helped lead a deficit-reduction panel last year.

The only spending the PAC did last year was on credit card and other processing fees, filings showed.

U.S. regulators are cracking down on Web giants they view as compromising user privacy to attract advertisers, and Facebook found itself in their crosshairs last year.

The company settled with the Federal Trade Commission, agreeing to be regulated for a period of 20 years whenever it decides to change its privacy policy.

In addition to privacy issues, Facebook has also thrown its hat into debates over patent reform, online piracy and cybersecurity, among other topics.

The company is readying for what is expected to be one of the largest U.S. market debuts in history with a $5 billion initial public offering.

Facebook significantly ramped up its Washington presence and spending last year as the company’s practices attracted growing scrutiny from lawmakers and regulators, forcing the social networking site to beef up efforts to protect its interests.

The Menlo Park, California-based company added experienced political staffers to its Washington-based public policy team, including Joel Kaplan, former deputy chief of staff to President George W. Bush. Kaplan gave $5,000 to the PAC and is treasurer.

With a new powerhouse team in place, Facebook’s lobbying expenditures skyrocketed in 2011 to $1.35 million from under $400,000 in 2010, according to data from the Center for Responsive Politics.

Still, the company’s lobbying pales in comparison to larger tech firms with Google spending $9.68 million and Microsoft spending $7.34 million on federal lobbying in 2011.

A Facebook spokesman was not immediately available for comment.

(Reporting by Alina Selyukh and Jasmin Melvin; Editing by Richard Chang)