Category: Yahoo!

Today’s New York Times op-chart column reporting on bloggers who write about politics and have a financial relationship with some of their subjects is very disturbing [“New on the Web:Politics as Usual.” By K. Daniel Glover & Mike Essl]. All financial ties require prominent disclosure, at the very least. We hope that policymakers will swifly require such rules. But if bloggers are to be taken seriously as journalists and opinion-leaders, they must hold themselves up to a high standard. It’s bad enought that now many accept advertising. I assume that the bloggers listed in the column, as well as any others who are working for politicians, corporations or any other interest they write about will be forthcoming about their connections.
PS: I support this column via my salary from the Center. It’s true that I have supporters–but they are all grantmaking organizations who don’t have any formal positions regarding what I do or write about. And I would never consider taking money from someone and then cover them–writing online or off. That’s bad journalism–and disreputable blogging.

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Yesterday, LULAC’s Brent Wilkes wrote an op-ed in the San Jose Mercury News claiming that network neutrality safeguards “could inadvertently lead to a significant widening of the digital divide by slowing the penetration of advanced broadband technologies into Hispanic and other under-served minority communities.” Wilkes is the national executive director of the League of United Latin American Citizens.

Wilkes failed to disclose that LULAC has funding from both Comcast and AT&T, two of the biggest opponents of net neutrality. He should have told the editors about such a conflict of interest and had it prominently included in his op-ed. His position is bad public policy for those LULAC serves. Ironically, it is the very special interests Wilkes defends (Comcast, AT&T, etc.) that are opposed to meaningful policies that would deal with the digital divide. Network neutrality and universal broadband service for all go hand-in-hand. The LULAC board needs to examine its conflict of interest policy to make sure that whenever an official makes a statement, and there is funding from a related vested interest, it is publicly acknowledged.

See LULAC/Comcast release

See LULAC/AT&T Foundation release

From: 2007 LULAC National Legislative Awards Gala
2006 SPONSORS

DIAMOND
Ford Motor Company

PLATINUM
AT&T
Comcast Corporation
General Motors Corporation
Univision Communications Inc.
Verizon Communications Inc.
Yum! Brands Inc.

GOLD
American Airlines
Bell South
The Coca-Cola Company
Coors Brewing Company
Miller Brewing Company
PepsiCo, Inc.
The Procter & Gamble Company
Tyson Foods, Inc.

SILVER
AARP
Burger King Corporation
Exxon Mobil
Home Box Office
Nielsen Media Research
Shell Oil Company
State Farm Insurance Companies

BRONZE
Pfizer
Rolls-Royce Corporation

We believe the rapidly evolving set of online technologies designed to track, profile and target us online, via PC and mobile networks, requires meaningful consumer protection safeguards. One emerging issue is how marketers, advertisers and others may use online tracking technologies, such as behavioral targeting, to “screen” out consumers they consider “undesirable.” In another words, engage in a form of digital redlining. Marketers are now discussing how to use the knowledge they have about each of us to avoid what they consider to be unprofitable customers (such as those that use coupons or demand lower prices). “Audience screening,” as marketers are calling some of their newer interactive ad techniques, permit companies to simply bypass marketing to consumers who don’t fit in to their view of what may be profitable. The CEO of Best Buy termed such customers “devils” [sub. may be required] in a 2004 Wall Street Journal story. As the president of one marketing firm just explained in his article “Using BT to Dodge the Undesirable,” [I]f we know a lot about our least profitable (or even unprofitable) customers, how long before we use that information to develop profiles that help us skip over the deal-seekers and tire kickers? …Conceivably, an online electronics retailer could profile its customers in a number of different ways to identify the devils. Logfile, site analytics and customer purchase history data could easily provide information on which customers repeatedly redeem coupons and promotional codes featured in deal-seeker newsletters like GotApex? or Fatwallet.com. We could also index profitability against purchase history for every customer in a retail database, or look to external resources to see where the devils might be coming from. A few relatively simple algorithms could easily limit exposure to unprofitable customers.”

Other technologies are also available to help companies screen us out. For example, the web marketing firm X 1’s “progressive optimization engine” [POE] enables companies to “make actionable decisions from massive amounts of complex interacting data…POE uses a wide variety of data (anonymous geo-demographic info, end-user behavior, client-provided customer data, third-party data, etc.) to profile end users and to track anonymously their online behavior and responsiveness.” As X 1’s CEO explained last summer, “If you combine the best attributes of behavioral targeting with a number of different technologies including progressive optimization and the more advanced audience profiling engines you can accomplish what we call audience screening. Audience screening allows the advertiser to identify the audience represented from an impression on a network or a portal and determine if that audience member is more or less likely to act in response to an advertisement than the general audience. If the audience member is regarded as highly desirable, then the ads are exposed. If the audience member is not deemed highly desirable, then they are not exposed to the ad and the next sequential audience member is evaluated for desirability and match to the potential customer base for the advertiser.”

So, you ask: what’s the harm? I just won’t see an ad and can go about my business online. But we all know it’s more complicated than that. As we are classified and as our profiles are shared online, too many people will know about us. They will know as well what others think they know about us—such as if we are considered a “devil.” Some of us may be allowed to see valuable editorial content—even important news—because we are considered a valuable demographic target. Whole classes of people could be placed on an undesirable list—think of those Americans struggling to just make it economically and can’t readily afford the e-commerce lifestyle. Decisions about online targeting and segmentation practices can’t be permitted to be solely in the hands of marketers and the ad lobby. There is a role for public policy—now. We hope State Attorney’s General, Congress, consumer advocates and the FTC will take notice.

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On Wednesday, Mr. Yang dismissed the need for public policy in the U.S. to address the digital divide. As reported by Communications Daily, Yang told the Tech Net Innovation Summit that `the market will address the digital divide via creation of very inexpensive PCs and cellphones for poor people.’ [Tech Chiefs Slam Visa Rules, Communications Regulation Framework: Digital Divide `Myth.’ Com Daily, 11/16/06. Subscription required]. Yet just six years ago, Yang remarked, “Access to computers and the Internet are becoming increasingly unbalanced, with information haves pulling away from the have-nots.” If Mr. Yang’s solution to ensuring equitable broadband access in the U.S. is cheaper hardware, it doesn’t reflect well on his understanding of the relationship between democratic participation and broadband communications in the digital era. It’s time that the U.S. developed new policies designed to ensure that all low-income Americans have free access to digital communications. We shouldn’t just have one set of folks with full access to broadband over PCs, mobile devices, and Internet Protocol TV’s. Universal service policy in the U.S. should mean that everyone who wants to is online. If not, there will be millions of Americans who won’t be able to participate in the civic life of the country. Mr. Yang did suggest that in a few other countries “ a more proactive set of rules may be necessary” to address such concerns. Perhaps Mr. Yang and Yahoo! aren’t interested in low-income Americans because they don’t have the income to be suitable revenue targets for the company’s well-honed interactive advertising machine.

Bill Gates also makes an appearance this week for another inclusion in the public interest digital policy hall of shame. Gates, speaking at the same summit as Yang, told Charlie Rose that much of U.S. telecommunications regulation “actually holds us back.” He specifically pointed a finger at the 1996 Telecommunications Act rules requiring monopoly providers to open their networks to competitors. As for the U.S. lag in broadband penetration, it was reported that Gates noted that as `the Internet continues to absorb TV and landline voice, broadband penetration will improve.’ [Gates Touches on Broadband Policy, EU Antitrust, IP in China. Com Daily, 11/17/06]. That a boy, Bill. Look the other way with your foundation hat on addressing the health needs of the developing world. Meanwhile, it’s steely-eyed business monopoly hardball when it comes to public interest telecom policy in the EU and U.S.

Finally, the same issue of Communications Daily (sorry to be a one-source Jeffrey today!) tells us that incoming House Commerce Committee chair John Dingell has “hired 2 of his former staffers who were working in the private sector.” Gregg Rothschild will be chief counsel; Dennis Fitzgibbons the chief of staff. These two folks have been working as a Verizon VP of federal government relations and as a director of public policy for DaimlerChrysler, respectively. While we appreciate that the duo wished to return to public service, their current occupation as corporate lobbyists doesn’t bode that well for the public interest.

We’ve been away from this column working on a variety of projects related to educating the public about the dangers lurking in the digital advertising system. Online data collection, profiling and one to one targeted interactive marketing across all platforms–mobile, digital TV and PC–is (sadly) the defining characteristic of our broadband era. Increasingly, such marketing schemes will use purposefully immersive interactive media content designed to engage all of us to embrace a variety of marketer-desired behaviors (the online ad industry touts its ability to use this technology to “convert” us. But it’s about buying and branding–not anything ethical or spiritual). CDD and US PIRG filed a complaint at the FTC last week urging the agency to launch an investigation and issue needed consumer safeguards. Our privacy and more is at risk. (Our complaint, which is a good overview of what’s going on, was also intended to provide the otherwise reluctant regulators at the FTC a little reality counter-programming at their Tech-ade event). The interactive ad system that has emerged for digital marketing in the U.S. is indefensible, no matter how its supporters rationalize it. In addition to working with the FTC, we expect that the new Congress will take the issue up next year. Meanwhile, we urge our readers to look at the complaint–and then come back to this column for updates.

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This deal is about expanding the interactive advertising economy–one to one marketing, data collection, the prominent availability of video from deep-pocked interests, and an endless platform that can commercially target every taste. While a smart business move (since Google now also represents Rupert Murdoch’s MySpace/Fox, the other leading Web 2.0 site), we are concerned about the total commercialization and commodification of the Internet/digital media. We have consolidation in both old and new media with increased cross-ownership of both. There are no network neutrality rules to ensure digital lanes can operate fairly for those non-Google pocketed content providers. And they are paving cyberspace with the mentality of Madison Avenue.

We will be back with more analysis.

The cable industry has worked to prevent ownership diversity. People of color and women own practically nothing in cable TV—neither systems nor programming channels. Nor do many of cable’s CEO’s come from diverse ethnic backgrounds. The cable lobby has fought against all policies that would promote diversity—including rules that would help ensure a more open broadband video Internet.

So why would so many civil rights groups support the cable lobby’s attempt to thwart FCC rules requiring an open network (via a new pending rule prohibiting proprietary set-top boxes)? Coming to cable’s aid, notes Broadcasting & Cable magazine was the Black Leadership Forum, representing almost three dozen groups. Siding with the Forum in comments to the FCC were the NAACP, the Congressional Black Caucus, the Urban League and the Southern Christian Leadership Council. Civil rights groups were joined by “limited government/free market” organizations such as Americans for Tax Reform, Reason Foundation, Institute for Liberty and Americans for Prosperity. Also arguing against the rule was the NCTA, Comcast and Verizon. We note that Comcast, Verizon and AT&T are supporters of the Black Leadership Forum.

The pricey lobbying and PR shop flacking for the Forum and the other groups—LMG—told reporters that opposition was based on concerns about consumers having to pay a few dollars more a month for open boxes. That is absurd, of course. What’s really going on is a continued cable lobby (and Telco) power grab. They don’t want any competition—just a box and a network they can fully control. [We wonder who actually paid LMG’s bill].

Siding with the cable and phone lobby will not bring the U.S. the kind of diverse and equitable electronic media system we desperately require. Such support is shortsighted, at best. At worse, it is another setback to ensuring a democratic media system in the digital age.

Source: “NAACP Opposes Set-Top Integration Ban.” John Eggerton. Broadcasting and Cable. Oct. 2. 2006.