Category: FCC

Progress & Freedom Foundation Comes to Aid of its Data-Collecting Backers (Using a `save the newspapers’ as a ploy to permit violations of consumer privacy protection!)

This report from Internetnews.com on the Progress and Freedom Foundation’s “Congressional” briefing illustrates how desperate some online marketers are that a growing number of bi-partisan congressional leaders want to protect consumer privacy.  So it’s not surprising that some groups that are actually financially supported by the biggest online marketing data collectors in the world would hold a Hill event to help out the friends who pay their bills.

It should have been noted in Ken Corbin’s that Google, Microsoft, Time Warner (AOL), News Corp. (MySpace) financially back the Progress and Freedom Foundation (PFF).  Other behavioral data targeting `want to be’s’ who monopolize U.S. online and other platforms are also backers:  AT&T, Comcast, NBC, Disney/ABC, Viacom/MTV/Nick, etc. For a list, see here.

PFF and some of its allies deliberately distort the critique of consumer and privacy groups.  We are not opposed to online marketing and also understand and support its revenue role for online publishing.  But many of us do oppose as unfair to consumers a stealth-like data collection, profiling and ubiquitous tracking system that targets people online.  One would suppose that as a sort of quasi-libertarian organization, PFF would support individual rights.  But given all the financial support PFF gets from the major online data collectors, how the group addresses the consumer privacy issue must be viewed under the `special interests pays the bills’ lens.

PFF and its allies are playing the ‘save the newspaper’ card in their desperate attempt to undermine the call for lawmakers to protect consumer privacy.  Newspapers and online publishers should be in the forefront of supporting reader/user privacy; it enhances, not conflicts, with the First Amendment in the digital era.  Finally, PFF’s positions on media issues over the years has actually contributed to the present crisis where journalism is on the endangered species list.  This is a group that has worked to dismantle the FCC, eliminate rules designed to foster diverse media ownership, and undermine network neutrality.

PS:  The article quotes from Prof. Howard Beales of George Washington University (and a fCV,ormer Bush FTC official with oversight on privacy).  Prof. Beales was on the PFF panel.  Prof. Beales, according to his CV has served as a consultant to AOL and others (including  Primerica and the Mortgage Insurance Companies of America).  Time Warner, which owns AOL, is a PFF financial backer.  All this should have been noted in the press coverage.

The Growing Role of Advertising in Online Video (and a Pitch by Google for Greater Ad into Content Integration)

As advertisers continue to exert greater influence in online programming content (and as we prepare for what will eventually be a digital version of the 1950’s Quiz show scandals), we are tracking this trend.  Here is an excerpt from Screenplays magazine on a recent Internet “upfront” conference held by ad company Digitas:  Across the board the message was that advertisers aren’t interested in backing web content without having access to precisely the right performance data…Measuring engagement…is a big component of tracking ROI…Carls Jr. recently rolled out an online video campaign with eight YouTube stars, said Alex Levy, director of Branded Entertainment at Google.  “Brands increasingly have an appetite for web content and the DVR has made everything old new again.  We have to keep figuring out how to integrate into the content itself, she said.

New York Web Confab Reveals Hurdles Agencies Have Set for Video Ad Metrics.  Screenplays.  June 9, 2009

Time Warner’s AOL Spin-off: How the Failure to Require Network Neutrality (Open Access) Led to a Failed Mega-Media Merger

News that Time Warner will spin-off AOL should also be analyzed in the context of the network neutrality debate.   AOL would never have had to pursue merging with Time Warner if the Clinton FCC had supported its call–backed by many consumer groups–for “open access” to broadband.  Denied the ability to migrate its successful telephone/common carrier-based business model to cable broadband by the FCC, AOL had no choice but to buy its way into the cozy cable industry club.  Here’s what Steve Case, then president of AOL, said at the National Press Club in 1998, as covered by my CDD:

“Government,” as he told the National Press Club in October 1998, “has a responsibility to preserve an open playing field—to preserve the openness, innovation and competition that are at the heart of the Internet….” Nor did Case shrink from suggesting that regulation was the key to untangling the broadband puzzle. “Significant challenges currently face regulators in the communications realm,” he conceded. “There is currently one set of policies that governs telecommunications, and another governing cable. These legal, policy and regulatory frameworks have little to do with each other….” Thus it was the government’s responsibility, Case concluded, to see that the cable broadband environment conformed to the “openness, competition and rapid innovation” that is the very “DNA” of the Internet. “The bottom line,” Case insisted, “is that competition in all ‘last mile facilities’ should remain open so that consumers have the same kind of choices in broadband that they do in narrowband.”

If the Clinton FCC, then under Chairman William Kennard, had supported open access, we (including the many Time Warner and AOL investors who lost considerable sums) may have avoided further media consolidation and the wreck which became AOL Time Warner.  It’s a history lesson the in-coming FCC chair and others should review.

Memo to Acting FCC Chair Michael Copps on Cable TV “Branded Storytelling”: A Tour of Embedded TV Advertising

Dear Mr. Chairman:

We are emailing you the link to this week’s Advertising Age’s story called “Designing a Custom Fit: Cable Offering more integrated, multiplatform deals.”  If you needed any additional evidence that the business model that further merges programming content with advertising requires scrutiny, debate, and safeguards (especially in the youth market), we offer the following article excerpts as evidence.  Clearly, the comedy writers are creating the marketing strategies for some of the cable programming networks.  But I’ve put a few of the best lines in bold:

Call it extreme sponsorship.

As advertisers look for maximum returns on their media investments, cable networks are offering an increasing number of creative, customized and multiplatform ways to partner with marketer brands—and to make sure viewers are paying attention.

The options for integrated marketing have gone far beyond a title sponsorship or a simple product placement. Today the buzzwords are “content-mercials,” “intromercials,” “branded storytelling” and custom marketing. Network series stars are featured in marketers’ commercials—and marketers’ products have a starring role in hit series…USA Network’s approach is to treat an advertiser’s brand as a supporting character in its multiplatform “Characters Welcome” credo. “Our network is not about one genre or one demographic. We are about characters. We celebrate the character of your brand,” says Chris McCumber, exec VP-marketing, digital and brand strategy for USA Network…

USA’s hottest show right now is “Burn Notice.” In its inaugural season, “Burn Notice” partnered with Saab 9-3 for an online game, “Covert Ops,” that allowed users to “drive” a virtual Saab all over Miami…In “Covert Ops,” “while you are playing the game, you are using the elements of Saab. The game drew more leads to Saab.com than the number of cars available to sell,” Mr. McCumber says. “The gaming area has incredible opportunities for brand integration.”…USA’s on-air integrations include using Hoover vacuums to “sweep” graphics off the screen during “Clean House.”…

On A&E Television Networks’ History, Subaru is a presenting sponsor for the upcoming “Expedition Africa: Stanley & Livingstone.”…

“We provided the explorers at certain points in the expedition [in four episodes] with the Subaru—where it made sense,” says Mel Berning, exec VP-ad sales for A&E Television Networks.

The integrations highlight features such as trunk space capacity and vehicle toughness off-road. Thirty-second “content-mercials” will run in every episode…AMC is promoting its Branded Storytelling—a way for advertisers to tell their brand stories through AMC’s programming, says Bill Rosolie, AMC exec VP-sales….Examples include: Takeovers, where marketers can own an entire episode, movie or day with their messages; Matching Moments, where AMC breaks the action with a sponsored pod that directly follows relevant content; and “Matching Attributes,” where brands’ messages are connected to key movie content by using custom creative to run within the film…

Nickelodeon has made multiplatform integration central to its ad sales efforts. This year Nick teamed with Walmart for an integrated effort celebrating the 10th anniversary of the No. 1 kids show, “Sponge Bob Square Pants.” The plan included TV, print and online media backed by in-store support. The Happy Place inside its Walmart stores offered exclusive Sponge Bob merchandise. A microsite (www.spongebobhappyplace.com) requests a sign-on code, only available at Walmart stores, to allow visitors access to exclusive content.

In 2008 Nick and AT&T joined efforts on a Web site where kids could text “iCarly,” get an iCarly ringtone, view cool gadgets (such as the Palm Centro or the AT&T Slate) and see a sneak peek of the iCarly movie “iGo to Japan,” which aired last November.

source:  Designing a Custom Fit.  Nancy Coltun Webster.  Ad Age.  May 4, 2009

The real digital TV transition: Why TV “Advanced Advertising” [aka Project Canoe] Raises Privacy & Consumer Protection Concerns

The cable and telephone industry have Google envy.  These broadband communications giants recognize that online advertising companies such as Google and Yahoo have created an enormous market for themselves through the delivery of online ads.  Comcast, Time Warner, Verizon and others want to use their Bush Administration-given broadband monopoly status to gain a significant share of this market.  Cable giants are also working together to transform television so it can better compete with online, and target viewers with more precision and in-depth ads.  The goal–for cable, phone and online ad companies–is to eventually provide a seamless system that tracks, profiles and targets us across every “screen,” including TV, PC and mobile.

Comcast is heavily investing for such a viewer/user tracking world.  It has plans, according to the trade publication Multichannel News to create a “gigantic database called “TV Warehouse,” able to store a full year of statistics gathered from digital set-tops in more than 16 million households nationwide…TV Warehouse, envisioned as having a massive 500 Terabytes of storage, would then feed up to a database even broader in scope operated by Canoe Ventures, the advanced-advertising venture formed by Comcast and five other large MSOs.  The idea: to give advertisers an enormous set of actual viewing metrics — showing exactly what millions of cable customers watched and when — as opposed to representative samples.”

Not surprisingly, Comcast’s Brian Roberts has said his company should no longer be viewed as merely a provider of television:  “Over the last few years we have successfully transformed Comcast from a cable company into a new products company that utilizes one infrastructure to deliver a growing number of products.”  Advanced Advertising, which is what the cable industry’s technical consortium known as CableLabs calls it, is one of the major products Comcast and others will soon provide.  According to CableLabs, “Advertising is growing in importance for cable operators. CableLabs is currently supporting activity in four areas designed to create new revenue opportunities around advanced advertising technologies. These areas are digital ad insertion, interactive advertising, reporting, and addressability.”   Cable executives are working with advertising companies to “…agree on a valuation metric. What’s a click worth?”

But the core concern with Advanced Advertising is the tracking of viewers, including the use of internal and outside databases for targeting. Comcast Spotlight, for example, offers marketers access to a broad range of databases for more precise targeting. Acxiom offers cable and other providers a host of database segmentation services, including its Personicx VisionScape. “With PersonicX VisionScape, marketers have at your fingertips real-time access to a wealth of information… that can help them understand more about their customers – what type of products they use, their purchasing behaviors, their channel and media preferences.  The PersonicX household-level segmentation system is built with InfoBase-Xâ„¢ data and places almost every U.S. household into one of 70 distinctive segments and 21 life stage groups based on specific consumer behavior and demographic characteristics.”

Cable’s work to create a more powerful viewer data collection and targeting system has been out of public and policymaker view.  Cable engineers have been working  together to perfect the technology that will allow it to merge “content and subscriber metadata for targeting zones (or, in a unicast environment, for targeting individuals) to bring the right ad to the right consumer at the right time.”

The phone and cable companies, knowing that the 1984 Cable Communications Act contains privacy safeguards for interactive TV ads and aware of the current debate on behavioral targeting, claims that such data collection and targeting will be anonymous and could include an “opt-in.”  We don’t believe any cable or phone consumer is being told the extent of the plans underway to track and target them.  For example, Alcatel’s product for IPTV related advanced advertising explains that:
“To capture the full revenue potential of targeted and interactive advertising, IPTV providers need to ensure that the following critical actions are addressed:

  • Capture and measure — The network must be able to collect “opt-in” subscriber information from a broad range of databases, which advertisers will use to reach specific “targeted” markets. This anonymous data includes usage patterns, subscriptions, demographics, location, presence and preferences — including how, when and where advertising messages are delivered, along with the type of device that is used. In addition, accurate measurement capabilities are needed that can verify audience response and track the effectiveness of ad campaigns…
  • Activate and interact — Finally, this data, combined with the right systems and infrastructure must be able to deliver personalized and interactive ads to the right consumer, at the right time.”

Consumers/subscribers should decide whether such an advanced system can target them at all.  Beyond informed consent (and data security), there need to be clear safeguards.  Targeted ads for financial, health, and products aimed to children and adolescents raise consumer protection issues.  I have real concerns about “ethnic” profiling, given how lucrative advertisers realize the Hispanic and African American markets are.  We believe that the cable industry has to engage the public in a serious debate about the scope and goal of its Project Canoe and advanced advertising initiative.  Congress, the FCC, and the FTC must become more proactive to protect our privacy from this new approach.

PS:  This week’s Multichannel News offers insight into the latest developments.  Here’s an excerpt:  “This year, the largest cable operators in the U.S. plan to have upgraded at least 20 million digital set-tops with code to run standardized interactive-TV applications. That will make it possible for viewers to click a button on their remote to, say, ask an advertiser to e-mail them more information…The industry over the last two years has coalesced around a common technical standard, maintained by CableLabs, referred to as Enhanced Binary Interchange Format, or EBIF (pronounced “EE-biff”)…Comcast, for one, claimed it had deployed EBIF user agents on more than 10 million Motorola set-top boxes by the start of 2009. The operator hopes to complete the rollout to its entire Motorola footprint, about 20 million boxes, by midyear…” [Interactive TV Begins to Bloom.  Todd Spangler.  Multichannel News.  March 3, 2009].

Dr. Mark Cooper’s Vision of a Principled Broadband and Telecommunications Policy Stimulus Approach

In a recent essay on reforming the Federal Communications Commission, long-time consumer advocate and economic expert Dr. Mark Cooper concludes with a very important analysis.  He says that:

“Ensure that stimulus does not deteriorate into corporate welfare, as the financial bailout did. A progressive stimulus package should direct funding to the distinguishing features of 21st century infrastructure – human capital and social networks.  Human capital and social networks are the unique inputs of the digital economy that create collaborative production.  These can be supported by directing funds to people and communities, rather than corporations.”   

Dr. Cooper is correct.  If the digital media era is to truly help the public, then funds should empower communities.  That includes social networks, mobile platforms, video services and other content services that foster a diverse and more democratic communications environment.  If the broadband part of the stimulus plan is merely corporate welfare to the already unregulated powerful, it will not generate the kind of economic growth–or societal change–envisioned by the incoming Obama Adminsitration.

Google and Network Neutrality: Make Your “Open Edge” Proposals to the Telcos and Cable Companies Public

If the documents reviewed by the Wall Street Journal provide Google with “a fast lane for its own content,” critical questions are raised about its commitment to meaningful network neutrality.  The Google policy blog post suggests that the Journal misunderstood the meaning of the alleged negotiation documents.  What Google wants, they claim, is to develop an effective caching arrangement.  But there are legitimate critical questions that should be raised about the ultimate effect of a contractual deal which places  “servers directly within the network of the service providers.”

We believe Google is seeking this arrangement to ensure that its advertiser-based services, including so-called rich media applications, You Tube branded ads, and multi-media universal search applications, have priority.  We think the future of the democratic potential of the Internet is undermined when those with deep pockets can favor their content over others.  In essence, Google’s Fortune 1000 client base will get to jump to the head of the queue before non-profit, small business and civic applications.  We recognize that many applications use similar strategies.  But all this needs to to be fully publicly debated, especially given the incoming Obama Administration’s support for network neutrality and its own political connections with Google.

That’s why Google should make immediately public the proposals made to phone and cable companies.  Let’s thoughtfully review what they are asking for, understand the context, and engage in the necessary public discussion. Google needs to be forthcoming on this.

Google’s Doubleclick Using Widgets to “give advertisers the ability to tap into the incredible power of potential brand evangelists”

Google’s Doubleclick division is working with social media and widget advertising company Gigya so marketers can “integrate a viral component into any campaign to allow consumers to “snag” or “grab” the ad onto their personal homepage or social network page.” We think the Doubleclick release is very revealing. So here are some choice excerpt excerpts:

“Widgets are part of a fundamental change within the online marketing arena,” said Ari Paparo, vice president of advertiser products for DoubleClick. “Widget Ads provide audiences with the ability for self-expression and identification with well-loved brands while providing marketers the benefits of virality and engagement along with the measurability of traditional online channels.”…

“Incorporating viral functionality helps give advertisers the ability to tap into the incredible power of potential brand evangelists,” said Ben Pashman, vice president of business development with Gigya,…enabling great creative to enter a user’s social circle, where it may become an even more powerful, user-endorsed ad unit.”

Widget Ads may be distributed in a multitude of ways including branded websites, word-of-mouth outreach and even through another rich media ad… integration with the industry-standard DART platform allows for valuable Widget Ad metrics including impressions, interactions, video metrics, viral “grabs” for different social networks, and reach and frequency…”

AT&T and a leader of its funded Privacy Forum Raises Questions About the Need for Safeguards

Those busy data collection bees at AT&T–including its funded Future of Privacy Forum co-head–appear to be working to undermine the growing movement supporting consumer privacy protection. According to a news report, a meeting was held last week at the University of Oklahoma on privacy issues. Forum co-director Christopher Wolf, whose law firm represents AT&T, is reported as placing behavioral targeting in a favorable light. Instead of calling for legislation, Wolf suggested that companies should create videos and other technical approaches to serve as supplemental privacy policies.

Also speaking at the event was Keith Epstein, “AT&T’s chief public policy and regulatory compliance counsel.” Here are the last two grafs of the story: There is no legislation pending in Washington regarding online privacy, Epstein said. A legislative solution if it did exist, he said, would be inflexible.

Epstein favored guidelines instead, and said the FTC should be issuing industry standards by the fall of next year.

AT&T’s stance on privacy legislation to protect U.S. consumers is troubling. It will have its deep-packet inspection, all-seeing ISP broadband clout, to monitor and then target each subscriber. AT&T should make it clear it supports legislation which provides real consumer protection (opt-in, transparency, control, extra protections on health, financial and youth data). Where is the privacy leadership at AT&T?

The Financial Meltdown & Media Deregulation Connection

Much of journalism has a `deer-caught-in-the-headlights’ quality as it reports on the current fiscal crisis. Why was this issue off the radar screen for so many reporters and producers? Part of it is that the very system that underlies professional reporting is connected (and funded) by the very forces that have helped wreck the economy. But over the last ten years, journalism in the U.S. has undergone a further serious deterioration, with its ranks thinned. Investigative reporting is on the endangered professions list (with investment bankers perhaps now joining that list as well).

Media consolidation has helped play a role here, further contributing to a news culture where reporters and their parent news organizations really don’t spend time examining beneath the surface of events. All the media mergers we have witnessed since the 1996 Telecom Act has decimated newsrooms, slashed news budgets, and has left journalism on life support (at best).

Just as the Congress failed to engage in meaningful oversight of the financial markets–and spurred the crisis along through deregulation– so too have they largely failed to address the impact of what’s called media deregulation (which meant eliminating rules designed to benefit both the public and press with policies that favored their largely giant corporate owners). As we write in Digital Destiny, Republican and Democrats have long been captured by the influence-wielding (and job promising and donation giving) Big Media “well-connected.” We blame the current deep crisis that has undermined the country’s system of reporting and journalism on the failure of policymakers to ensure meaningful diversity of ownership, public service rules, and new proactive policies which would have addressed this critical problem.

Former FCC Chairman Michael Powell’s key congressional patron was Sen. John McCain. Powell’s enthusiastic and uncritical embrace of a deregulatory philosophy during his recent tenure at the helm of that oversight agency helped spur media mergers, journalism lay-offs and other editorial cutbacks. Powell is currently a “technology adviser” for the McCain campaign.  For those of you who are interested in learning more about Mr. Powell and Senator McCain, it’s covered in Digital Destiny (New Press, 2007).

We don’t want to suggest our column is intended to be partisan. Many people know we have been equally critical for the failure of William Kennard, Mr. Powell’s predecessor during the Clinton era, to respond to the call by consumer groups to implement open access for broadband (now known as network neutrality). Mr. Kennard is one of Senator Obama’s major donors. We were also critical of Reed Hundt, Mr. Kennard’s predecessor. Both Pres. Clinton and Al Gore hailed the passage of the 1996 Telecom Act. Frankly, we have concerns about the fate of public interest media and telecommunications policies regardless of who wins the election. But it’s important, in our view, to recall history–including the recent events involving former FCC chairman Michael Powell. How both candidates would fix the mess with our communications system–including ensuring meaningful content and ownership diversity for digital media–should be part of the national debate.

We should realize by now that deregulation of the financial markets contributed to a culture of greed that bought down—at taxpayers expense–an economic house of cards. Fixing our system of journalism for the digital era must be on the policy agenda [we need legions of investigative reporters asap].