Lobbyists like to hire academics in order to give their agenda the patina of scholarly respectability. Many academics are ideologically aligned with the interests of major media and telecom companies–supporting an unregulated environment (and like to reap the bucks as well). Some academics want to schmooze with deep-pocketed special interests. So it’s not a surprise to learn that Time Warner Cable has a “Research Program on Digital Communications.” They have already released a volume of papers on the “Future of Digital Communications: Policy Perspectives.” Time Warner’s so-called research agenda is so self-serving that it would be laughable if the goal wasn’t ultimately to undermine the public interest and consumer protection. Luckily, there are scholars and other policy experts who care more about their integrity and the academic issues and wouldn’t consider taking such funding. Here’s what the first “research question” is for those seeking funding to ultimately help undermine consumer privacy by enabling Time Warner and other digital marketers to expand their behavioral targeting approaches:
Topic One: Advertising, Two-Sided Markets, and the Role of Network Operators (ISPs, MSOs)
The emergence of more precisely targeted (interest-based or so-called “behavioralâ€) advertising offers potential benefits to consumers while at the same time raising possible concerns about privacy. Application providers, network owners, advertisers, content providers, and other interested parties may play a role in allowing these potential benefits to be realized. By facilitating two-sided markets, or platforms that enable two distinct but related groups of customers (such as advertisers and consumers) to obtain value, service providers can expand the scale and scope of their offerings to consumers. Industry groups and the Federal Trade Commission have developed principles for self-regulation online, while some advocacy organizations and members of Congress have pointed to potential harm from more targeted advertising and are calling for new government mandates.
Key questions concern the types of disclosures and the level of consumer consent that should be required.
Questions
• What are the benefits of more precisely targeted advertising, and how prevalent is the practice?
• What technological innovations support the development of more targeted advertising over digital media?
• How are consumers affected by increasingly prevalent forms of targeted advertising, and what is the appro-
priate public policy response?
• What is the role for self-regulation, government intervention, and industry standard-setting?
• What role should network operators play in regulation (voluntary or prescriptive)?
• Describe the future of the advertising marketplace and the role of new and potential entrants, such as
Internet service providers (ISPs), cable operators, and other multichannel video programming distributors
(MVPDs) offering interactive television services.
• How can two-sided markets help encourage the development of new broadband and video services?
• How can regulation of advertising or privacy affect, promote, or retard the development of these new
services?
Category: cable TV
Consumer and Privacy Groups at FTC Roundtable to Call for Decisive Agency Action
Washington, DC, December 6, 2009 – On Monday December 7, 2009, consumer representatives and privacy experts speaking at the first of three Federal Trade Commission (FTC) Exploring Privacy Roundtable Series will call on the agency to adopt new policies to protect consumer privacy in today’s digitized world. Consumer and privacy groups, as well as academics and policymakers, have increasingly looked to the FTC to ensure that Americans have control over how their information is collected and used.
The groups have asked the Commission to issue a comprehensive set of Fair Information Principles for the digital era, and to abandon its previous notice and choice model, which is not effective for consumer privacy protection.
Specifically, at the Roundtable on Monday, consumer panelists and privacy experts will call on the FTC to stop relying on industry privacy self-regulation because of its long history of failure. Last September, a number of consumer groups provided Congressional leaders and the FTC a detailed blueprint of pro-active measures designed to protect privacy, available at: http://www.democraticmedia.org/release/privacy-release-20090901.
These measures include giving individuals the right to see, have a copy of, and delete any information about them; ensuring that the use of consumer data for any credit, employment, insurance, or governmental purpose or for redlining is prohibited; and ensuring that websites should only initially collect and use data from consumers for a 24-hour period, with the exception of information categorized as sensitive, which should not be collected at all. The groups have also requested that the FTC establish a Do Not Track registry.
Quotes from Monday’s panelists:
Marc Rotenberg, EPIC: “There is an urgent need for the Federal Trade Commission to address the growing threat to consumer privacy. The Commission must hold accountable those companies that collect and use personal information. Self-regulation has clearly failed.â€
Jeff Chester, Center for Digital Democracy: “Consumers increasingly confront a sophisticated and pervasive data collection apparatus that can profile, track and target them online. The Obama FTC must quickly act to protect the privacy of Americans,including information related to their finances, health, and ethnicity.â€
Susan Grant, Consumer Federation of America: “It’s time to recognize privacy as a fundamental human right and create a public policy framework that requires that right to be respected,†said Susan Grant, Director of Consumer Protection at Consumer Federation of America. “Rather than stifling innovation, this will spur innovative ways to make the marketplace work better for consumers and businesses.â€
Pam Dixon, World Privacy Forum: “Self-regulation of commercial data brokers has been utterly ineffective to protect consumers. It’s not just bad actors who sell personal information ranging from mental health information, medical status, income, religious and ethnic status, and the like. The sale of personal information is a routine business model for many in corporate America, and neither consumers nor policymakers are aware of the amount of trafficking in personal information. It’s time to tame the wild west with laws that incorporate the principles of the Fair Credit Reporting Act to ensure transparency, accountability, and consumer control.â€
Written statements and other materials for the roundtable panelists are available at the following links:
CDD/USPIRG: http://www.democraticmedia.org/node/419
WPF: http://www.worldprivacyforum.org/pdf/WPF_Comments_FTC_110609fs.pdf
CFA: http://www.consumerfed.org/elements/www.consumerfed.org/File/5%20Myths%20about%20Online%20Behavioral%20Advertising%2011_12_09.pdf
EPIC: www.epic.org
CDD Urges Regulators to Protect Consumer Privacy in Comcast/NBCU deal
The Center for Digital Democracy will ask both the FCC and FTC to ensure that consumer privacy is protected as part of the regulatory review of the Comcast/NBCU partnership. Comcast is currently deploying interactive TV applications, including for advertising, on its cable systems.  The nation’s largest cable company and broadband ISP has played a leading role in developing next-generation “advanced advertising†services through the Canoe Ventures interactive TV cable consortium, as well as with CableLabs (Comcast chair Brian Roberts is the chair of the board of CableLabs, the industry’s R&D center). For advanced advertising, information on household viewing, including from individuals, will be collected from set-top boxes that can be combined with outside databases to form viewer ad targeting profiles.  Highly personal ads will be created, practically instantaneously, for real-time delivery based on these profiles. Cable and other video providers are creating a “real-time decision-making system†for marketing that analyzes user data–including income, ethnicity, and viewing and behavior patterns–to help determine the precise ad to be delivered. Comcast is reportedly planning “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… having a massive 500 Terabytes of storage, would then feed up to a database even broader in scope operated by Canoe Ventures…â€
As the nation’s biggest “video provider†and “largest residential Internet service provider,†Comcast has access to detailed financial information on its TV and broadband subscribers. It also has a treasure trove of consumer data on viewing behaviors online and with TV. Comcast can also use its dominate position as the leading high-speed ISP and cable TV provider to extract additional consumer information from its programming partners.  Regulators will need to ensure effective safeguards on network neutrality, programming access and competition, and consumer privacy—especially for “advanced advertising.”
CDD also will ask competition authorities to review Comcast’s relationship with Canoe Ventures, and its implications on content diversity.
Some Background:
http://www.comcastmediacenter.com/media/news-releases-detail.html?content_item_id=161;
http://www.comcastspotlight.com/sites/Default.aspx?pageid=7680&siteid=62&subnav=3
http://www.canoe-ventures.com/;
http://www.cablelabs.com/projects/dpi/;
http://www.experianmarketingservices.com/capabilities_digitaladvertising.php;
http://www.lightreading.com/document.asp?doc_id=183658&site=cdn;
http://www.multichannel.com/article/161894-Comcast_TV_Warehouse_To_Collect_STB_Clicks.php;
http://www.screenplaysmag.com/corporate/sigma/;
http://www.comcast.com/corporate/about/pressroom/corporateoverview/corporateoverview.html
Network Neutrality, a Narrowed Internet and Digital TV [Attention DoJ, FTC & FCC]
It appears that the network neutrality fight now also must be focused on how new TV sets are connected to the Internet. A narrow, closed universe, of digital lite applications are to be part of the new high definition television universe, according to Variety. For example, new TV’s connect to a version of the Internet but haven’t been “built for full-fledged Web browsing.”  But these sets “will come pre-installed with targeted applications for specific websites, somewhat like iPhone apps.” [our emphasis] Some 50 million people are predicted to have these Net-lite sets by 2013.
Variety explains that: Indeed, apps are seen as the keys to success with Web-enabled TV. There are no plans for a central app store, but analysts say they wouldn’t be surprised to see one. For now manufacturers can “push” new apps onto TVs but viewers can’t add any themselves. This puts manufacturers in the new position of deciding which sites gain access to their customers’ screens, and there is already talk that they are contemplating selling such access via revenue-sharing deals.Â
The Obama Administration has been a strong supporter of network neutrality. It should challenge this threat to competition and new threat designed to narrow the Internet. Beyond concerns on openness and content diversity, it’s worth noting that some in the TV industry see the deliver of Internet services via TV’s a way to expand the impact of commercials and ads (since online video ad can’t be fast-forwarded or easily skipped). These Net-enabled devices also raise important privacy and consumer protection issues. Notes Variety, “[T]he new technology also could add power to an advertiser’s message, with consumers able to click a link and instantly learn more about a product — and with ads being better targeted based on a person’s viewing and browsing history.”
source: Television’s killer app: New HD TVs equipped with internet connection. Chris Morris. Variety. August 14, 2009.
Technology Policy Institute’s Funders: An Online Marketing and Data Collection Lobby [Annals of Undermining Privacy Safeguards]
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
Cable Giants Canoe Ventures and Your Set-top Box Data [Annals of Telling Congress One Thing, But Insiders Another]
From a November 2008 report on Canoe CEO David Verklin’s speech at the “NewTeeVee Live” conference. Excerpts: Canoe Ventures outlined its strategy today at the NewTeeVee Live conference in San Francisco, where David Verklin, the CEO, outlined the cable industry’s answer to the competition from online video…“Data is the new creative,†Verklin said. He said Canoe thinks the key to that data is the set-top box that’s already hooked up to the televison. That box can tell advertisers exactly how many people are watching an ad.
And this excerpt on Comcast’s data mining warehouse from a January 2009 report in Multichannel News. Excerpt: Comcast has sketched out plans for 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, according to an industry executive familiar with the project. 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.
Canoe CEO David Verklin has said the venture expects in the near future to provide viewing metrics for 32 million U.S. cable households, representing about 57 million set-tops. “One of the first things we must do is bring set-top data into the marketplace and make that the currency,†Verklin said, speaking last November on a panel at the CTAM Summit. Detailed audience measurement metrics, in Verklin’s view, are crucial to Canoe’s aims to sell interactive-TV services and deliver ads that are “addressable†to individual set-tops.
and an excerpt from an interview with Canoe’s chief technological exec Arthur Orduna. Worth thinking about the implications:
And when a viewer does respond, or requests information, what happens?
[Orduna]:Â There the local system comes into play, and so does Canoe, actually. Because whatever I click will be collected into a separate aggregation server by the MSO or the system. That information would then be sent to a centralized Canoe aggregation server, because we’d be managing all the information for that particular campaign. And then whatever would need to be done with that data, whether it would need to be presented back to the subscriber, or whether it would be compiled for fulfillment or reporting, that would be Canoe’s responsibility.
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-biffâ€)…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].
Cable TV and Your Privacy: Time to Address Looming Threats
It’s not just the cable television industry’s position on network management [network neutrality] that is a problem. So too is its expanding use of customer data for profiling, analysis, and targeting. Project Canoe [the cable initiative on targeted interactive advertising] is only one part of cable’s data-driven plans. As cable trade CED reports, the industry has geared up to reap the rewards from its extensive data mining services. Here’s are some excerpts: “Add to the marketing mix a mountain of data and metadata generated by sophisticated billing systems and third-party data companies, and it’s little wonder why the marketing of cable versus the competition is changing dramatically…“We’ve built 10-12 statistical/propensity models of people who would likely take a service, and we are refining that technique. We’ve seen a very significant increase in take rates” [explained Tim Doolittle, vice president of marketing science for Charter Communications]…”Data is captured through the billing system and cross-tabulated with marketing efforts” [noted Steve Brookstein, executive vice president of operations for Bresnan Communications]…they need data they can understand to build marketing models,†said Chris McDonald, president of Pluris Inc., a leading provider of data organization and analytics.
That data, he maintains, is coming from a variety of sources such as billing systems and third parties…The addition of emerging data points, such as data coming from the Internet, e-mail and customer service online, is extremely valuable, McDonald says.
“It’s valuable data knowing how customers are behaving.” [our emphasis]
source: Fighting for The Money. Craig Kuhl. CEDMagazine.com. October 1, 2008
Letters to Hill on Online Advertising and Privacy: A Failure to Communicate
The two headlines coming from the responses sent to the House Energy and Commerce Committee so far are that trials of deep packet inspection ad tracking/targeting were launched without meaningfully informing subscribers, and that the companies really failed to fully disclose all the data collection and targeting they routinely do.
On the second point, a strategy by several companies was to gloss over what they collect from behavioral targeting. You would never know reading AOL’s letter, for example, that it acquired behavioral targeting leader Tacoda last year [which is now integrated into AOL’s “Platform A” system]. AOL’s letter to the Hill is a fairy tale version of the targeting it can do. To see a video produced for AOL’s Advertising.com that is more honest about its ability to collect and target, see its “Holy Grail of Online Advertising” animated promo.
Charter Cable, which was working with NebuAd until advocates and Congress raised the alarm, suggests for whatever online ad services it does on its website, it relies “on third-parties, such as Yahoo and Google to perform these functions.” But it promotes its vehix.com site saying that: “More leads. Better leads. Precise geographic and demographic targeting. Unparralled branding power. Vehix.com isn’t just another dot.com vehicle site. Vehix.com is a powerful new way to combine the targeting precision of Cable TV and the internet to create a powerful sales building program.” Comcast answers the Congress by repeatedly claiming that it doesn’t target individuals online. It could have included in its letter what it says to potential advertisers, that: “On a monthly basis, Comcast.net receives over 3 billion page views, 15 million unique users, average visit length of over 14.9 minutes and over 60 million video streams. Comcast.net Mail Center has over 20 million registered accounts, 7 million logins per day and over 2 billion page views a month.†None of the cable companies, of course, said a word about their coordinated moves into personalized interactive television ad targeting (Project Canoe). Insight cable could have included in its letter a section from its privacy policy, which says that:“Our Website may post banner ads or other forms of advertisements and/or links from third party advertisers that are not owned or operated by Insight or Insight Entities. These third party advertisers may independently solicit and collect personal information, or send their own tracking devices to our visitors. Other third party Internet programs or applications may also cause additional advertisements or banner ads to appear on top of our web pages. Insight does not have control over the placement of such advertisements or the tracking devices utilized through these applications. When you visit a third party advertiser’s Website, you will be subject to the privacy policy and terms of usage agreement of that Website operator.”
Of course, the tests by CableOne, CenturyTel, and Knology reveal the failure of the current disclosure process. Customers shouldn’t be required to read complex and confusing legal updates about privacy policy. The lack of candor from Google, Yahoo, Verizon, Comcast, etc. should be addressed by the companies quickly supplying new information to Congress about their complete data collection and targeting practices and plans.