[Congressional Record Volume 143, Number 107 (Friday, July 25, 1997)]
[House]
[Pages H5809-H5810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          USE OF THE INTERNET

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Minnesota [Mr. Vento] is recognized for 5 minutes.
  Mr. VENTO. Mr. Speaker, today I rise to speak with regard to the 
matter of personal privacy and the absolute vulnerability and risks and 
abuses that are taking place with regard to personal privacy. I 
specifically want to reference the use of the Internet, the Internet 
system, the online service providers and web sites that exist on the 
Internet. The Internet, of course, is accessible through our computers 
and the online services that we purchase.
  Earlier this year, in fact last year, in 1996, I first introduced 
legislation that would require an affirmative action by the individual 
Internet user, the subscriber, to permit the use of personal 
information; that is to say, the telephone numbers, the e-mail address, 
and the profile that is possible. A service provider or for that matter 
a web site can in fact, through the information and activities that an 
individual uses on the Internet, can in fact make almost a complete 
profile of all the web sites that you visit and utilize.
  They can do this, quite frankly, without the knowledge of an Internet 
user; that is, a subscriber or web site can in fact do that. It is as 
if you are walking down the street with $100 bills sticking out of your 
pocket and you are not aware of it. That is to say, we as individual 
Internet users are very vulnerable.
  Of course, as I introduced that bill last September and reintroduced 
it this past January, H.R. 98, I hope some Members will join me in 
terms of requiring affirmative approval of a service provider or a web 
site to use personal information about an individual that is using the 
Internet.

                              {time}  1415

  And this had been the subject this past June, and I might commend 
Commissioner Varney of the Federal Trade Commission for the work she 
had done at that time, she has since left the FTC, but this June she 
had a seminar and a series of meetings on, in fact, personal privacy on 
the Internet.
  At that time some of the service providers, namely Netscape, the one 
that we use, incidentally, in the House of Representatives, and 
Microsoft pointed out they were going to make efforts to provide for 
personal privacy and some security. But 7 weeks after that, this week 
we picked up the paper, the Washington Post here yesterday in 
Washington, DC, and it says America Online, one of the service 
subscribers, will share the users' numbers for telemarketing.
  Eight and a half million individuals are customers of America Online, 
and they were going to share their personal telephone numbers, and I 
assume their E-mail addresses, for sale. They were going to receive 
money back for this information. They were going to receive $150 
million back for sharing the personal information, sharing the privacy, 
selling for profit the personal privacy of the users to the tune of 
$150 million.
  Well, that is wrong. And the fact was that after this became public, 
this has been out for some time that they were going to do this but 
they did not share it, it was like looking for a needle in a haystack 
trying to discover what America Online was doing, but after that, after 
this happened, America Online, I am pleased to report, has backed off 
their plan to give out phone numbers.
  I think what this does point out in living color and in graphic 
detail is the vulnerability, as suggested in the legislation I have 
introduced, H.R. 98, of individual Internet users to have the abuse, 
the involuntary sharing, even being unaware sharing of their personal 
information.
  It is really unbelievable, as I said yesterday, that America Online 
would be cashing in for profit by selling the personal privacy of their 
users. The fact is that we need to correct this problem. We need to 
have some standards.
  I think most of us are very leery of any type of censorship with 
regards to information. We do not want to thwart the development and 
limit the development or the availability of information, or the 
development for that matter and use of the Internet, but the risk we 
run here is that the Internet is going to be filled or be a great 
wasteland in the fact that it will not have any type of security.
  There will not be the type of credibility and certainly not the 
responsibility on the part of the Internet user. We will not know when 
we purchase something whether we are participating in a transaction, 
whether, in fact, a communication or message, or just a complete 
absence of security or personal privacy.
  So I urge my colleagues to join in sponsoring H.R. 98 after they have 
seen this graphic example of abuse by America Online with regards to 
personal privacy.
  Mr. Speaker, I provide for the Record two articles covering the issue 
I have just been discussing.

               [From the Washington Post, July 24, 1997]

   AOL Will Share Users' Numbers for Telemarketing: Consumer Groups, 
       Privacy Advocates Call Subscriber Notification Inadequate

                       (By Rajiv Chandrasekaran)

       America Online Inc. plans to disclose the telephone numbers 
     of its 8.5 million subscribers to certain business partners 
     for telemarketing purposes, a decision that industry 
     specialists say could generate a financial windfall for the 
     online service but anger many of its customers.
       AOL said it will make the subscriber information available 
     to companies such as consumer-services firm CUC International 
     Inc., which signed a $50 million marketing arrangement with 
     AOL last month. Such agreements, which industry analysts say 
     could become more common because of the telephone list, are 
     an increasingly important source of revenue to AOL as it 
     seeks to reduce its dependence on monthly user fees.
       The new policy is outlined in AOL's revised user rules, 
     which were posted online earlier this month and become 
     effective on July 31. The policy allows users to request that 
     their phone numbers not be disclosed to telemarketers.
       The company's decision, however, has outraged consumer 
     advocates, who say AOL members have not been adequately 
     informed of the new policy, which as of yesterday evening had 
     not been mentioned on any of the screens a user sees when 
     logging on.
       ``Their disclosure is not good enough,'' said Jean Ann Fox, 
     the director of consumer protection at the Washington-based 
     Consumer Federation of America. ``This sets a new low in 
     turning subscribers into a commodity.''
       Although it is a fairly common practice for companies to 
     sell customer information--

[[Page H5810]]

     AOL has long offered the names and addresses of its 
     subscribers to direct-mail marketers--disclosing phone 
     numbers is a rarer practice, industry experts said. ``It's 
     not at all common in the online world,'' said Patrick Keane, 
     an analyst at market-research firm Jupiter Communications in 
     New York.
       AOL's decision comes just as the company largely has 
     repaired customer relations frayed by widespread busy signals 
     that occurred on the network in the winter and spring because 
     the company failed to anticipate the demand a flat-rate 
     pricing plan would generate. The new policy, some analysts 
     said yesterday, risks re-opening old wounds.
       ``They're walking a fine line with a customer base that 
     already has been nettled,'' Keane said.
       AOL officials played down such concerns, saying they 
     believed most subscribers would welcome the solicitations. 
     ``We're telemarketing to our members goods and services we 
     see as benefits of their AOL membership,'' said spokeswoman 
     Tricia Primrose.
       Primrose said AOL does not plan to publicize the new policy 
     before July 31, but will notify members before they begin to 
     receive calls. ``We're going to give them every 
     opportunity to get off this list,'' she said.
       Privacy advocates contend, however, that AOL customers 
     should be asked in advance if they want to be on 
     telemarketing lists. The advocates also say that as an online 
     service, AOL should be held to a higher standard in 
     protecting customer information than companies that don't do 
     business in cyberspace.
       ``Many people who subscribe to AOL like the feature that 
     they have a certain distance between their use of the 
     keyboard and the outside world,'' said Robert Ellis Smith, 
     editor of Privacy Journal in Providence, R.I. ``They don't 
     have to give out a physical address or a home number. Now AOL 
     is suddenly exposing these customers to intrusions at home 
     during the day.''
       Initially, AOL plans to offer the phone number to two 
     companies, CUC and Tel-Save Holdings Inc., a long-distance 
     company with which AOL signed a $100 million marketing 
     agreement earlier this year, Primrose said. CUC and Tel-Save 
     do not plan to start telemarketing until later this year, she 
     said.
       AOL plans to screen the telemarketers' solicitations, 
     Primrose said. The company now monitors mailings that are 
     sent to its customers by firms who purchase its subscriber 
     mailing lists, she said.
       AOL's mailing lists include members' names and addresses, 
     as well as demographic profiles, with information such as 
     household income and past buying habits, that the company 
     says it obtains from outside marketing databases.
                                                                    ____


                [From the New York Times, July 25, 1997]

        America Online Backs Off Plan To Give Out Phone Numbers

                           (By Seth Schiesel)

       Responding yesterday to consumer outrage and mounting 
     concerns about privacy in cyberspace, America Online, the 
     largest on-line service provider, abandoned its plans to 
     begin providing lists of its customers' telephone numbers to 
     telemarketers and other direct-sales peddlers.
       The reversal came less than 24 hours after the plan became 
     widely known through news accounts and on-line postings. 
     America Online drew immediate fire from politicians and 
     privacy-rights groups for the telemarketing venture, in part 
     because the company for years had assured subscribers that it 
     would not release their phone numbers and other personal 
     information to outside parties.
       Because America Online's eight million subscribers are 
     already besieged by ``junk'' electronic mail, customers 
     bemoaned the prospect of some of those same advertisers, or 
     different ones, ringing the phone at home.
       ``That's the most obnoxious form of solicitation,'' said 
     Camilla M. Herlevich, an environmental lawyer in Wilmington, 
     N.C., an America Online subscriber. ``They always call at 
     dinner time. We call it the arsenic hour.''
       But the controversy goes beyond telephone numbers--and 
     transcends America Online, for that matter.
       For consumer-privacy advocates, the case illustrates the 
     need for increased Government oversight of the buying and 
     selling of the copious consumer information gathered in the 
     course of everyday commerce. Savvy companies already mine the 
     trove of available credit card information to find buying 
     patterns that might lead to one more sale.
       But with the advent of cyberspace commerce, marketers are 
     able to track their quarry even more easily--tracking each 
     click of the mouse, in some cases, as a user surfs the World 
     Wide Web. So far, such efforts typically can identify no more 
     than a user's computer, and not the identity of the 
     individual operating the PC.
       Experts predict, however, that personal identification will 
     eventually be possible, making privacy difficult to protect--
     whatever the stated policies of companies collecting such 
     data.
       Like magazines and other businesses with valuable 
     subscription lists, America Online has already been selling 
     lists of its subscribers' names and addresses. But those 
     lists do not include the corresponding E-mail addresses or 
     customer phone numbers. A few weeks ago, however, America 
     Online quietly proposed changing its longstanding policy to 
     begin selling its telephone lists.
       Privacy advocates said that adding phone numbers to the mix 
     would allow marketers to cross-tabulate with additional sorts 
     of information that people might not be aware they were 
     exposing by simply signing up to an on-line service.
       ``The phone number is used as an identifier the way that 
     the Social Security number is,'' said Evan Hendricks, the 
     editor of Privacy Times, a privacy-rights newsletter. ``They 
     can use the phone number to look up the name and address and 
     then you can find out about their house and how many kids 
     they have.''
       Telemarketers and other direct-sales organizations have 
     resisted Government regulation by agreeing to self-imposed 
     privacy-protection guidelines that typically include 
     provisions allowing consumers to request that their personal 
     data not be sold to third parties. But the America Online 
     episode is certain to raise new questions about whether the 
     industry can continue to police itself.
       ``It's unbelievable really, that AOL would be cashing in 
     for profit by selling the personal privacy of their users,'' 
     said Representative Bruce F. Vento, Democrat of Minnesota, 
     who has introduced a bill to regulate the use of consumer 
     information on line. ``It just boggles the mind that they 
     would do it quite this boldly.''
       America Online would not reveal how many of its members 
     called, faxed or sent electronic mail to the company to vent 
     their displeasure. America Online executives insisted that 
     they did not intend to ``rent'' the phone numbers. Instead, 
     they said, America Online would provide the numbers to 
     companies only as one part of an overall marketing deal.
       ``The only calls we intended for you to receive would have 
     been from AOL and a limited number of quality-controlled AOL 
     partners,'' said Stephen M. Case, the company's chief 
     executive in a letter to subscribers yesterday.
       Those partners would have included Tel-Save Inc., a 
     discount long-distance telephone company that reached a $100 
     million marketing pact with America Online in February, and 
     CUC International Inc., a telemarketing giant that made a $50 
     million deal with America Online last month.
       America Online officials said yesterday that those pacts 
     were broad based and would not be affected by scrapping the 
     plan to share telephone lists.
       ``We said, `It's so insignificant, just drop it,' '' said 
     Robert W. Pittman, chief executive of America Online's 
     operating subsidiary. ``For it to get this blown out of 
     proportion says we really screwed up the communication.
       ``At the end of the day we didn't want to soil our 
     reputation or confuse our members.''
       The members were certainly confused, or at least angry. 
     Internet bulletin boards were ablaze with irate missives 
     about the company, some of them profane. Many of the 
     complaints stemmed from the fact that America Online had 
     tucked its only notice of the proposed policy shift in an 
     obscure corner of the service. The notice had been posted on 
     July 1, but did not come to widespread attention until 
     Tuesday.
       ``Unless you stumbled across it you wouldn't know unless 
     you saw it on the evening news,'' said David Cassel, a 
     freelance writer in Berkeley, Calif., who runs an Internet 
     mailing list about America Online that has 12,000 
     subscribers. ``People thought it was exploitative, deceptive 
     and instrusive. People were outraged.''
       The Federal Trade Commission has been investigating 
     marketing practices in cyberspace since last summer, most 
     recently holding a series of four ``workshops'' with industry 
     groups last month.
       Yesterday, noting that credit cared companies often pitch 
     services to their customers based on analysis of spending 
     patterns, Commissioner Christine Varney said: ``The 
     difference in perception is that people believe that AOL 
     knows a whole lot more about them or has the capacity to know 
     a whole lot about them than American Express does. Presumably 
     they can see where you go, what you do, where your email 
     comes from, who you're sending it to.''
       Earlier this month the commission's staff sketched the 
     outlines of a regulatory structure for Internet advertising 
     when it determined that a World Wide Web site called KidsCom 
     had probably engaged in deceptive practices when it collected 
     personal information from children and used the data for 
     marketing purposes without the consent of parents.
       But the commission has not issued any regulation on 
     Internet marketing aimed at adults, and is still leaning 
     toward allowing the industry to police itself.
       ``It's about creating a dialogue with industry, and this 
     marketplace is not going to work unless consumers have 
     confidence in it,'' said Victoria Streitfeld, a commission 
     spokeswoman. ``The real effort has been to really not have 
     Government come down on this emerging technology but to raise 
     the issue.''

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