Subj: Online Privacy: Perspectives of Information Technology Association of America From: Mark Uncapher, Vice President, ITAA, 703-284-5344, muncapher@itaa.org To: Internet Caucus Advisory Committee EXCERPT FROM ITAA ONLINE PRIVACY STATEMENT: INTERNET REGULATION & DIGITAL OPPORTUNITY The Internet has grown dramatically as a consumer medium. In 1996 there were under 40 million users connected to the Internet globally. Projections put the number of online users at nearly 1 billion by 2005. Small and mid-sized businesses now have the ability to compete on a global scale. The Internet has changed our lives for the better—and more quickly--than any other technical advance in recent history. Now, however, a concern about the business practices of a few firms threatens to upset the democratic model on which the entire Internet is based. With 26,000 direct and affiliate member companies, the Information Technology Association of America (ITAA) represents the builders of the Internet and e-commerce revolution. Their products and services, from software and telecommunications to consulting and complex systems, form the technical infrastructure on which all else rests. Understandably, any steps which may form barriers to the broadest possible access to this infrastructure are viewed by this community with considerable concern. We believe that no one should be left behind in the Internet Economy. For example, our “Digital Opportunity Initiative,” is aimed at growing and diversifying the information technology workforce by attracting African-Americans, Native-Americans and Hispanic Americans into high paying and exciting information technology jobs. Moreover, we were interveners in the Federal courts supporting the Federal Communications Commission “schools and libraries” program to wire our nation’s classrooms to the Internet. ITAA is committed to avoiding a “digital divide” in which some in our society become “information have-nots.” We are generally opposed to government restrictions on the use of information gathered from Internet customers and restrictions on Internet advertising. Such regulation could significantly undermine the ability of providers to offer free content and access by encouraging many websites to offer only subscription content and access. While sensitive to the need to safeguard individual privacy on the ‘net, we also believe that upsetting the Internet business model could have a variety of significantly negative unintended consequences. ***· Internet participation could become unaffordable to many middle and low income Americans. Advertising support of websites and access providers makes the Internet more affordable than it would be with a “pay- per- view” model; ***· Companies no longer attracted by the cost effective “narrow casting” capabilities of the Internet may eventually withdraw from this marketplace, shrinking the medium and its ability to deliver robust content; ***· Companies and customers will lose quality and productivity benefits delivered by websites no longer able to customize Internet-based products and services; ***??Quality and productivity losses sustained at the consumer level will aggregate to slow the economy as a whole. The Internet’s growth has sparked renewed attention to consumer privacy. Numerous consumer surveys and newspaper stories conclude that one of the hurdles to e- commerce is satisfying consumers’ demands for privacy. A number of recent legislative initiatives have surfaced as well. Consumer surveys also demonstrate that consumers are carefully weighing the impact on their privacy in participating in this new medium. We believe that barriers should not be constructed to the ability of Internet companies to offer consumers convenience, nor should we underestimate the capacity of consumers to make informed privacy choices. The Internet is a highly interactive medium over which consumers exercise considerable control. A recent Gallup poll for @Plan found that 85% of the public were extremely concerned about Internet Privacy. Yet the same survey found that by a 60 to 37% margin, the American public prefers the "Internet Industry" over the "Federal Government" to protect their privacy. These numbers suggest general support for consumer empowerment and industry self-regulation, rather than government Internet regulation to address the concerns.[1] ---------------…. While the Internet seems to be rewriting history on an hourly basis, reason tells us that these are still early days. Naturally, different consumers may require varying degrees of comfort level using this technology. The reluctance of some consumers to engage in Internet commerce after such a short period should not be seen as a need for regulation. Internet commerce companies have a strong incentive to address effectively consumer concerns in order to advance online commerce. Portals, Internet Service Providers, e- commerce sales sites and other Web sites are striving to earn consumer confidence. An open and supportive legal environment has helped encourage the rapid development of the Internet. In a strikingly fast period of time, the World Wide Web has transformed competition and fueled dramatic economic growth. Our economy is on the brink of creating the largest and most vibrant marketplace of goods, services and ideas the world has ever known. ---------------------------------- FOOTNOTES: [1] http://biz.yahoo.com/prnews/000306/ct_plan_ne_2.html