July 2008

The Wall Street Journal today reported that U.S. online publishers are seeing increased traffic from overseas while seeing little revenue from these foreign visitors. This represents both an uncompensated cost—in the form of server space and bandwidth—and an untapped source of revenue. So untapped, in fact, that foreign visitors account for only 5% of revenues for most major sites while constituting as much as half of their traffic.

Many publishers are attempting to tackle the problem by using geographic information related to visitors’ IP addresses—the basic identifiers that allow computers to communicate over the Internet. (You can see what information can be gleened from your IP by visiting sites like Proxify, that display the information that is publicly available regarding your IP address.)

While this seems like a convenient way for advertisers to turn foreign traffic into a new source of income, lawmakers may interfere with this process, denying web publishers the revenues needed to continue the growth of their businesses. Efforts to limit what information web publishers and advertisers can use in order to serve up content and ads to readers are underway both in the U.S. and in the E.U. In fact, Europe is split over whether to consider IP addresses “personally identifiably information” and grant them legal protections as a result.

My colleague Wayne Crews recently testified before the Senate Committee on Commerce regarding this side of the pond’s approach to privacy regulation. In his testimony, Crews was quick to point out that regulation would not only cut off revenue streams, but also stem the development of future technologies which may use information in ways we’ve never considered. Those developments are surely to be in advertising, but will also undoubtedly be in other areas of communication—perhaps some will be as revolutionary as the web itself.

We also have to consider the “little guys” of the web. According to Google’s Q1 2008 conference call (transcript can be seen here) the search company passed along over $4 billion to its AdSense publishers network in 2007. So, restrictive privacy regulations won’t just harm big companies like Google, Microsoft, CBS, or NewsCorp; the small websites and blogs supported by larger ad networks will also be affected by laws or regulations that would prevent advertisers from getting the right ads to the right people.

The biggest issue at hand, however, is the notion of consumer choice.  Currently, search site users can choose from a huge variety of search engines and other services, each offering different privacy guarantees to visitors. Increasingly engines other than Google—like those run by Microsoft and Yahoo!—are differentiating themselves from the Mountain-View-based giant through their privacy policies, providing consumers with additional choices. And people ought to be able to choose if they want to offer up some of their personal data in return for more customized services, or tolerate a less accurate search in order to preserve their privacy.

Certainly this choice is better than the solution Congress is offering: no choice at all.

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I’m not sure what to say about yesterday’s FISA vote that I haven’t said a dozen times before. I’m disappointed, obviously, but I can’t say I was surprised. I was probably more surprised that the White House didn’t get its way in February than that it did get its way in July. The powers that Congress granted yesterday will almost certainly be abused in the coming years, but we probably won’t find out about them until long after it’s too late to do anything about them.

But Aaron Massey makes an excellent point that’s worth quoting:

Although there are many aspects of this bill that disappoint me, I would like to take a moment to talk about the one closest to my research: legal compliance in technology systems. This bill sets an incredibly bad precedent for anyone advocating legal compliance. Essentially, what the telecommunications companies did was blatantly against the law. However, this bill retroactively provides them immunity for their actions. When the consequences for violating the law are removed retroactively, companies have an incentive to violate the law in the future.

The ethics in situations like this are already difficult for engineers to recognize. For a technologist like Mark Klein, setting up a room with a whole bunch of cables going into it is a normal daily aspect of their job. Most will not see the ethical implications. Most engineers at that level are not aware of the bigger picture. They may not be able to say for sure whether their action is a violation of the law. To speak out about such a thing already takes great personal courage.

The last thing engineers need to see is a case like this. They will recognize that even if they do risk their job to speak out about a possible legal problem, and even if that possible problem is recognized as such, it is now, with the passage of this bill, clearly possible that Congress will bend over backwards to let their employer off the hook.

To understand how difficult it was before this amendment was passed for someone like Mark Klein to do what he did, I urge you to read the introduction Cindy Cohn gave him at the EFF Pioneer Awards. Congress has just made it harder on the heroes. This is a disappointing day.

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Via Hit & Run, Sarah Lai Stirland reports on the plan to roll out a new political action committee called Accountability Now, which would punish members of Congress who voted to legalize warrantless wiretapping and immunize the participation of telecommunications companies in illegal spying.

On the Accountability Now site, you can pledge to donate money in a newsworthy August 8th money bomb that will raise money to defeat candidates selling out privacy and civil liberties. I rarely, rarely support politicians, even the ones I think are good. The opportunity to oppose some bad ones is quite delicious.

August 8th is the day Nixon resigned thirty-five years ago.

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