Hill Back to Biz of Biz Privacy

Congress is talking privacy again. Not as in personal privacy against FBI investigators, but in terms of regulating how corporations collect personal data. Declan McCullagh reports from Washington.

WASHINGTON -- Privacy is back.

Congress and the White House abruptly shelved the topic after last September's terrorist attacks -- and quickly enacted a passel of new laws that granted police unprecedented surveillance powers.

No, there's no move afoot, at least not yet, to limit FBI wiretapping, Internet monitoring, or the ability of courts to approve secret search warrants.

But Capitol Hill is resuming where it left off circa Sept. 11 -- by debating relatively modest proposals that would regulate corporations' data-collection practices and require privacy impact statements from federal agencies.

"I don't think there's any question that there was a setback after Sept. 11 when Congress' attention turned elsewhere," says Marc Rotenberg of the Electronic Privacy Information Center. "But I think the pendulum is swinging back now."

On Thursday, Sen. Ernst Hollings (D-South Carolina), convened a hearing to talk up his privacy bill, introduced last week.

Hollings' "Online Personal Privacy Act" regulates how Internet service providers, online service providers and any commercial website -- including non-commercial ones that are supported by advertising or sell product -- may collect information about visitors. The measure covers "personally identifiable information," including name, e-mail address, or even a numeric IP address.

But it applies only to the customer records of Internet-related firms -- not their meatspace competitors -- which is why some businesses oppose it. An Amazon.com lobbyist pointed out the discrepancy during the hearing, and Hewlett-Packard predicted the vague definitions in Hollings bill would invite lawsuits.

Hollings is offering companies one carrot: A section of his bill preempts state data-collection laws to create a uniform federal standard.

"As a privacy advocate, I'm not thrilled with preemption," says EPIC's Rotenberg, who testified at the hearing on behalf of a pro-regulation approach. "It would seem to me that conservatives who otherwise support federalism and states' rights wouldn't be thrilled with it either."

Some conservatives and libertarians do advocate a privacy-federalist approach. Last year, a pair of George Mason University economists proposed encouraging states to experiment with the best ways to preserve privacy, rather than have Congress set a one-size-fits-all standard.

Some critics of Hollings' bill see it as a partisan maneuver.

"This year is shaping up the same way 2000 did in terms of privacy legislation coming forward with election issues in mind," says Jim Harper of Privacilla, which opposes new regulations aimed at Internet firms. "Let's throw it out there and see if we can make a political issue out of it. This is not a way to craft serious legislation."

"If the Republicans were to say 'no dice,' the Democrats would think they have a campaign issue," says Harper, who predicts the Hollings bill has a "zero" percent chance of becoming law this year. If Congress does not act by the end of the session, a bill must start over next year.

A House Republican aide who is close to technology issues says it's not clear whether Hollings truly believes in data collection rules or whether he is trying to score political points.

"Let's get down to it," the aide said. "He's a big government liberal and he likes government managing things. One of the biggest unmanaged things out there is the high tech sector and specifically the Internet. Unless he gets his way."

Another bill (PDF) introduced this week would require federal agencies to append a "privacy impact analysis" to proposed new regulations.

Sponsored by Rep. Bob Barr (R-Georgia), it would not apply to the private sector or to state or local government agencies.

"All Americans deserve to know how new rules or regulations passed by the government will affect their right to privacy," Barr says. "From medical records to surveillance cameras, and from government snooping on the Internet to recent calls for a national ID, we are seeing firsthand, each day, the importance of guarding our right to privacy."

A hearing on Barr's proposal is tentatively scheduled for next Wednesday.