While you watched all your other magazines go out of business or shrink pages over the last several years, our colleagues at Consumers Union and its flagship Consumer Reports Magazine have quietly grown while successfully monetizing the net. That's something even the New York Times, Rupert Murdoch, and the Wall Street Journal (both before and after Rupertization) have failed to do.

Now, CU has announced purchase of The Consumerist, a feisty blog that rips unfair and downright sleazy business practices while offering consumer tips. From the New York Times story by Stephanie Clifford:

The blog offers consumer tips, like how to return products and how to confound a telemarketer, and covers shopper complaints, like excessive retail markups. It will become part of a new division of Consumers Union, and the current editors will remain. [...] Consumerist’s voice is younger, too: contributors write in the arch tone that is a hallmark of Gawker sites. But Consumers Union’s executive vice president, John Sateja, said that was not at odds with the more serious voice of Consumer Reports. “When Consumers Union was formed, it was a pretty snarky, aggressive organization that took on big organizations just like Consumerist is doing today; it’s just going to an audience that we basically don’t reach,” Mr. Sateja said. “It may not be language, or voice or style that Consumers Union has, in recent years, become accustomed to, but it is part of the roots of the organization.”

UPDATE: Larry Lessig's Newsweek piece is a pre-dot-bomb retread by Mike Weisman at Reclaim the Media.

Internet guru Larry Lessig has an interesting op-ed in Newsweek: Reboot the FCC:

We'll stifle the Skypes and YouTubes of the future if we don't demolish the regulators that oversee our digital pipelines.[...] President Obama should get Congress to shut down the FCC and similar vestigial regulators, which put stability and special interests above the public good. In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: "minimal intervention to maximize innovation." The iEPA's core purpose would be to protect innovation from its two historical enemies—excessive government favors, and excessive private monopoly power.

I've often written about the freecreditreport.com scam. The website is run by the credit bureau Experian. Over at Smartmoney.com, in her story FreeCreditReport.com: Not So Free -- Still, reporter Stacey Bradford points out two key astonishing facts.

FreeCreditReport.com spent a little more than $19 million on advertising during the third quarter, an increase of 28% from the same period in 2007, according to TNS Media Intelligence. A vast majority of that money -- roughly $14 million -- was spent on television ads.

The somnolent lapdog known as the Bush Administration Federal Trade Commission is responsible for the deception. Perhaps the numbers in the Bradford piece will wake them up. In weak settlements totaling a paltry $1.2 million dollars, it has continued to allow Experian to use the word "free" for its overpriced subscription service. Using the word "free" confuses consumers into thinking that they are going to the government-mandated annualcreditreport.com site where you can get an actual free credit report required by law. The web is full of other blogs that agree with me: (MSNBC Red Tape Chronicles blog, Huffington Post blog, Washington Post blog). If you are tricked into purchasing over-priced credit monitoring with the promise that it is "free", complain to the FTC and also to your own state attorney general (list here). He or she is a tough consumer cop, unlike the FTC.

Here's another thing: When the full history of the financial meltdown is written, it will describe the role of the credit bureaus. Not only did their super-duper credit scores fail to accurately warn of consumers' ability to repay, but their use of trigger lists and their incessant Internet ads for products such as lowermybills.com (also owned by, you guessed it, Experian) drove people to the mortgage companies where they got hooked on over-priced debt (previous blog). Over at his Center for Digital Democracy, Jeff Chester has written about the role of the credit bureaus in the explosive growth of behavioral advertising on the Internet.

UPDATE: Our 31 Oct 2008 coalition letter to FCC. We sent a similar to Congress.

If you think of the television spectrum, and you probably don't much, you've probably wondered: what's in between the assigned TV channels? The short answer is white space. Think of it as median strips between highway lanes. While some of that space is needed to avoid interference, some of it can be allocated to other beneficial uses. On Tuesday, the FCC approved a proposal backed by U.S. PIRG and a variety of public interest groups, and by Microsoft and Google. The decision will help bring broadband Internet access to more communities and, because the FCC order allows unlicensed uses, it will spur yet another round of technological innovation on the Internet. From a statement by our coalition partners at Free Press:

Nearly every market in the United States has available white spaces; in some communities, more than three-quarters of the broadcast spectrum is unused. Today's FCC vote allows innovators to develop new technologies that will bring Internet service to millions of Americans in under-served communities.

Today’s decision is consequential to our nation’s future because wireless broadband has the potential to improve our economy and quality of life in even the remotest areas. One of the best options for promoting broadband and competition across the country, particularly in rural areas, is maximizing the potential of spectrum-based services. Because we are a nation of innovators and entrepreneurs, the Commission’s decision to open fallow spectrum to new uses will give our country an opportunity to reclaim its place as a world leader in broadband deployment.

Google has announced on its blog that it will no longer pursue a controversial and PIRG-opposed web advertising partnership with Yahoo. From Google:

However, after four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement.

Professor and Internet guru Larry Lessig (and author of the new book Remix (previous Remix blog)) has a New York Times op-ed today: Copyright and Politics Don’t Mix. The editorial discusses the threats to long-standing consumer fair use rights to use limited excerpts of copyrighted material. The problem is caused by TV networks and record companies demanding under the obtrusive Digital Millennium Copyright Act that YouTube remove homemade videos and political ads that use snippets of their audio and video (clearly fair uses) in them. Excerpt:

THROUGHOUT this election season, Americans have used the extraordinary capacity of digital technologies to capture and respond to arguments with which they disagree. YouTube has become the channel of choice for following who is saying what, from the presidential campaign to races for city council. But this explosion in citizen-generated political speech has been met with a troubling response: the increasing use of copyright laws as tools for censorship. [...] It would be far better if copyright law were narrowed to those contexts in which it serves its essential creative function — encouraging innovation and ensuring that artists get paid for their work — and left alone the battles of what criticisms candidates for office, and their supporters, are allowed to make.

Public Citizen Litigation Group attorney Paul Alan Levy, one of the leading defenders of free speech on the Internet, thinks so. He has an interested post Trademark Abuse by Jones Day to Suppress Free Speech over at Consumer Law and Policy blog:

A new entry in the contest for “grossest abuse of trademark law to suppress speech the plaintiff doesn’t like” comes from Chicago, where the giant law firm Jones Day has sued BlockShopper.com, a web site that reports on real estate purchases in two upscale specific Chicago neighborhoods, as well as in Las Vegas, Palm Beach, and St. Louis.

Apparently, Jones Day didn't like links to its attorneys or its website. Levy says:

"That is what web sites do – they link to other web sites (that’s what makes it a “World Wide Web”)."

"that Jones Day is simply using an unsustainable legal theory, as well as the threat of ruin by litigation against a huge law firm, to try to bully Blockshopper.com into submission."

Over at his Surveillance State blog, Chris Soghoian Debunks Google's log anonymization propaganda.

Google announced on Monday that the company will be reducing the amount of time that it will keep sensitive, identifying log data on its search engine customers. To the naive reader, the announcement seems like a clear win for privacy. However, with a bit of careful analysis, it's possible to see that this is little more than snake oil, designed to look good for the newspapers, without delivering real benefits to end users.

Harold Feld of Media Access Project has a detailed blog explaining the significance of the FCC ruling against Comcast on net Neutrality. And Internet guru Larry Lessig has written a letter to the FCC commending it. Excerpt:

Comcast didn’t invent the Internet. Indeed, it, and most other cable companies, were relatively slow to recognize the important value the Internet would provide both to the public and to companies providing Internet service.[...]But if Comcast is to benefit from the Internet, it is perfectly reasonable that it be required to do so in a manner that doesn’t pollute the value of the Internet for everyone else. Yet that is what Comcast has done here. By secretly adding a layer of secret sauce into the Internet that interferes with legitimate applications and network services, Comcast has injured the value of the Internet to other innovators. By denying that it has done this, it has added insult to that injury. The Commission has done us all a great service by stating clearly that it will assure that the platform for innovation that the Internet is will not be compromised by such behavior.

Today the FCC published its formal enforcement order (announced 1 August) condemning cable behemoth and would-be Internet gatekeeper Comcast for violating the FCC's principles of net neutrality, or Internet freedom.

Although Comcast asserts that its conduct is necessary to ease network congestion, we conclude that the company’s discriminatory and arbitrary practice unduly squelches the dynamic benefits of an open and accessible Internet and does not constitute reasonable network management. Moreover, Comcast’s failure to disclose the company’s practice to its customers has compounded the harm.

In a letter to the editor in today's New York Times, Gigi Sohn of our ally Public Knowledge, points out that a recent story missed the importance to consumers of a recent court decision on the use of cable company remote recording systems (RS-DVRs) that function like home-mounted TiVos or VCRs. Excerpt:

[The story, "A Ruling May Pave the Way for Broader Use of DVR" (Business Day, Aug. 5)] said that "for most consumers, the decision does not make much difference." Nothing could be further from the truth. Had it not been overturned, the lower court’s holding would have outlawed "buffer" copies -- the very temporary copies (in this case 1.2 seconds) that every digital device and service must make to play digital content. Had the studios bringing the lawsuit succeeded, countless consumers would have been exposed to liability via the simple operation of their computers.

Tim Karr of SavetheInternet.com has a nice blog explaining the successful FCC hearing on the Internet held at Carnegie-Mellon University last night: Excerpt explaining the digital divide and need for expanded efforts to make broadband hookups available to everyone:

America’s digital divide is delineated by class, location and race. Only 35 percent of American homes with less than $50,000 in annual income have broadband, according to the Census Bureau, while 76 percent of households earning more than $50,000 per year are connected. Meanwhile nearly 20 million Americans live in areas not served by a single broadband provider, while tens of millions more live in places with just a single source for high-speed Internet. Just 39 percent of rural households subscribe to broadband service, compared to 54 percent of urban dwellers.

Interstate Commerce Subcommittee Chairman Byron Dorgan (D-ND) and Chairman Daniel Inouye (D-HI) of the Senate Commerce Committee held a hearing today entitled Privacy Implications of Online Advertising. In her testimony, Lydia Parnes, Associate Director of the FTC, referenced the PIRG/Center for Digital Democracy online advertising petition to the FTC (previous blog).

In her testimony, Leslie Harris of the Center for Democracy and Technology offered a good overview of what's at stake. She pointed out, as does our PIRG and CDD petition, that the new trend of behavioral targeting poses greater threats than traditional search advertising:

There is also a risk that profiles for behavioral advertising may be used for purposes other than advertising. For example, ad networks that focus on “re-targeting” ads may already be using profiles to help marketers engage in differential pricing.10 Behavioral profiles, particularly those that can be tied to an individual, may also be a tempting source of information in making decisions about credit, insurance, and employment. [...] The concerns about behavioral advertising practices are heightened because of the increasingly sensitive nature of the information that consumers are providing online in order to take advantage of new services and applications. Two data types of particular concern are health information and location information.

The use of ISP data for behavioral advertising is one area that requires close scrutiny from lawmakers. The interception and sharing of Internet traffic content for behavioral advertising defies reasonable user expectations, can be disruptive to Internet and Web functionality, and may run afoul of communications privacy laws.

Papers reported widely this week on a federal judge's decision ordering Google (owner of Youtube) to give the TV network Viacom "its records of which users watched which videos on YouTube, the Web’s largest video site by far." Google Told to Turn Over User Data of YouTube by Miguel Helft in the New York Times, Anick Jesdanun in the Associated Press, and Slashdot. In the case, Viacom is asserting broad rights to protect its copyrighted broadcast materials that may have been posted as clips on Youtube. While both companies claimed they would devise ways to anonymize data and protect consumer privacy, the order raises a variety of questions for consumer and privacy advocates and civil libertarians, not the least of which, to me, is the overarching question: have the courts and Congress gone too far in protecting the rights of intellectual property holders without considering those of consumers?

Among the questions raised in the Times' and other stories:

"Users should have the right [under Bork law] to challenge and contest the production of this deeply private information," said Kurt Opsahl, senior staff lawyer at the Electronic Frontier Foundation, an online civil liberties group."

Interestingly, Google has rejected demands by privacy groups for more stringent protections for I.P. address records, saying that in most cases the addresses cannot be used to identify users.

Both companies have argued that I.P. addresses alone cannot be used to unmask the identities of individuals with certainty. But in many cases, technology experts and others have been able to link I.P. addresses to individuals using other records of their online activities.[...] Mr. Opsahl also said that even records that did not include a user’s login name and I.P. address might be able to be associated with specific people. In 2006, after AOL released for research purposes the search records of thousands of anonymous users, reporters from The New York Times were able to track down one person by analyzing her search queries. Mr. Opsahl said anonymous viewing habits may similarly yield clues about the identity of viewers.

Update: This Center for Digital Democracy blog by Jeff Chester discusses other undiscussed issues in the Google/Viacom story. At Google,

"They now call YouTube a "next-generation advertising platform," something we think reflects how they really view the service. Google is pitching the branding and sellling of YouTube to advertisers. Google is now tracking YouTube views as it promotes to advertisers a scheme to take advantage of the "viral" marketing capabilities of YouTube."

Also, this Huffington Post blog entitled A few Important Stories That Are Not News (in the US) by Jamie Love of Knowledge Ecology International discusses some international intellectual property issues of note.

"ACTA: Japan, the US and the European Union are holding secret negotiations on a new intellectual property right enforcement treaty, misleadingly named the Anti-Counterfeiting Trade Agreement. This negotiation is making headlines in Canada and is reported in Europe, but not by the US newspapers and wire services."

The successful band Nine Inch Nails has released its newest album The Slip for free online. Two other things are very interesting.

From the website download page: the slip is licensed under a creative commons attribution non-commercial share alike license,

we encourage you to
remix it, share it with your friends,
post it on your blog, play it on your podcast, give it to strangers, etc.

Jeff Leeds of the New York Times had a story yesterday:

In a post on the band's Web site, www.nin.com, the band’s leader, Trent Reznor, said, "Thank you for your continued and loyal support over the years -- this one's on me."[...] Mr. Reznor’s new offer could serve as another test of how the easy availability of free music online affects subsequent CD sales and other money-making opportunities.

Our colleague Jeff Chester of the Center for Digital Democracy is on a panel today at the FTC's Town Hall-- Beyond Voice: Mapping the Mobile Marketplace. As noted in today's Media Post (subs. req'd):

Two leading advocacy groups intend to file a complaint with the Federal Trade Commission about mobile marketing, Jeff Chester, founder and executive director of the Center for Digital Democracy, will announce today. "We're filing a complaint to force the FTC to take a proactive stance," Chester said. Mobile ad companies "incorporate the same problematic business practices that we witnessed with PC-based broadband marketing, including behavioral targeting and profiling techniques--except that this time they know your location," he said.

PIRG studies have shown that the average cost of college textbooks per year is now $900. That's on top of rising tuition and fee costs. That Book Costs How Much? is the title of an editorial in today's New York Times. The editorial supports our Student PIRGs Campaign to Maketextbooksaffordable.org. We are working on college campuses to urge faculty to use Open Educational Resources, such as web-based non-copyrighted books. We are working in Congress to take House-passed affordable textbook legislation over the finish line. From the New York Times:

A study being carried out by the geographer Ronald Dorn at Arizona State University suggests that students who use free online textbooks perform as well academically as students who buy expensive copies from traditional publishers. Colleges and universities should take advantage of these new developments. Cash-strapped students and their families need all the relief they can get.

Today, the Center for Digital Democracy and U.S. PIRG filed detailed comments in the FTC inquiry into behavioral marketing, intrusive search advertising business models and the future of the Internet. We note that the entire inquiry is the result of our initial 2006 petition and we pose a solution that protects privacy while encouraging commerce on the web. Here is our lede:

The commission has failed to effectively protect U.S. consumer privacy in the digital marketing era. The commission's decision to issue its proposed staff principles on the same day it approved, 4-1, Google's acquisition of behavioral marketing and online ad giant DoubleClick -- without any privacy safeguards -- is not a coincidence. The commission—frankly under both the Bush and the Clinton administrations—has been largely incapable to take a meaningful stand on data collection and interactive marketing.

Helen De Michiel of the National Alliance for Media Arts and Culture (NAMAC) has an op-ed column urging that the Next president should launch the Digital New Deal in today's San Francisco Chronicle. She calls for harnessing the digital skills of youth in a national service program:

The talents and organizing skills of the millennial generation, whose numbers now exceed their Baby Boomer parents, can be harnessed to connect citizens across online communities and amplify America's independent media voices and visions globally. As a benefit, these Digital New Deal-makers will earn a living wage, be able to retire college debt and develop a lifelong commitment to the public good.

Yesterday Microsoft put big money into a $44 billion bid for Yahoo, in an acknowledgment of the competitive threat to its longtime computer hegemony posed by the Googleplex. While Microsoft had stayed on top largely due to clever marketing of what most consider average products bolstered by a variety of controversial and even anti-competitive business practices, it had never figured out the Internet. No problem, they'll buy part of it. A big chunk, as Steve Lohr explains in the New York Times story Yahoo Offer Is Strategy Shift for Microsoft. The deal at $31 per share is 62% above Yahoo's current price of around $19.

Our colleagues Jeff Chester of the Center for Digital Democracy and Professor Joe Turow of the University of Pennsylvania's Annandale School for Communication have issued strong statements. Here's Professor Turow's statement in its entirety:

"Microsoft's decision to buy Yahoo! is a direct result of the decision by the FTC to allow Google to purchase DoubleClick. It is further evidence that despite the appearance of unlimited choice in the new media environment, people's activities will be tracked and shaped by a very small number of companies who care far more about surveillance and targeted advertising than the public interest. The federal government, which should have been the guardian of the public interest, has dropped the ball."

In November 2006, the Center for Digital Democracy and the U.S. Public Interest Research Group petitioned the FTC to open up an antitrust investigation into the growing consolidation of the online ad business. We asked the FTC to impose competition safeguards in the Google/DoubleClick deal. The FTC failed to do both and has now placed consumers and competitors at risk.

Over at the Credit Slips blog, Adam Levitin has a detailed piece commenting on yesterday's Wall Street Journal story by Eleanor Laise:

Treasury Plans Social Security Debit Card. Adam explains the issues involved in Social Security's move to pre-paid debit cards instead of checks for unbanked consumers:

This is significant for two reasons. First, it redistributes the costs of Social Security payments among the federal government, social security recipients, merchants, and banks. Second, it represents the federal government's most major outsourcing of payments and creates a potential benefits provision monopoly.[...]While the prepaid Social Security debit cards are more secure than checks, and help unbanked Social Security recipients avoid check-cashing fees, they have costs of their own for Social Security recipients.

As more and more transactions are now plastic, we need to make all plastic card rights equal to credit card rights.

More resources: Gail Hillebrand explained pre-paid debit card legal issues in her Consumers Union blog entry last month. Here is our debit card fact sheet. Finally, here is an AP story Social Security Plans To Offer Debit Cards by Marty Crutsinger via the Washington Post.

The story Web Playgrounds of the Very Young by Brooks Barnes in today's New York Times describes the way that the Web 2.0 interactive social networking version of the Internet has become a newer, more powerful version of the old Saturday morning cartoons for powerful media companies to adapt and indoctrinate kids into commercial culture:

Media conglomerates in particular think these sites -- part online role-playing game and part social scene -- can deliver quick growth, help keep movie franchises alive and instill brand loyalty in a generation of new customers.[...]"Get ready for total inundation," said Debra Aho Williamson, an analyst at the research firm eMarketer, who estimates that 20 million children will be members of a virtual world by 2011, up from 8.2 million today.

This summer, social scientist Kathryn Montgomery, Ph.D., of American University, published perhaps the leading book on the digital commercialization of youth: Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet. Here's an excerpt:

The driving force behind this exploding media culture is the exponential rise in children's spending power during the past several decades, prompted in part by the very changes in family structure that are confounding the role of parents. Never before have children and youth played such a powerful role in the marketplace. The Internet emerged as a new mass medium in the midst of an already highly commercialized children's culture. An enormous advertising and market-research industry was ready and waiting to adapt its strategies to the Digital Age. With the promise of e-commerce profits, "Echo Boomers," "the New Millennials," and "Generation Y" became prized consumers in the growing new economy.

In a story today -- In the Fight Over Piracy, a Rare Stand for Privacy -- by Adam Liptak, the New York Times reports on efforts by Oregon Attorney General Hardy Myers to challenge the bludgeoning legal tactics used by the Recording Industry Association of America in its lawsuits against illegal music file downloading. Essentially, RIAA has insisted that Internet Service Providers (ISPs), including universities, act as its agents and give up information on their subscribers, including students, or pay damages themselves. Now, on behalf of the University of Oregon, Myers is challenging whether the investigative demands and other tactics used are legal under Oregon privacy and licensing laws. From the NY Times:

In the past four years, record companies have sued tens of thousands of people for violating the copyright laws by sharing music on the Internet. The people it sues tend to settle, paying the industry a few thousand dollars rather than risking a potentially ruinous judgment by fighting in court.[...]"Certainly it is appropriate for victims of copyright infringement to lawfully pursue statutory remedies," Mr. Myers wrote last month. "However, that pursuit must be tempered by basic notions of privacy and due process."

The FTC has voted 4-1 not to block the Google-DoubleClick merger on competition grounds, denying a petition from U.S. PIRG, the Center for Digital Democracy and EPIC. Concurrently, the FTC staff have issued a call for comments on a proposed set of "possible self-regulatory principles" on behavioral advertising. In our view, this merger's tremendous transformative impact on online markets and the well-evidenced privacy harms that the Google-DoubleClick combination create should have resulted, at a minimum, in conditions if not denial. We're also disappointed that the full FTC didn't understand, as dissenting Commissioner Pamela Jones Harbour did, that this merger has numerous anti-competitive network effects. We'll read the proposed privacy rules more closely before we comment further. Here is an excerpt from our Center for Digital Democracy colleague Jeff Chester's statement:

By permitting Google to combine
the personal details, gleaned from our searches online and YouTube downloads, with the vast repository of information collected by DoubleClick, the FTC has sanctioned the creation of a new digital data colossus. The FTC is supposed to protect the privacy of Americans in the digital age. The excuse offered by the majority of the commission --that consumer privacy can't be addressed by current antitrust law--reveals a lack of leadership and determination to protect U.S. consumers. It's clear that this merger--and the ones that follow--will be about companies creating the twenty-first-century's equivalent of railroad, steel, and oil monopolies in the past. The FTC was created to protect Americans from the dangers of such monopolies, something the agency failed to do today.

From Louise Story's New York Times story F.T.C. Member Vows Tighter Controls of Online Ads on yesterday's first day of a 2-day FTC Town Hall on Internet advertising:

Jon Leibowitz, the commissioner, said he was concerned about ads being shown to children online and about the tactics advertisers are using to collect data about people. "When you're surfing the Internet, you never know who is peering over your shoulder or how many marketers are watching," he said.

Another consumer advocate said that Web sites are asking visitors to provide excessive amounts of information, putting them in uncomfortable situations. Amina Fazlullah, a lawyer at the U. S. Public Interest Research Group, compared shopping online to visiting a used-car dealership. Online advertisers, she said, ask the kinds of questions about people's buying power and interests that they would probably choose not to tell a used car dealer, for instance. "In the brick and mortar world, if you're asked for information, you can say 'no,'" she said.

We've joined the Center for Digital Democracy in a supplement filed today at the FTC to our November 2006 complaint on Internet privacy and behavioral targeting. Here is the news release. Excerpt from the release:

In connection with today's FTC Town Hall meeting, "Ehavioral Advertising: Tracking, Targeting, and Technology," the two groups filed a 74-page supplemental statement in support of the formal complaint they filed last year which identified new technology designed to aggressively track Internet users and create data profiles used in personalized "one-to-one" targeting schemes. "Over the past 12 months, new tracking and targeting technologies have escalated the attack on personal privacy online. As our report documents, online marketers are creating digital dossiers on individual consumers ('behavioral profiling'), so they can be tracked when surfing the Web, watching a broadband video, or using their mobile phone," explained Jeff Chester, executive director of the CDD.

"The new business models of the Internet and mobile commerce can stimulate the economy and offer consumers choices," observed Ed Mierzwinski, Consumer Program Director of U.S. PIRG, "but unless the FTC steps in now and sets some basic rules for privacy protection, the costs to consumers posed by so-called behavioral targeting, the manipulation of both surfing and price choices, and the 24/7 corporate surveillance and dossier-building will easily outweigh any supposed benefits to consumers."

Today, both U.S. PIRG staff attorney Amina Fazlullah and The Center for Digital Democracy's Jeff Chester are featured panelists at the opening day of the FTC's 2-day Town Hall on Behavioral Targeting and Internet Advertising. Watch this space. At 9 am we will post the latest update to our fall 2006 CDD/U.S. PIRG complaint to the FTC outlining the scope of threats to privacy and consumer well-being posed by the Internet's unchained and unregulated search/advertising business model. Many trace the origins of this town hall to the issues we raised one year ago.

Wal-Mart Watch has a post by Alex Goldschmidt that the CPSC has charged that Wal-Mart withheld recall information (score one for the CPSC!). Meanwhile, over at Consumer Law and Policy blog, Steve Gardner's post The Doctrine of Unintended Consequences finds that the fast food industry should have been more careful about what it wished for when it sued to overturn New York City's food menu labeling law:

The court thus provided a road map for cities and states to draft menu labeling laws that don't conflict with federal law. In other words, the decision gave cities and states a green light to make nutrition information mandatory at restaurants.

Meanwhile, over at Credit Slips, the blog about bankruptcy and consumer credit issues, Katie Porter has a withering critique -- Reporting on the "Mortgage Meltdown" -- of a recent Wall Street Journal article and an editorial that both get it wrong on bankruptcy facts. Bookmark these consumer blogs.

I get offered a receipt each morning when I pay cash to buy my cup of coffee, where a mistake is meaningless and I certainly cannot deduct the cost of the coffee on my taxes, or get reimbursed by PIRG, as far as I know.

But do I get a receipt when I vote, where mistakes matter to democracy? Each year, poll workers jokingly give me a "I voted" sticker when I ask, but no real receipt. But worse, many voting machines don't even keep a printed internal "paper trail" receipt for audit purposes. No, not with today's new and "improved" touch-screen voting machines. You can watch U.S. PIRG democracy advocate Gary Kalman (pictured) and other experts in a Voice of America video talking about the need for paper trails in electronic voting machines. Excerpt from commentary by VOA's Jeffrey Young:

The credibility of a democratically-elected government begins with balloting the public believes to be fair and accurately counted. And as the technology of voting advances, election officials have to take new steps to ensure accuracy, and with it, credibility.[...]Unfortunately, many of the electronic voting machines now in use do not create receipts. So, states and [smaller subdivisions called] counties would have to purchase many millions of dollars worth of new equipment to have this capability. But ultimately, what is at stake is the credibility of the election system in a democratic society.

You can always find a few interesting items in the New York Times to blog about. From Monday's paper:

Home buyers in predominantly black and Hispanic neighborhoods in New York City were more likely to get their mortgages last year from a subprime lender than home buyers in white neighborhoods with similar income levels, according to a new analysis of home loan data by researchers at New York University.

"There's no question that if you live in a predominantly African-American and Latino neighborhood you're going to be paying more for your mortgage," said Sarah Ludwig, executive director of the nonprofit [Neighborhood Economic Development] Advocacy Project, which is based in New York.

NYPIRG has launched a new website called
cyberstreetsmart.org. Check it out:

Many of us are so dependent on the Internet and wireless gadgets that we can barely shop, socialize or do business without them. While taking care of business online is convenient, if you are not careful it can leave you exposed to con artists and thieves. CyberStreetSmart.org can help you avoid online scams and frauds, become a smart online shopper, recognize fraudulent emails, protect your identity and steer clear of predators who stalk networking and dating sites.

Check out Greg Beck's post Video Professor sues anonymous griping posters, demands their identities over at the Consumer Law and Policy blog. The post concerns a lawsuit by an infomercial king known as the Video Professor challenging certain consumer complaint websites ranking his products poorly. The sites also allow consumers to post ratings anonymously.

The Internet has become the preeminent forum for consumers to share information about products and services online. Courts have recognized that the First Amendment protects the right to post criticism anonymously, noting the risk that critical opinions would be chilled if the identity of anonymous critics could too easily be revealed. Indeed, Video Professor's own website advises consumers to search for customer reviews online.

Later that same day-- updated to add these two hearing and testimony links. (1) Amina Fazlullah of U.S. PIRG's testimony; (2) link to the full hearing including all witness testimony. Other witnesses included FCC Commissioner Jonathan Adelstein and an AARP representative.

U.S. PIRG staff attorney and telecom expert Amina Fazlullah testifies this morning before the U.S. Senate Special Committee on Aging at a hearing Preparing For The Digital Television Transition: Will Seniors Be Left In The Dark?. The hearing will be webcast beginning at 10:30 AM Eastern. Here is an excerpt from Amina's testimony, which will be posted at the committee site later this morning:

It's been nearly two years since Congress established the official transition date from analog T.V. broadcasting to digital, yet virtually no U.S. consumer knows what will happen on February 17, 2009. On that date, television broadcasters will switch from analog to digital signals. The transition offers the country the return of valuable, "beach front property" spectrum that can be used to enhance emergency communications, spur innovation and improve broadband connectivity.

One other thing will happen on February 17, 2009. Every consumer who watches over-the-air TV with an analog set will have their set go dark. Including in the estimated 22 million consumers in this category are 8 million households with at least one member older than 50.

Reuters and Fox are reporting in the story Sprint Hangs Up on High-Maintenance Customers that Sprint -- a cellphone company -- is canceling customers who call customer service too much. The company claims that the customers were calling "hundreds" of time a month on issues it felt were "resolved." Two things:

What with 10 days in Europe and all, I am behind on checking out the consumer blogs. So, here are a few excellent posts from the last few weeks: Over at Credit Slips, the consumer credit and bankruptcy professor blog:

In the paper, I build off their ideas to develop a proposal for "self-directed credit cards," which would allow consumers to pre-commit to set levels of credit-card usage and avoid the temptation to spend or borrow more in the heat of the purchasing moment.

If the average card offers is about $5,000 in pre-approved credit, that about $365,000 in offers for every American household--or about $1000 a day, every day of the year. By comparison, median household income is about $46,000, or about $127 a day. It wouldn't be unreasonable to speculate that many families are offered about seven times their annual incomes in credit card debt.

And, over at his Digital Destiny blog, Jeff Chester has some prolific and thoughtful posts:

Software used on the Internet has enabled the development of reputational rating systems based on feedback: users of sites can see what their "friends" or "similar users" are buying at Amazon and can read "ranked" reviews (How many of you found that helpful?) at many sites, can rate (or flame) comment posters at a variety of sites, and importantly, can rate and rank the sellers at either small businesses or big auction sites including EBay. This ranking has been important in increasing consumer confidence about doing business with sellers they know little, or nothing, about.

In today's Washington Post, in his story The Ol' Bait and Click, Alan Sipress reports that not only are some authors using fake "sock-puppet" identities to pump up their own books, but worse, that some EBay sellers are actually very patient scammers who may spend months selling cheap products legitimately to build up their reputation ratings. Then, they start "selling" big-ticket items that they never ship to the customer. It's a variant as old as "The Big Con" pulled off in the Paul Newman-Robert Redford classic "The Sting." Sipress reports:

John Morgan, a business professor at the University of California at Berkeley, said his research found that 526 eBay sellers posted more than 6,500 listings on the site during the second half of 2005 for low-priced or seemingly valueless items in an apparent bid to inflate their feedback reputations.

Brooklyn Law professor Wendy Seltzer is blogging her interactions (main blog page and latest post in the saga) with Youtube after it deleted a snippet of the Super Bowl broadcast she'd posted, and sent her a so-called Digital Millennium Copyright Act (DMCA) "takedown" notice:

That didn't take long. On Feb. 8, I posted to YouTube a clip taken from the Super Bowl: not the football, but the copyright warning the NFL stuck into the middle of it, wherein they tell you it's forbidden even to share "accounts of the game" without the NFL's consent. Their copyright bot didn't seem to see the fair use in my educational excerpt, so YouTube just sent me their boilerplate takedown. Time to break out that DMCA counter-notification.

Personally, as a big fan (previous blog on the documentary Shut Up and Sing), I was excited to see the Dixie Chicks sweep five Grammy categories this year, including the trifecta: album, record and song of the year. And, as opponents of media consolidation and its negative impact on the diversity of both music and speech -- we at the state PIRGs were pleased as well. As the New York Times editorialized today in The Courage of Others' Convictions:

The awards -- including for the trio's fittingly titled album "Taking the Long Way" and the song "Not Ready to Make Nice" -- ended a desolate period in which their music was boycotted and banned by country music stations, their CDs were burned and smashed, and group members' lives were threatened.

Was it mere coincidence that at the very same time these big media conglomerates were vilifying the Chicks and/or giving the administration a pass on its Iraq policy, they were also intensely lobbying the administration to free them from the media ownership limits they loathe? One reason these limits are in place is to make sure that a wide diversity of viewpoints and voices have access to our nation's publicly-owned broadcast airwaves. Having diverse viewpoints and voices could provide a necessary counterweight to the Big Media mischief that victimized the Chicks -- and the American public -- and turned a MSM {Main Stream Media] that is supposed to be a watch dog on our government into its lap dog.

Good news! Steve Jobs, whose own Apple iPods and soon-to-be iPhones are laden with intrusive copy protection (Digital Rights Management) schemes, has "jolted" the music industry by calling for an end to copy protection (New York Times: Jobs Calls for End to Music Copy Protection. It's a great idea and his loud voice will help. By the way, I am still waiting for my free download from Sony music, promised as settlement compensation in a class-action lawsuit penalizing Sony for its brazen installation of a digital timebomb into my computer (and a few million others) that damaged my peaceful enjoyment of a CD I'd purchased legally and, worse, posed extreme dangers to my computer to boot. All I'd wanted to do was play a CD on my computer and Sony said: "We set the terms, you have no rights." (More on Apple "iHandcuffs," DRM issues and my fight with mega-conglomerate Sony is here.)

A few items from the "You can run, but you can't hide from advertising" files:

If you go to, or more importantly, watch a college basketball game on TV, watch for the State Farm "Basket Profile" program's garish signs cluttering the backboard stanchions. In the New York Times story State Farm Is There, Right by the Backboard, columnist Stuart Elliott captures the moment concisely in his concluding rejoinder to a ludicrous quote from arena marketing consultant David Bialek:

Bialek: "It's just part of the backdrop, as much a part of the game as students wearing sweatshirts with team logos."
Elliott: Hmmm. Now there is an idea: paying students to wear sweatshirts with advertisers' logos.

Meanwhile, in the Wall Street Journal, Emily Steel reports in Grabbing Older Consumers via Cellphone (pd. sub. req'd) that Redbook is targeting 30-something women with cellphone text-message ads. So-called mobile-marketing is the next big thing (after college hoops backboard stanchions, of course); marketers have so far failed at any demographic except teens and college students. From the WSJ:

Forrester Research estimates that consumers between ages 12 and 21 are more than twice as likely as the average adult mobile user to send messages or browse the Internet on their cellphones. Just 33% of mobile-phone users 45 to 54 years old use any form as messaging, compared with 76% of mobile-phone users 18 to 24 years old, the firm estimates. To expand the mobile-ad market, marketers need to teach older consumers to use their mobile phones for more than just talking, ad executives say. That will help consumers to start using their phone "for more than just voice, but this retail and purchasing experience,"

The Center for Responsible Lending has published a critique of major analytical flaws in a new working paper Defining and Detecting Predatory Lending on payday loans by Federal Reserve economist Donald P. Morgan of the Federal Reserve Bank of New York. The Fed paper comes to the preposterous conclusion that while payday lending is "expensive," it is not "welfare-reducing" and therefore not "predatory." I had a premonition that this paper would contain such out-of-step findings when the first reference I saw to it was a laudatory pre-publication tease, with excerpts, on a rent-to-own industry website. From the Center for Responsible Lending critique:

Morgan's findings are flawed for three key reasons:

The analysis contains fundamental errors in its characterization of which states allowed payday lending. Example: Morgan identifies North Carolina--which had at least 500 stores during the analysis period--as a non-payday lending state.

Key definitions utilized by the research are overly narrow or are contradicted by available data. Example: Morgan, in part, defines vulnerable households as those with unpredictable future income. However, an industry survey notes that households are nearly three times likely to borrower payday loans because of unexpected expenses.

Morgan's finding that unlimited payday lending leads to lower prices is flatly contradicted by other research. Example: Researchers from the FDIC, using a national, random sample, found that most payday companies charge the maximum rate permitted by state law.

By far, one of the clunkiest, over-priced 19th-century interfaces to the digital world has been the device that sits on top of TV sets known as the set-top box. Why care? If you want your HDTV, and your TiVO, your digital cable and all your toys to play well together, we need the better devices that competition and some long-delayed FCC action on its so-called CableCard rule can force. The cable guys have had a long-standing monopoly (at a hefty monthly fee, don't forget) and they've offered a Hobson's choice. Now, as the New York Times reports from the Consumer Electronic Show in Las Vegas, Atop TV Sets, Basic Black Boxes Face Competition:

At the Consumer Electronics Show in Las Vegas last week, makers of set-top boxes exhibited devices with a host of new features: more hard-disk space for storing digitally recorded TV shows, easier-to-navigate program guides, connections to Web sites, DVD burners and video games. The box manufacturers and the cable operators like Comcast, Cox and Time Warner Cable that they sell to, have an age-old motivation for improving their products: fear.

Although the geek-meter on most of the links in this post is spiking high in the red zone, here's a succinct summary from Karen Sum-Ping:

Consumers should care about CableCARD because it is what allows digital device manufacturers to compete against that digital cable set-top box and provide better features and prices. Previously, a cable subscriber had little to no choice but to lease a digital set-top box from his particular cable provider.

Check out the column Gadgets as Tyrants in today's New York Times. It's by BoingBoing's Xing Jardin and describes how the electronic toys and systems you buy increasingly impose severe digital rights management (DRM) restrictions that limit your use and enjoyment. These restrictions are allegedly to prevent digital piracy but, when a CD or music download or game or movie will only play on one brand of machine-- anyone can see the real goal is locking up market share, diminishing competition and limiting consumer choice. From Jardin:

One electronics show attendee told me his 12-year-old recently asked him, "Why do I have to buy my favorite game five times?" Because the company that made the game wants to profit from each device the user plays it on: Wii, Xbox, PlayStation, Game Boy or phone.

Meanwhile, in my own continuing saga as an unwitting lab rat (more, including info on whether you are a victim) in Sony's treacherous DRM debacle, I've received one, but not both, of the spyware/virus hole-free album downloads I was promised (as part of a massive settlement of consumer claims) after I spent hours figuring out to get my computer to expunge the dangerous DRM system Sony loaded without my permission when I merely wanted to listen to a purchased CD. More news as we get it. For more on DRM, including the Microsoft Vista issues, see Defective by Design.

The New York Times understands that our real-world democracy depends on Internet freedom, known technically as net neutrality. From its lead editorial Wednesday Protecting Internet Democracy:

Internet users now get access to any Web site on an equal basis. Foreign and domestic sites, big corporate home pages and little-guy blogs all show up on a user's screen in the same way when their addresses are typed into a browser. Anyone who puts up a Web page can broadcast it to the world...[MORE]

Cable and telephone companies are talking, however, about creating a two-tiered Internet with a fast lane and a slow lane...Creating these sorts of tiers would destroy the democratic quality of the Internet. Big, wealthy voices would start to overpower the smaller, poorer ones...A n