California Data Bill Hits Wall

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A California bill to prevent the collection of Internet-use data from computer users has been stymied in committee in the state Assembly, and it may fall victim to intense lobbying from Microsoft Corp. and America Online Inc., according to a sponsor.

The bill, introduced by state Sen. Deborah Bowen (D-Redondo Beach), sought to expand an existing section of the state penal code that prevents distribution of information by video stores identifying consumers and the tapes they watch. Bowen sought to prevent electronic tracking of consumers as they surfed the net.

The legislator is concerned that laws that allow cable companies, for instance, to use consumers' personal information for "legitimate business purposes" are vague and, therefore, ripe for abuse. She feels that consumers should have the right to protect their accounts unless they expressly authorize their use and destination.

In addition to cable companies-or "video providers," as they are termed in the bill-the resolution targeted digital-video-recorder services, video-on-demand, direct-broadcast satellite providers and wireless video services.

Under the bill, distribution of identifying information would have been criminalized. Trackers could be convicted of misdemeanors and assessed $3,000 fines. Further, it enabled civil lawsuits by consumers whose rights were violated.

As the bill was introduced in February, interactive-TV companies such as Wink Communications Inc. said they did not object to it. Although some companies said they intended in the future to collect aggregate data for clients, such as ratings companies, that data would not identify specific consumers, they added.

The bill picked up some active supporters, including the Privacy Rights Clearinghouse, the California Public Interest Research Group (CalPIRG) and state Attorney General Bill Lockyer.

But during hearings, representatives of Microsoft, AOL, the American Electronics Association and some smaller Internet-service providers opposed the bill.

As with the cable open-access issue, opponents argued that the Internet must be allowed to mature without regulatory curbs that might stunt its growth. That's why the federal government has prevented taxes on Internet activities, they noted.

The bill passed through three Senate committees, but it withered on the Assembly side after a 3-3 vote in the Public Safety Committee. Because of the tie vote, Bowen may try to resurrect the bill before the end of the legislative session in August.

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