October 25, 1995
Web posted at: 1:25 a.m. EDT
Transcript from "CNN Today"
BOBBIE BATTISTA, anchor: In 1981 there were 213 computers registered as part of the Internet. By 1993, that number had surpassed 1.5 million. And with so many people, electronic litter is scattered around the Internet and an alarming amount of information is there for the taking -- your sexual orientation, your bank balance, Social Security number, political leanings -- it's all there for the world to see and businesses to read and sell. The Commerce Department is calling on the computer industry to develop ways to protect your privacy, but the industry is balking at any hint of regulation and promises it will come up with a private protection plan on its own -- for a price. Joining us now is Evan Hendricks, publisher of Privacy Times, a bi-weekly newsletter and author of the book, "Your Right to Privacy." Also, Robert Smith Jr., executive director of the Interactive Services Association, an industry advocacy group. Thank you, gentlemen.
I think the thing that scares me and a lot of other people out there is that my name, my social security, bank accounts, whatever, are just floating around being swapped or sold. I don't know where they are or who has possession of them, and I really don't have any recourse if I wanted it to be private. Is that accurate and is it fair? Mr. Hendricks?
EVAN HENDRICKS, Privacy Times: Well that's exactly right Bobbie, the problem is under our current system of law, or lack of law, when people collect your name, they own your name and they're pretty much free to do with it whatever they please. (119K AIFF sound or 119K WAV sound) And so you lack a lot of control over the information. Sometimes you don't even know who's collecting information about you, and the kind of systems they're talking about want to collect information and are designed to do so on your home shopping, what you view, what your preferences are. A whole host of personal information that you'll have to surrender control over if they have their way.
BATTISTA: And Mr. Smith, do you agree to that existing law that what we do have right now, do not apply uniformly to all the information sources out there whether it's telephone, video or whatever?
ROBERT SMITH JR., Interactive Services Association: Well my position on that is even if you have a uniform law that Congress and the federal government passed, you're still going to have a problem in the privacy area in the fact that when you're dealing with the Internet. It's a worldwide medium, (170K AIFF sound or 170K WAV sound) an environment and a good number of these services, the millions of computers that are connected to the Internet, are accessible from other parts of the world. Now there is ... I here in Washington, D.C., can access a computer system in Norway, Russia, France, Japan, and what have you. So that the issue with privacy, there's certainly the danger for abuse; it has occurred, no one's disputing that. But there is the recognition by a good segment of the industry that without ensuring privacy of their users, they're going to turn the user community off of these systems and it's going to be good business practice to have sound privacy rules that govern their activities.
BATTISTA: OK, so we agree there is a problem. Really, the debate is the solution to the problem, whether it should be government-regulated ... whether there should be federal laws, whether or not the industry is capable of policing itself.
HENDRICKS : Right, what we really need, Bobbie, is a baseline of legal protection so we can at least give choice a chance and people will have control over what information's about them. What the companies want to be able to do is collect all that information about what you're doing over the information superhighway and then be able to sell it. They'll be sitting on a gold mine. That information is worth lots of money and right now, with no laws, they have a free ride on our data. But what the solutions really aren't that complicated. Conservatives talk about property rights, liberals like to talk about human rights, and the solution ... if for to protect the human right of privacy, we should create some sort of property right or legal interest so people will always ... companies will always have to get permission before they use information on people for other purposes than what it was collected for. And what I don't like about the report yesterday is after 15 years of showing for the most part that voluntary compliance has failed, the government ... the Clinton administration ... has come out waffling and saying that we should try it again. That's basically inexcusable. It's time to dust off the recommendations from 20 years ago, the commission Sam Ervin recommended and put them into law.
BATTISTA: Mr. Smith, you don't necessarily agree with that, correct?
SMITH: Well, I think I'd like to put in a little context. Number one, the on-line Internet world as we know it today was not in existence 15 years ago. While it's true it came into fruition in the early to mid-80s, the business as we know it today involving millions of people, tens of millions of people and millions of computer systems, is only a couple of years experienced and from an industry perspective, we're not against laws and regulations per se, but we feel we need to have a better understanding of this medium and give the industry the opportunities to come up with solutions before Congress or government comes charging into this. In fact, our own industry took a first initial step in privacy by putting together some guidelines with regarding of renting of mailing lists to subscribers. It's a first step, it's not the only step and you're going to be seeing other efforts in the coming months.
BATTISTA: Mr. Hendricks, though, if companies do police themselves, isn't there an economic incentive there for businesses to do that because I for one would pay for that privacy; I would probably align myself with a company that offered that.
HENDRICKS : Well, it's a difficult situation when people don't know what's going on, so it's simpler and more straight-forward to give people the kind of rights over their information that will give them a choice. What you hear industry saying is what I've heard them saying for 15 years, and it's basically smoke screen, so nothing happens to give rights to individuals. When they collect this information, they are going to be sitting on a gold mine, and then expecting them not to use it for other purposes and to make money, often to the disadvantage of individuals, is pretty much like trying to roll a lamb chop past a wolf.
BATTISTA: Let's talk about encryption software and let me explain that just a minute for our viewers, because it would seem to be a good idea, but there are some downsides to it. But it basically scrambles or codes electronic messages and files so that only the intended recipient can decipher it. It also allows digital verification of the sender's identity on the Internet, which is anonymous.
HENDRICKS : Encryption is a major part of the solution to this problem because you know, the president always had a scrambler when he's talking on the phone on Air Force One. Encryption is now going to become affordable so people can scramble their computer communications and their phone conversations and beyond that, Bobbie, they're developing plastic cards that allow you to purchase things and not leave a record the way a traditional credit card does. So certainly viewers should know that as these technologies become available the first way to protect your privacy is stop information from being collected in the first place. The reality is that information is going to be collected in certain contexts and that's where you need a baseline of legal protection so there's fair play and a chance for choice.
BATTISTA: But the government doesn't like this concept.
HENDRICKS : Well the government basically lacked the leadership, which is disappointing. Here you have a president who, not only himself but his mother, was the subject of an illegal search of State Department Records in attempt to take him out, and so you think you'd get a little more leadership on the issue, but this is what can happen to anybody. It can affect you as a consumer: Problems with inaccurate data and databases is denying insurance and employment and credit and it used to be that people were just able to build swimming pools and then they found out this was an attractive nuisance and kids would jump in and drown. Well, today's databases and the interconnection of the system of the information highway, you're really talking about the electronic equivalent of an swimming pool without any fences around it and that's why not only are people's privacy being invaded, but a lot of scam artists are exploiting personal information to commit frauds out there and that's another reason why we need protection.
BATTISTA: I -- I'm sorry, Mr. Smith --
SMITH: I was just going to say that there have been laws in a wide range of areas and laws unto themselves are never the ultimate solution and I don't think it's ever going to be the ultimate solution in this particular case. I think there's a real business incentive for companies to ... the majority of responsible companies ... to practice and to inform their consumers of their privacy practices and how, and under what conditions they might use information and to give consumers the choice of whether information about them can be collected and to do so in an open public way, such that the services that don't do that will be clearly identified and consumers can steer clear of them. So even if new regulations and laws came into place, I don't think it's ultimately going to solve it. It needs to be solved at an industry level that ensures they're widely informed of these practices to the consumer.
HENDRICKS : Well Bobbie, this industry will fail, like other industries have, to police themselves. Just this month it was revealed that somebody has developed a list of 250,000 Internet addresses showing what people what chat groups they're visiting, what Web sites. That tells a lot about people, and when they were putting this list up for sale, the broker selling it refused to disclose who was the source of this information. So somebody's already been collecting this information and putting out there and refusing to follow any sort of fair information practices and industry really hasn't done anything about that.
BATTISTA: OK, that will have to be the last word gentlemen. But we thank you, but we hope the problem is solved soon as it only obviously will grow worse as more computers come on- line. Evan Hendricks and Robert Smith, thanks very much for joining us today.
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