November 6, 2006 8:10 AM PST

FTC chief warns against 'unnecessary' Net rules

WASHINGTON--The head of the Federal Trade Commission on Monday voiced reluctance toward adopting consumer protection laws that target technological concerns du jour, saying the "collective voice" of consumers often prompts change.

Deborah Platt Majoras, the agency's Republican chairman, said she prefers relying on a combination of existing laws, vigorous competition and user pressure to address complaints about new products or potentially worrisome uses of technology.

Deborah Majoras Deborah Platt Majoras

For proof, look no further than a situation in September in which hundreds of thousands of people who use the popular social-networking site Facebook rebelled against a new feature that some charged was Big Brother-esque, Majoras said. Within days, the site's founder had quieted some of the fury by giving people the option of turning off the "minifeed," which shows people whenever someone in their network makes a change to their relationship status, favorite music or other profile information.

"On the Internet, consumers appear to reign supreme, and they can be very powerful and tough customers," Majoras told an audience of about 300 people in a morning speech here that kicked off a series of public hearings hosted by the FTC.

Dubbed "Protecting Consumers in the Next Tech-ade," the three-day event is billed by the agency as a counterpart to global consumer-protection hearings held in 1995. This week's lineup is scheduled to include panelists predicting how topics like communication, social networking, advertising, computing power and security will change over the next 10 years.

Despite the vast differences in technology use between 1995 and today, existing laws that cover "unfair and deceptive practices" have proven elastic enough in many cases for Internet Age adaptations, Majoras said in her opening remarks.

Ten years ago, "we weren't even talking about spyware as a potential problem. But when it emerged, we determined we needed no new law or regulation to begin combating the scourge," she said.

Majoras said the FTC would nonetheless "continue to vigorously enforce all the laws at our disposal," such as the Can-Spam Act of 2003, which critics charge has done little to curb the rise of unsolicited e-mail.

The FTC chief on Monday stayed away from an issue that advocates have flagged as a major consumer protection issue this year: Net neutrality, the idea that network operators such as Verizon Communications and AT&T must be prohibited from charging Internet content providers premium prices for speedier delivery.

Whether new regulations are necessary to prevent what Net neutrality proponents refer to as an Internet "fast lane" has generated a significant split. Network operators and hardware manufacturers generally reject the need for new laws, while Internet companies such as Google and Yahoo, as well as consumer groups, have been lobbying for their passage.

But Majoras said during an August speech that she didn't see the need for new regulations because there has been no demonstrated harm to consumers, that normal market forces will likely prevent any problems, and that new laws will cause more problems than they solve.

The FTC is currently undertaking a study on Net neutrality and plans to issue policy recommendations. That step was lauded by FTC Commissioner Jon Leibowitz, a Democrat, when he took the stage later Monday morning.

"Will carriers block, slow or interfere with applications?" Leibowitz asked. "If so, will consumers be told about this before they sign up? In my mind, failure to disclose these procedures would be...unfair and deceptive."

Unlike Majoras, Leibowitz said there's still room for Congress to act in at least one realm--specifically, to devise a "consensus antispyware law."

Right now, federal regulators may only require spyware purveyors found to violate consumer protection laws to hand over ill-gotten profits--as they did in a settlement announced Friday with adware manufacturer Zango. Congress needs to grant the FTC the power to levy fines on top of that, creating an added deterrent, Leibowitz said.

The "Tech-ade" hearings continue through Wednesday in George Washington University's Lisner Auditorium and via Webcast. A private session for law enforcement and government officials is slated for Thursday.

CNET News.com's Declan McCullagh contributed to this report.

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8 comments

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net neutrality is no about new regulation...
it is about putting into legislation a practice that the FCC has always done. net neutrality is about making permanent and enforcable a practice that the FCC already engages in. the FCC has always (at least until recently) favored consumer protection and free speech when it decided on matters pertaining to the internet. adding net neutrality provisions to telco reform legislation is simply making a law out of what the FCC is currently doing, so that those practices do not change with administrations.

ted stevens and his ilk are deep in the pockets of media and communications companies and would like to change that FCC practice so that telcos and cablecos can charge more money to guarantee delivery of content. this could also mean that internet service providers can degrade services like vonage so that they cannot compete with telephone services that the cable or telephone company would like to provide.
Posted by chris__anderson (23 comments )
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Myth of "Vigorous Competition"
Again and again we here the mantra of "vigorous competition" and how it will ensure consumer protection in regard to internet services. The ones mouthing this canard are willfully blind to the real facts on the ground in this country. There is far less real competition in the US compared to other industrialized countries and the fact is we pay more and get far less than most!
When one of these industry apologists is asked directly how will a Net Neutrality law will adversely affect the telecom/ cable companies the answer is that it will destroy incentive to invest and upgrade services. This is stated straight faced after they have given all manner of assurances that said companies would never abuse the consumer in the ways that a Net Neutrality law would prohibit. If you are not planning to make a life of robbery why oppose laws that criminalize it? This is the proof that these companies want to reserve the right to tilt the playing field in their direction as they see fit WITHOUT federal legislation protecting the consumer getting in their way!
Posted by zanzzz (138 comments )
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It hurts my eyes to read this!
"Will carriers block, slow or interfere with applications?" Leibowitz asked. "If so, will consumers be told about this before they sign up? In my mind, failure to disclose these procedures would be...unfair and deceptive."

Ok so all they have to do is TELL you, they are going to mess with your connection. This would maybe make sense if they dropped my DSL price to $9.99 a month. (like advertising based applications, I GET something to give something)

Unfortunately all the examples they give of the vigorous competition are simply not applicable to the current state of US broadband. So if I am stuck with <enter local ILEC here> it doesn't matter to me if they tell me or not, I still have no other real options!

And one more thing? Why do the carries complain about new laws when it comes to Net Neutrality yet, they beg and pay big bucks for them when it comes to Cable Franchise laws?
Posted by LarryLo (164 comments )
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Spending money
On the subject of spending money, it's well known that the current power players spend in the millions each year to lobby for favorable legislation. Yet they won't invest in upgrading the network because they have no incentive. I was just wondering what would be the return on investment of the companies, in a fit of enlightenment, looked past the here and now and actually reinvested some of their profits into the network. Seems they would, over the long term, make a hell of a lot more money.
Posted by 04Outlander (16 comments )
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FTC = Fox Guarding Chicken Coop
This Republican appointee is unfit for the position as she is just another another example of a fox guarding the chicken coop. Her energies are expended to further the aims of corporations largely at the expense of average consumers.
Look at the example she sites regarding "Facebook" and how tough and demanding consumers on the Internet can be. That is because consumers on the Net have millions of choices and real competition exists that benefits all. How does that compare to the stifling oligopolies that control internet access? I personally have one "choice" when it comes to internet broadband. What "vigorous competition" will give my voice and most other consumers the leverage to keep prices low, offerings attractive and compelling? The answer is NONE! That is largely due to the fact that the FTC and other government "oversite" agencies have been run by people with a greater interest in a few corporation's profit margins than with what is best for the consumer and the nation in a highly competitive world.
It's time to change these faces and it starts Nov 7 at the ballot box. Just say no to Republicans that think what's best for corporations is best for America.
Posted by zanzzz (138 comments )
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Without The PUC, Cingular Would Have Screwed Me
To put it politely, Deborah Platt-itude is drinking the Republican Kool-Aid. I bet she feeds her kids ketchup as a vegetable too. As Rush Limbaugh would say, "Let the freeeeee market take care of things." Well here is my recent story.

AT&T Cingular (Stinkular) tried to charge me for a full month's cell service after I cancelled 13 days into the new month. I talked to their service rep, and was basically told, "Screw you. We can charge you, it in the fine print". My hackles now raised, I filed a complaint with the California Public Utilties Commission. A week later I got a call from Cingular's Office of The President offering to prorate my bill for only the days of service used (which is what they should have done in the first place. Oh, and they were sorry (my ass) to lose me as a customer.

So to Deborah Platt-itude and the other Republicans, like those at FERC who let Enron scam California for bilions, I say go to hell. Your days of screwing the consumer under the guys of the free market are numbered.
Posted by CancerMan2 (74 comments )
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The "Go To" Girl For Big Business
Before joining the FTC, Ms. Platt Minoras had an esteemed career as a litigator at the law firm of Jones Day in Washington, DC. According to Jones Day's website, they are the "Second-Most Cited as Go-To Firm by 'America's Biggest Companies'". "Those polled for the study, "Who Represents America's Biggest Companies," were asked to name primary outside law firms for litigation, corporate transactions, labor and employment, and intellectual property." So we can see who buttered Ms. Minoras bread and where her allegience lies. What a phoney.
Posted by CancerMan2 (74 comments )
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FTC is a failure
When is the FTC going to start doing what it is supposed to do?

Spam is sending porn directly to millions of kids
Spam is sending fraudulent stock schemes to millions
Spam is fraud

The FTC is supposed to regulating this. The FTC is incompetent. These people need to be removed and a new FTC be formed who have a clue as to how to protect consumers.
Posted by timbach2 (1 comment )
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