June 18, 2010

Clark Rector Jr., Executive Vice President - Government Affairs
Dunn Anderson-Sweet, Federation Intern

• Expanded FTC Rulemaking Before Conference Committee
• AAF Files First Amendment Brief
• FCC Votes to Move Toward Reclassifying Broadband
• Smaller Websites Concerned with Draft Privacy Measure
• Public Hearing on Comcast-NBC Merger
• House Energy and Commerce Leaders on Google

Expanded FTC Rulemaking Before Conference Committee

The House and Senate conference committee considering financial regulatory reform will consider the issue of expanding rulemaking authority for the Federal Trade Commission. If enacted, the changes would be one of the greatest expansions of the agency’s authority in decades. The expanded authority is in the House version of the legislation, but not the Senate’s. AAF believes the changes are ill-advised, and of such magnitude and controversy that they should not be included as an “add-on” to the unrelated financial reforms. In addition to meeting with representatives of members of the conference committee and other members of the House and Senate, AAF has joined in a letter to the conferees stating our concerns as well as an advertisement run in the Capitol Hill publications Roll Call, The Hill and CQ Today.
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AAF Files First Amendment Brief

The AAF has joined with other allied advertising associations to submit an amicus brief to the U.S. Court of Appeals for the Sixth Circuit in the matter of Commonwealth Brands v. FDA. The brief is in support of a First Amendment challenge to the Food and Drug Administration’s restrictions on truthful tobacco advertising and marketing. This is a very significant case with free speech implications that could affect many products far beyond tobacco. Many of the original FDA restrictions have already been struck down by a lower court. At issue is the use of colors in advertising and a requirement mandating the top 50% of the front and back of cigarette packaging and 30% of smokeless tobacco packaging be used for warning statements. The lower court let stand a ban on tobacco brand name sponsorships of athletic and other events as well as a ban on brand names on merchandise such as caps, t-shirts, sporting goods, etc. The court also let stand a provision allowing federal agencies and state and local governments to enact more stringent regulations, The brief can be found here.
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FCC Votes to Move Toward Reclassifying Broadband

The Federal Communications Commission has voted 3-2 to begin public comment on a plan that would give it the authority to regulate the transmission of broadband Internet services. The proposal would designate broadband as a telecommunications service rather than its current designation as a more lightly regulated information service. FCC Chairman Julius Genochowski has said the Commission is considering three options – maintaining the regulatory status quo, imposing a full telecommunications regulatory regime, and a “third way” approach of limited regulation. The action comes after a recent court decision ruling that the Commission does not currently have the authority to move forward with regulating broadband.
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Smaller Websites Concerned with Draft Privacy Measure

Many small websites have expressed concern about the draft privacy legislation released by Reps. Rick Boucher, D-Va. and Cliff Stearns, R-Fla. Rep. Boucher has expressed a preference for a system that would have website users giving consent before any personal information is shared with third party companies, such as ad servers. Many small site operators rely solely on revenue generated from selling this information, without which they could no longer afford to provide content. Some of those companies have expressed concern that if such a requirement becomes law they may be forced to relocate to outside the country to locations where such restrictions do not exist in order to continue operations.
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Public Hearing on Comcast-NBC Merger

The FCC will host a public forum on July 13 in Chicago to consider the $30 billion takeover bid by Comcast for NBC Universal. Both companies have a strong presence in Chicago, and the Commission feels that hosting the forum there will promote a thorough discussion.
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House Energy and Commerce Leaders on Google

Google has responded to a letter from leaders of the House Energy and Commerce Committee regarding the privacy breach in its Wi-Fi data collection practices. Google admitted there was an error in the software code that enabled its vehicles to collect sensitive material from unsecure Wi-Fi networks. Google is unclear as to the extent of information collected, but assured the Committee that only two individuals in the company have seen the data. The company has suspended all Wi-Fi collection practices and is postponing destroying information already collected until current legal matters are resolved.
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