myself of all the tools and services available over the internet, let me say at the outset that i applaud the explosion of technological advances that has transformed forever the way we communicate and transact business. i support innovation on the web, however i cannot do so at the expense of individual privacy. given the importance of issues involved i believe it was a mistake for this bill to move through the house under the radar and without the benefit of a single hearing. but my concerns are not just about process. i believe that hr 24.71 would have unintended negative consequences for consumers and asffected businesses that will lose the confidence their subscribers with their first data or privacy breech. consumer desire to have access

to the next cool tool should not be mistaken for the voluntarily terry surrender of privacy interest. in addition to the like of thoughtful process in the house, i believe there are four substantive problems with hr 24.71, first it leaves unaddressed of who the bill applies to, which i believe creates collateral and intellectual enforcement concerns. by defining what is a video tape service provider, hr 24.71 leaves open the possibility that businesses that provide video on demand over the internet or those with dual distribution platforms like netflix can avoid or delay compliance with legitimate discovery requests.

second the debate on hr 24.71 centered on the online experiences of consumers with social media like facebook, however the by as passed applies a physical and -- applies to physical and online video taped service providers alike and disclosures are authorized to any person, not only friends on facebook. consequently a consumer's privacy information is vulnerable to release to third parties like the news reporter who published the video rental history of judge robert bork that paved the way to enactment of the video privacy bill. third, despite claims that the video privacy protection act

is outdated only a single provision of the statute was updated leaving consumer oriented provisions that should have been reviewed unalter and there was no consideration given to the fact that changes in the act will have to state laws that afford similar and sometimes broader protections to consumers. this oversight is likely to invite thorny conflict laws disputes given the borderless bound representatives of the internet. the compani -- many online have a false sense of privacy due to their lack of understanding of lengthy and complex privacy policies they are compelled to agree to in

order to use the service. as a result, online users often share a lot of personal information unknowingly and to unintended audiences. i do not believe that you kn unsuspected users should be deemed to give up their rights to a level of privacy. and my concerns are heightened more when the user is a young adult whose ability to adequa adequately assess has not matured. the internet platforms are constantly changing,. today, when online bullying of teen and young adults can lead to depression or even suicide,

and online predators can learn otherwise confidential private information about their prey, i believe the selective piece meal amendment was -- is irresponsible. as a commentator saying that movie and rating data has more information of a highly sensitive nature. it exposes the member's personal interest or struggles with various highly personal issues including sexuality, mental illness, recovery from alcoholism and victimization justice marshal wrote years ago that privacy is not a commodity possessed absolutely or not at

all. the objective is to strike an appropriate balance between meaningliful protections for consumers and promoting a healthy online economy. i do not believe that hr 24.71 has found that appropriate ball. i support a comprehensive online privacy plan that will address and mitigate the unintended consequences of third party sharing. in that regard, i believe that justice olito got it right when he said, in issues involving dramatic technological change the best solution to privacy concerns may be legislative. a legislative body is well situated to gauge changing public attitudes and draw detailed lines and to balance privacy and public safety in a comprehensive way.

this hearing is an important step toward to finding the right balance and it is more critically important because the house failed to give the matters the kind of attention they required. i thank the chairman for this opportunity and look forward to working across the capitol to move forward. thank you so much. >> thank you, representative watt and that is the purpose of this, is to give a hearing to all these matter and the issues. your complete written testimony will be made part of the record and we have -- we are fortunate to have with us chairman leahy who is the author of the original video privacy protection act and i understand that i left out allen simpson's role. >> allen was very important in that. >> okay. so i apologize for that.

good friend. today, this law is just the video privacy protection act is just one of several critical privacy laws that chairman has written and passed during his year in the senate. i turn it over to the chairman. >> i thank you, very much. it's good to see my friend congressman watt. we have worked on so many things from privacy issues to the voting rights act and i appreciate that collaboration, i should tell chairman franken and i thank him for his responsible leadership he has done on this issue of privacy. we have come about it naturally. i see a smile from a friend of mine in the audience who has probably heard this story more than once. one of the few things i have ever seen written about me in the press, and actually framed

it, was a side bar to a "new york times" profile. my wife and i live in a old house on a dirt road. and we had part of our honeymoon there nearly 50 years ago. 50 years ago this summer. and hundreds of acres of land and fields and all that had been gone over by an adjoining farmer's family since i was a teenager. saturday morning, a reporter and out of state car sees a farper sitting to porch, asks does senator leahy living up this road and he said are you a relative? he said no. and are you a friend? no. is he expecting you?

no never herd of him. we like our privacy in vermont. in the digital age, ensuring the right to privacy is critical. as our businesses collect and store and use our most sensitive personal information for their purposes not ours. whether it medical records, private financial situation permanent thought personal thoughts and feelings, i worked to ensure with ors to make sure that american's privacy is respected. we talked about the act from '88, i said it was to make us all a little freer to watch what we want without scrutiny. now, it's true that technology has changed the chairman mentioned what justice olito

said, but today the social networking and video streaming and cloud and mobile apps are the new technologies they have revolutionized the ability of american's information but they are out pacing our privacy laws. that is what we have to think about. so, i continue to push to enact the personal privacy data and security act to create a nationwide breech notification standard. want to better combat cyber crime. that is why i propose a review and update of the electronics privacy act. recently some companies that dominate various aspects of cyber space have announced that they want to simplify matters so they can more easily track

americans' activities across the board. obviously to their own financial benefit. but i worry that sometimes what is simpler for corporate purposes not better for consumers. it could be simpler for some if we had no protections. it would be simpler for some but not better for americans. and i worry about a loss of privacy because of the claimed benefit of simplicity. privacy advocate s have serious concerns and are looking for answers and information when dominate interests intice a check off to receive a new service, they may not be presenting a realistic picture to the consumers.

a one time check off means all time surrender to privacy. that does not seem like the best thing for consumers. i worry that the vast data banks makes it readily available to the government who has unfet unfeterred power to gain information. soy think we -- so i think we need reform. it good that many are here. i'm hearing from corporate america as well. but i'm hearing from privacy advocates that have expressed conditioners about the privacy concerns. the one time check off of consent to disclose and mine and sell, sell, sell and share information does not adequately protect the privacy of

consumers. the proposal on updating the law does not respect, doesn't cover streaming and cloud computing to the extent i would like. we need to more forward. comprehensive review and updating of communications and we should update the video privacy act. so i'm -- i just want to thank the chairman for doing this. i just want to stress again, this person likes his privacy. and i especially don't like it when someone says we will make life simpler if we with -- if we sell your privacy. >> thank you, mr. chairman, we will go to the second panel, thank you again representative watt, you were the first panel

evidently. you are a single person and be can a panel. so if the panel can come forward. i'd like to introduce our second panel of witnesses. david hiemann is the general council of netflix. mr. heimann has sieve e nmpn ha last decade and has seen the company grow. he was the general council of webvan an internet based grocery deliver service. bill mcgevran is a professor in university of law in minnesota. before joining the u, he was a resident fellow at harvard's

berkman internet for internet and society and a litigator in boston. professor mcgevern received his ba from nyu. finally i should add that he was a staffer for senator shumer, mark rode enburg, he chairs the american bar association committee on privacy and information protection, and has edited several privacy law textbooks prior to founding epic that is again, electric privacy information center, he was council to senator leahy where he advised the senator on the act we are considering today. he received his jd from stanford

law school. christopher wolfe is the director of the privacy and information practice here in washington. and he also the founder and cochair of the future of privacy forum. he was the editor and lead author of the practicing law institutes first treatis on privacy law and has authored many publications on privacy. he received his jd from washington and lee university and his a.d.from boden college. thank you for all being here today and we will start with mr. heiman. >> thank you for the opportunity to testify before you today to video privacy protection act. my name the david heimann. i have served as the general council of netflix since 2002.

a time when streami videing vid more the topic in a room. how far we have come in a short period of time. today's hearing is the testimony to the power innovation of our internet economy netflix was a dvd by mail service at the st t start. we saw an opportunity to use the internet to discovery movies that consumers would love and provide opportunities for distributes. the popularity of the dvd by mail service grew. but we continued to research and try new consumer offerings we were an early pioneer in the

streaming of movies over the internet and to personal computers and in 2008, we began to provide streaming video straight to the tv. millions consumers use the service on more than 700 different types of internet connect devices. including game consoles and mobile phones and televisions. we delivered more than three billion hours to those consumers. at the same time that we have seen an untick from consumers the world of social media has exploded. facebook offers tremendous opportunities for consumers and businesses. netflix believes that social media is a powerful new way for consumers to enjoy and discovery movies and tv shows they will

love. so we have been offering these opportunities to consumers not in the united states. more than half a million subscribers outside of the united states are connect with faceboo united states. under this law, it is unclear whether consumers can give ongoing consent to allow netflix to share the movies and tv shows that they have watched instantly through our service. the law is unusual unlike most federal statutes it could be read to prohibit consumers who have provided opt in consent from being able to authorize the disclosure on an ongoing basis on the information they so desire to share. the friction that it creates places a drag on this that is

not done in any other medium. recognizing this, the house recently passed bipartisan bill, hr 2471 that clarifies the consumers wish to share their information. it leaves the opt-in standard within the bill undisturbed. netflix spoert supports the op standard. the vppa singles out one type of data sharing. instead of trying to grab specific notions of -- we would encourage a measured and review of privacy for the 21st century. one designed to costar innovation and balancing the privacy expectations of consumers. it will take considerable time

and effort and we are ready to assist. we hope that the senate will see the value in allowing consumers to opt in to privacy sharing. i thank you for the opportunity to be here today and i look forward to your questions. >> by the way, your complete written testimony will be made part of the record. professor mcgevran >> thank you. thank you. chairman franken, ranking member coburn and members of the sub committee and staff, thank you for inviting me to testify here today. i'm a law professor at the university of minnesota. my teaching and research focused on internet privacy and intellectual property law and in that context i have written about the video privacy protection act which i see as a model for privacy legislation more generally. there are enormous benefits that

we get from recommendations from friends, and i myself use social media and those recommendations heavily. but the potential problems are serious too as others have noted. in an article i argued that the key to getting that balance right is securing genuine consent that means an individual sent a social message intentionally not by mistake. if we have too many accidental disclosures we under mine the privacy concerns and the recommendations ratings. meaning that our friend wants us to see this movie, not passively that he saw it and did not like it much. the vppa is there to support that. i want to address, the interest behind the bill and the fa fact that amendments are not necessary to keep up with technology and the problems with hr 24.71, it safeguards

interests, why else would a reporter think that judge bork's rental history would be important in the first place. in my view the greatest flaw is it limitations to video which arises from the accident of it enactment. the disclosure of books and other websites can get in the way of exploring information effectively. protecting these rights was part of the california reader protection act that took effect in the beginning of the month. any work covered this copyright should be protected. not just movie. second, the vppa in its current form already allows video companies to put in place,

strategies including integration with facebook. now it true that the vpa requires opt-in consent every time a video choice gets forwarded to a third party. it's actually easier to satisfy those requirements online than off. the statutes' authors after all, envisioned a video rental store saw them signing a different paper every time, and on the internet, each time they are showing or using a movie, they can can be given a button to check. it would be radical to assert that a electronic format does not require the statute. it is contrary to the e-sign act and to all the case law i've seen. i think the real observation

here is not about technology, it's a disagreement with the vppa's explicit policy choice to get case by case consent rather than one time authorization. finally i want to note that hr 24 .71 has problems and misses opportunities for reasonable comp mice. i'll note a few. changes to the statute apply to every disclosure not just those in social networks by rushing to addressing netflix and facebook it reviews privacy from other settings from law enforcement to behavioral advertising. by mentioning internet i'm concerned the bill may for close electronic consent for other technologies such as cable and satellite. that's a real concern. the provision for withdrawing consent says nothing about how it's supposed to be done. that vagueness may permit companies to comply by making it easy to give consent but hard to

withdraw that consent. most important, the bill passed by the house has -- there may be better ways of getting consent than what is offered in the vppa, what about general authorization with a short time limit and then opt outs for individual postings. i urge the committee to explore those types of opportunities to stream line the vppa for the 21st century. thank you. and i look forward to questions. >> thank you. >> mr. chairman, senator coburn, thank you very much for the opportunity to testify today. as you know, there are few issues of greater concern to internet users than the protection of privacy. in fact according to the federal trade commission over the past

decade the top of priority of american consumers has been privacy and identity theft. so this is timely and of great concern to a lot of people. i want to begin by talking about the purpose and passage of the video protection privacy act. as you suggested this is a smart and forward looking piece of legislation, among the various provisions that congress enacted 25 years ago was one that said, let's not keep personal information longer than is necessary. today we have an enormous problem in the country with data breeches, identity theft and companies keeping date on their customers and clients for much longer than they should fortunately in this area, there were strong safeguards that have prevented and protected our users of these new services from those types of problems. what the video privacy protection act sought to do was to deal with a new reality in

video services. prior to the mid 1980s most people watched broadcast television or saw movies. there was little collection of personal data about individuals' particular movie presence prefo when the story broke about judge bork's video rent aal practices spurred a protection of privacy. it's not a pro hchtibition of disclosure. even for marketing purposes, personal informations can be disclosed. this is the key provision that i want to draw your attention to. there was an important compromise that the congress struck when they w