minor language. i am not familiar with that, but it does not put any kind of a cap or what it can be or how often, and it( was handed a note that a director here at this conference told us, reported to us twoçw3 days ago that theyçe not affecting in direct costs until this year. . çxdxdççt5

>> 15% to-18% of the cost indirect? did you have a figure on that, dr. barr blood? >> i did not have an exact figure on that. we saw a 45% labor, 45% food and there are other costs which would be included in that. >> in the other? >> correct. it would be less than 10%. >> they say 10%, you say 50%- 80%. i would like to get to the bottom of this. >> we can send you our statistics that we used to get to that number. the time has changed from 2005-

2006 to now, the costs have drastically gone up. from 10%-a 15%, that would be 50%? >> and recently they have charge started to charge the cost per week have three months of operating budget in a fund balance and that is to purchase equipment. i want to open a bakery and i need equipment to that. we will sometimes build a fund balance also when the dishwasher breaks down we can repair that or replace it. in the state of texas, they took out their deep fryers and had to use their fund balances if they had them to replace. a district might look that at that -- at that and say it might be in direct costs. >> i think we have to look at these omb guidelines for the

only concern i have about a cap on these things, that is if everybody goes to that, if the mean is 14%, there is something which below that. if all the sudden they can say that we can ship these costs over, we will find that halfway point. i just wanted to put a cap on it. >> i think the problem we have is that with the cost of fuel increasing in such a fast manner call school boards are at significant issue with costs they did not anticipate at the beginning of the year. four other help -- for other folks to help defray expenses and the cyclical nature of fuel costs or cabbage can cost anywhere from $3 to $12 per box, it makes it difficult from a cookie cutter approach to try to figure out how we can capture

them or maybe we can figure out a way to look at the food consumed away from home provision which i understand is the index we use, not the cpi that maybe we can look at that and try to use a factor in there that is maybe a little more reasonable and will help both ends of this issue. it is something we have to look at barry >> yes, if you have the answer, let me know. [laughter] >> could you let us all now? >> bright, i don't know. this is something we will have to have our steps look at. >> thank you very much. i want to commend you on presiding over this hearing and highlighting this important issue. very few issues we confront in washington have as much importance, i think, not only to the life of a child and his or

her -- his or her family but to the family of america and our long-term economic security. we cannot separate the issue of child nutrition and what happens to children in our schools and their communities for we cannot separate that from job creation and skill development and economic growth at all of those issues. i want to thank those in the audience and of course our panel. for the work you have done over many, many years, laboring in the vineyard, literally, for so long. so passionately. we are in a time. , where these issues can be addressed but we're in a time of tight budgets and economic difficulties. it wil lobby easy. to do what we hope to do the . we met with many of your

colleagues. you all look well rested so apparently people did not stay up too late. dr. bartlett and ms. boldt i wanted to thank you. i want to ask one question to the panel before we conclude. just to get your sense of some of the practices that are working, some success stories. we have heard from a number of experts and school nutrition that one of the biggest problems with administering the various milla programs is you have different paperwork, you have different eligibility and oversight requirements. i wanted to ask a broad question for each or all of you. ñiwhat would you recommend as to addressing this problem to make the programs easier to administer? you may have covered this already but i just wanted to get

a sense from the experience we have had in pennsylvania. have some pennsylvanians in the crowd. ñrif there are bestñi practicesu have identified which would help on these questions of administration. >> thank you and i think we can get some wonderful examples from districts across this country that are doing really great things and have become innovative. we have to be very creative. we have not even talked about it here but it could be another way to help our program. that was in our testimony and that is weak collect all the income data in every individual school districts and everybody in the district uses that data for all different federal programs. all of that cost is in our program, the school nutrition program. when you're collecting all this income data, that is the cost. the other thing is that we do verification. we have to go through that whole

everybodyñr uses that all information great if we could look at another way somewhere else to collect this income data to be accountable. the other big piece is that the free category. if we could eliminate the reduced category and make those children all free because they qualify in wic and come to school and they do not qualify for free meals. at a same level. that would really help streamline our program. these are ways that we can streamline the spending and the a minister of a burden on these programs that are very well audited and accounted for. thank you. >> anyone else? >> i have more direct experience but a couple points -- there are studies to easy it minister oìbn

that has to be done for school lunches. and working with states to help them use medicaid directly to verify income. moving in that direction would be useful. that is oneñi idea. >> thank you very much. mr. chairman, thank you, i know my time is up but we are quickly concerned about this issue -- we are quickly concerned about this issue and these issues that involve children like we made progressñi recently on childre's health insurance, this issue as well as a matter of basic justice for children and for families. and we have to do everything we can to get this right. thank you very much. >> last question and i want to follow up with dr. wilson. this difference in the competitive budget. are reimbursements -- dr.

bartlett said that paula card lines are -- a la carte are being subsidized and you may -- you need the money from competitive services. i am trying to wrestle with this and figure it out. are reimbursements subsidizing the competitive foods? >> i don't know a state department that would allow that to occur. we have to keep our a la carte budget separate. when we are reviewed once every five years, that is one of the things they check. some of those districts may not have been reviewed correctly or something because we are not allowed to use any money from the reimbursable programs to subsidize a la carte. if you don't bring your labor that is doing that, our state

department would say that we need to see labor because it has to account for the exact cost. i am not sure where they were at home by we absolutely havea ala carte. one reason that we haven't is that it subsidizes my breakfast and lunch programs. the second reason is that i am trying to meet the needs of all children and i want those children to stay in school and obtained their nutritional foods from may. i have very strict restrictions on what i sell on that a la carte line. it is priced accordingly so that if you bite out cart items, that money is being used for that. >> the money flows one way but not the other way? >> harriston it would not allow for it >> but it allows it the

other way. >> it is part of the entire food service fund. >> dr. bartlett, when i read your testimony it seem to indicate that actually the school lunch federal reimbursements are subsidizing the a la carte lines up? >> the main thing has to do the allocation of the overhead costs. the sfa director recognizes have a gets allocated to the different meals. our methodology which was applied to this study, we did the same study 14 years ago and that found the same results of a cross-subsidization. it argued that those programs should bear some of those overhead costs.

we had the same finding before and a practice that we follow are generally accepted accounting procedures. in terms of the districts, it was a nationally-represented sample. it was not due to peculiarities in the district we studied. >> i will have to think about that. i think i understand that what you were saying is that set up for the school lunch program and school breakfast program and you introduce a la carte lines and they are using the overhead. beverly does subsidize the a la carte lines. you are saying that all arrangements then covers a any cost of thenla carte lines. >> yes, exactly.

>> again, if a la carte lines have to meet dietary guidelines , i guess i am not a word about it. it is only problem is they don't do that right now. i don't much care how the food gets out there as long as it is good food. that is really all i have. great panel, thank you all very much. thank you for what you did in knoxville, a great example. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> we welcome dr. david paige. he is from the john hopkins school of public health. he is a recognized expert in the area of community health and

maternal child nutrition. his groundbreaking study of lactose intolerance and children -- in children and a design and implementation of community-based programs to find the scope of his interests. h mr. kennethechh hecht is with us. his mission is to improve the health and well-being of low- income californians for food. on completion of law school, he worked for 15 years as a public- interest attorney. he found the legal assistance association in san francisco. right away, you're a friend of mine. that is how i started my whole

career is as a legal aid attorney. i'm glad you're here and lucy nolan, executive director of end hunger. in connecticut . they raise awareness a mugger in connecticut with access to nutrition assistance programs. they speak out to eliminate the root causes a under. she received her mba from ohio western university and her doctorate from the university of connecticut school law. we welcome you all here to this discussion on the re- authorization of the child health bill. if you can summarize and several minutes, we appreciate it. >> thank you, mr. chairman. as you noted, i am at the johns hopkins school public help and school of medicine. i member of the maryland state

wic advisory panel a member of the wic program at johns hopkins and i am testifying today on behalf of the national wic program and a copy of their testimony will be appended. i acknowledge my good colleague, rev. douglas greenway who is the executive director. my comments this morning will focus on the critical role of the wic program in that role it plays into curing the nation's health. they have demonstrated that it is a potent force in improving the health, nutrition, and well- being of women and infants and children living in poverty it is poverty that we're talking about with respect to the problems of under-nutrition and poor- nutrition. over 13 million children today below 18 years of age, 18% of the population is living below the federal poverty level which

for 2009 is set at $22,000. the number rises to 21% when we look at children below five years of age. it is even higher in the african-american population, hispanics, and children living in female-headed households. we have a considerably large number of children and families at risk. between 2000 and 2007, the number has risen considerably with a 50% increase. another 1.7 million children we are dealing with. the census bureau estimates that over 12 million children are food insecure as measured by generally accepted standards. we know the number will escalate in the current economic situation wic is very effective in reaching this population. 75% of all the wic enrollees are below the poverty level with about 35% below 50%.

i would like to focus briefly on some of the risks that exist within this population and the role that wic place. i will try to do this briefly. poverty in general results in poor health. among pregnant women, 60% who enter the wic program have a clinical or medical condition at cert. 30% have obstetrical problem spread 27% are in the and the same number have low weight gain during pregnancy. these are critical issues with respect to low birth weight and preterm births for the wic program is effective in reversing these conditions. there have been multiple studies that are independent studies that show clearly that wic has been very successful in increasing birth weight as well as reducing preterm births.

i will not go into the specifics. they are in the testimony. underpinning all this, there is a comprehensive review which indicates that the programs of focusing in into quitting the studies that wic is effective in lowering these incidents of lower birth weight and preterm births but is also extraordinarily cost effective. there have been multiple studies showing the cost effectiveness of the program with regard to the reduction. even a simple reduction of one or two nights in the neonatal intensive care unit for one day in terms of a woman's extra stay in a possible will more than compensate for the wic benefits. this has been an extraordinary accomplishment on the part of the program. i would like to identify another risk factor and that is infant mortality. it is very high and is among the highest among the industrialized

countries. hreducing low birthweight and reducing preterm births is an effective way of reducing infant mortality. there have been a number of studies that the to the reduction of that. our own work in the mid 1990's reinforced that particular issue with reduction to infant mortality i would like to discuss the preschool population. that indicates there are more subtle problems that exist in this population. we need to be very clear and we need to reach out to increase the enrollment of the population at risk. i want to mention that the centers for disease control has to multiple studies in this area which show the effectiveness of the program regarding improve weight gain, improve overall health, as well as a sharp reduction in anemia. obesity is another area which is in the interest of the committee.

wnwe need to think of obesity as poverty-induced repulsing -- resulted in food insecurity and obesity as part of this -- as for this continuing spectrum of issues we are dealing with in poverty. obesity is not limited to only that group. nevertheless, this is an important population group that is suffering from the epidemic obesity as a result of inadequate food purchasing, calorie-dense foods that are available, inadequate numbers of supermarkets, and other choices that exist in many of our poor communities, urban than rural throughout our country. we need to do a great deal in this area and perhaps a question and answer can't address this more fully. breast feeding is another area i would like to speak briefly as a critical area. when we talk about obesity, we're talking about starting about pre-conceptually.

the first time we can really introduce a remedy is by providing breast feeding. human milk is the most important nutritional headstart we can provide to their newborns. human milk is species-specific. to the living tissue that provides both the enter the infectious agents, antibodies, and other elements we need to improve the well-being. wic is dedicated to try to improve the number of individuals who do elect to breast feed. at lower economic tears, this has become very difficult. socio-economic factors are a major impediment in this population. we need to do a great deal and perhaps we can explore this further in question and answer. i would like to move to some recommendations on very quickly with regard to the administration of the wic

program. i would argue that we enroll all infants, women, and children below 185% of the poverty level. it is cost-effective and smart policy and we will set the tone in the health infrastructure to help the population moved out of poverty, become more well- educated, and move forwardñi in eliminating this problem. medicaid recipients makes sense and is compatible with enrolling everyone below 185%. i would like to argue the fact that we option to certify children up to one year. this will maximize program- effectiveness. this is a very smart and cost- effective measure that combines remediation and prevention. we need to be more efficient and clever about integrating the remediation arm and a preventive

arm that is implicit in the wic program. i would also argue that we established links with local services. this will improve communication and better target nutrition. it will streamline the applications and expansion of the wic for electronic benefits. there is one area that does not get attention and that is the military families when an individual service from that family and certainly, but son gets extra pay butñr that counts against them in terms of the wic. it is a small$"' matter of the subgroup of individuals that deserve to not be through of the wic program. i thought i would bring it to a higher authority when it was brought to my attention with respect to improving it.

i thank you very much for the opportunity to testify today. >> thank you very much. . hecht? >> you have to punch the button in turn on your speaker. >> good morning. thank you senator harkin and other members of the committee. i am from the california policy of advocates where we were to increase access for low and -- low-income californians for this atrocious and affordable as with much of the conversation this morning, our focus has been on school programs but we have recently come to realize that by the time kids come to school, it may be too late to stop them from becoming obese.

as the study shows, obesity is exceedingly difficult to reverse so that an obese preschooler is likely to go on to be an obese adolescents and then an obese adults with all the disastrous concert and -- consequences for that individual and the country. care reform that we get it right when the kids are for starting out in our preschools and our schools. we participated in two studies which helped us about nutrition. one was in los angeles where we looked candid observations in homes and centers. another was done by mail to about 500 randomly sampled centers and homes throughout the state of california for the results were remarkably

consistent and each fortified the other. i would like to talk about those results. i would look -- like to talk about child care food programs, specifically. a moment on obesity -- one in four children in the 2-5 age bracket is obese or overweight. before ever reaching can the garden. -- before ever reaching kindergarten. this is exceedingly difficult to reverse. it is the beginning of a long, long problem. at the same time, we still have concern for honker and food insecurity. the number mentioned it so far was 12 million children in that preschool bracket and that turns out to be almostñr 20%, almost e

in five children living in a household that is deemed by the government to be their food insecure or hungry. a few moments of the child care food program --ñi is a big program. it is serving 3 million children throughout the country, about 1/3 of them are in homes that are small about 2/3 are in centers that are a bit larger. there's been about $2 billion per year. ñiin addition to providing reimbursement which is critical to the agencies, the child care food program also provides a 3 month free visits every year which is more than licensed child care homes and centers will receive in any state, i believe. it provides nutrition education, training, technical assistance, or it used to until the reimbursement ran away and the money had to be focused on other

things and away from these important services. chalkier food program is based on the food groups. milk, fruit and vegetables, grain, protein and that sets the quantity of those foods so that children should get enough nutrients. what it doesn't address is the quality of those foods and it does not limit the number of calories. in other words, the child care food program said about the moment is not responsive to obesity the male patterns were set in place before we were aware of the obesity and they have not been changed since. the usda has commissioned a study from the institute of medicine which is to start next year and i think it is a safe estimate that the results of the study will not be implemented for another four years. our recommendations are what we

believe our consensus, in arguable changes to the program that do not interfere and work well with the program. a moment of our studies -- our two studies found that the child care facilities that participated in child care food program's had better nutrition than the facilities that did not. we found that head start was at the top of the pack and that food brought from home, glad there are no mothers on the panel of the moment, was the worst. it had the least good nutrition to it. within that, there was a range of nutrition that was better in child care food programs than not. even in the child care food program, there are problems. for example, whole milk is being served in 50% of the child care food programs.

i think it is absolute consensus scientifically that from the age of two on, children should not receive all milk. -- whole mill. lk. only a certain percentage of the school programs were serving in the whole wheat at all. our recommendations follow the following principles -- one, we want it to be consistent with the wic program which is serving roughly the same population that program has recently experienced a real transformation in its food package. that is terrific based on lots of study, lots of input from scientists and nutrition is all over the place. we really try to bar from that. second, we are trying to make the recommendation simple because in the homes, the digitally, there's not much time to fuss with complicated nutrition requirements.

third, we are trying to make inexpensive so that the nutrition reimbursement goes as far as possible. some recommendations on the nutrition -- first, we urge that the reimbursement be increased as we heard in the first panel. the costs have run away from all the nutrition programs. in child care food program where there is intense of paperwork, the reimbursement as the lost. with the increase in reimbursements, we are asking that nutrition improvements within theñi meal patterns the leg. the link to. there is plenty of signs to back this up. low-fat milk, more fresh fruits andxd vegetables, more whole grains, less sodium, less sugar, less fat, not rocket science. as i mentioned, we would like the nutrition and nutritional education to be absolutely consistent with the wic program

which is doing a great job and should grab onto it. third, we are proposing that there be some changes in the health environment in these facilities in order to maximize the benefit of federal reimbursement. every program should have water easily accessible to the kids. they should have limits on screen time. was to get those kids outside it is bad weather, they need to move in sides of physical activity is important. in a school program, with a concept called foods of minimal nutritional value. we would incorporate that into child care to make sure kids are now having sodas, candies, the things we know they shouldn't be having. we need to devise some strategies to work with the moms and dads who are sending a crew from home and do not know better. in order to have these benefits may make a difference. we need to grow these programs.

there are two ways we would recommend that spread. ñi. one has to do with access and participation. they should be categorical ñi qualified to these programs. there are areas of our state and i suspect other states where there cannot be families in child care homes because there is now sponsoring organization. we would recommend that where there is now sponsoring organization that the state be the sponsor of last resort or they might delegate that responsibility so that children will not be deprived of a family calkier home symbol because there is not a sponsor in the neighborhood. finally, there are ways to simplify and scream -- streamlines program grie this p.

finally, we need money to train. the federal and state money to train has dried up that is not coming back anytime soon that the state level. i think it has to be federal reimbursements of that the sponsorsçó are trained, the providers are trained, the providers are in a position to provide indispensable nutrition education to the kids and their families so that we really sped the preventionñi strategies throughout our communities. thank you. >> now we will turn to miss nolan. >> thank you for inviting me to present testimony today on behalf of meals served to children outside the school that. these mills of one of the best way to improve nutrition for america's children in tough

economic times. i am here to talk specifically about the after-school programs and some are nutrition programs. these programs are designed to provide nutritious meals and snacks to children when school is out. we know that when children participate in federal food programs, they do better with their weight and that children when they are out of school, a gain weight. we have science behind that. we really need to make sure we can provide these children's with the meals and snacks that are atrocious. the sponsors are trying to increase the quality of the food they serve. we work with a community in middletown rather work hard to have better food that the kids will eat but also increase their fresh fruits and vegetables. many funds to do this. they cannot do with their present fund spreas. we have schools in connecticut that are certified as help the school and when they certify, they are given 10 cents extra per meal served in the prior

year. i suggestñi this would be a gret way to incentivize other summer nutrition or after school nutrition programs, as well and give them the funds to be able to get the healthier foods. these programs are really great because they combine food with activity. we see many kids that go in and they go swimming because they can get a meal or they can do arts or they could do their homework or play basketball. they get the physical activity they might get -- not get we really feel is imperative that we keep these programs as activity-based as well. it helps us look at the whole child a look of the future of our children and look at them as the psychological health of our children by getting activity. i would suggest that we need to increase access to these programs. right now, the summer nutrition

program national serves one in five eligible children. in connecticut, we serve one in four. we are number 8 in the country and that is prettyçó terrible. the area eligibility is that 50%. we should use the current and non-lose funding such as the 21st century learning grant of 40%. this is so we can grab more children. i think we can also create a partnership with farmers on these programs. in middletown, we had a partnership with csa, a form that was part of wesleyan university. they can ever we can talk to kids and pointed sunday with kids and talk about farming and taught the more they -- their food came from. they brought with them and try.

if other kids are going to eat something, but i'd try it. they might not at home if it is their siblings or mother goldman. nutrition education is key. the standard education program, we work with them. we get out by grants of $750 to communities to sponsor as a way to buy things that are non-food related. maybe the rubble of bicycles. kids would come every day and every time the getty raffle ticket of the summer session, they with raffled off and they would win a bicycle.

they would tell their friends. they would have movie days, things like that. last summer, we increased -- we served an additional 18,000 meals and over 400 kids daily on those sites. that is a $3,000 investment. we really do need to get people out there and do out reach. we can get two families and hang door knockers, we can get out before school is over for it is key we let people know these programs are happening. the summer mills of the after- school snacks and breakfast should receive commodity support in the rural areas perhaps cachalot commodities. that was more cost-effective. an after-school snacks, there is really not enough food for an average school's back for it i

have a loss -- i have a summit he's lunch at 10:30 and egos often plays football. he is practicing football until 6:00. kids need something in between especially if they are eating early. last year, with the economic stimulus plan, we added two more states to the supper program. we would like to see that all of the country. they are key programs and we can feed kids all year long. they can feed them on the weekends and after school. families who get home later -- is just enough food for our children. we need to give them what they're really need. we can also do that for the national school lunch program which would be great. the final thing that i would like to add is that we would really like to see this as a year-round program, the child nutrition program for it will have a sponsor doing summer nutrition and then somebody else doing after school, the rules

are differentc. catfa is different very want to create one program with identical eligible the programs and identical reimbursement administration to streamline these programs, save money, and feed kids at the same time we don't need a mishmash of programs now. we need what whole program that will do the best thing per that would be the best economically, as well. those are my recommendations, thank you very much. >> thank you. you were saying that we put together the summer and after- school programs, separate programs, what else to my missing? >>cacft.

>> put them all together under one guideline, one operational kind of program. is that we were saying? -- is that what you are saying? >> kids are not eating during school vacations or weekends. if we can put the mall together and have one common program where kids can get these mills during the year -- right now, we have sponsors d>> i have talked with people and homeless shelters and it is too difficult for them to make sure they have all little things they need to have to give to our state department to get the funding. if we can have something that everybody could have together, i think it would be easier to administer and kids will eat and more people would be sponsors.

>> we have a pilot program in california that operated since the last reauthorization in which sponsors of summer food are permitted to go on serving snacks during the school year to children under the summer to rules so they do not have to grapple with two sets of rules and regulations and reimbursements. the number of sponsors has gone up enormously. the number of kids participating has gone up enormously gri. we had a community-page program and school-based program. that would be enormously better and cheaper with money that could deported to nutrition. it was a recommendation that was made several administrations ago but did not go anywhere. i think it is terrific. >> i will take a look at that. you mentioned about the summer feeding program that many times what attracts kids is not the food, is the other ancillary activities, swimming, games and things like that.

i am sure you are not saying that the food does not have a part of it but there is another aspect if that is so, what kind of suggestions would you have that we might institute that would draw kids in for the summer feeding programs? we have the ymca all over the country that are really involved in well as programs. they have embarked on the several years ago. would that be something that could be a part of this? maybe it could be churches would get involved. how you promote all these activities that lets you get food to these kids? >> aircraft program is called operation participation because of what kids to participate.

we found that if you give them something to get the hell they will tell their friends who then,. in one community, we have police officers and firefighters, every friday and read to them. there is a big trunk and it was a mystery what was in the trunk. on the last day, they would read clues as to what was going on and the kids would have to guess. at the last day of the pc program, they opened up the trunk and they all got t-shirts. we got kids who came for the raffle because the one of the bicycle so badly that they came to make sure that their names were in the raffle. we have had art supplies that have come. we have really been able to get kids to come and you are to because we do know that as their

part we can streamline eligibility with federal funding or the summer programs using the 21st century program spread we can use that as a way to get kids. you are right, the food is certainly a poll but -- a pull back but this is a whole experience. we have been able to build the community into these summer sites. we have the police officers and firefighters come and we have had raffles. >> since we are limited in what we can do, we can provide the funding and should increase the funding for the summer eating program, the adult child care program, after-school programs, should we set out lake it together to certain activities that the local community has to engage in to be able to participate?

they come to report a liberal of food and the kids can have lunch or something which does not work very well but that is encouraging local committees to think about the things they do. >> let me sharpen the question. in california, over 80% of the children who eat summer food mills he'd been at school. we are starting to see the beleaguered school districts will not be able to offer as much summer school as they have the past. they will be -- there will be more children not anchored to a program for school it gives them a summer food meal. there is a serious problem increasing this coming summer at least in california of children who will not be closed by some

activity either academic or recreational where we can prop up the food program. >> if there is some kind of pilot that we could do to try this out maybe state-by-state, that would be helpful. you would see more significant use of the program. >> i want to see what role we have for the ymca's because they are into wellness and promoting wellness and perhaps this is something we should be looking at as part of this. >> boys and girls clubs, i think. >> yes, that 2 per -- that, too . >> i liked the idea of you

create an umbrella out there. we create these programs in washington and they are great programs and you talk about three individual ones. all the sudden somebody comes in with another idea and we create a fourth panelist on this panel who has a great program and we throw money at it. throwing money is not necessarily the answer to a parade ever but can use more funding but if you had them under one umbrella and you restructure the program so you do-not have the overlap, you would want upsetting money to be able to be spent on additional meals and whatnot. there are some very good ideas that you have tossed out there. it is pretty obvious that what you are doing with kids in your program is you let them have fallen. if kids have fun, they will show up.

there's probably a lot of peer pressure to bring in other kids if they know they're having fun. you are doing a lot of the right things. dr. paige, i was curious about your statement that everybody in the 185% poverty level should be enrolled. you are saying those folks are eligible now. they're just not enrolling. you're not talking about an expansion just making sure that folks that are eligible to get enrolled. again which i'm sure there are some of those parents who when they leave the hospital, maybe they don't know about the program or some of them want to do it on their own rather than depending on the government. that is an interesting concept you throughout their that it will save us money in the long run if you do have more families

participating in the program. >> currently, there is not sufficient appropriation to meet the entire need so we could be successful. my own view is that not only will the nutritional risk to be addressed but we will have the opportunity to develop a more comprehensive preventive program. it is hard to measure the prevention but when you're talking about newborns and pregnant women, there is a strong and compelling case to be made that prevention is important. it is from that perspective, a broad based public help prevent a perspective. does not simply empty rhetoric. we know through the data that

women can't begin to provided informational infrastructure, we can start with a comprehensive program, prenatally. we can start this nutrition education. we're talking about obesity and where to start my own view is that we need a vertical, comprehensive, integrated, program of all the nutritional programs. we have a fractured system right now. wic is a wonderful system. it has to have a link into the schools. we have to have a standard and unified approach with regards to qualifying as well as reducing the burden on the clients to continue to qualify for many of these programs. we can be much smarter about it. we can integrate it and move to a streamlined approach or locate the programs with health programs so that we are dealing

in a more comprehensive approach to deal with the nutritional risks that exist within the population we're serving. we can make effected use and economical use of the personnel back and forth between the spread an electronic system would communicate back and forth in terms of immunizations and social-service is. we have complex problems here. we have poverty that feed the malnutrition that exists. we have to be clever about it. it was mentioned by my colleagues that we must have a more comprehensive and effective system, particularly of money becomes less available. we have to be smarter about the way we run these programs. we have to start pre- conditionally and the schools. we have to address obesity. that is not isolate. low birth weight is not isolate. this is part of a continuing --

continue on that exists in the community. we're the best country in the world and have the best programs but we are not clever about the way we apply them in our lower- tier population that needs a consistent and coordinated message that moves over time. after two or three years, we have children gradually and they're going to school and get a different message in every state and community with respect to good nutrition. it is an amorphous concept than just saying," good nutrition." we need streamlined an integrated approaches. we need a beer per call logical approach that is built on science and nutrition with a core that is federally suggested.

we're losing a tremendous amount of money. the client -- the client burden in going from one doctor to another to get one blood count or another and care that affirmation is not an efficient system. it does not lead to good care, either. >> your comment about one in four children are obese before entering kindergarten is an interesting to set tech. ñi-- an interesting statistic. is there a direct correlation between that statistic in the economic strata which those children come up? >> yes and no.

i wish i could give you a more simpler answer. there is no question that it costs more to have healthier food. ñithe families with less money r are having a hard time helping their children helpedñr helping- have healthy diet. on the other hand, there is obesity at every income strata. doesñi not only isolated to the low-income areas but theçó cause of it seem clearer and the consequences seem much more severe. >> lastly, you mentioned in your testimony and your written statementñi that this before in your program is a real problem. is there any way for your providers to go online to do this bursas having all this paperwork to complete? secondly, what can we do to eliminate the paper work? i have no idea what it is aware

ofçó that side. >> that is a welcome question. there are ways the providers couldn't use computers to go online to find some information that they need. the sponsoring organizations are doing them more. some of the families have difficulty either owning or being adept at some of the computer technology. the paper work is extremely burdensome in the family homes and centers. there has been a paperwork reduction task force meeting. some of those recommendations have been met and some have not. it should be carried on. there are some questions that are asked of providers if they serve the same number of children.

is that real or are they making it up? is a blunt instrument for trying to make sure that there are no fraudulent claims being made in child care. has been put in place to try and stop that are really very blunt and are burdensome to the providers and to the sponsors and not very adaptive to cash in a problem if there is a problem. 3 . .

>> of 13 million american children below the age of 18 living in american families with incomes below the poverty level is a stunning number in and of itself. the percent of children in poverty increases to 21% in children below the age of 5. the section on a low birth weight where you are highlighting the problem, but you also have some good news there based upon the data in the wood program that reverses many of the outcomes that we are talking about. and then of course, in the section on infant mantra -- infant mortality, this line i have never seen before.

we know it is true, but we do not see this very often, that the disease burden among the survivors is lifelong. and it is just staggering, what our challenge is. çóit leads to a -- leads to my question on the whig program. we have, as we know, we are in the middle of a terrible crisis and a lot of families are living through the trauma and have limited budgets and resources. but i would ask you, doctor, if you could, and i know it is difficult to do this, but drank some of the recommendations that you make in terms of the three most urgent for the few that are most urgent in light of the need and the gravity of the problem, but also in context of the

budget realities that we have. >> thank you, senator casey, for highlighting the cigna began numbers. i might add that those numbers -- highlighting the significant numbers. i might add that those numbers increased drastically in female members. in baltimore and washington we are looking at 60% party. these are extraordinary problems we are dealing with nationally. i would also like to comment, if i may, regarding the lifelong burden over the past 8 to 10 years -- regarding the life of a burden. over the past eight to 10 years, there has been the result of fuel growth syndrome and a low birth weight, the adult disease burden is in terms of -- its ships in the entire physiology of the anatomy and the physiology of the fetal growth restricted that results in heart disease at age 50 and 60 and result in diabetes and a number of disease burdens that up until

very recently we thought were verizon but -- isolated, from scratch, age specific problems and we are much wiser now. when we " statistics regarding the dollars saved in neonatal intensive care units, that is the beginning. and we have this disease burden moving through time. and a congenital anomalies that exist as a result of the inadequate nutrition and environmental are chips that exist that are continuing. now to your question, i really cannot answer the question entirely. i can say philosophically, my own view is to start at the beginning to try to maximize and optimize the embryo where we have many, many problems. but we do not think of the embryo. we think of the fetus and we think of 30 weeks or 34 weeks and whether there is a more tangible human experience. but the embryo is undergoing enormous development and requires the best nutrition. we have to get women into the program very early.

we have to increase education, not just for the poor women, but for the population in general. these are not problems unique to this population they are just elevated, escalated in this population. my own view is to start conceptually, moved through pregnancy and infant seat into childhood. -- and infancy into jobs would. but i make a note in my testimony that with a 4-year- olds, these are youngsters are already walking, but did not have the key position of the newborn in the household. it is easy to forget them. and the risks that they face in terms of the nutritional factors that are required for interaction, for cognitive the relevant -- we pay a penalty if we sacrifice our one to four year-old and the concentrate on newborns. it is a complex question. there is a hierarchy. my own view is to maximize,

optimize feel close pregnancy in the early infant. -- in the early infancy. and my idea is to address the wick program. not only is the food critical, but the education and the continuing education that exists. you heard in my earlier response, i heard it -- i see it as a vertical issue. we have to protect this newborn right through the 124 age, right through headstart -- right through the age of 1 to 4, right through the headstartñi in a cohesive manner. that would be an attempt at answering your question, senator. >> thank you, and i know i am over time. i will just present this to ms. nowlin as something we will be sending to you. i have worked hard on the summer food programs. in our state, we have a large portion of our state that is rural and i will ask the question for the record that i

will preview now. i just ask for your recommendations about how to make the program more effective in rural areas. we are about a minute and a half over, so i will submit that for the record. thank you very much. çó>> thank you very much. thank you to all of you for your good work. i was kind of shocked at the statistic that you put out there on the 25 year-old with 25% of them being obese -- on the age of 225 with 25% of them being obese or overweight. -- the age of 2 to 5 with 25 percent of them being obese or overweight. and what you think this is happening? >> there are two parts of it. one is carrigan and carries out. the simplest part of it is that children are not getting movement -- one is calories' in

and calories out. the simplest part of it is that children are not getting movement. every reputable body says there should not be any television before the age of 1 and after that, perhaps an hour of quality educational television. but in so many homes, it is on all day. on the food side, we know that adam twardowski has done the food studies that show that help your food is more expensive to purchase. and in some cases it is less accessible. so, with both access and affordability it makes it very difficult for low-income families to feed their children the kind of foods that they would like, or for a child care providers to have the kinds of food that they would like. on the other hand, we found a very interesting thing that we are still developing, but i ñithink it is solid. the families that paid more for

child care got less in terms of nutrition because they were not always going to the programs that have the child care food program with the federal reimbursement in it. so, for all of the bashing, the child care food program is a good program purities to get better, but it is a good program. -- is a good food program. it needs to get better, but it is a good program. >> are you recommending that we change the law to mandate -- because you were talking about some of the changes for trout care sites, that -- because you were talking about the changes for these chowder sites should be -- child care sites should be changed. what are your recommendations? >> i would go in two directions. one, what i think are modest recommendations with regard to the, what -- quality of food, that we really borrow from the wick food package change and get

water into those kids, lowfat milk, and limit sodium, salt, and sugar and fat. and then the surrounding environment, which includes some of the screen time, physical activity, not having certain kinds of food are around were the children are. i was analogizing of foods and minimal nutritional value in the schools. there are some foods that children ought not to have and we know what those are. finding those are practical and and lamentable -- and implement able suggestions. >> earlier on you were talking about the mothers and the children and whether or not these kids are preprogrammed, which is a scary thought, based on the nutrition that they received before they were born.

i listened to that because i ñithink that is an issue that we see. it makes it so hard for these little kids. >> i was going to jump in and say, paradoxically, many of the low birthweight infants are at risk for obesity because given their reduced size, organ size, and shifts in hormones and so on -- i have lectures that i will not bore you with -- even those ships, they are born into a cow abundant environment and they tend to -- a calorie abundant and armand and they tend to -- environment and they tend to have their coverage control interfered with. as a result, we have this paradox of low birthweight. the question was asked earlier white we would demographically see a tilt in this provision of economic the disadvantaged. this is arguably an important

issue that is being pursued scientifically, but there is enough evidence at the moment to read these underpin the logic of it, yes. >> and you talk to dr. pager out how you can make it easier for people and clearly how we do a better job is to get this nutrition information out there and make it as easily accessible as possible to low-income families from the very beginning. and when you talk about how difficult it is to access the information and doing it on a site basis, could you elaborate on that in terms of making it a -- what would be your dream of how to make this accessible to low-income mothers? >> we have been cleverer bought during this internationally -- clever about doing this internationally in terms of using star power and using agents of change within a community in regard to using mazzuca and other elements that

are quickly identifiable by many of us in the population. -- in regard to using musical and other elements that are quick and identifiable by many of us the population. but we have a very fractured message across the spectrum of services that we provide. we need that reinforcement. and then my dream -- i am coming back to the same thintheme. working in a cooperative, integrated manner with the food programs out there, with the school program, in a consistent message as well. there is conflicting information. we see in the newspaper frequently, even for us on an upper tier, maybe. suddenly, the scientific information or the food information has changed and the sands had shifted under us. it is both proper, but this is happening on a continuing basis

in terms of, i will say the fractured basis of the message out there. i think i will stop there and get your response. >> i am out of time to reduce -- to do my response. could i just ask one more question? and it was the question that senator casey was one to ask you ms. nolan, about how you would replicate this id on a rural basis. -- this idea on a rural base is. >> one would not believe it, but we have a fair amount of rural and poverty in eastern connecticut. to one of the things that has been an issue is transportation. i think if there is at -- is a way that we can increase transportation to those places, we can lessen the time that the food has to be there so that maybe somebody can drop it off and then have the kids come in -- or you know, have it for a longer time.

there are a number of things and a number of people who have worked on this and i would be happy to get you something written up that explains it fully. >> thank you very much. >> rev. greenway reminds me that the national association wic is launching on tuesday partnership with the sesame workshop, which goes to my comment about using various outlets. >> how are they doing that? are they showing sesame characters eating spinach? >> we will both watch on march 10. [laughter] whether that is or is not successful, we need an approach that addresses it in the language in the venue that people are cordoba with and operate with. -- are comfortable with and

operate with. >> we have a partnership that will provide healthier habits for life kids, which is combined reading and radio and educational tools that emphasizes speed a rainbow, so, all of the fruit and vegetables. talking and broccoli will be there with cookie monster tomorrow. and those who have little children know that when they go to the grocery store they go, oh, mommy that is some time food, but carrots are any time food. it is that kind of nutrition message that we want to reinforce to the sesame workshop. we have been communicating through wic all along, but now we have a successful partnership to do it through. we have been putting into the hands of wic families already and they are already a big hit. >> and with the program as well,

we're looking at other efficient message -- methods that use modern technology to reinforce the message, provide dvd's brain to of informations are there can be an interactive chat room on the internet. how each one will not solve the problem, but an this broad based approach, we can make progress. as i have said, we have been very successful, the u.s. has, in achieving awareness. and we have not been clever enough to apply id consistently here in our own homes in our country. >> thank you very much. >> i just have one other area i would like to cover with you, dr. page, and that is the area of breast-feeding. 28 years ago when i was a member of the house, i was one of the honorary cochairs of the

national breast feeding coalition. that group informed -- have formed to protest the activities of the nestle corp. in terms of their provisions of milk -- and what my thinking of? infant formula. but also, how they were providing it to mothers in hospitals as soon as they got -- gave birth. they got a nice package of infant formula. the coalition was, i think, fairly successful at the time in terms of the boycott and nestle agreed to change a lot of its practices at that time. this was the mid-1980s. although, i have understand that it has crept back in, that there are still these packages given to mothers in hospitals as soon as a child is born. they get these packages of

infant formula and things like that. i do not know how extensive that is, but i have heard that it has crept back in. and since that time, even in my own family, having been involved in promoting breast-feeding, but we found -- as you alluded to, i think -- that low-income women, the incidence of breast feeding is the lowest. among higher income women, it is the highest. what are the barriers? getting low-income women to focus more on breast feeding. >> what is interesting is that if you look at the data in the '60s and '70s -- and let me also say that i am not only aware, but have been a strong supporter of yours and arms length in terms of everything you have done in this regard. in the '60s and '70s, but

through the early '70s, the level of breastfeeding among the low-income population was quite high. in a generation and a generation and a half we have reversed this. is the attraction of formula. this attraction starts in the hospital when there is a discharge pack. our colleagues in the infant formula business are clever about this. they say, yes, breast is best, but when you need to go out for an evening or so, and slowly, both the commitment as well as the lactation begins to erode and you have a quick move to a formula. yes, in hospitals they are now giving out infant formula pack ice. our own data shows clearly that there is a marked difference between those that received the package versus those that do not, in terms of the rapid decrement of breast feeding.

this is a problem that has resurfaced. and i do -- i am all for enterprise and entrepreneurial activity, but i do think we have a responsibility to our newborns to eliminate that practice. >> you talked about pure counseling. i think that is extremely important. >> thank you for raising that, senator harkin. we at hopkins are working aggressively in this area. and the data shows clearly that not just the individuals, but the clinics that have appeared counselors president -- peer council is present do much better in terms of initiation and duration. this program is an extraordinarily strong program. >> the other thing is that there has been a shift. in the 1960's and 1970's, fewer women in the lower economic

strata were employed. they were home. that has shifted. because of the erosions of the economy and their husbands pay things, like that, more and more women in the workforce. to take an example, my oldest daughter has a very nice job out in california. her company provides all kinds of benefits for breast feeding. they have a room, refrigeration, they can pump. they provide all of that stuff. but she does not have a minimum wage job. most of the low-income women go to work at the 7/11, or the caseys, or the department store and they just do not provide that kind of help. they want to breast feed, but they do not have the ability to do so. what i am hoping is that -- i hope this administration will start talking about a national effort to provide support for

new mothers in the workplace so that they are able to breast feed their children. we just do not have that at all in this country. we need that national effort. it is also the work is that we have got to start working in. i hope you will start looking at that, too, of how we change that attitude, that mind-set that we have in this country. i have seen personally and i have heard many stories of women who take their children someplace, maybe a restaurant, they are proceeding and are told to stop. >> let me just jump in on that. my doctoral student who is now my colleague, dr. gross, was that was arrests in the state of maryland about eight or nine years ago. -- was at toys r us in the state of maryland about eight or nine years ago. she was breast-feeding and was asked to leave. she was angry and agitated and

she got a lot changed in the state of maryland, that someone can appropriately breastfeeding commercial establishments. you have raised the point that has been at the center of my concern for many, many years in terms of how we begin to change the culture. the workplace culture, and even the community coat -- culture because there isñiñr a lack of receptivity to breast feeding, whether it is in a train, or at home. and some of the strongest negatives exist within the family itself. we have a great deal of work to do in this particular area. the peer counselors have been very effective at breast feeding and i think it can also work in other areas in terms of even the issue of obesity. our communities tended to

respond more immediately to the exhortations of folks from the community. they are a powerful force. >> we have to focus on this because president obama has suggested and has supported this visiting nurse program and put it into his budget, by the way, for next year, which is laudable. and that is having nurses go to low-income homes with pregnant mothers to be and to work with them on their nutrition and stopping smoking and no taking alcohol and that kind of peer counseling. hopefully we can expand beyond that also as an encouragement for them to rest because least in the initial stages of the baby's life. >> the decision to breastfeed is really made prenatally. usually, the data suggest in the

seventh or eighth month as the realization, recognition of a new life to be born and the responsibility. we need to bring in our obstetrical community, our nursing community and we need to be clever about it. we need to shape this in a way that is also consistent. i would have not a polemic, but just a fact, many of the wic when iwomen, a large number abad breastfeeding within the first three or four weeks. those who elect to do not have -- we do not have a healthy structure even in wic or any of our social services to reinforce the decision on the part of the mother. and she becomes quickly discouraged. there is no support internally

or externally and there is abandonment. >> listen, thank you all very much. this has been a great pal and i thank you for your leadership in this area, all of you in this whole area. we invite your continued input and advice to us as we developed this reauthorization of the child nutrition bill. i thought the two panels were very good. we focused on a school based programs and the non-school based programs. we have to think about how we streamline them, make them more effective and how we leverage money. in other words, where can we get communities to add on to in terms of leveraging those dollars a bit better up there. i thank you all very much and the committee will stand adjourned until they call the chair. >> thank you.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> all this week at 8:00 p.m. eastern, a rare glimpse into the nation's highest court. tonight, we talk with justices and -- justices kennedy and alito to discuss what works in their orol decisions. interviews with supreme court justices all this week at 8:00 p.m. here on c-span. for more information about the supreme court, go to c-span.org /supremecourt. a video gallery on its discretion -- of you will find a video gallery on its construction as well as interviews with the justices. and the tv tonight features ron paul and the end of the fed. david russell of "in fed we trust" and dorothea lange -- and linda gordon who wrote "dorothea lange. >> the c-span thursday, a look

back at tribute paid to u.s. and world leaders, including the dalai lama, ted kennedy, ronald reagan, walter cronkite, colin powell -- colin powell and robert byrd. and russian by minister vladimir putin discusses his future from his annual call-in program. and presidential advisor austin goulsbee on the global economy. and the co-founder of guitar hero on innovation and entrepreneurship. plus, the art of political cartooning. >> fox news contributor michelle malkin is our guest this weekend on both tv's in depth. the columnist and blogger and author of four books takes your calls and e-mails and tweets. three hours with michelle malkin live at noon eastern on sunday on the tv. >> now available, c-span spoke -- c-span's book about "abraham

lincoln." from lincoln's early years to his life in the white house and is relevant today. abraham lincoln in hardcover at your favorite bookseller and nowlin digital audio to listen to any time available where digital audio downloads are sold. learn more at/c-span.org lincolnbook. >> -- to learn more at c- span.org/menkenbook. >> earlier this year, house committee held a hearing on internet advertising and in particular how companies send ad space on consumers browsing habits. the hearing is about to end a half hours.

>> today is a joint hearing of the subcommittee on commerce, trade, and consumer protection and communications technology on the internet. i want to welcome all of you to this hearing and i want to just give you some advanced notice that in about 20 minutes we will be called to the floor for a series of votes. some have estimated to be -- we are scheduled for about 27 votes on the floor, which is certainly going to extend the hearing.

so, we ask that you be patient with us. we will try to conduct this hearing and tried to be very mindful of your time, but our actions will be dictated by the house schedule and the votes on the floor. now, i want to recognize myself for five minutes for opening statements. as i indicated c'mon the two subcommittees combined our commitment on these resources to study the is extremely important issue of vero affects from advertising. i want to just take a moment to

thank chairman dr. --ñi to thank the chairman for teaming upçó on this particular issue. this is but one hearing along a continuum of legislative action is examining online consumer privacy and how companies handle consumers' personal information. ñithe subcommittee on commerce trade and protection, which i chair, marked h.r. 2221, a bipartisan bill which addresses security information, bridges about security, and some of the resulting harms to the

consumers. i'm hopeful that there will be more hearings. there are currently no federal laws specifically governing the bureau of advertising, nor do we have a comprehensive general policy -- general privacy law. as members of congress we have anticipated for some time that this hearing would be highly informative and very valuable in helping us ask the question that everyone seems to ask, is federal privacy legislation necessary or should companies be trusted to discipline and regulate themselves? at this hearing, i look forward to hearing from our very distinguished panel of witnesses about this growing trend of online behavioral advertising.

marketing research firms have estimated that targeted ad spending will reach $4.4 billion by the end of 2012. that number is by opening -- that number is eye opening as it translates to almost 20% of all online display and spending that is projected to be spent by the year 2012. as prevalent as these ads are becoming, so, too, are the buzzwords, which are purportedly needed to flush out the appropriate contents of the information principles and practices. words and phrases such as "transparency," "choice," " consumer expectation."

this is dependent on a range of variables. there is feed back in here. such variables may include the identities of the user, whether he or she hasñr visited with a website, whether the ads are being served by first or third- party sites. through (e-existing privacy policies and disclosure, the robust settings for managing user privacy, and the list can go on and on and on. all of these and variables are important as to whether legislation is needed. i will be listening intently to

your accounts and out of front companies are dealing with personal and formation of their collecting from suit -- from consumers, what they're doing with the information, and what tauruses and controls that consumers have over the subsequent use of that information. and i want to thank all the witnesses for coming in this morning and for sharing with us much needed input into these matters before us tola.. and i want to thank all of the subcommittee members and the staff for so diligently preparing us for these hearings. now want to recognize for five minutes for the purposes of opening statements the ranking member mr. donovan.

>> thank you, mr. chairman and i want to thank german doctor and my fellow the chairman, mr. bowsher, on this. privacy continues to be an issue of increasing concern to consumers. i am pleased that we are looking at all of the relevant issues. ñiwhat was once thought to be an issue limited to business with whom consumers have a customer relationship has been forever altered by the internet. progression and innovation in digital and computer technology over the past 20 years has transformed many aspects of our lives. by the same token, the progress has opened the possibility to potential abuse is an invasion is in your lives. in the connected world of the internet where data is instantaneously accessible to anyone in theñi world, we have learned how vast amounts of consumer data can be inadvertently disclosed or

subject to more malicious and intentional left. we also know the main reason consumers should be concerned about the amount of personal information out there on the world wide web is because the sensitive and personal information can be used for harmful purposes, particularly identity theft. thankfully, we are addressing some of those concerns with the data security and breach notification legislation moving through the committee right now. our oversight into the data security issue opened our eyes to the types of personal and sensitive information many institutions, ranging from businesses to government to maintain about us. but a lot of information is kept about us navy for legitimate reasons that mandate data retention, for instance, law enforcement purposes, but most consumers do not understand our information gathered about us will be used or with whom it will be shared. these concerns are legitimate. what is more, these concerns over keeping personal

information private are exacerbated by digital technology and the capabilities of internet technology. the information that fill the rooms of file cabinets in a paper-based business cannot be stored on devices that attach to a key ring and -- can now be stored on the ice is that attach to a key ring and make that easy ñrthe ability to -- make theft easy and often untraceable. the ability to use this for marketing purposes stretches as dynamic even further. the internet is a communication tool as a means of commerce and education and social interaction. a generation has been raised on the internet with the ability to find information relevant to their interests and communicate in ways that we could not imagine only 10 years ago. most expect these services to be customized for their preferences. many of these technologies and practices that deliver high

levels of customization present new challenges and concerns fourth consumers, primarily understanding what the trade off is for these services. do we need to relinquish personal information about ourselves and our internet for the purposes of generating more user specific advertisements in exchange for access to the information we seek on the internet? and if so, who has our access to this information? the internet has been a successful tool for commerce, and has benefited consumers with convenience, choice, and savings. relevant advertisements based upon user interest will be more beneficial to the consumer and business, which in concept is2nm different than the manner in which marketing research determines which advertisements are selected to be placed in magazines, newspapers, or on television based on the intended audience. however, in practice the internet is different because of its ability to track preferences on a minute by minute basis.

the question is how advertisers engage in the process of identifying their potential target audience. specifically, what information is used to generate targeted advertisements? i have a son who would do anything to protect. and although i cannot monitor çóhim every waking moment, and r that his ability to accessñr the internet, nor would i want to. like any parent, i want to address that he will be safe to surf on line and interact with his friends without been unknowingly monitored or profiled. while my son is in default on the edge -- vulnerable demographic, millions of americans of all ages spend time shopping and posting on the internet. haueter information is used and what control the individualñ has over the collection of their information is at the center of the debate of whether we need a federal privacy laws. and if so, how it should be structured and what activities it will address. in the case of my son, i am

concerned with the information being gathered and how it is used. i am less concerned with who is conducting the behavioral profiling or what technology they are using. i thank the witnesses today and i afford to your testimony, particularly hearing more about what the industry is doing to address many of these concerns in and of itself. mr. chairman, i am ready to work with you and the stakeholders to address and identify problems and ensure that whatever solution is to develop will legally apply to the behavior regardless of who engages in it. thank you, mr. chairman. >> the chair thanks ithe gentleman. now i will recognizeñi the chairman of the subcommittee on communications technology for five minutes for the purposes of opening statements. the gentleman from west virginia, chairman doctor for five minutes. >> thank you very much, chairman

rush. i want to begin by saying thank you to you and your very fine staff and mr. or don savidge -- radonovich as well as mr. stern's and his staff for the excellent cooperation we have had amongst ourselves. i very much look forward to our continued collaboration as we consider the need for legislation and discuss the principles that privacy protection legislation should embody. broadband networks are the primary driver of the economy and it is fundamentally in the nation's interest to encourage their expanded use. one clear way congress can promote greater use of the internet for access of information for electronic commerce and for entertainment is to ensure that internet users have a high degree of privacy

protection. including transparency about information collection practices and uses, and control over the use of information that is collected from those who use the internet. i have previously announced my desire to work with chairman waxman, chairman rush, and ranking members barton, stearns, and radanovich to craft legislation to ensure internet users that their online experience will be more secure. such a measure would be a driver of greater levels of internet users such as electronic commerce, not a hindrance to them. today's discussion will examine behavioral advertising and ways to enhance consumer protection in association with it. i am a supporter and a beneficiary of targeted advertising. i would much prefer to receive internet advertisements that are relevant to my particular

interest. in fact, have bought a significant number of items based upon targeted advertising delivered to me from websites that i frequently visit. i have a deep appreciation of the value of targeted advertising from the consumer perspective. it is important to note also that online advertising supports much of the commercial content applications and services that are available to internet users without charge. i have no intention of doing anything that would disrupt the veryçó essentials business model for internet based companies. at the same time, i think consumers are entitled toçó some baseline projections in the online space. consumers should be given clear and concise information in an easy defined privacy policy about what information a website collects about them, how that information is used, how long it is stored, however is stored,

what happens to it is -- what happens to it when it is no longer stored and whether it is given or sold to third parties. consumers should be able to opt out of first party use of the information and for its use by third parties orñr subsidiaries who are part of the company's normal first party transactions or without whom the company could not provide its surface -- service. all of that would fall beneath the opt out. consumers should be able to opt in for those parties on marketing services. this arrangement true not prove to be burdensome. in fact, it is very much in line with the practices of many, if not most, the repeatable service providers today. i look forward to hearing from our witnesses about their reactions -- reputable service providers today. by the four drink our witnesses about their reactions to these business models that depend on online advertising without protection for consumers privacies. for example, has suggested a

workableñi online opt in or opt out consent arrangement, are there additional arrangements in which dropped out consent might sometimes be appropriate? what safeguards should be in place to ensure that consumers are given meaningful consent of the sharing of their information both on and off the internet? what role could self-regulatory organizations play in a statutory arrangement that ensures that all entitiesñi that collect information about internet users abide by a basic set of consumer privacy standards? i also look forward to learning about emerging approaches to enhancing consumer choice and control over the use of information through efforts like the network advertising initiative and persistent opt out cookies. what benefits could be services offered to consumers? what is the best way to inform consumers about the availability of the services? and again, how could the

consumers meaningful comment -- consent be procured? i am also interested in hearing pay-per-view about what the future of advertising may hold -- in hearing the per view about what the future of our advertising may holdñr a. i want to thank our witnesses for taking the time to join us here today. they represent a broad and diverse range of interest. and we very much look forward to hearing your testimony. thankñi you, mr. chairman. >> the chair thanks the gentleman. the chair now recognizes the ranking member of the subcommittee on communications, mr. stearns from florida. he is recognized for five minutes for the purposes of opening statements. because good morning and thank you, mr. chairman. i want to -- >> good morning and thank you, mr. chairman.

i want to echo mr. boucher's comments and i want to thank the witnesses for coming this morning. for the most part, you are going to educate us. you are the experts here and we want your opinions. we want to do no harm here. when we look at this possibility of federal legislation dealing with privacy, we want to be sure that as consumers -- that is consumer centric. consumers do not care if you are a search engine or a broadband provider. it is want to ensure that their dot -- they just want to be ensured that their privacy is protected. and they feel they know how much -- congress should and -- should not make the decision for them, but should make the rules so that they can make their own choices. that means companies to be as

transparent as possible about the information they collect and how they are using it. that way, consumers will be better able to make informed, privacy decisions. this should include robust disclosure and notice outside the pot -- the privacy policy. notice and disclosure is to be clear and conspicuous so that consumers know that. first, the information being collected, second, what is the information being collected, how is it beingñi used, and third, w tor juu this information frm being collected if they so desire. by giving the consumer more robust and transparent information, we can strike the proper balance between privacy protection and strong internet commerce. furthermore, my colleagues, i want to emphasize two principles that should play a prominent role in our examination of this issue. first, we should apply the same standard to companies that are engaged in similar conduct with similar information. we should avoid applying those

same standards to entities that do not use the same types of information for the same purposes and do not have anywhere near the same volume of information about the prospective consumer. for example, search engines and internet advertising networks may use it consumers visit to a critic of the website to create profiles for services not directly related to the reason for the visit. other entities, like web publishers, collect information only to provide the very service the consumer has come for -- has come for. our approach should recognize that. second, any legislation in this area should hold various parties accountable only for that which they know and control. we should be wary of efforts to make any one party responsible for the actions of others. consumers online activities provideñi advertisers with valuable information upon which

to market their products and services. collecting this type of information for targeted advertising is very important because it simply allows many of these products and services to remain free to consumers. without this information, web sites would either have to cut back on their free information and services, or would have to start charging a fee. neither result is good for the consumers. overreaching privacy regulation could have a significant account -- a significant negative economic impact at a time when many businesses in our economy are struggling. let's be very careful on these issues before we leave to legislative proposals. when i was chairman of the commerce production and trade, held a number of hearings on privacy. we worked on the privacy protection act, which we brought as a bill. this bill would have required data collectors to provide consumers with information on the a d collecting the information and the purposes for

which information was being collected. i believe it was and still is a good base bill to use as we move forward to develop a new privacy bill. also, i would like to bring up a eight-bring up an issue that perhaps many of us have thought about. but i do not want to bog down the discussion about it. which agency will regulate and enforce privacy standards? will it be the sec or the federal trade commission? accommodation or possibly a new agency? i know this -- a combination or possibly a new agency? i know this will not be solved this morning, but i look forward to working this out and doing this in a bipartisan fashion. i would be interested, if possible, if some of the witnesses would give us their feelings about how the jurisdiction of this privacy bill would be best supervised with. mr. chairman, i would conclude with pointing out that we have talked a bit in previous hearings about deep pocket inspection. the point is, whether a company

uses deep pocket inspection or read your e-mail directly, this should be part of the privacy rules in some way. i think witnesses can also help us on thatñi particular aspect. i lookñi forward to the hearing and i thank you for the opportunity to speak. >> the chair thanks the tournament. the chair now recognizes the gentleman from ohio, mr. space, for two minutes for the purposes of opening statements. >> thank you, chairman rush, for convening a survey on the topic of behavioral advertising. i was struck when reviewing professor felton's testimony by a comment that he makes, "responsible ad services to the collect less information and track users less intensively than the technology would allow." to me, this means that just because we can does not mean that we should.

company's advertising on their sites is what enables our constituents to contact free services online. they also understand that it is a way to provide consumers with ads that are more relevant to them. however, i want to make clear ñithat one bad apple could spoil the whole bunch. among online consumers believe their personal information is at risk for corruption, misuse or theft, will be the moment this approach we are discussing today will cease to work. i strongly believe it is in the interest of all parties to disclose to consumers their advertising practices and intent and to ensure that the consumers information is regarded against exploitation and security breach. i look forward to working with my colleagues on this issue as we move forward. i yield back my time. >> the chairman thanks the judgment. it is now my honor to recognize

for five minutes for the purposes opening statement, the ranking member of the floor committee commerce. >> thank you, mr. chairman. as i look on the other side of the aisle, gladding to see that none of the democrats who played on the democratic baseball team are actually in the room. [laughter] so i can congratulate them in their absence and i will not have to do it face to face when i see them on theçó floor. but last night, mike doyle, who is the manager of the team, bart cpac, who is on thisñi committee -- bart cpac, who was on this committee, played an amazing game. it was not the usual mumbling game. [laughter] mrsa played very well as a team and as a result they beat the stalwart republicans -- they actually played very well as a team and as a result of the beast of republicans.

we had a number of energy and commerce republicans, mr. gingrich, dr. gingrich who is here mr. sculley, who is here, played second base some, and also did some base running and scored. mr. pitts, who came in and watched the game. [laughter] luckily, he did not try to play. although, we could have used his bombing skills from the vietnam war. anyway, we raised quite a bit of money for charity and had quite a bit of time. when you see mike doyle and you see that he is grinning from ear to hear, i just congratulate him and tell him to take pity on the downtrodden republicans who did not quite have the stuff last night. on this hearing, mr. chairman, i do want to thank you and the ranking members for working in a

bipartisan fashion to protect the privacy and security of every american's personal information. i am glad we are working on this in a bipartisan way. i especially appreciate chairman rush's agreement to act on the republicans data security bill. that billñi has implications for the broader privacy discussion and i hope that bill will move forward in the full committee. along with congressman markey, co-chair the congressional privacy caucus. i'm glad that we are working on these issues in a bipartisan way. i, myself, every few days hit the delete button and clean out all of the various cookies on the computers that are in my office and my home. it is amazing to me how many of those accumulate, and most of

the time without any knowledge of myself or anybody else for that matter that they are being put on the computer. i think is a big deal if somebody tracks where you go and what you look at without your personal approval. we would not like that. and i personally do not like in the internet world. the information about myself is mine unless i choose to share it. i would just as soon that it stays as my information only. i think i have the right to know what information people are gathering about me and the right to know what they are doing with it. it is obvious that the public agrees with the statement that i just made because poll after poll shows that they think their information and their right to privacy is just as important on the internet as it is in the non-internet world.

when i opened an e-mail for the new daws cowboys stadium that is in my congressional district, i do not expect to begin receiving unsolicited ads for airline tickets to the dallas-fort worth area or hotels, also for my district in arlington, texas. it is obvious that people track what i do and where ago. and try to take advantage of that. . .

there are other companies locators that we do not even know their name. then you have proposed -- the in between companies. put together, it still is a little bit of a wild west out there. i think it is time congress begin to look at that and try to bring some law and order to that particular wild west area. i see my time is expired, mr. chairman, so i will submit the rest of the statement for the record. i am glad you and the congressmen are working with the republicans and taking a serious look at this. i want to commend the private sector that is here today. it is my understanding you are

working together to come up with some voluntary rules. it is always probable to do with through a voluntary market based approached as opposed to a mandatory, regulatory approach. in any event, they do it again, mr. chairman a congratulations to the democrats on winning the baseball game last night. i yelled at. >> ho-- i yield back. >> thank you. i want to thank you and chairmen brush for calling the start hearing. i would also like to thank the panelists for being here with us this morning. today we're sirte to examine the practices and consumer protection from eckerman online

advertising practice known as b.a. their advertising. and more and more americans rely on the internet for online videos and to purchase goods and services. and american -- americans need to have confidence that their personal information is properly protected. consumers should also understand the scope of the information that is being collected, what it is being used for, the length of time it is being retained, and the security. for court in fort mason -- more information consumers have, the better.

i think you -- thank both of you for having this hearing today. i yield back the balance of my time. >> [inaudible] the chair recognizes the gentleman from michigan. >> we have great attendance. we will see what the attendants is after lunch. i would like to associate myself with mr. barton's remarks. information is yours. when you make a phone call, no matter who it is you do not expect the phone company to share the information was someone else. imagine if you ordered a pizza on the phone and all the sudden

you get different pizza companies going in and knowing that you will be subscribing to that. that information is personable -- personal and should not be shared. it needs to be protected. it is nobody's business. do not expect to have someone call you in your car when you could to make an errannd and expect a competitor to trace to back. i yield back the balance of my time. >> the chair now recognizes the gentleman from georgia. >> i think the chairman. i want to thank the ranking member for his kind words. it i want to remind the ranking member that those of us that sit in this the and also cheer.

>> of the chair now recognizes the tenement for five minutes. -- the chair now recognizes the gentleman for 5 minutes. >> thank you. it is important that we focus on protecting privacy. today we would hear about privacy policies that various companies do. as we proceed and think about legislation, it is imperative that we use of a balanced approach in proceed with caution, and i think if we do have any legislation it certainly should apply equally

to all entities through the internet system. i yield back the balance of my time. >> the chair now recognizes the gentleman from ohio. >> think you, mr. chairman. i believe that consumer privacy rights should be carefully guarded. also i am encouraged by the steps to protect consumers. it is my hope that if legislative action is taking we will do so in a careful manner. with that, i will submit the rest of the record and give back. >> the chair recognizes the

gentleman from georgia. >> i want to thank you for calling this hearing on the emerging use of behavioral use on behalline. this type of advertisement is estimated to reach 4 port $4 billion in revenue. -- this type of advertisement is estimated to reach 4 billion in revenue. i believe it will be important that we focus on three components of potential regulation that these committees proposed. first, it is important to distinguish what it is that we're going to be regulating. currently, most-interest based advertisement is conducted through a web browser cookies.

these encoded text files indicated users online activity and enable advertisers to customized ads based on a series of preferences. however, as we have seed and the industry, technology moves very quickly, india if we are to propose regulations on this industry that we must make the determination of how and what we're going to regulate. mr. chairman, we must also examine which federal agency whithat would be best suited to chordate -- to coordinate jurisdiction. it regulations are necessary, we would coordinate the efforts and responsibilities of the government entities, thereby allowing for industry growth while at the same time safeguarding an individual's private information. lastly, we would also have to

determine who we would be regulating. would it be the advertisers? accordingly, i think it will be important as we move forward we take the time to hear from companies that advertised as a way to give us a different perspective on this important issue that will continue to be crucial to the further development of on-line activity. the heart of the hearing is the american consumer. our focus must be their overall protection. i look forward to hearing from the panel and the yield back the balance of my time. >> the chair recognizes the gentleman from louisiana. >> thank you. i want to thank you and the ranking members of the subcommittee for having this hearing. i am pleased the committees are

examining this issue and a greater issue of data privacy. another congressman has committed to this in the past, but technology continues to advance and develop. we must continue to examine ways consumers do not have the personal information compromise. the technology industry is one of the most advanced in the country. it is also one of the most beneficial for consumers and the economy. we're able to share information and conduct commerce in ways that were never imagined a few decades ago. the industry provides millions of jobs for people all across this country. one thing that i think we must point out is that the industry has evolved and grow on its own with little regulation from the federal government. some would say that the government's billion to regulate this industry is one other

reason it has grown and provided good jobs. there have been issues and things we must address. i hope we would proceed with caution i hope the focus of today's hearing is how we can protect consumers and the personal information in which steps the industry will take to do that. i hope the focus is not on how the government can improve the industry. as we continue to go into this issue today, we should focus on the consumer and offered the consumer of the greatest transparency. i believe that self regulation is sufficient. everyone involved in online

advertising should all be subject to the same requirements. consumers are not always aware that the internet activity is being tracked. they want to know if this is going on and if so, they should be able to opt out if they choose and be assured that the breach of the personal information will not occur. i look forward to the information from the panelists today. it is important that these committees understand their positions and activities as well with all the implications of the practices. thank you, and i yield back. >> the chairman thinks the gentleman. -- thanks the gentleman. we will recessed the committee

until the completion of the votes. we will reconvene 15 minutes after the completion of the vote. until then, we are recess. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] put>> the committee will reconvene. i want to thank each and every one of d.oyou for your patience.

i want to apologize for the time that you have spent here. it has been a record-breaking debt. -- day. we have had consecutive votes. we will proceed to the witnesses. we will proceed with introducing witnesses.

we have the executive director for the center for digital -- [inaudible] let me start over. edward phelp is a director at princeton university. [inaudible] we have ahead of privacy for yahoo! nichol wong. mr. christopher kelly is the chief privacy officer at

facebook. mr. charles coraine is the executive director of advertising initiative. [inaudible] we want to thank the witnesses for their patients and appearance before the subcommittee this morning. will you please stand and raise your right hand. do you solemnly swear to tell the whole truth, and nothing but the truth? let it reflect that all the witnesses were silent and their affirmative. we now ask the witness is to

enter into opening statements. you are recognized for five minutes. please turn the microphone on and go. >> thank you. my name is edward feldman. i am here as a technologist. i am a computer science professor and like to explain some of the technology behind the liberal advertising. the most serious privacy concerns are raised not by advertising but at the gathering of information about users that can be used either to target ads or for other purposes. i would like to describe what technology makes possible. response will add services do not do everything that is possible and i do not mean to imply otherwise.

otherwise can describe what their own systems do. to explain what the technology allows i would like to walk through a scenario illustrated by the diagram. what i would like to describe is a scenario involving behavior advertising. think you. -- thank you. i go to a weather site and look at the forecast for washington. the weather site sends me a page with a forecast information.

along with that page it sends my computer a command, telling it how to find an ad. my web browser connects to an ad service shown at the bottom. along with the request, information is passed to the ad service about me. the fact that i normally look up the forecast in princeton, new jersey. that service and an ad, which is inserted into the page. -- sends an ad, which is inserted into the page. the service cents a long as a cookie, which contained a small, unique code, which in the example is 7952. my computer stores it. later i visited a social networking site. my computer context add service

to get an ad. my computer automatically sends along the cookie that the service provided earlier. this request for an ad carries more information about me. it's as i am interested in baseball and jazz. and that my name is edward felton. it knows that i am the same person who looked up the weather earlier. it adds a new information to the profile of me. the service sends back an ad. this time it is for the washington nationals. that is connecting the dots between think that i did on different sites -- things that i did on different sites. this buildup of more expensive profile about me. next, and go to a bookstore and looked up books on travel to

hawaii. the book site send this to add site. -- sends this to the ad service. by this point, the service knows enough to identify me. in as i live in princeton and my name. -- it knows that i live in princeton and my name. in this example, the at service gets my credit report in my insurance history, which adds to the profile of along with other information it had. finally, i go to a new site that uses the same service. my computer request and ha ad. it sends an ad 4 budget hawaii

vacations. it knows i am interested in a low-kostroun because as my credit report. the new site sends information about what i was reading. in this example i was reading about cancer treatment. add service got information in three ways. firs-- the ad service go t information in three ways. all of this information ended up in my profile. the result was well-targeted ads and the creation of electronic profile of me, containing sensitive information. iad services are not the only

ones who can assemble such large profiles. all of this is possible as a technical matter, which is not to say that the ad services to all of it or even most of it. they may be restrained by law, regulation, or market pressure. what is clear is the technology by itself cannot protect users. >> would you please bring restatement to a close. >> i was just wrapping up. i just want to thank the committee for giving me the opportunity to testify.

>> you are recognized for five minutes. >> i appreciate the opportunity to appear before you today at this important hearing. i am not as vice president of policy and head of privacy. i joined the company 11 years ago. quite simply, my job is making sure yahoo! earns in maintains users trust each and every day. we provide a wide range of useful products and services to 500 million users worldwide. the internet has changed a great deal.

fiskare consumers not only expect that yahoo! will meet the needs but anticipate the needs as well. the same is true for advertising. consumers are more likely to click on advertising that speaks directly to them in their interest. for example, the dollar might have ads on hybrid cars if you have spent time on the yahoo! green. we offer industry leading products and services largely for free. it has been paramount to our growth and critical to our future success. our perch to privacy is transparency, a meaningful choice, and user education with back and protections with data that limits how long personal identifies -- identifiers are

maintained. let's talk about transparency. the leading edge privacy center provides easy navigation, information on special topics, and gives prominence to the opt out page. we have also experimented with the number of ways to provide transparency outside a standard policies, giving users multiple privacy touch points. we must also put control in the hands of the users. we also did not want users to have to redo their opt-outs again and again. that means users can clear the cookie and will not clear their privacy choices at the same time.

the final aspect of the front and the privacy protection is user education. for over a year, yahoo! has displayed 200 million ads per month that explaine privacy. we focus on security and data retention as core aspects of protecting back and policy. -- back-end privacy. this dramatically reduces the period of time we will hold data and vastly increases the scope of data covered by the policies. limited exceptions are explained more fully in my written testimony. we believe this approach to testimonprivacy is a testimony r success in privacy.

the decision about whether to ask for consent or give users opportunity to opt-out depends on the information being collected. most advances in online privacy protection have come as a result of the industry initiative and self regulation. market forces drive companies like doggett to bring privacy innovation to customers quickly. as one companies leave, many other companies follow. as congress considers this role in helping protect consumer privacy online, l.b.o. pew will consider approach that enables providers to keep pace with customer demand and expectations as well. i am very proud of what his record of trust and privacy. -- i am very proud of yahoo!'s

record of trust and privacy. >> hthank you. the chair recognizes ms. wong. you have five minutes. >> thank you. i am pleased to appear before you this evening to discuss online advertising and the ways that google protect the user privacy. online advertising is critically important for the economy. it enables many thousands of businesses to connect to consumers around the nation and across the world. it helps support on-line newspapers and other web publications that we read every day. for the last decade, industry has challenged behavioral advertising.

we recognize the need to deliver relevant advs, well-respected and privacy. -- while respecting privacy. will that advertising has tool content and services available on the internet today. as google prepared to roll out internet based advertising, we talked to many users and government experts. those conversations led us to realize that we need to follow three important issues in order to provide consumers with greater transparency and tourists. -- with greater transparency and choice. what information is being collected and how was it being used? and finally, falcons and consumers -- how can consumers be given greater control over

how the information is used? when you see an online advertisements today, you generally do not know much about the advertisement. kugel is trying to solve this problem by providing a link to more information write and advertisement -- right in the advertisement. we believe this is a significant innovation that empowers consumers and we believe this is the direction that many in the industry are going. if you are curious about getting information about that ad, you can click on a link.

it is explained what information is being collected, how it is being used and how you can exercise stress and in more information. -- how you can exercise choice and more information. google has inferred that my cookies should be inferred from hybrid cars and movie rental information and realistic. before we introduced a preference manager, most users had no idea what interests were being associated with their cookies on line by advertising companies. we are the first company to introduce this transparency. if you do not agree with interests, you can delete any one of them. for example, if you want to delete movie rentals, you can do

that with one click. i have just done that. likewise, you can add anything you look like. googled is not leav does not use categories. there are many other options. if you are sports fan, you can associate your cookies was sports. if you prefer not to see these options, you can opt out at any time. people cannot collect any information in you will not receive advertisements from it. this is attached by attaching a cookie to your browser. these traditionally have not been persistent. our engineers had developed a tool that was not previously

available that makes it permanent, even when users clear other cookies from browsers. after you opt out, click the download button and follow the directions to install a browser plug in. i hope this gives you a better idea of how we showed internet address. thank you for your time. >> we welcome mr. kelly. you're recognized for five minutes. >> thank you. thank you for the opportunity to address important privacy matters on the internet. we agree with you that protecting privacy is critical to the future growth of the economy. facebook now serves more than 200 million active users worldwide. 70 million in the united states.

we are a technology company that gives people the opportunity to share their lives and experiences to the internet. their privacy settings give users control over how they share their information, allowing them to choose their friends they accept, the affiliation's they choose, and how the information is shared with friends and the world at large. today i would like to make key points. today's, our privacy principles are at the core of advertising model. second, in offering the free service to users, we are dedicated to developing advertising that is relevant in personal without invading user'' privacy and to give users more control over how their personal information is used on online advertising environment. we primarily achieve the objectives by giving users control over how they shared the information that model real world information sharing and

providing transparency about how to use their information and advertising. the federal trade commission's behavior advertising principles recognize the important distinctions made by facebook advertisement targeting vs. other sites and companies. facebook understands that you of us want to be kermit's, showinhg no information with anyone. people come to facebook to share information, please give them the technological tools to manage the sharing. poll information on facebook users is not available to those users on facebook, let alone

users of the internet. if someone is searching for new friends on facebook, all that she might nsee is the limited information that users have decided to make available. most users decide to make profile information limited to the non-friends. we're constantly refining the tools to allow users to make informed choices. everyday use of the site educate users as to the power they have of how they share the information and user feedback informs everything we do. facebook its transparent with users about the fact that we're advertised business. advertisements targeted to user

preferences and demographics have always been part of the advertising industry. we want this committee to understand the use of personal information between advertisement in the head and a viable form and the use, dissemination, or sharing information and non- identifiable form. user should shachoose what information they choose to share. to take in the example, if you were to navigate to the social networking site, if it were facebook, we would not be sharing with advertisement provided that he was edward

felton or that he likes jazz. the privacy policy and user experience and form them about how advertising on the service works. advertising that enables us to provide the service for free to users. it is presented on the page allocated for advertising. unless the user decides otherwise buy directly in voluntarily sharing information with advertisers, they can only target facebook advertisers. facebook builds and supports products on user control and we think you very much for the opportunity to present our velocipede and the approach to online advertising before the committee. >> thank you.

>> i want to thank the chair and ranking members of the committee for their interest in privacy and holding this hearing and to support their effort to help americans get a fair, digital data deal. that is what they deserve. i submitted my testimony in writing to lay at the broad parameters of the interactive advertising system in the united states. all the elements that are shaping the system -- you can look at that if you want information. i have been looking at these issues for 15 years. i last work closely with congress committee back in 1998 when he led the campaign that established the childrens' on- line privacy protection act. right now that is the only online advertising law.

imagine a world that we have created, and you have already spoken about it -- imagine a world where every move you are being watched. what ever content you read, what you buy, how much you are willing to spend, and how much you are not willing to spend. where you go, what you like, what you do not like -- all of that being compiled. outside database is being used to build up a larger profile of who you are and it even includes your race whether you are low income or middle-class. they call it digital's fingerprints, but this very powerful system is unaccountable to the average american is

constantly storing all of this information and making claims and assumptions about you. this is without any accountability to you as a consumer, let alone as a citizen. that is online advertising system today as we know it. it is different from traditional advertising because it is able to track you minute by minute, second by second. your information is being sold in online advertisement auctions. it is an incredible system that we have created. it is now in almost everything we do online. there is a broad data collection system going on as they filled the incredibly sophisticated system. i want to make it clear that our

call for privacy and consumer protection rules is not about undermining the role of online advertising and marketing. that has an important role to play. we need to have on-line advertising and marketing, but we need to at -- it is not about any particular company, it is about the overall practices the industry has created to collect the information and use information with a powerful, multimedia online advertising services that are not understandable and controllable indefinable but consumers. i think it is very clear if you look at the issue of what is called sensitive data, which i am hoping you are going to work on. in particular, financial data. when you look at what happened during the recent financial crisis, online advertising played a major role in

encouraging people to take out the subprime mortgages. online advertisement where some of the biggest advertisers on the internet during the boom time that led to the current crisis. people had no idea when they're taking out a mortgage and loan what exactly they were getting. the system was defining them in certain ways and making them certain offers. as a result, they have had to face the consequences. we need some regulation that puts the system into accountability. consumer groups around the country are calling on you to enact legislation as soon as possible to bring shared

information principles of to the digital era. self regulation has failed. they have been working on self regulation for 15 years, and all you have is more data collecting every minute. americans should not have to trade away their rights to control the information. whether it is buying the mortgage or buying a car or anything else without having to get their data up. there is a balance. there is a win/win possible here. thank you. >> the chair recognizes mr. korane for 5 minutes. >> i would like to thank you on behalf of the networking advertising commitment to discuss the economic benefits and the privacy implications of

online behavior advertising. we are coalition of advertising networks and other online marketing companies dedicated to the effective self regulation. as originally founded nine years ago, we have grown to include more than 30 online leading advertising companies, including all 10 of the largest advertising networks. today, consumers can learn more about online behavior of advertising -- behavioral advertising. today's hearing focuses on industry practices and consumer expectations. we are committed to online practices that strike the right balance between the consumers of economic and privacy expectations. we believe they differ -- they enjoy the diversity, but we must also provide consumers with meaningful notice and choice.

tens of millions of americans benefit every day from three website in content and services made available on the web. these services include news, video, but sharing and social networking services. we support the services by connecting them with advertisers in using a web browser cookies to serve them with more compelling and advertisers. we provide web sites with their broad variety of services. they help advertisers with campaigns across multiple sites. they also make on-line advertising more interesting and more useful by using non- personal filable information to predict interest.

the self-regulatory code was established to meet the challenge and continues today to provide the same core principles for members. users should proceed clear inconspicuous -- and conspicuous notice on what sites they visit. sensitive data should not be used for online behavioral advertising without consent. the consent should also be obtained it personally identifiable information is merged with information previously gathered about the person's web browsing. and as the technologies have matured, federal trade commission has called on the industry to broaden and enhance the approach to self regulation. we believe self-regulatory practices should be as dynamic as the marketplace they serve. we're moving quickly to respond. we're working to develop technologies that would support

and enhance consumer noticed in or around behavioral-based banner ads. additionally, to help protect user choices, we are implementing technology to improve the durability of user preferences stored in browser cookies. we believe that the current approach strikes the right balance and consumers' expectations for the advertisement. the model combines an opt-out with non-personal viablinformat. this preserves the experience in which web sites provide users with more rather than less advertising. users have multiple options to control advertising, either by using opt-outs or their own web browser tools.

in significant changes to this model -- and significant changes to this model could pose a profound risk to the user and the experience and economic model. consumers could be inundated with prompt asking for permission to search relevant advertisements. this could uproot the revenue model that supports many web sites today. it is vital to continued growth in the right balance between the economic, technological and consumer expectations. thank you. >> the chair recognizes mr. creman.

>> a as a leading internet expert, i obviously had internet companies as clients. these include wireless cable and telecom fraud and companies and microsoft and thein the technicl sector. i want to talk about the internet problem and solution. what is the internet privacy problem? technology has turned privacy upside down. before the internet, it was inefficient, costly, and difficult to collect private information. through inertia, what we have is a default, finders keepers, losers weepers privacy policy. most americans incorrectly assumed that the privacy they have enjoyed in the past is privacy online.

that is not true. all but the technology trends out there, social networking, it internet mobility, all of them will dramatically increase privacy online. fifth, increasingly the undercount currency of the internet is private data. -- increasingly the underground currency of the internet is private data. privacy can be taken away from them for free and profited from with no obligation to or compensation due to the affected consumer.

the sixth part of the problem is that we have the technology driven swiss cheese privacy framework. this may be the worst of all possible worlds. simply, the framework we have gives the user no meaningful choice to either protect themselves or benefit themselves in the marketplace irina of their private information. -- marketplace arena of their private information. if consumers private information is being taken and exploited without their consent, the consumers are most at risk of having their information stolen , wouldn't it be logical for the framework to be made around consumer?

but where consumers are able to effectively understand and negotiate the risk and reward involved with sharing private information. moreover, the consumer is the only one that knows the information about their personal situation or interests, shouldn't it be the consumer that is empowered to make the decisions? i think one thing is obvious, and that is we should have a consumer framework that would be superior to the current technology-driven framework. it would empower consumers with the control and freedom to choose to either protect or to exploit their privacy. it will prevent competitive arbitraged by creating a level

playing field, and would allow you to stay current with the constant changing innovation because you are not technology- oriented, you are consumer- oriented. you will be able to accommodate both sides. so in closing, i think we can do better than the current finders keepers losers weepers privacy policy of the united states. thank you. >> the chair thanks the gentleman. the committee will engage the panel in a series of questions. in your testimony, you discuss meaningful choice for consumers. this is a principle but everyone

agrees is a good one. the only choice for consumers using yahoo! is to opt-out of receiving interest-based advertising. it seems they cannot opt-out of the collection of tracking. can you clarify what the consumer's choice is with yahoo!'s opt-out? i have another question. does this only stop the displaying of advertising for stop the collection of data?

>> out opt-out is not a collection of data. there are a number of reasons why we collect data, and primarily that relates to the display of advertising. advertisers pay us to show advertisements. we have to note the advertisements were delivered in shown. -- and shown. another reason why has to do with the way we operate with sites. if we were to stop collecting data, there are a number of users that would opt-out and engage in that a certain behavior. we are no longer showing them behavioral advertisements

wednesdahen they opt-out. we have other uses for the data. i am not sure if i understood the other question as being different from that one. maybe i miss her. -- i misheard. pops out that we offer -- that opt-out is very clearly defined to users and is easy to find. what we offer on the back end is an organization of that data within 90 days. is anonymous asian -- is anonymization in 90 days. all of the systems are logged

out. >> they can opt out? >> there are other tools other browser level that would address that. our systems do not work that way. . . if you typed in the search and you are not signed in or registered with us, what that means is that the only thing we

get back is what all of us here get, the standard log line that records -- a computer is asking you a question and it comes with two things that can be identifying a user. one is an ip address, which your isp assigns to you, and the other is a cookie, which is what anne referenced. neither of these things are tied to an individual. you cannot know it is nicole or chris or anne based solely on the ip address and the cookie. just to be clear about the type of data that we collect. we do provide an opt out, as i was demonstrating, for the use of that cookie and ip address data to target ads. in other words, when you click on the opt out, what it does is instead of getting a unique cookie, which is a series of numbers and letters, if you get the opt out cookie, and it literally says in it opt out so that the data that we collect goes into a huge pool of all

users who have the same opt out cookie. it is completely abrogated which means we cannot see an individual user in that pool of data that has been identified as opt out. >> the chairs time is up. the chair now recognizes the ranking member, mr. radanovich, for 5 minutes, and at the conclusion of his questions and answers, the chair will relinquish the chair to the chairman of the communications subcommittee at that point. >> thank you, mr. chairman, and welcome, members of the panel. your testimony is very interesting. my first question goes to mr. curran, is it? for your testimony, i understand it you are involved in a broad industry-wide effort to create self regulating principles, and that these principles -- you're going to be releasing these principles pretty soon, i understand within about 30 days.

can you expand a little bit on what we can expect you to address on those, and i am particularly interested about the enforcement areas of these principles. you need to punch your -- there you go. >> there are two different answers your questions because they are terror -- because there are two different things going on. in my long form testimony, i detailed some of the work going on with the and a i in terms of our member companies, which are primarily advertising networks and other online marketing companies, to essentially further the delta element of technology that would allow notice inside the banner ad really to get together to advance an infrastructure that would allow any entity serving a behaviorally targeted ad or any party responsible for a behaviorally targeted ad to deliver that kind of notice in connection with an ad. >> that is work that the in a i has been pursuing from a

technological perspective? >> separately, i think your question relates to a far broader industry dialogue that has not been led by the nih but by a lot of acronyms. >> that is much clearer now. [laughter] >> i think the key takeaway is that the ftc has indicated that broader self-regulatory approaches were needed for industry, and those are similar in spirit to those of the nih to apply on this ecosystem-wide basis. my understanding is that the rollout of those principles is in weeks. and we're very much supportive of those efforts, and i think that they're very much part of a trend of a momentum towards exactly what the ftc called for

in terms of a very vigorous engagement. >> thank you very much. ms. wong, i would love to ask you a question regarding your comments or support of establishing a uniform online and offline framework for privacy. i would love to have you clarify what uniform means, and does it mean that it should apply to all entities and engage in collecting or using and sharing online information whether they are high as peas or application providers? should it be straight -- isp 's or application providers? >> google in a number of the folks at the table here been working hard to think about federal comprehensive privacy legislation, and if i were to encourage the committee to do anything, i think it is backing something like that because our

history on privacy legislation has been trying to sectorally trying to regulate privacy with children, with health, with financial, so that for user on the internet, their internet experience is seamless. they go from their bank to their doctor to their web service seamlessly and do not realize that different seat -- different privacy laws apply. the importance for ensuring that users continue to trust the use of their data on the internet is to have baseline privacy law across industries. and to get your second question -- >> let me ask you to clarify this a little bit. when you say uniform, does that mean -- does that apply to content providers that provide content over google? is that what you call uniform online privacy? >> right, yes, there would be baseline standards for all companies in terms of notice to users, access and controls for

user, and security for that data. >> thank you. ms. toth, in yahoo, recently you announced that you will completely erase ip addresses at the end of its data retention period rather than just deleting a few numbers as is the practice of a number of your competitors. if you do not need the ip addresses for fraud prevention or anything else, what is the utility in keeping the ip address at all? why the fractional numbers, and why don't you just dump it right and wait? >> i think we have slides in there of our data retention policy. the vast majority of our data at 90 days we de-identify the data. we apply a four-step process to removing identifiers. the ip address is one of those identifiers that is stored in the laws, and for us we completely delete that identifier in 90 days with the exception of the fraud and abuse

systems which hold it for up to six months and then it is deleted. so we store that data only for as long as we needed for the purposes of providing our services and then we de-identify the records and that gets to the ip address. the ip address is typically in the context of use having to do more with customizing a user experience along the lines of geography, those sorts of things. but it is the-identified and it is removed at 90 days. does that answer your question? >> good enough. thank you very much. >> i again want to express apologies to our witnesses for the lengthy delay. we were on the house floor a bit longer than we had anticipated,

and you were very patient. we want to express the committee's appreciation to you for your willingness to stay with us and provide what has been some truly excellent testimony. i am going to propound a series of questions and then recognize other members who are here. some had made the point in written testimony, and i heard it made otherwise, apart from this hearing, that there can be a meaningless opt in and in a meaningful opt out. and i would assume the difference it depends on some extent to the degree of disclosure that is made to the user. so what i would like is to get your statement of what you think the elements of a meaningful opt out would be. who would like to enter? mr. chester. >> i think that we need an opt in. and my rule of thumb is, and

this has to be done in a doable way to make -- >> mr. chester, before you alter the question and answer the question you wish i had asked, let me it -- let me see if i can get you or someone to answer the question i actually did ask. ms. wong. >> i will give it a try. i think that there are good opt out and there are bad opt ins. i think a bad opt in is, you know, an opt in slipped in in a long provision at the beginning of the contract relationship with your user that they forget over time, and so there could be continued data collection in the life of your relationship with that user that the user has completely forgotten about. a good opt out is an opt out that is presented again and again to the user as a meaningful choice to them. in our interest-based advertising, one of the things that we're trying to do is put ourselves in front of the user so that we encourage them to engage with their own data. that is the person by that -- of that adds by google link in the

ad because we want them to know when you are looking at this page, it is not just that new york times were looking at. the ad is from google and you should engage with that data. it is to give the sense of control so that they change their behavior and start to engage and take control of their own data. i think that that -- >> said you would make full disclosure to the user of what information is collected about the user. you would describe how that information is used once you have collected it, and then you provide the opt out opportunity? >> that is right. >> and would those be the meaningful elements of opt out? >> i think that that is right. the continued engagement with the user. >> now let me ask mr. chester what his response to that would be. >> my rule of thumb is this. it has to be done workably. companies should be telling the consumer what they tell perspective clients. when you see what -- and i included some of that in my

testimony, when you see what they are telling their clients and their prospective clients or when they are reporting on the results of that data collection system they have created with the advertising, they are talking about massive collection of data that is far beyond the kin of what might be presented in a simple opt out. so they need to be honest and tell people exactly what is about to happen. it can be a scale here, but if you read what they are doing, including the companies here, if you read what they are saying and also how the applications, the interactive applications -- when you read the literature, the interaction applications have been designed to get people to give up more data, so they have to be honest. >> thank you very much. if we were to draw a regulatory line of some sort that is focused on the collection and use of personally identifiable

information, should we include within the definition of what is personally identifiable in formation, the ip address? mr. chester is saying yes. let me see if any have any different views. everyone agrees that -- well, okay, ms. wong. >> i will give it a try again. i think our position is that the ip address can be personally identifying depending on your relationship with the user. if you are the isp that assigned that ip address, what it means is that you are actually billing that user every month and you have credit card are bidding -- or billing information from them, which means you can in fact associate the ip address the isp assigned with a real person. if you're like google with an unauthenticated user where you do not know who is a trust -- who is attached to the ip address, it is not personally identifiable. >> it is personally identifiable if that is

associated with other kinds of affirmation about the user, some of which might be sensitive and personal. you would probably say that it is not personally identifiable if you have that in isolation perhaps with an opt out cookie? >> right. >> i think i interest in your position. let me ask about the possible role that self-regulatory organizations might play in a statutory scheme that would extend privacy rights to internet users. several questions about that. i know that we have well- regarded sro's in existence today. many of the major internet companies are affiliated with one more sro's, and i am concerned if we add a statutory scheme on top of that, in order to assure that every internet user has the understanding that his online experience is secure because all web sites will have to comply with a certain set of

fundamental privacy assurances. how we do that in association with continued viability and usability for the sro's, so just a couple of key questions. how would a user who feels aggrieved because the sro, for example, may not have complied with the principles it signed up to comply with get recourse? should there is some point be access to a federal agency to seek that resource? and how could we make sure that every website actually complies with the minimum set of guarantees? so it like to try answering that? mr. cleveland. >> i think you're trying to get to something that actually works, an accountable system. one idea i would offer is whether it is self-regulatory or governmental is that there needs to be some audit that is occurring on a regular basis.

those could be automated audits or they can be personalized. they need to be random because what you're talking about is meaningful. we're talking about accountable. and if you care about those two words and those two concepts and principles, there needs to be verification. >> other comments, mr. chester? >> there is a role for self regulation, but i have to underscore that self regulation has failed. the only reason the in a i is upgrading its principles is because of a controversy that occurred over the google double click merger when all these consumer privacy groups made so much trouble that the ftc said, we've got to do something about privacy principles. and then the in a after many years of being asleep, decided, if we're going to revamp them. the only reason the companies have reduced their retention time is because the european union has been pressing them. so it is the forces of regulation that has actually

bolstered the failing self- regulatory system. >> so you would agree, that the statute imposed certain fundamental guarantees and they meet your definition of what those fundamental guarantees of privacy should be, that an sro that enforces those fundamental guarantees or has those as a core principle that our condition of membership, such an sro could be effective, could it not? >> i think the history of self regulation certainly need telecommunications like the kids area has been that the route -- the self-regulatory structure is only as good as the law has been in fact. >> my time is expired. i will recognize mr. stearns for 5 minutes. >> this is the first time in the history of congress that we have had this kind of procedure on the floor. we had almost 55 votes, and they were over almost 8 hours. and so you have hit sort of a perfect storm, so your patience is appreciated and we appreciate you staying.

ms. toth and ms. wong, on any given day people come to your sites. let us call that x.. they all come to your sites. what percent of those people actually go to your privacy, ms. toth? >> we did not calculate it as a percentage. the number of page views of users who come to our privacy policy remains out fairly low number overall. >> just take 1000 people, just to make it easy. you could even tell me if it is 10 percent or 1% or half a percent? >> it is hardly far lower than 1%. >> so it is very small. ms. wong, how about you? i do not know when i can try to get back to you with the number, but i don't know the number of these. >> no one on your staff can even give me a ballpark? it is not 10%. >> i am sure that it is lower than the number of visits that we get.

a year ago, we started uploading videos to explain our privacy practices, and we see that users are engaging with us in those. >> because it is a video. >> and they are rating them and telling us what works for them and what does not, and that notice is a really important thing for this committee. we have to find better ways than a pure privacy policy to engage with our users. >> videos might be a good way. now each of you mentioned that you are willing to give to the consumer the information that you have collected and get into sort of a category. is this information that you are going to give -- this is then sensitized or you have put together a summary and given it to the and -- the customer. we let the user actually see the raw data or at lack -- or at least actually see what you collect? we you ever get to the point that they can actually see what you collect? >> i would love it if we could -- i would like to see some of the data that we ashley to

collect. >> i could actually see it that i wanted to. and not just get your categories. >> we have a slide that shows our log files or a sample of what we collect in the log files. i don't think that a consumer would engage with in that that would be meaningful because it is a very technical expression of a users interaction with us on the site, so what we do in our interest-based advertising and the behavioral targeting system that we use is to take those visits and categorize them based on the types of interaction. so the user visits sports, they will have a score that indicates they visit sports. the actual log files themselves would probably not be useful for consumer to engage with. it is a series of -- it is actually quite difficult to explain in plain english what is in a log file. >> ok, but the customer would have access to it if they wish to? >> we did not ads make it available because there are no

tools that actually generate log files and a way that would be easily as decibels for consumers. what we give consumers is ready access to our privacy policy, educational links, opt out opportunities that are abundant across the site. >> the demo that we did for you about our ads preference manager is an attempt to make that interface real, which is demonstrating the interest categories that are assigned to a cookie in order to target advertising because i think anne is correct that if the user will not read a privacy policy, they are surely not going to read code. >> mr. chester, before you answer that question, what do you do with the bad actors? we sit here and pass a bill and we set up opt in and opt out procedures and we've got yahoo and googled, but what you do with the bad actors? is it possible that in addition to developing this legislation so that all 50 states can have one set, because each state now is developing a different one, so there might be a need for us at the federal level to develop

it so you don't have 50 different privacies. my question is twofold. what do we do with the bad actors, and is it a possibility that you could set up good housekeeping seals that everybody would say, i am safe with this site, bingo, i can go into it and feel comfortable, and the bad actors would not get in and then you could differentiate and say i am not going to fool with those. >> i think if you passed legislative standards, that would be the base line. everyone would know basically that they are protected. you now have a changed ftc potentially, and hopefully you will reauthorize it soon. the ftc has been hampered in going after the bad actors. it has been constrained from really looking as closely at this markets as it should be and has not had the resources, and it is also been in conflict. there is now a new chairman there. there is a new director of consumer protection. they really want to move on this

issue, and they could in fact be empowered to go after the bad actors in a much more vigorous way. of course, we do not want to see state pre-emption consumer advocacy. >> when i had hearings on this, one of the problems we found is that there was no reference paucity between countries and you had the bad actors outside the it -- reciprocity, and you had the bad actors outside the united states. and so part and parcel of this is to develop legislation with other countries where you have reciprocity so that you and go after corruption and fraud and there is that ability to do that. >> i think that we are falling behind the europeans. i think it is ironic. they are going and have a better privacy policy and build a whole new online commerce business that is privacy friendly while we are lagging because they are moving. the market is really being shaped and this is something positive about the industry. we are creating this global

interactive market. yes, there are european and asian companies, but they in fact have created the standard and that is terrific. what happens here can shape the rest of the world. as for profiles, you can see company after company says i can have all this information about an individual consumer. i would hope that under the legislation, that consumer could see all the detailed information that is being collected about them. >> mr. cleland. >> if congress is serious about this, you need to focus on the concept of deterrence. if privacy violations or repeated violations are important, there needs to be a significant penalty of whatever is appropriate, but if legislation is passed and there is no deterrent and there is also no significant way of getting caught, meaning independent audits of some type, it will not have teeth. it will not be meaningful. it will not be accountable. so if you are serious about this, you need to think about how do you take on accountability, a problem across

the internet, not just with privacy, and try and address that and create more accountability. it is never going to be perfect but it is key. >> mr. chairman, if you'll give me a little slack here, i want to bring this last question, which is also what we as the rate -- as legislators are grappling with, the regulatory side versus the enforcement. mr. cleland talked about enforcement, and we have two jurisdictions here. we have the fcc and the federal trade commission, so i'd like to start to my left and give us a feeling of how you think this bill should come together in terms of jurisdiction with the fcc in the federal trade commission. some people think that the fcc could be the enforcer and the ftc could be the regulator, but i would be curious if each of you would take a few moments, mr. chairman. >> i think this is closer to an ftc issue. i think it is fundamentally a consumer protection issue. >> both for regulatory and

enforcement? >> yes. >> ok. >> i would agree with mr. felten. we of work for very long time with the federal trade commission on issues of consumer privacy online. we believe that they are well versed to address this issue. >> ms. wong. >> i feel little bit out of my depth in understanding the jurisdiction between federal agencies, but like anne we have worked for quite a while with the ftc. my experience in watching them of the last 10 years is that they brought very import -- very effective enforcement actions. >> i would say as well that we worked extensively with the ftc so far along this and i have a great deal of expertise in the competition area, which is one of the things that is driving better technology throughout the industry in providing more transparency and more control over data. the ftc has developed a great deal of expertise in this area. >> i'll like to see a joint task force because the fcc will have expertise at the network level

and particularly with cases of inspection. but when it comes to the ad itself and the consumer experience, is the ftc. >> because this will envelop -- this is going to develop once you get broadband more for you will see voice and everything over the internet 3 all communication will be through that media and so i think the fcc has a part and parcel role. >> i think i would echo that, and not to the ftc, certainly in terms of our business model for cookie-related activity. the ftc for over a decade with its workshops on technology has been instrumental in raising awareness of the policy and technical issues and very much determinant in setting the direction for self regulation. as for other business models and other regulatory schemes, i would not be of a speech to that. >> fdc is the lead in close coordination with the sec. the only problem would be if jurisdiction got in a way of passing legislation.

that would be the only tragedy. >> thank you very much, mr. stearns. the gentleman from new york, mr. wiener, is recognized for 5 minutes. >> thank you. could i ask perhaps for ms. wong to talk a little bit about your experience developing crumb, which is your -- research -- chrome, your browser. wouldn't it be possible through that vehicle so that when you download it, your first page is to tell us what information you would like to know about the pages you are visiting and what information's that you would like to share, and maybe a collection of boxes you can check or not check? it is similar to what facebook tries to do, although they do not do it right in your face. that seems to be an even better place to think about the true gateway for the experience.

if i wanted to do that through chrome, would not be able to do that in some way? i know i can erase the cookies and i can erase my browser history, but cannot do something like that? >> thank you for that question. i am at a disadvantage because i am not an engineer, just a lawyer, and our engineers do amazing things. i do not know if there is any limitation on what they can do. i know they are working hard to build privacy controls. >> maybe mr. felten can tell me about the technology possible here. >> short, the affirmation follows the users might be concerned about mostly happened not at the browser but after the vote user has interacted with a website or a content provider, so that technical controls would exist mostly not in the browser but in the web sites themselves. >> let me interrupt on that point. but if you have a fairly finite number of browsers that most people use, but save for the

purposes of this conversation is five -- that basically probably accounts for most of what people did. and the browsers are themselves competitive with one another. you could argue that the browser industry grew out of people's dissatisfaction with explore. so why could you not say that if you want your website to come up when you are traveling through firefox, you have to have certain of your own a affirmation that you're giving us about what we can tell our users. isn't that kind of a technical solution, a solution but a technical way to kind of serve as a gatekeeper for a lot of web sites? >> yes, and they're certainly things you could do along those lines so that the browser could help the user express their preferences, and the browser could in a technical way query a site and see what promises the site makes about uses of data. there have been efforts to do this in the past. there was a standardization effort called p3p, the platform

for privacy preferences, which defines such a standard, and for reasons that are subject to debate, the standard did not stick. it was not popular. nonetheless, i think that this is a fruitful approach and i for one would be happy if the companies got together and had a discussion again about how to do this. >> mr. kelly, tell us a little bit, if you could, about your experiences in stepping on the toes of people's privacy concerns. it seems to me that we to some degree have three companies that have succeeded because consumers with a lot of different choices have chosen to use google, chosen to use yahoo, chosen in large numbers to go to facebook. could be their reason that they are choosing your 3 services in particular is that you are being self selected by an active consumer marketplace that thinks privacy works on your sites?

you just had an experience, i guess it is ongoing, where you had a conversation with your members about privacy. how does it work differently on yours -- what search engine do you use when you're searching the internet personally? >> is usually google. >> how does your privacy experience as a consumer of google different than as a member of facebook, is it at all? >> i think all three of the site have succeeded because they are providing great user experiences overall. in some cases those are around privacy. because we have based a business on identity and personal information and the effective sharing of that with people who share a social context with you come we knew going and that privacy was going to be a critical issue for us. and our goal has been to build technologies that allow people to make choices, so one of the things that has got lost in the discussion of social networking

is that friending, whether you friends someone or not and how you connect to them is in and of itself a privacy setting. it determines what information that you see on facebook, and that been a great experience for us. when you look at google or yahoo as a search engine, they are looking to deliver a different experience. they look for you type in a word to and get back something that they think is the most relevant experience for you to get you to that page that you need to go next. if you use other services on those sites, they are providing different experiences there. our goal has been to build technology that empowers users and lets them make their own choices about how they share information. we've aimed to extend that into the advertising realm as well. >> mr. chester, i know you and answer this question, but let me build on it. take me back to 1986 or even 1996. i don't even know when this phenomenon all began. you could buy it someone's

credit report from three different companies. you could probably find aggregators of their formation that helped car dealers feel out -- peter add who is in their information to prove you could probably scrub public records to find out what kind upon that they own, how many taxes they have paid. it seems to me that there will always been resources that allowed someone to do 75% of what you described in your testimony as the thing we are protecting against. and we have acted here in congress to try to limit access to that of formation, but to some degree, would you not agree that consumers have pretty much now have a lot the tools that inform that experience? i would argue without knowing, i bet there are places you can go on the internet that even final software plug ins, to let me know who is doing what and what web sites are good or bad at protecting information. it is a two-part question.

one is a lot of the stuff that you are most concerned about is going to be out there with you don't play into the internet at all, and secondly, it is in some degree the marketplace -- are consumers allowing the winners to be the good privacy companies? >> polls after polls after surveys including the one that uc-berkeley just released about a week ago, 10 days ago, say that most users, most consumers have no idea about what is being collected, how what is being used, how it really works. i think this will come out as part of the debate and that is why we need good privacy legislation because it will undermine public confidence -- if people really do not know what is going on inside facebook in the third party developers and all the data flowing out. they did not know what google is collecting across its various interests. if they knew, i think it would be more concerned. consumers do not know. the polls show that. this is a whole different world here, right, then it was back in

1996 are 1998 when we did the children's act. you're talking about the instantaneous merger of a vast number of offline databases with online behavior, minute by minute, that is adopted to an individual's actions and reactions with various online environments, including all the personal information they put on their social networks. this is a completely different system that has been created. and finally, you know, i have a 16-year-old. i look at this as the world that will be here very soon. we will be buying our mortgages on this mobile phone in the not too distant future. this is the dominant way we're going to be doing business for the pc and the mobile phone. it is a whole different world that has been created. on the one hand, we should be proud of it. they created it for us. we just have to make sure that consumers are protected. >> thank you, mr. chairman. >> thank you, mr. wang appeared

the gentleman from louisiana, mr. sculley is, is recognized for 5 minutes. -- mr. sculley saialise, is recd for 5 minutes. >> when we talk about opt in versus opt out, and i would imagine for business model purposes, opt-in is the preference, because it for someone to opt in, i think it would probably limit the number of people that would want their data to be collected on the front end, but if they do go to the process of opting out, are they actually stopping their personal data from being collected, or are they just not getting the targeted advertising? >> when a user is opting out for us, that is an opt out of collection but of use of the personal id -- information, but i also want to be careful about the use of the term personal information, but because very often what is being conveyed to

us is our permission that is specific only to a browser that is used to customize advertising. but even that level is of what the user is able to opt out of in terms of the data being used. >> but in different levels. if you're going on a browser, and i think ms. wong talked about that, if i just go on google and do a search, there is different information, maybe just my ip address, but then if i actually use yahoo for an e- mail account, then i am going to be giving you a whole lot more information if you will have access to that, and that i choose to opt out, what am i opting out of there? are you not going to be collecting that data anymore or are you just not going to be giving the targeted advertising? >> the way that we do it at yahoo is that when a user opts out, and we are no longer showing them targeted advertising, and we're not using their permission and that particular way. if we offer a wide a way of braddocks' a -- and services like e-mail, search, all wide array. >> may be social network

services. >> social networking, exactly. when a user opts out, we opt them out of the delivery of targeted advertising, but we also recognize that users may not want us to have that much affirmation about them, so we take great pains to de-identify the data as soon as we can. we spent over you're looking at every single product, every single data system that got to really try to minimize the amount time that we hold data about users. >> ms. wong, and in this calais -- mr. kelly. >> i think it is roughly the same answer i gave earlier, which is really collect very little data from users when they are searching the ip address and the cookie, if any opt out for our interest-based advertising is an opt out for those targeted ads, and it means that the cookie you are getting is not uniquely identify air. it is just dropping the query that you send us or the data that we've gotten into a bucket of all opt out cookies. >> our service is based on sharing personal information

with others, so we in there -- we inevitably end up collecting a great deal of personal information's said it weakened a bit of we share with others, and ashley as people to retain people's photo albums for them, which they usually expect to be retained indefinitely. in certain circumstances, and particularly in our advertising products, where we are innovating and where people believe -- may not be used for presentation at a particular way, we allowed for opt outs in those instances because we think it empowers users. that allows them to say i am not comfortable with that at this point, but they can reconsider that at a later time. our goal overall, and i think the goal of this committee and any legislation it considers and any enhancement of regulatory authority should be to make sure that consumers have real power to make those choices. we tried to embody that in technology as much as we can, and you are here trying to embody it in law and trying to encourage the regulatory agencies to continue the meet their burdens and their obligations under existing law. >> i apologize to interrupt.

there is something else i would ask especially as it relates to e-mail services. and both for yahoo and goggle -- and for google, it can answer this. if a user of gazan or google air -- or any other e-mail services the size that they want to opt in or they do not want to opt out to all of those agreements, and you can collect whatever information you want from them, but let us say they then send me, and i did not have that service, and they send me an e- mail. i did not agree to any of those issues. do you read e-mails from people that are yahoo! or google e-mail subscriber? do you read through those e- mails to gather formation and anyway? >> gazan does not scan the content of e-mail communications in order to share targeted advertising. >> or for any other purposes? >> there are only some purposes for -- there is a process that actually removes viruses from e- mail that is an automated

process but we do not use the content. >> for advertising. ms. wong. >> we're using that same technology that scans for viruses and also scans for spam. it is technology that looks for pattern in text, and we use that not only for the spam blocking and viruses but also to serve ads within the gmail user's experience, so import like the -- >> so if two people are exchanging an e-mail about a sporting event and they're talking about going to the game and then they want to go out for a drink afterwards, could they then maybe expect to get an advertisement about which different bars are offering specials about the game? >> they will not get an e-mail with an advertisement, but only the gmail user will be able to see ads that show up just like they show for the site of our search results, that are key to specific words, a key words just as if you typed them into the browser that are calling from our repository of millions of ads to deliver an ad that is

targeted to the content you are reading. >> if that was a two-way conversation, one was the gmail subscriber who agreed to or did not opt out of the privacy, but the other person in that conversation was not a gmail user, clearly not someone who opted in or opted out, would any part -- because in an e-mail thread, they could have maybe four or five replies and you have a long thread built up, and not -- and in and not going to just be the chief apostle affirmation that it's going to be there. the person who is a non-g bill user is gore to be included in that thread. with any of that the mission be read? >> the non-g mel user would not have any ads targeted to them at all. their data sits in the recipient's, the gino recipient's e-mail archive. >> so if you've got all rhythms it went to that gmail e-mail -- if you have got algorithms that went through that gmail e-mail, then when you are reading things in that e-mail, some of the

things that you are reading with a big part of the threat of a non-gmail subscriber. >> that is right. >> how does your privacy policy handle that, because that person clearly has absolutely no knowledge of you reading their e-mail, they surely did not agree to it, and they did not have the ability to opt out, so how's that handled? >> just to be really clear, there are no humans reading e- mail at our company. >> but even if that is a software algorithm that is trained to go through and look for key words or key information, their e-mail address, of course, is going to be in there, so you would be of dead know who that person is at least from their e-mail address, but you also be of a have access to the permission to read you have anything in the algorithms -- but you would have access to the affirmation. t you have anything in those algorithms that prevents that information that is not gmail- related to be read from a person who did not agree or have the

ability to opt out of the privacy -- >> it would have to be that the user decided that they did not want to receive that e-mail from the person who sent it to them so that this is fully in control of the gmail account holder, and they can refuse to receive e-mails from certain people. >> so you be putting the burden now of privacy collection on a user of you know, someone who actually has a gmail account? but your user actually knew what your policy was and could today right now go online as you showed, you have got many opportunities for your users to opt out. >> that is right. >> the person who is the third party who is the non-gm of subscriber who is part of that thread does not have the same access, so how can you put the burden on the person who sent the e-mail? >> no, no, no. the person who sent the e-mail has sent their e-mail to their friend. that user is not going to get any ad targeted to them. we are not point have any permission about that user id all. except for the fact that we hold their e-mail because we are the

e-mail service provider for the gmail account holder, which is the same as any other web mail service. >> the real question is how that person -- that gino subscriber clearly has the ability to provide -- to protect their privacy, to opt out if they so choose. maybe some of their data is still collected but they could still opt out, but the third party that they have sent the e- mail to who then replied back to them who is contained in that thread, they do not have the same ability, but their data is subject to being searched in the same way, so how -- >> that is true, but that occurs with every web mail service. >> guy who just said that they did not do the same thing. >> every web mail service scans their e-mail for spam, scans it for viruses, it is the same process. >> but also for targeted advertising, i think that you said you all do scan it for targeted advertising. >> we do not target.

>> and i guess that in the case with their scanning it for other services, that would maybe be sold to third party, how is the purpose the -- how does the person protect their privacy when they never had the same opportunity to opt out of the original d mile subscriber who sent the e-mail was able to have the same access? >> to be very clear, now uses information is sold to any third party. >> mistress police -- you're now past 10 minutes. we're going to wrap up. >> i can get that in writing, thank you. >> that is fine. many of the witnesses would like to respond to that last question and writing, i would be highly appropriate. the gentleman from vermont is recognized next, mr. welch, for 5 minutes. >> thank you, mr. chairman. thank you. want to join my colleagues in apologizing for the delay and appreciation of your patience although i think i might rather have your job today than ours. ms. wong, in your written testimony, you noted that the committee should continue our efforts to explore the privacy

issues. this is obviously an incredibly difficult issue, because of the complexity of making this work and assuring confidence to users and because of basic questions about what should be private and what is not. i am asking that you expand on that and what ongoing efforts is google making about the merging of online and offline data, and the issues that are created as a result of that. the start asking you if you would comment on that and probably ask a few others as well. >> i actually think that this is a multi-dimensional question. i think absolutely there is an obligation on industry to do the right thing because the trust of our users is incredibly important. i also think that there is a role for groups like mr. curran's groups, the self- regulatory groups, which continue having us innovate on best practices. i think the best thing that has happened in the last year it is that all the major internet companies are competing to create better privacy technologies, and that is really phenomenal.

there's also a role for government, but cost to be very clear, there are bad actors, so there is a role for oversight into the range of players on ecosystem and the conduct that they engage in. and the thing that i think is most important, and the reason it should apply to both online and offline com is that the companies that you have here all face our users, are all invested in deepening the relationship with a markup -- with our users. their companies that do not face the public that are behind it, and that need more oversight because nobody knows what they do with their data. >> mr. curran, do you want a comment or anything else to add? kudos to you for the role that you play. >> i would simply say that we have an obligation to tell you about our successes and our areas of improvement as self- regulatory organizations as it relates to -- and also to, i think, work with you to explain

the somewhat complicated technologies that go around the different business models. i do not believe that -- i have to purchase memberships and we are not in the position of having a legislative view at this time, but we're very much committed to educating the committee on the technologies, and i think today's hearing has been very helpful on that in terms of helping you discern the exact technical infrastructure that goes into all of this online advertising. >> let me come back to mr. kelly. the congress is never going to be able to address technical issues. it is not our competence. it is not our job. it is not what we should do. what specific things in terms of policies, mr. kelly, would you be recommending that congress do in order to protect privacy, which is our proper concern, but do it in a way that does not strangle innovation?

>> and that is a critical role that you do have, to protect the innovation in american tautology and how we have been able to lead the world in this area. but obviously protecting the privacy of american consumers is critical to us and to other companies in the technology industry, but not everyone. and so there are many actors out there who are tasked and see their role as gathering data and building personal profiles of people with no notice, no consent, no control. i think that congress's regulatory action should be largely directed there. with a set of existing and extensive regulations, and we've talked tonight about our work with the ftc as a technology industry in this area, where there are bans against deceptive practices and other activities, but still there are many technology companies out there,

whether they be spyware vendors, whether they be just sort of surreptitious collectors and aggregators of personal data that deserve the attention of this committee, the congress, and existing regulators. >> thank you very my time is almost expired and i yield the balance of my time. >> could i answer? >> i think it is up to the chairman. >> go ahead, mr. cleveland. >> the key concept of what you're looking for and that the ftc and others should build on is longstanding, fair representation law. we obviously have a huge gap. jeff mentioned a lot of the polls out there. clamor -- consumers do not have a clue about all the stuff that is being collected on them, not a clue. so that if you believe in fair representation and you take the facts of all the people that have been dealt with on the internet and they do not know what is going on, there is a serious breakdown of fair representation.

>> mr. chester, please. >> just very briefly. all the companies here, including the members of in a i, as far as i can see, are increasing the affirmation that they are collecting on consumers. it is not that there's a question of best practices. they are building and expanding the data collection for that is the nature of the businesses. that is the nature of the online advertising system to build out these very sophisticated approaches. therefore you need gabbros, you need to bring -- you need to have rules, you need to bring pia up to date, because you do not know your name anymore to know you are poor you need to protect sensitive data and you need to have the ftc be a better watchdog. >> with that, mr. welch, your time is expired. let me thank our witnesses for

what has surely been a long informative session. we thank you very much for taking your time to talk to us. we have clearance for unanimous consent from the minority to place in the record a letter to the subcommittee, the joint subcommittees actually, from the federal trade commission concerning the subject of today's hearing, all laid it -- a letter from data foundry, a data company based in austin, texas. without objection, those will be made part of the record. and this proceeding will be kept open for a period of 3 weeks so that other members of the subcommittee can submit to our witnesses questions in writing. and as you receive those questions from the members, if you could respond to them promptly, that would be much appreciated. thanks again to you for an excellent hearing. ñrthis hearing stands adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]

[captioning performed by national captioning institute] >> the nature of most human enterprises is to ask yourself, am i doing this the right way? >> all this week, are rare glimpse into america's highest court threw unprecedented, on the record conversation with 10 supreme court justices. tonight, associate justices anthony kennedy and samuel alito. interviews with supreme court justices, 8:00 p.m. eastern on c-span. get your own copy of our original documentary on the supreme court on dvd. as part of our american icons collection, a three-disc set, including programs on the white house and the capitol building. it is available at c-span.org. >> a number of publications have listed their best books of the past year. booktv looks at a number of

them. ted knight offers one paul, david wessel, and linda gordon. you can see a full list on our web site in the news about books section. >> c-span, thursday, a look at tributes paid to u.s. and world leaders, including ted kennedy, ronald reagan, walter cronkite, colin powell, and robert byrd. new year's day -- all look at what is ahead for the new year. russian president -- russian prime minister vladimir putin talks about his future. presidential lead pfizer on the global economy. the creator of the segway and guitar hero. plus the art of political cartooning. >> fox news contributor michelle malkin is our guest this weekend on "in doubt." the author of four books including a "culture of

corruption" take your calls and e-mails. sunday, a lineman -- live at noon eastern, on book tv. >> there is less than a month left to enter the 2010 contest. $50,000 in prizes for middle and high schools to the three top prize -- $5,000. create a five to eight minute video on one of our country's greatest friends or challenge the country is facing. it must incorporate sends up -- c-span programming and show varying points of view. winning entries will be shown on c-span. do not wait another minute. total website for contest rules in info. now, a conference examined legislative strategies to eliminate all educational disparity three civil rights leaders discuss educational achievement among low-income and minority students. house education members chairs the conference. this is about an hour.

will begin first on the panel will be hilary shelton, the director of the naacp's washington bureau. >> thank you very much for pulling this together. i am hilary shelton director of naacp washington bureau. this is the oldest and largest grassroots based civil rights organization celebrating 100 years of service and addressing many of the issues of inequity that we will discuss here today. certainly as we talk about the last century there is still much more that needs to be done before we truthfully say all americans regardless of race, ethnicity, family income or where they live have access to high-quality education. despite the equal protection clause of the u.s. constitution, the 1954 brown versus board of education decision, we talk about improving our schools. have a dramatic disparity in public education continues to plague our nation. the implications of the persistent achievement gap are