government agencies. we also need to repeal the job- killing health care law. just about every day during my campaign, i visited with small business owners who told me this health care law is going to increase their costs, how they're making those tough decisions about whether to continue offering benefits. once we repeal this law, we can replace it with common-sense reforms that lower costs for families and small businesses. republicans have outlined these priorities and reforms in the pledge to america, a governing agenda built by listening to the people. hard work lies ahead, but those of us in this new class of representatives have come face to face with the people's frustration and we are committed to making sure washington humbles itself and starts making good decisions. listening to the people, honoring our constitution, and making the most of the blessings god has bestowed on this great nation is how we go about securing the promise of the american dream for our children and their children. thank you for listening, and may you and yours experience all the joys and blessings of the holiday season.

>> next, the federal trade commission chairman, and then the polish president talks about his relations with russia and the united states. tonight, the economics editor of the bbc. tomorrow, a look back at the week in politics and the u.s. institute [unintelligible] on relations with iran, and an update on the global climate change talks in mexico. "washington journal" begins at 7:00 a.m. on c-span. >> this week, federal trade commission chair john leibowitz

in the fcc's recent report on privacy. >> before we get into the substance of the privacy report, i want to talk about the policy a little bit. this is referred to as a "staff preliminary reports." where does it go now? >> one of the things we do when we write a preliminary report is we take comments. we take comments from stakeholders, consumer groups, government officials, maybe state attorneys general, because we understand a lot about privacy, and we have obviously worked to learn quite a lot about internet privacy. we also understand that the laws are not perfect, and we want to understand how to implement a do not track mechanism and to ensure that there is privacy by design.

it is a practice that helps us ensure we get to the best information from people working in the industry. >> this report has just come out. where does it go next? does it go to congress or to the board? >> we have sent it to congress, of course. it has really resonated, as you know. it has gone to the ftc board. the commissioners voted 5-0. they want to release the report and moved forward. that is something we are very proud of, that we have a pragmatic approach to people's privacy. we may make sejanus -- we may make changes here and there based on suggestions given to us. >> there are three major points to this report that you have

sent to congress. first, companies should promote consumer privacy through their organizations and at every stage of the development of their products and services, which you call privacy by design. point number two, simplify consumer choice. finally, you call for companies, when it comes to online privacy , a is to provide greater transparency of their data practices. let's start with point number one. >> i wish we could take credit for the phrase privacy by design, but it actually comes from a commissioner in ontario. just as an aside, rafi, the children's singer, was part of that.

let me give you an example of the failure of privacy by design. if you look at the peer to peer systems, there was no privacy component. or a totally inadequate privacy component, early on, and that is why the earlier versions p2p allowed for a lot of stolen information from people's computers and even government computers. that is why privacy by design is an enormously important feature going forward. >> tony romm of plitico is joining us. >> let's jump into some aspects of this report. it is one thing to say that privacy should be part of everything companies do, but what role does the ftc play in

making sure that it actually happens? >> timbrels, and this goes -- two roles, and this goes beyond what i have said. it is best practices for companies and it is advice from lawmakers, members of congress. i think we all recognize that there will be a major debate next year in congress, and should be. our role is to provide guidance to companies, and two, when they fall below the standards we expected them, when they engage in unfair practices or have inadequate security, reinforcement action, bringing cases against companies. >> speaking of enforcement actions, you see it reaction from stakeholders, lawmakers. what can the ftc do now with the last remark the you have put

together? >> that is a good question. i think it is already having an effect. we expected to have -- we work with companies. we work with senators. we expected to have a favorable reaction from companies, consumer groups and lawmakers across the board. privacy is a very bipartisan issue. people have really been very supportive of our report. just yesterday, microsoft announced that it was going to offer consumers a do not track mechanism. that one, makes it clear that do not track is technologically feasible, and two, means we are getting by in from companies. it is something for companies to voluntarily have privacy by design. it is better to do it that way

than by government regulation. we are agnostic. we are happy. >> speaking of microsoft, we have a privacy series here back in september. one of our guests was from than two. she talked about what -- was from yahoo!, and she talked about what they do to ensure privacy. >> it is fairly technical. we go into it in some detail in our privacy policy and talk to consumers about the very specific type of data being transmitted by your browser to our server. that is what our data retention policy identifies after 90 days so that it is not kept in perpetuity. it is released. we are trying to have a privacy policy that conveys this information, and we are looking for ways to make this affirmation a lot more understandable, to simplify it,

to speak to consumers in a language they can understand. we are looking for symbols. we're looking for shortcuts to get consumers actionable privacy information that they do not have to dig around and look for, that is readily available to them in depth. >> that is exactly right. than you has a wonderful -- yahoo! as a wonderful policy. they only keep the data for a; 90 days. one of the things -- for 90 days. one of the things we said in our report was the data should be released more frequently. >> as you mentioned, microsoft just announced yesterday that internet explorer 9 will have a do not track feature. what do you think of that? it allows people to have their

own list of sites that are red lighted and green lighted. what do you think of that particular functionality? >> per se, i want to commend microsoft for doing this and for giving users a real choice about being tracked by third-party cookies. we want feedback because that is one approach you can take to block third-party trackers. i think what they are doing is really an important step forward. we would like to see other technology companies -- we have been talking to various vendors -- move forward as well. i think you will see that in the coming days. we are hoping that the advertising community will also support this. >> speaking of the advertising community, here is with the

interactive advertising bureau had to say about the do not track proposal. >> there are millions of interconnected web sites and computers. an ecosystem is built on the flow of different types of data. >> in understand. they are lobbying organization for companies that like to put third-party cookies on people's computers. they are doing what they think they should do. we are doing what we think we should do. think about third-party tracking. if you go on amazon or netflix and they give you recommendations, we all understand that that is a company you have a relationship with. but here is the thing about third-party tracking. let's say you are walking around a shopping mall and there is a

guy standing behind you. he does not know your name, but he sort of knows where you live. he follows you to every store and looks at the label you want to buy, the credit card you are using. if the guy was calling you, that would be troublesome. if he was pollock -- was following you, that would be troubling. if he was following your doctor, you would want to punch him. that is what a cookie is on your computer. it follows you all around the internet. by the way, if someone gave me the option of not being tracked on the internet, i would probably not take it because i sort of like having targeted ads, and many people do. but company and -- but consumers should have a choice. >> how does industry self regulation of work here? how is the formulation that the ftc put together in its staff

report -- what role does the ftc play if the industry does lead the way? >> it industry does come around first, we will applaud them for it. they will be taking a major step toward consumer privacy, and that is really important. if they do not, we have a bully pulpit. we sometimes admonish those who do not necessarily violate the law could be doing a better job. that is one part of it. the other part is that the commission is not in a position yet, but we could call for legislation on this. many of the companies who want to do the right thing to give consumers more choice are on board. consumers would prefer that --

would prefer that happened in congress right a lot. >> did you get the impression that lawmakers were on the same track as the ftc? >> i got the sense that privacy -- and i know this because i have testified a lot on privacy issues -- is really a bipartisan issue. when i testified about in a net privacy before the senate congress committee at the beginning of august, it was not as chairman rockefeller, but also senator thune and a wide variety of people across both sides of the aisle that really care about the issue of privacy. so, when i watched and listened to parts of those hearings -- and it was one where it started and then there are two hours of votes -- i was very pleased by

the reception. the people on the committee had done their homework. there were questions asked the were harder than other questions. i think for the most part we're going to see a lot of resonance on capitol hill in terms of support for this. >> there are new members entering in 2012 who are interested in privacy. there seems to be a disconnect between democrats and republicans on the issue of do not track. the person who could take over the subcommittee was not a big fan of the technology. do you not think that will be an issue? >> i really do not. time will tell. i think some of the business community who oppose what we're doing probably said that

industry is totally opposed to this and, you know, this is going to change the ecosystem of the internet, but i think when you start to see companies like microsoft, which is the leading browser company, i think that helps people understand, members of congress, that they industry wants to do the right thing. >> one of the things i read in your report was that most of us on the commission supported the do not track. was there dissension? >> there is no dissension. it was a 5-0 vote. one of the commissioners was concerned that the technology

was not quite there yet. i have not talked to him since the microsoft announcement, but my guess is that this will help give him some comfort. again, i believe he concurred in his recommendation. this is one of the wonderful things about the federal trade commission. all of us are committed to the agency. all of us are committed to ensuring privacy protection and balancing it. all of us are committed to moving this through. >> how does do not track compared to be quite popular do not call? >> well, they have similar names, and they're both designed to protect consumer privacy, but they're different. with do not call, there is a registry as you know. there are close to two hundred

million telephone numbers assigned up. it has really helped to ensure the peace and quiet of the american dinner hour. one person called it the most popular government programs since the elvis stamp. with do not track, we are calling for something that will help ensure consumer privacy and consumer choice, but it is different. we did not want to have a main registry of numbers because we thought i could be harvested by by spammersd it's -- and spyware. we thought could be done voluntarily and through the browsers. we are bringing on a wonderful technologist who is a princeton

engineering professor to be our chief technologist. he was very involved in thinking through the do not track registry and reviewing the whole privacy report. he is been very helpful to us. >> our guest is john leibowitz, chairman of the federal trade commission. we are talking about the preliminary staff report on online privacy. tony romm is our guest reporter. next question? >> there is a concern that we will put consumers in a position where they cannot access sites they wanted it do not track is enabled. now they have to have a password or they cannot give the content they enjoy. is this a realistic fear, and if it is, what role does the ftc played all of that? >> i have heard some of this anecdotally. again, we want to empower companies to do this in a way

that they feel they can effectuate it best. part of the reason we do a preliminary report is to take comments about the best way to do this. you could standardize a do not track mechanism in a browser or you could have different approaches. i think, whether it is microsoft that had this announcement about a red light, green light list, and you could pick your less to so that presumably, you would not be blocked from accessing the site you want, or whether it is the approach that the second- largest browser is thinking about, where you have a protocol that says do not track meet and companies or advertisers would have to say, we will not tracking. what we want is consumer choice.

those in the community that opposed do not track -- and as you know, there is much more in our report, what one lobbying organization wants to do -- and they have critical concerns, not just anecdotal, but i'm sure the business community can work together on this. >> another area in your report is transparency. when companies provide online privacy statements to consumers, you have described them in the report as incomprehensible and inadequate. >> at the palace my description of how we describe it in the report. it is -- i think that was my description of how we describe it in the report. our report a slightly more nuanced. online, consumers want to get to

the last box. these privacy policies are written by lawyers. i am a lawyer too, though i do not like to admit that to people. consumers really deserve a clearer, more transparent notice, and a shorter one, so that they can actually understand what they are agreeing to. this is particularly true in the mobile space. as a much internet moves to mobile, how can you go through 20 clerics to get to the privacy policy? it is all -- 20 clicks to get to the privacy policy? it is almost inherently unfair. there was an on-line gaming company on april fool's day theat said if you opt out of ths

privacy policy, we will give you $6. if you do not opt out, but we're getting your soul for all eternity. do you know what percentage opted out? 11%. companies know this. they can do a better job with privacy policies. >> one of the things that i know you and others at the ftc had knowledge is that the agency has talked a little bit with adobe about flash cooking technology. could you talk a little bit about that? >> one of the obstacles today do not track mechanism for third parties is that the browser at this point -- not all browsers can block -- and i think most browsers cannot block third- party adobe flash cookies. we're working with adobe to come

up with the way to do that. there are very smart people who develop browsers and internet technology for the major vendors and they are looking at that too. >> are there other enforcement actions coming down with respect to privacy? >> yes. put adobe aside. this is a policy issue with respect to adobe. we have a number in -- a number of investigations with regard to privacy. you will see more. >> anything you'll be able to detail? >> not this time. >> one of the things you have worked on in this report is simplifying consumer choice. companies are not providing, in your words, consumers with joyce. webb -- consumers with choice, whether or not they want to be tracked. is that something you like to see mandated?

>> is something we would like to see more of for consumers. there are some areas, by the way, where you do not need to have choice. for example, if i cut to an internet site and i order something, i do not think i need a choice of how they ship it. it is what we anticipate will happen when we buy a product from amazon or from somewhere else. there are other areas, tracking is one, not the only one, where we think the consumer should have a choice about what is going on with their data. again, it is an ecosystem. no one wants to get rid of the free content on the internet that consumers have come to love and expect. there are a lot of things that just do not involve consumers. they ought to have more choice about that. >> use the above notice, choice and harm based tools -- you

spoke about notice, joyce, can harm-based tools. choice, and harm-based tools. >> there is a problem four or five years ago about nuisance at where. you would click on something on the internet and it would put some software on your computer that would feed you advertising. maybe it only feeds you 10-15 a day, but one company we brought an action against acknowledged that they were responsible for 6 billion ads in consumer computers. in the aggregate, that is a lot of harm. the notice enjoys approach have been two different ways that we -- notice and choice approach

have been two different ways the we have looked at the issue. >> the next step of the talk is to look at do not track in relation to all other issues. i guess the question is, companies and stakeholders, and we sitting at this table, we talk about new technology but not so much about privacy literacy and education? >> i think it is just the part that we knew would resonate the most, and it has resonated enormously across different stakeholders and among consumers. there are a lot of other things in the report, but it has only been out for a week. i think the notion of educating consumers and having companies provide a little more balance and choice to consumers will continue to be discussed.

our expectation is that we will do hearings next year before members of congress in both houses. when we did a press availability, i had to say, remember, there is more to this reporter then do not track. in the end, i think it is a very substantive report. our staff did a terrific job, as did the commissioners. this was percolating at the commission for quite some time, and i think the whole thing will resonate. hopefully we can move forward with a little more choice, transparency, and baked in privacy protections. >> are there any differences in policy recommendations for wireless? >> i think our policy recommendations are -- i would say this. our policy recommendations are consistent across different platforms, but when it comes to wireless and to hand-held devices, you have to think about

them in a slightly different way. for example, one issue is the privacy policies. consumers ought to know what the privacy policy is. how do you get to a privacy policy on a screen where consumers will actually see it before they agree to give their information to a marketer? not unlike our antitrust laws which have served us so well for more than 100 years, you know, the approach in this case, the guidance it has to be thought of differently. >> is there any protection for the personal and private information out there? >> well, there is a horse-is-