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Understanding Facebook's privacy aftershocks
by Caroline McCarthy


Depending on your preferred geological metaphor, Facebook is either an active volcano, a volatile fault line, or something else with sulfuric acid hissing out of it.
(Credit: CC: Flickr user NZ Dave)
It's been a long time since it got in the way of the World Series, but the threat of seismic tumult still hangs over Silicon Valley. When earthquakes elsewhere in the world dominate the news, people get a little more sensitive to their own vulnerability in the Bay Area. The ground might really have just given a twitch. Is it moving?
Comparing Facebook's latest product modifications to deadly natural disasters is probably a little bit inappropriate, but the psychological reaction doesn't seem all that different. The social network modified its policies for handling user data once again as part of its F8 conference and release of the Open Graph API, and ever since it became clear that more information is being set as public by default and more is being shared with third parties, concerned Facebook users have been on jittery alert, perhaps prone to overreaction, concerned that something even bigger may be about to change.
They might be freaking out a little too much. Still, the lesson to be learned from this bizarre analogy is that dealing with social media is more like disaster preparedness than you would think.
On Wednesday, one small but alarming security hole was found in Facebook; the company attributed it to an engineering bug, and patched it. On Thursday, PC World detailed that Facebook was "secretly adding" third-party applications to user profiles, something that the company once again attributed to a bug and said that it had been fixed. Investor-pundit Paul Kedrosky and fanboy idol Peter Rojas, former editor of Engadget and co-founder of GDGT, both announced on Thursday that they were deactivating their Facebook profiles.
Basically, Facebook is the Pacific Ring of the Web. In its six-year history the company has radically changed its product by implementing one small, step-by-step move after another. Recently published excerpts from David Kirkpatrick's forthcoming book "The Facebook Effect" recall small Facebook features and quirks that were quietly snuffed from the site, like the random placement of the "Wedding Crashers" quote "I don't even know what a quail looks like" under its search query field. Cue a few thousand early Facebook users saying, "Oh, yeah, I remember that!"
How do you bust up a giant landmass into seven pieces without anybody noticing? Slowly. How do you turn an uptight, closed-off Web business built by a few college students into a sprawling creature that seems capable of sharing anything with anyone anywhere? Very, very slowly. But when something big happens, people start to notice the small stuff that they wish they'd seen earlier. Concerned Facebook members are now acting like the social network has grown into something beyond their control, that even lawmakers might not be able to do much good, that the company is acting more like an unpredictable force of nature than a business run by, well, humans. Which is funny, because these days Facebook is playing up its human side, its fallibility.
After Wednesday's privacy glitch caused Facebook to temporarily disable its chat feature while all the bugs were fixed, The New York Times quoted the company's vice president of public policy, Elliot Schrage, as saying, "Are we perfect? Of course not." We should be getting used to the fact that an "iterative" product model, the sort of practice that's become commonplace now that pushing out new features no longer requires waiting for the next release of a shrink-wrapped software package, will mean imperfections. It will mean screw-ups. It will mean bugs that are quickly patched and poorly thought-out features that are pulled in due time, but they were there in the first place, and user data may have been affected in the process. These are Facebook's tectonic plates, and we are just riding around on them.
This is disconcerting, and perhaps unethical. It's provoked concern among lawmakers, anger among activist groups, and fear among Facebook members. But, for better or for worse, this is how Facebook has been working for the past six years, and the Web at large may finally be coming to that sort of understanding.
The ground is moving at Facebook, and it always has been. The social network can credit a big portion of its success to this ability and willingness to keep changing while some of its industry brethren--MySpace, Digg--kept products relatively static and are now suffering the consequences. This doesn't mean that Facebook's unstoppable by any means, though. Maybe the coalition of U.S. senators petitioning the Federal Trade Commission to rein in social networks' handling of user data a bit will be effective, and Facebook will be forced to stabilize the iteration of its service a bit; this, in turn, could mean that its lightning-speed innovation could be curbed as red tape and roadblocks go up, making it more likely that another service could race in and start chewing at its market share.
Or members could, of course, just leave--and Facebook's business model is only as good as the 400 million people who inhabit it. But people choose to live in areas prone to deadly natural disasters, too. Living your life (or a portion of it) on the Web and entrusting personal data to social-media services like Facebook means that you're agreeing to colonize a product that's subject to change and unexpected error. This is true for many services besides Facebook, too. Twitter's shown hints of major expansion plans. Location-based networking start-ups have an appetite for marketing partnership dollars and a whole lot of private data in their coffers. Then there's Blippy, the new, edgy purchase-sharing start-up that accidentally exposed several users' credit card numbers last month.
You could choose to err on the side of paranoia, assume that Facebook CEO Mark Zuckerberg is greedily dreaming of how awesome it will be when he sells everyone's data to marketers and uses the profits to buy himself a private island, and delete your Facebook account. Or you could just be aware, be cautious, and figure that maybe your credit card data is something you want to keep off of Facebook for now.
Because while Facebook is the company it is today--subject to constant and frequent volatility, eager to tread into new marketing and networking territory--this is how it's going to be.

FCC plans Net neutrality regulations for broadband
by Steven Musil
Net neutrality regulations are likely to be imposed on broadband providers after all.
Federal Communications Commission Chairman Julius Genachowski plans to announce details of the plan on Thursday, a senior agency official said. The purpose is to circumvent a recent federal appeals court ruling saying the FCC had no legal authority to punish Comcast for throttling some BitTorrent transfers.

Stung by the recent unanimous ruling, Genachowski will outline a "third way" to implement Net neutrality regulations, the official said in a statement.
"The chairman will seek to restore the status quo as it existed prior to the court decision in order to fulfill the previously stated agenda of extending broadband to all Americans, protecting consumers, ensuring fair competition, and preserving a free and open Internet," the official said.
The confirmation from the FCC comes only hours after two senior Democratic politicians sent a letter to Genachowski saying that imposing Net neutrality regulations on broadband providers such as AT&T, Comcast, and Verizon is "essential." And Free Press, the liberal lobby group that's led the fight to hand the FCC more Internet regulatory authority, hastily convened a conference call to warn that Genachowski would be leaving President Obama's Net neutrality promises unfulfilled.
Free Press President Josh Silver called news of Genachowski's planned announcement "extremely welcome," but said his group would wait to see "whether the FCC has gone far enough to protect consumers with this new proposal."
Earlier in the week, The Washington Post reported that Genachowski "has indicated he wants to keep broadband services deregulated," a position favored by companies that say sweeping new regulations will deter investment and be overly burdensome.
The FCC official said Wednesday that Genachowski hopes to balance "a weak Title I and a needlessly burdensome Title II approach." Title I refers to lightly regulated information services; Title II refers to heavily regulated telecommunications services, such as legacy telephone networks.
The aim is to "apply to broadband transmission service only the small handful of Title II provisions that, prior to the Comcast decision, were widely believed to be within the commission's purview," the official said, adding that the plan would have "meaningful boundaries to guard against regulatory overreach."
Reclassifying broadband services as a telecommunications service under Title II of the Telecommunications Act would effectively import some of the rules from the analog telephone era and extend those to the modern Internet. The move could the FCC the authority to regulate prices and competitive access under what's known as common carrier rules on these networks. It also would not require Congress to enact a new law.
Reclassification, however, is bitterly opposed by telecommunications companies, who predict it will harm consumers, hinder investment, and cost jobs. Net neutrality laws could endanger 65,000 jobs by 2011, with the total economy-wide impact growing to 1.5 million jobs affected by 2020 because of reduced revenue growth in the broadband sector, according to a recent report (PDF) sponsored by Mobile Future, which counts AT&T as a member. AT&T has lobbied against Net neutrality laws.
Also on Wednesday, FCC commissioner Robert McDowell, a Republican appointee, sent Congress a four-page letter summarizing the history of the FCC's Internet regulation. McDowell cited, for instance, a Clinton administration-era FCC decision concluding that regulating Internet access providers would lead to "negative policy consequences."

House privacy bill draws fire from all sides
by Declan McCullagh
Rep. Rick Boucher, a Democrat from rural Virginia, has been unsuccessfully pushing for Internet privacy legislation for a very long time. In 1999, he proposed a bill that would give regulators more power over commercial Web sites, and he cosponsored the Consumer Privacy Protection Act in 2005.
That history probably didn't prepare Boucher for the almost uniformly hostile reception his latest legislative effort, a still-unnamed discussion draft (PDF) regulating data collection efforts, received on Tuesday.
Liberal special interest groups announced they were "disappointed" that Boucher didn't slap even more regulations on Internet businesses. Free-market think tanks panned it for going too far. And industry groups like the Interactive Advertising Bureau said it was far too broad as currently drafted.
"This bill is not the answer," said Michelle De Mooy, a senior associate at the pro-regulation group Consumer Action. "We don't think it effectively protects consumer information online."
Adam Thierer, president of the free-market Progress and Freedom Foundation, was equally skeptical--albeit for an entirely different reason. "By mandating a hodge-podge of restrictive regulatory defaults, policymakers could unintentionally devastate the 'free' Internet as we know it," he said.
The 27-page discussion draft co-sponsored by Republican Cliff Stearns would erect a new set of regulations that Internet companies must follow, along with many non-Internet companies as well (which has already led to fears that direct marketers would be swept in).
Any company or nonprofit organization that collects personal information from at least 5,000 people, including names, e-mail addresses, or U.S. mailing addresses, would not be allowed to "use" or "disclose" the data without consent. Providing a "clear statement" about how the information is used would, however, qualify as consent in many cases.
That was enough to irk groups that lobby for more regulations targeting technology companies. So were the sections of the Boucher-Stearns bill that would prevent individuals from filing lawsuits and would preempt stricter state laws.
"We're very disappointed with the legislation, which relies on notice and opt out, which has proven to be so ineffective," said Susan Grant from the Consumer Federation of America. "It carves out a huge loophole for behavioral advertising. It prevents states from enacting and enforcing stronger privacy protection."
For their part, the politicians behind the draft bill are painting the draft legislation as a work in progress. "I have been working for years to enact meaningful privacy protection legislation and this draft is advancing the process," Stearns said in a statement. "While I may not support everything in the current draft bill, it is important to get the input of stakeholders."
Lending your name to legislation you don't actually support is an unusual move even in Washington, D.C., and Silicon Valley firms were left scrambling on Tuesday to digest the proposal. One big unanswered question: How would it affect behavioral advertising, which accounts for a growing percentage of revenue at companies such as Google and Yahoo?
"The amazing thing about the Boucher legislation is its ability to transport us across time," said Jim Harper, director of information policy studies at the Cato Institute, which supports limited government. "Ten years ago, Congress and regulators thought they knew how to deliver privacy better than markets. We know they don't, but they still think they do."

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