It has been an exciting week in the world of net neutrality. This week, Julius Genachowski, the Chairman of the FCC, announced the Commission’s intention to enter into a formal rulemaking process to codify the four principles of net neutrality currently in use and to add two more principles. The additional principles include a statement that consumers must be able to access the lawful content of their choice, subject to reasonable network management. Essentially, ISPs cannot block traffic to say, NBC Video, just because they have a partnership with Hulu. However, they still may prioritize all video content over all file sharing in order to manage the use of the network. In addition, networks must be transparent about what they are doing to manage traffic. This would give small business and direct response marketers more information about how consumers are experiencing online offerings like video advertising. Specifically, if you are providing an application for wireless devices or making videos available on sites like YouTube, you will know if some of the network providers are slowing certain services during peak hours. You will then be able to adjust your content delivery accordingly.
Late last week Representatives Markey (D-MA) and Eshoo (D-CA) introduced a bill that would keep the Internet open by preventing Internet service providers (ISPs) from imposing “a charge on any Internet content, service, or application provider to enable any lawful Internet content, application, or service to be offered, provided, or used. In other words, they cannot charge you (as a content provider) more than the cost of service for your lawful content and any lawful applications you make available.
The bill also prevents ISPs from providing or selling any content, application, or service provider any offering that prioritizes traffic over that of other such providers. This addresses concerns that ISPs will sell premium access to some companies, which would have the end result of degrading everyone’s content. This is important to any company that is using video online, but is not interested in paying more than they currently do to ensure the quality of the video is not reduced. It’s not easy to be moved by advertising when the video is pixilated or freezes every three seconds.
Similar bills were introduced in the last two Congresses. However, the larger Democratic majority and President Obama’s stated priority of keeping the Internet open may mean there will be some movement on this bill. However, the House will be in a District Work Period (aka recess) until after Labor Day.
In the meantime, you can watch this video.
For more information on ERA’s government affairs efforts, click here.
On the evening of April 20 and all day on the 21st, ERA will be hosting the Government Affairs Fly-In. In addition to two fantastic networking receptions, a keynote address by Senator Pryor, and detailed issue briefings, you will have the opportunity to really let lawmakers know about how this issue affects your business.
WASHINGTON—On the cusp of the Electronic Retailing Association’s (ERA) self-regulation program (ERSP) completing its 200th case and a DRTV spot playing during the Super Bowl, ERA president and CEO, Julie Coons, has been named to The National Advertising Review Council’s (NARC) Board. Coons, who was brought on the board simultaneously with DMA CEO John Greco and IAB CEO Randall Rothenberg, recognizes that the perfect storm of the wary economy, the Obama administration and the broader acceptance of direct response marketing all played a significant role in the updated board appointments.
“The convergence of the decision by NARC to welcome ERA to the board and the economic conditions and the continuing evolution of this industry is incredibly synergistic. It gives us an opportunity as an industry to work more closely with the well established organizations representing the advertising community, which will definitely increase our prominence both with the government and industry players alike,†says Coons.
The Better Business Bureau, NARC and various associations are eagerly waiting to see how the recent changes in Washington will affect advertising regulation, which up this point has been widely self-regulated. “We must be vigilant to see what changes are made at the top, particularly with the FTC. We need to be vigilant in this era in which there’s clearly going to be a focus on greater business regulation, but we do have a very good track record. I am not overly worried today, but again, we must be very vigilant to ensure that these new policy makers and appointees understand the tremendous success of ERA’s self-regulation program,†says Coons. Currently, ERA’s ERSP program independently reviews direct response advertising claims and then refers cases to the FTC when its recommendations are not acted upon.
Coons is eager and excited about ERA’s newly positioned role and believes that in the end it will be a major win for the consumer who can expect a greater level of comfort in remote transactions. “This is a result of the electronic retailing industry working with NARC and pursuing a dialogue with them about the changing landscape of reaching the consumer. To their great credit, it also serves as a recognition on NARC’s part that electronic retailers are a very important marketing channel and should be appropriately represented to ensure consumers are protected against false claims,†she says. Coons sees her role as ensuring that the direct marketing industry has an equal voice within the advertising community. For more information on ERA or its government affairs initiatives, please click here.
So, you may have read or heard about The Wall Street Journal’s article implying that Google no longer favors net neutrality. You might have also seen the reaction from the Open Internet Coalition, a group we belong to, explaining that Google actually does fully support net neutrality and that edge caching is not a violation of net neutrality. But, you might not realize that even if your headquarters aren’t in Silicon Valley, the difference between network prioritization and edge caching is important to your bottom line.
At ERA, we are strenuously opposed to the prioritization of traffic for commercial purposes (aka, the non-neutral net) because it will have highly negative consequences for our membership and for consumers. Say you primarily run infomercials and take many of your orders in call centers, but you also use a website for order taking. Or maybe you have a few products and you sell them online. Keep in mind at least 60 percent of ERA members generate a significant amount of their revenue from online sales. If we allow Internet Service Providers (ISPs) to prioritize certain types of content by literally sending the information more quickly, you will either need to pay for this service or the quality of your website will be degraded. That is, it will take users a long time to view the information you put online, they will likely get frustrated and go to another website that is in the ISP’s prioritized group.
The reason your website’s quality will be reduced is related to inefficiencies that occur from prioritization, as well as the fact that your traffic will have to wait for top-tier traffic to go first. But if you run a successful business, why should you worry? Shouldn’t you pay more and get a super-fast website that blows your competition out of the water? Well, even if you are a Fortune 500, there are 499 companies out there that will give you a run for your money. And in the end, the speed offered in the top-tier won’t be the Autobahn of the information super-highway that you were promised. It will still be a relatively slow end-user experience. That is partly because prioritizing traffic is one way that ISPs avoid investing in more capacity, which would keep the Internet fast for everyone. That would mean you wouldn’t need to pay more to stay competitive. It would also be good news for new companies that might be entering the market for the first time.
On the other hand, edge caching, the practice the WSJ article focuses on, does not degrade the quality of online traffic for everyone else. Edge caching allows companies to store information in a way that is closer to the end user. This improves the experience of the person watching a video or using a particular service provided by Google (or any of the many other companies that use this practice), but it does not cause any of the inefficiencies or raise any of the anticompetitive issues that result from prioritization. Most importantly, it does not degrade your content. Please let us know if you have any further questions.
Can you believe we’ve had this online community for a year already? Thank you to everyone who has read, commented, voted and contributed to this ongoing social dialogue. As we move forward, I thought it might be fun to look back at some of the more interesting, funny, thoughtful or even provocative posts from the past year. As we said from the get go in launching this blog: Join the discussion—we dare you!
So, there have been some changes in Washington since my last post. In addition to all the post-election excitement—and believe me, the buzz is palpable—there is a good deal of speculation about what will happen in the next administration. There is no doubt the next administration will assign a higher priority to technology and consumer protection issues than the last, but what will that mean for your business?
For those interested in expanding Internet access, the FCC has approved the unlicensed use of “white spaces†for new technologies, including those that are aimed at expanding broadband access. The two current FCC commissioners speculated to be contenders for chairmanship voted for the measure. Expansion of Internet access in various forms will definitely be a part of an Obama administration. On the other hand, there are many other pressing issues the new Democratic majority will be interested in pressing forward, and this could mean comprehensive legislation might be difficult to pass. Legislation would not be necessary to enforce net neutrality, unless Comcast wins its appeal, claiming that the FCC did not have the authority enforce net-neutrality regulations.
Consumer protection laws might also become a major issue in the next administration. The Consumer Product Safety Commission has been criticized as being too close to the industry; so some changes may occur there. Even though this issue was visited in recent legislation, there might be pressure from the White House to step up enforcement. During his time in the Senate, President-Elect Obama voted for the Consumer Product Saftey Commission overhaul, and even introduced an amendment that would require a somewhat burdensome reporting system for items manufactured overseas. In the Senate, he encouraged the FTC to enforce rules against telemarketing scams directed toward seniors.
Hard economic times might lead to a strong push for federal legislation that would help states collect sales and use taxes from companies that sell to states where they have no physical presence, or nexus. This might be attractive on its own or as part of a package that would mandate states to engage in spending on any number of programs. This would definitely increase the costs of many products marketed directly to consumers.
Before the transition even begins, there will also be more changes in Internet technology. In a few weeks, the FCC will consider broad changes to the Universal Service reform policies that will affect prices for telephone and broadband service prices. We’ll be sure to keep you posted. As always, please send your legislative concerns our way to ensure your voice is heard on Capitol Hill.
WASHINGTON, D.C.—Last night, the Barack Obama campaign took an unprecedented step in the history of the infomercial, by running concurrently on several networks in the prime time half-hour beginning at 8 p.m. to make an appeal to voters in the form of an infomercial.
The John McCain camp, led by spokesperson Tucker Bounds responded, “As anyone who has bought anything from an infomercial knows, the sales-job is always better than the product. Buyer beware.â€
Rick Petry, representing the Electronic Retailing Association, a trade association that represents direct marketers that use electronic means including infomercials, had this response: “To use a political agenda to indict an entire genre of advertising by portraying it in such a negative light is patently unfair. It would be like charging an entire industry and everyone associated with it, say politics for example, as being scurrilous. We at ERA will be the first to tell you that there are some who use this method of advertising inappropriately, which is why we have an independent self-regulation program, ERSP, administered by the National Advertising Review Council in partnership with the Council of Better Business Bureau. With this watchdog mechanism in place, claims have to be proven; a standard that politicians are not required to live up to. The fact is infomercials have been used by not only start-ups with unique products, but successful brands such as Kodak and Mercedes Benz, even the U.S. Navy.â€
Mock commercials have been discussed on this blog before, whether it’s “Saturday Night Live†or others that find creative inspiration from direct response or general advertising. However, a recent independent commercial supporting Obama has blurred the lines of advertising and advocacy. This example is intriguing because it’s a new take on an old, famous Budweiser commercial. It also shows how commercials can at times have the power to transcend into pop culture. The actors from the original, infamous “Whassup†campaign have taken a hard line at McCain in this updated version.
Original Whassup Bud Ad:
Obama Whassup Ad:
This also becomes an issue of branding. Could Budweiser’s brand be somewhat tarnished for Republicans? Did all the references of Teresa Heinz Kerry harm the Heinz brand in 2004? I can tell you this much, my college roommate ordered “W- America’s Ketchup†off the Internet after refusing to buy Heinz products. A lot of Americans wouldn’t buy it, regardless of the fact that her role at the company is limited to philanthropy projects and that her former husband was an admired Republican senator. The same could be true for die-hard democrats that declined to buy Coors products while republican Pete Coors was running for the Senate in Colorado.
According to The Wall Street Journal, “But the video is causing a ripple in industry circles, because Budweiser—which clearly has no interest in backing a presidential candidate—is powerless to stop it. In a departure from normal industry practice, neither Anheuser Busch nor its ad firm, Omnicom’s DDB Chicago, own the Whassup slogan or concept. Instead, the brewer paid Charles Stone III, who created and starred in the ads, roughly $37,000 to license the idea for five years. That deal expired three years ago.â€
But, regardless of this particular political ad’s positive or negative impact, it does further prove that advertising campaigns can have a long-standing impact in American culture. Having already received well over 2 million views, they’ve taken something straight from the ad world to create an organic, viral marketing phenomenon.
It has been an exciting week in the world of net neutrality. This week, Julius Genachowski, the Chairman of the FCC, announced the Commission’s intention to enter into a formal rulemaking process to codify the four principles of net neutrality currently in use and to add two more principles. The additional principles include a statement that consumers must be able to access the lawful content of their choice, subject to reasonable network management. Essentially, ISPs cannot block traffic to say, NBC Video, just because they have a partnership with Hulu. However, they still may prioritize all video content over all file sharing in order to manage the use of the network. In addition, networks must be transparent about what they are doing to manage traffic. This would give small business and direct response marketers more information about how consumers are experiencing online offerings like video advertising. Specifically, if you are providing an application for wireless devices or making videos available on sites like YouTube, you will know if some of the network providers are slowing certain services during peak hours. You will then be able to adjust your content delivery accordingly.
Late last week Representatives Markey (D-MA) and Eshoo (D-CA) introduced a bill that would keep the Internet open by preventing 
After the Obamamercial, in which 
On the evening of April 20 and all day on the 21st, ERA will be hosting the Government Affairs Fly-In. In addition to two fantastic networking receptions, a keynote address by Senator Pryor, and detailed issue briefings, you will have the opportunity to really let lawmakers know about how this issue affects your business.
WASHINGTON—On the cusp of the 
So, you may have read or heard about The Wall Street Journal’s article implying that Google no longer favors net neutrality. You might have also seen the reaction from the 
So, there have been some changes in Washington since my last post. In addition to all the post-election excitement—and believe me, the buzz is palpable—there is a good deal of speculation about what will happen in the next administration. There is no doubt the next administration will assign a higher priority to technology and consumer protection issues than the last, but what will that mean for your business?
Mock commercials have been 
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