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advertising and mailing lists.

As a measure of direct

marketing's economic importance and consumer acceptance, consumer sales volume from catalogs alone are estimated to be in the tens of billions of dollars. The direct marketing industry makes a major economic impact through increased sales of goods and services. In addition, the direct marketing industry itself is a major contributor to increased employment. Video tapes are emerging as a major element of the marketing business. The new traditional video tape version of movies are being sold through the mail as well as educational and instructional material. Everything from exercising to cooking to gardening to entertainment is finding its way onto videotape. A rapidly growing amount of all video tapes in the United States are sold directly to consumers through the mail. Privacy is not a new concept to the direct marketing industry. We not only protect our customers against unauthorized disclosures, we give them an opportunity to restrict our members from renting or exchanging their names. Typically, a direct marketer as shown in the attached examples will notify its customers that mailing lists containing their names and addresses may be exchanged or rented and they are given the opportunity to limit or restrict such disclosure. addition, through mail preference a consumer may contact DMA and we will distribute their names to any list marketer or broker who requests it, including members and non-members, who in return will eliminate those consumers names from any solicitations that they make.

In

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Video mailing lists rented or exchanged do not contain a list of titles purchased. They simply state how many times an individual purchased through the mail in a preceding time period. In some instances the lists may indicate a subject preference, e.g. sports. There is no doubt that direct marketing companies, like retail stores, know what a customer has purchased. And there is no doubt that direct marketing companies use this information in an attempt to increase sales. Companies in our industry want to know about a person's interest to be better able to market products to that person. If you are a hiker, changes are you would be interested in a catalogue selling camping or fly fishing equipment. If you are a gardener, you might want to buy bulbs or seed. If you are a handyman, you might want to buy more tools. And if you watch videos at home on your VCR, you might want to buy more videos...or home electronics...or books. These lists are closely controlled and they are used only for marketing purpose. They cannot be accessed over the counter and are maintained with a high degree of security.

In contrast, a video store primarily rents video entertainment films. As a result they keep a more detailed record of an individual to protect themselves in case the customer does not return the videos. It was these rental

records which were released for non-marketing purposes in Mr. Bork's case.

In terms of unauthorized access to the name and habits of our customers, we simply are unaware of any instance, even an isolated one, where a name of a direct market consumer has found its way any place except onto a mailing label back to consumers. We do not believe that this practice of list rental and exchange raises privacy issues. Others after looking at this issue including the U.S. Privacy Protection Study Commission have concluded that receiving mail in itself does not raise privacy concerns.

In July of 1977, some five years after we began our own effort, the United States Privacy Protection Study Commission issued the most comprehensive report ever done in this country on privacy. It studied the direct marketing industry

extensively and concluded that:

That a person engaged in interstate
commerce who maintains a mailing list
should not be required by law to remove
an individual's name and address from
such a list upon request of that
individual, except as already provided
by law.

The Commission went on to state however, that an

organization should afford its customers the opportunity to restrict the use of their names. The Commission believed that a voluntary approach would be successful. We believe that our MPS system and those of our individual members have been very successful and that the direct marketing industry has protected its customers from the very abuses which prompted this legislation.

The proposed legislation covers direct marketers as well as retail stores on the theory that the disclosure of video tape selections is a practice that warrants legislative protection and if it is warranted for retail stores than the same restrictions should apply to anyone who distributes video tapes to consumers by other means. This we believe is bad privacy theory.

The Privacy Commission and subsequent legislative activities in the privacy arena all focus on the relationship between the record keeper and the subject of that record. Congress in 1984 as part of a cable reform package included a cable subscriber privacy section because of the concern that it had at that time with the developing central role of a cable company. Not only could a cable operator learn of you movie selections, it could discover when during the day or night you watched that movie. Congress acted on its concern that the cable operator was a new institution with no established track record of protecting consumer's privacy rights. Also, the cable industry sought the legislation.

More recently, in landmark legislation, both of these subcommittees passed the Electronic Communications Privacy Act. That statute recognizes the special role of remote computing services in our society and established very strong requirements concerning the release of information from such services. Also, the remote computing industry sought the legislation.

Here the video store industry has sought this

legislation in light of the publicity resulting from the unauthorized disclosure of Judge Bork's records. The library community has also sought legislation because of the abuse of their libraries by law enforcement officials through library

awareness programs.

In stark contrast, there is no record to support any legislative action directly affecting direct marketing. Given the industry's unblemished seventeen year history of compliance with privacy questions, we seriously question the need to legislate our business. We strongly request that we be given the continued opportunity to respond voluntarily to the challenge of privacy.

Moreover, this legislation is also too restrictive in terms of its limitation on the sale or rental of mailing lists where the individual has been notified that his or her name may be rented. The current language prohibits any disclosure which would directly or indirectly disclose the character of the video tape rented. We agree that this alternative consent procedure should not be used to disclose the specific titles rented. We do not see the harm in the commercial use of the character of the material rented. It does not invade someone's privacy to find out that he or she has rented classic movies or westerns, especially when the individual has the power to stop such disclosure if he or she chooses.