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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.

In

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.

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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

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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.

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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

We do not believe that this practice of list rental

consumers.

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.

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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.

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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.

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