Home, Home in the Internet Cloud

We are in the midst of demanding times: financial crisis, war, a newly inaugurated president. And that's just the first five minutes of the evening news.

These issues rattle our personal orbits; it is understandable that other important issues drift to the margin. But it's worth remembering that it's not just our homes on Main Street that are at risk. Our "digital homesteads" are in trouble as well.

In the last decade, Americans have claimed a stake in the Internet cloud and built vast homesteads byte by byte, seeding social networks, photo sharing sites, blogs, e-mail, e-commerce and search sites with highly personal information.

The closets and trunks of our virtual homes are stuffed with virtual maps of our families, friends and associations, our personal finances, political opinions, correspondence, search terms, health data and in some cases, our real-time location.

Virtual Homesteads Don't Belong to Us

The only problem is that while the virtual homestead may feel like it "belongs" to us, it does not. The homestead, in fact, belongs to the myriad of third parties, which store our data remotely.

It's like living in a frontier mining town, where the company owns the houses, the dry goods store and the bar. The privacy of your personal information depends on the rules set by the company holding your data.

There are very few legal limitations as to how your information will be used. And just as people failed to read the fine print on their mortgage documents, few read the privacy policies that govern their virtual homesteads, and thus fail to understand whether and how their personal information will be used.

Instead, the more we use online services and store our personal information with them, the more comfortable -- the more relaxed -- we become with the idea that a third party is holding some of our most personal information.

Consumers generally remain blissfully unaware of the implications of the lack of legal protection for their digital homesteads. A Consumer's Union study in the fall of 2008 suggests that the public has an incomplete knowledge of privacy regulations at best.

High Price Paid for False Sense of Security

People are apprehensive about companies obtaining their digital information and, for the most part, they understand that the rules governing privacy are set by the online sites rather than the government.

But they rarely take actions to protect personal information collected during online transactions, even when the site offers privacy controls, giving the online industry little incentive to compete on privacy.

But we may pay a high price for this false sense of security. The fact is that the rapid technological advances of the last decade have out-distanced legal protections for our information, putting privacy at risk.

It's not just companies, which have almost a free hand over your digital homestead; the government, too, has easier access to the data we store online than it does to the personal papers in your bricks and mortar home. Current communications privacy laws are simply not up to the challenge created by dramatic changes in information technologies.

So, much of the highly personal information we place online as a result of our increasingly digital lives, has less legal protection than the grocery list scribbled in pencil on the back of an envelope and stuffed in a desk drawer in your home.

Simply put, the constitutional protection we take for granted for our "houses, papers and effects" does not extend to the digital homestead

There is no legal or policy rationale for affording second-class privacy status to personal information collected and stored by today's modes of communication and information technologies.

This is another "mortgage meltdown" waiting to happen. If we don't take action to extend full privacy protections to our digital homesteads, we jeopardize eroding public trust in the medium and putting the Internet economy in peril.

That's not a risk we should take while trying to recalibrate our economy and encourage innovation.

Crucial That President Obama Takes Early Action

So, how do we begin to install digital locks and keys in our homes in the Internet cloud?

Consumers need to play their part and take responsibility for their digital homesteads, most importantly by taking advantage of the increasing array of privacy tools provided by online sites. And companies need to step up self-regulation to separate the good actors from the outliers.

But it's also crucial that President Barack Obama take early action to protect online privacy.

He can do this first by being a strong advocate for a comprehensive federal privacy law that would require companies to follow fair information practices, and give consumers rights in their information.

And as personal health information migrates online, the president should also support changes in our communications privacy laws to ensure that the digital homestead be afforded the same Fourth Amendment protections against unwarranted government intrusion that have protected our homes since our country's inception.

Leslie Harris is president and CEO of the Center for Democracy and Technology.

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