Big scramble over privacy plan

The pressure is on: High-stakes, closed-door maneuvering involving lawmakers and the fate of a November ballot initiative is roiling the Capitol.

The initiative would boost privacy rights for millions of online customers. But it won’t go directly to voters at all, the sponsor promises, if a bill emerges from the Legislature and makes it to the governor’s desk by Thursday, June 28.

“If the bill passes before (this) week’s deadline to withdraw, we will withdraw our initiative. If it doesn’t, we will proceed to the November election.” — Alistair Mactaggart

That’s the deadline for the initiative’s sponsor, San Francisco developer Alastair Mactaggart, to pull it in favor of compromise legislation aimed at accomplishing much the same thing.

Legislation is far cheaper than a ballot fight. A full-blown political battle over the ballot measure could cost communication companies, their business allies and their opponents $75 million or more, a number of Capitol lobbyists said.

“If the bill passes before next week’s deadline to withdraw, we will withdraw our initiative. If it doesn’t, we will proceed to the November election. We are content either way, as we feel that both the legislative solution and our initiative provide tremendously increased privacy rights to Californians,” Mactaggart said in a prepared statement.

The bill, Assembly Bill 375, by Assemblyman Ed Chau, D-Monterey Park, is on track to move rapidly from the state Senate back to the Assembly and then to Gov. Jerry Brown’s desk with just hours to spare. Brown, a Democrat, has not said whether he will sign the bill. The contents of the final bill have not yet been negotiated.

The bill’s backers are scrambling to get the initiative to Brown’s desk on June 28, hours before the deadline.

It’s all about privacy — specifically, how much of it customers can demand of such communication giants such as Google, Verizon, AT&T and Comcast.

Initiative backers collected 625,000 signatures, with 365,880 valid signatures needed to qualify for the Nov. 6 ballot. Local officials are verifying signatures.

Chau’s bill would expand the rights of consumers to know what data is being collected about them online, and even to delete it. It would also empower consumers to decline the sale of their information and report violations, which must then be addressed by the violator or risk civil action.

The initiative’s provisions are similar. It would do three things:

–Give customers the power to request that a business release to the information the business has on the customer.

–Require that a business release information on how the customer’s personal information was used or sold and to whom.

–Require that a business not sell or disclose the customer’s personal information.

Initiative backers collected 625,000 signatures, with 365,880 valid signatures needed to qualify for the Nov. 6 ballot. Local officials are verifying signatures.

Mactaggart decided to go the initiative route after the initial version of AB 375 failed to reach the Senate floor.

Chau and state Sen. Robert Hertzberg, D-Van Nuys, are the driving forces behind the bill. Hertzberg convened opposing camps for a series of closed-door meetings that hammered out a compromise reflected in the bill.

“We listened to every stakeholder at the table, including proponents of the privacy initiative on the ballot, to come to a legislative agreement that protects consumers at a level unseen by any current California law,” Hertzberg said in a prepared statement.

California, as is so often the case, may be a harbinger of a national trend if the initiative or bill is ultimately successful. The New York Times on May 13 said, “[P]rivacy advocates say it will be one of the most meaningful checks in the United States on the growing power of internet behemoths.”

The Legislative Analyst’s Office said this about the initiative’s fiscal impact:

“Increased costs, potentially reaching the low tens of millions of dollars annually, to state and local governments from implementing and enforcing the measure, some or all of which would be offset by increased penalty revenue or settlement proceeds authorized by the measure.”

Mactaggart decided to go the initiative route after the initial version of AB 375 failed to reach the Senate floor. Hertzberg then convened his meetings that resulted in the amended version of the bill now under consideration.

The California Chamber of Commerce is opposed to the initiative, leading a coalition under the banner of the Committee to Protect California Jobs. It calls the initiative “poorly written” and “misguided” and argues that the chief beneficiaries would be trial lawyers, who would prosper through lawsuits brought by irate customers.

“This ballot measure disconnects California. It is unworkable, requiring the internet and businesses in California to operate differently than the rest of the world — limiting our choices, hurting our businesses, and cutting our connection to the global economy,” says a statement from Chamber president Allan Zaremberg, Andrea Deveau of TechNet and Robert Callahan of the Internet Association.

The committee has so far raised $1,010,000 with the money coming in $200,000 chunks from AT&T, Comcast, Facebook, Google and Verizon. Facebook also contributed $200,000 but then said it would pull out of the committee.

But if backers of Chau’s bill are able to scramble quickly enough, all that may become mere history.