At a Senate hearing on mobile privacy issues, lawmakers grilled technology executives on their policies and how they share consumer information with other companies. The hearing comes amid recent revelations that Apple’s iPhone and Google’s Android phones routinely collect information about the location of consumer cellphones. Apple has since limited the data it collects.

“I know you can shut off your location services but that doesn’t do the trick because we want to use them,” said Sen. John Kerry (D., Mass.), who recently introduced a privacy bill along with Sen. John McCain (R., Ariz.), which would establish consumer online privacy rights. “We still need a privacy standard. We still need basic rules of the road.”

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The bill, labeled the Commercial Privacy Bill of Rights Act of 2011, would impose new rules on companies that gather personal data, including offering people access to data about them, or the ability to block the information from being distributed. Companies would have to seek permission before sharing sensitive religious, medical and financial data with outside entities.

The bipartisan proposal would create the nation’s first comprehensive privacy law and largely adopts recommendations made by the Obama Administration last year. Current laws cover only the use of certain types of personal data, such as financial and medical information.

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“Modern technology allows private entities to observe the activity of Americans on a scale that is unimaginable, and there is no general law” governing the collection and use of that data, Sen. Kerry told the Senate Commerce Committee.

The Massachusetts lawmaker said he was working with others and soon planned to introduce a “privacy bill of rights.”

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Mr. McCain, an Arizona Republican, and Mr. Kerry, a Massachusetts Democrat, are backing a bill that would require companies to seek a person’s permission to share data about him with outsiders. It would also give people the right to see the data collected on them. The bill is expected to be introduced ahead of a Senate Commerce Committee hearing next Wednesday on online privacy.
The move comes amid widening scrutiny of the tracking industry. In the past year, The Wall Street Journal’s “What They Know” series has revealed that popular websites install thousands of tracking technologies on people’s computers without their knowledge, feeding an industry that gathers and sells information on their finances, political leanings and religious interests, among other things.

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The reactions are all over the map, and no one is exactly happy. I’ve collected a few of the reaction statements below.

President Obama:

“This decision is an important component of our overall strategy to advance American innovation, economic growth, and job creation. As a candidate for President, I pledged to preserve the freedom and openness that have allowed the Internet to become a transformative and powerful platform for speech and expression. That’s a pledge I’ll continue to keep as President. As technology and the market continue to evolve at a rapid pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and that the democratic spirit of the Internet remains intact.”

Rep. Fred Upton, R-Michigan, incoming Chairman of the House Energy and Commerce Committee

“The FCC’s hostile actions toward innovation, investment and job creation cannot be allowed to stand. We must use every resource available, including the Congressional Review Act, to strike down the FCC’s brazen effort to regulate the Internet. … Despite FCC claims that these are just rules of the road that everyone agrees with, anyone can recognize that what the Commission claims to be statements of broad industry support are really cries of ‘uncle’ resulting from threats of even more onerous regulation.”

Rep. Greg Walden, R-Oregon, incoming Chairman of the Subcommittee on Communications and Technology

“More troubling than the substance of the network neutrality rules are the legal theories underpinning them. If left unchallenged, this power grab will allow the Commission to regulate any interstate wired or wireless communication on barely more than a whim. For all these reasons, we plan to look at all legislative options for reversing the decision. We also plan to hold a series of hearings early next year on the substance, process and claims of authority underlying this proceeding.”

Sen. John Kerry, D-Massachusetts

“The FCC’s Democratic Commissioners should be applauded for reaching a consensus on rules that will protect network neutrality on the Internet. As Commissioner Copps, a lifelong champion of open communications and democratic discourse, said in his statement today, vigilant and vigorous implementation of the rule is critical to its success.”

Dish Network CEO Charlie Ergen

“DISH Network applauds Chairman Genachowski and Commissioners Copps and Clyburn for adopting critically important net neutrality rules. The Commission’s Order is a solid framework for protecting the open Internet. The new rules give companies, including DISH Network, the framework to invest capital and manpower in Internet-related technologies without fear that our investment will be undermined by carriers’ discriminatory practices. While we wish the Commission would have gone further to expressly prohibit discrimination on wireless platforms, we are pleased that there will be ongoing Commission oversight and enforcement authority.”

Kyle McSlarrow, President and CEO, National Cable and Telecommunications Association

“Our consistent view has been that the current ‘openness’ of the broadband marketplace can be preserved while simultaneously fostering the innovation and massive private investment needed to ensure the future growth and vitality of the Internet. While we agree entirely with Commissioners McDowell and Baker that new regulation is not necessary to accomplish that goal, it has been clear for some time that there were three votes at the Commission for rules that would go much farther than those adopted today. Thus, the question before us has been whether rules could be drafted in a manner that avoids a raft of unintended consequences and that preserves broadband providers’ ability to innovate and invest in a marketplace that justly represents a great American success story.”

J. Scott Holladay, Economics Fellow, Institute for Policy Integrity

“Today, the FCC voted on a batch of tepid new rules. Some net neutrality protection will be provided, but the exclusion for wireless will create barriers to new start-up content providers and chill content innovation over wireless Internet.”

“The new but not-yet-properly-defined ‘managed service’ exemption may amount to the first step down a slippery slope of non-neutral Internet service. The exemption should be carefully tailored to address only a small number of special categories of applications that cannot operate under the existing open framework.”

“The FCC rests these decisions on shaky legal ground. Rather than invoke its more robust regulating powers, FCC bases the new rule on legal authority that was called into serious doubt by court decision earlier this year making the long term prospects for the rule quite poor.”

The Writers Guild of America, East

“A compromise means the parties to a dispute reach agreement. Here, no one has agreed to anything. These tepid rules will be challenged in court and in Congress, and they fail in the most fundamental ways – permitting paid prioritization and all manner of discrimination in wireless. Our members write most of what people watch on television and in the movie theaters and increasingly, online. Today’s FCC vote will diminish our members’ ability to create and distribute innovative content and audiences’ ability to watch the content of their choice.”

The strategy is expected to be unveiled in a report being issued by the U.S. Commerce Department in coming weeks, these people said. The report isn’t yet final and could change, these people said.

In a related move, the White House has created a special task force that is expected to help transform the Commerce Department recommendations into policy, these people said. The White House task force, set up three weeks ago, is led by Cameron Kerry, the brother of Sen. John Kerry (D., Mass.) and Commerce Department general counsel, and Christopher Schroeder, assistant attorney general at the Department of Justice.

The initiatives would mark a turning point in Internet policy. Recent administrations typically steered away from Internet regulations out of concern for stifling innovation. But the increasingly central role of personal information in the Internet economy helped spark government action, according to people familiar with the situation.

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Kara was sorely disappointed when she realized she wouldn’t need her yoga mat for her piece on Asana, which, as it turns out, isn’t a pose that helps you channel your chi, but rather, a high-profile start-up from two former Facebookers aimed at addressing the workplace collaboration and communications space. Benchmark Capital and Andreessen Horowitz together invested $9 million in an attempt to tip the karmic balance in Asana’s favor. Kara showed no fear in a post this week addressing head-on the what-ifs raised by our spicy chairman, Rupert Murdoch. Rupe has threatened to remove content from search giant Google (GOOG) and Kara decided to fill everyone in, from the inside out. AllThingsD went a little bit Hollywood late in the week and Kara reminded us all to set our TiVos to catch our very own Katie Boehret on “The Martha Stewart Show” where she was scheduled to showcase a few cool gadgets for the holidays.

Digital Daily wasn’t quite as Zen this week, covering a few of the scintillating conflicts that always seem to plague the holiday season. It was a case of bickering brothers and Psystar style early in the week as Apple readied the deathblow against the Mac clone retailer. Apple (AAPL) claims that Psystar computers that ship with Mac OS cut too close to home and must be eliminated. Apple may be sandblasting a soda cracker just a little here as Psystar has already filed for bankruptcy. John followed up with some thoughts on foreign policy. It seems that Senators John Kerry and Orrin Hatch put on their best Hawaiian shirts, black socks and leather-man sandals this week to play the obnoxious Americans intent on bossing around the European Commission. While there was no word on whether they made a fuss about not getting ketchup with their French fries, they did encourage the EC to hurry up and approve the pending Oracle (ORCL)-Sun (JAVA) deal. Sticking with the European vacation theme, John finished out the week with news that Apple and wireless carrier O2 would begin selling iPhones at Tesco supermarkets in the U.K. We assume that, like all things sold in British grocery stores, Tesco iPhones will also come with tikka masala and malt-vinegar options.

MediaMemo was back up to full speed this week, and while we don’t blame Peter for doing his civic duty last week, we’re glad he’s back on the job. He has been closely following the decline of advertising dollars that have been blamed for everything from the death of newspapers to Lou Dobbs “going rogue.” Peter reported that Yahoo upped the ante this week with a meta-advertising campaign targeted at, yep, ad executives. That’s one way to drum up business, or so believes the team at the new Yahoo (YHOO). In another startling revelation about media consumption, the Olswang media law firm reported that iPhone consumers tend to be willing to pay for some content. Peter echoed the same, reporting some purchases of his own. In yet another story about a potential grab for media dollars, Peter reported that Hulu, the online television giant, grew in both content and viewership. Peter reminded us that viewers everywhere are holding their breath for when the juggernaut throws up that pay wall.

Katie held down the Mossberg fort this week and did so even while simultaneously appearing on TV. Quite a feat, but lady geeks have special two-places-at-once powers. Back underground at Mossberg HQ, she reviewed Clicker, a Web site aiming to be the place to find any TV program you might want to watch. The service will point you to wherever a particular episode may live in electronically viewable format and does so without cluttering results with the Web’s video jetsam. She praised the service on the whole, but warned that it’s not a magic bullet. If you are directed to a site that features a pesky proprietary media player, you will still have to make the download. She said that the user account on the site will even let you use it like an online TiVo (TIVO), alerting you when shows have posted and building you a playlist.

Please take care while nursing your Post Retail Stress Disorder this weekend, and take solace that while you may never fully use that knee again, you did get your four-dollar toaster. Tune in next week: Weekend Update will bring you the all-meat, no filler account of the week’s events at AllThingsD.

“Sun Microsystems’ financial position has become more precarious and the commission’s inquiry has continued,” the letter states. “Some have raised concerns over the company’s ability to continue to employ its thousands of workers. Accordingly, we respectfully request the European Commission complete its investigation of this transaction as quickly as possible.”

An earnest (and surprising) appeal. But it’s hard to see it going over well with the EC, which issued a formal objection to the deal Nov. 9 and has been carping about Oracle’s (ORCL) lack of cooperation in its investigation for months now.

Meanwhile, Sun (JAVA), which reported a net loss of $2.2 billion for its 2009 fiscal year, compared with a net loss of $403 million for 2008, continues to lose about $100 million per month as it waits for the deal to close.

Below, the senators’ letter in full:

Chargé d’Affaires Angelos Pangratis 
Acting Head of Delegation
Delegation of the European Commission to the United States
2300 M Street, NW
Washington, DC 20037
 
Dear Chargé d’Affaires Pangratis:
 
As fellow government officials committed to the principle that competition is the cornerstone of healthy economic growth, we would like to take this opportunity to share our thoughts with you as to the proposed acquisition of Sun Microsystems, Inc. by Oracle Corporation. In addition, due to Sun Microsystems’ deteriorating financial condition and the possible negative effect on employment of the company’s workforce, we respectfully request the European Commission expedite the completion of its investigation into this transaction. 
 
The United States Department of Justice, after an intensive investigation, closed its inquiry into this transaction without taking any action. In fact, the Justice Department did not find documentary evidence that this acquisition would harm competition. We recognize that the European Commission has a sovereign right to thoroughly investigate transactions where corporations utilize the European Union’s marketplace. Further, it is our understanding the Commission is concerned about competition in the database software market.  However, we have been informed by Sun Microsystems that their subsidiary, which competes in this specific market, generates only €17 million in revenue and that the same market has competitors with capitalizations of tens of billions of Euros. 
 
Unfortunately, Sun Microsystems’ financial position has become more precarious and the Commission’s inquiry has continued. Some have raised concerns over the company’s ability to continue to employ its thousands of workers. Accordingly, we respectfully request the European Commission complete its investigation of this transaction as quickly as possible.   
 
Thank you for your attention to this matter.

On one of my many trips to Los Angeles (what can I say? I like to hang where LoRo* hangs), I dropped in to see Nick Grouf of Spot Runner.

As many might know, Spot Runner is an online-offline ad agency play that has gotten big funding and even bigger hype of late.

We’ll see how that goes. But Spot Runner actually seems to be tackling an underserved (and unexciting) market of local and national clients in need of cheap online ad solutions married to more traditional marketing venues to boost revenue.

Here’s my video interview with Grouf at Spot Runner’s offices on Wilshire Boulevard:

I met Grouf many years ago when he–along with Spot Runner partner David Waxman–founded PeoplePC and Firefly Networks.

Grouf sold the struggling PeoplePC–which hawked computers bundled with an online service–to Earthlink (ELNK) in 2002 for $10 million and assumption of $35 million in liabilities, in a Web 1.0 meltdown deal that followed a disastrous IPO.

He then started working for the Presidential campaign of Sen. John Kerry, helping figure out how to best and most cheaply place critical television ads–crunching all sorts of data about lots and lots of neighborhoods and towns and cities nationwide to figure it out.

What Grouf figured out, though, was that a system for doing so was nonexistent.

That experience turned into Spot Runner, which is essentially a do-it-yourself model that tries to iron out inefficiencies in the buying and selling of advertising and bridge the gap between the traditional and online ad markets.

Offering cheap ad templates, clients can make and place low-cost television and radio ads for small and national businesses, as well as political campaigns, and get analytics about the impact of the ads. Some ads cost as low as $500.

Spot Runner got a pile of cash to try to do that better, recently nabbing $51 million in funding to add to the $60 million already raised.

Investors include international media giants Daily Mail and General Trust (DMGT.L) and Grupo Televisa (TV), investment company Legg Mason Capital Management (LM) and luxury conglomerate Groupe Arnault/LVMH (MC.PA).

Spot Runner’s previous investors are Allen & Company, Battery Ventures, Comerica Bank (CMA), Lachlan Murdoch, Vivi Nevo, Capital Research and Management, CBS (CBS), Index Ventures, Interpublic Group (IPG), Tudor Investment Corporation and WPP.

Its board includes Index’s Danny Rimer and former AOL exec Bob Pittman.

All that money has given Spot Runner an eye-popping valuation upwards of $500 million.

This is its biggest burden, I think, setting expectations very high for what is still a little start-up.

And while there are rumors of both Microsoft and Google, as well as Comcast, being interested in acquiring the company, Grouf dismisses the speculation.

He says Spot Runner is more intent on using the money raised to buy companies and improve its offerings.

For example, it recently bought Weblistic, a local search listings creator, and hired former Microsoft exec Joanne Bradford.

Bradford, who was a VP and chief media officer of MSN Media Network, is executive vice president of National Marketing Services at Spot Runner, focusing on getting national advertisers to also think small and targeted.

Who knows whether the company will be able to overcome its hype, but time (and money) will tell.

(*And a free D6 bag for anyone who correctly identifies who I am referring to here, either by sending in a comment or an email to me at kara@allthingsd.com.)