April 17th, 2001
Online profiling gets mixed marks in the classroom
By Dana Hawkins
U.S. News & World Report
Adolescent energy fills the air in the Margaret Buerkle Middle School library. Research projects on slavery are due tomorrow--the last day before spring break for the students in suburban St. Louis. After a briefing by their social studies teacher, the seventh graders dart across the room to claim one of 15 fully loaded computers with jumbo monitors and high-speed Internet access. “This is a miracle,” says Donna Unterreiner, the school’s librarian.
The divinely outfitted technology lab was funded not by taxpayers but by ZapMe! Corp. of San Ramon, Calif. “ZapMe! is cool,” says 12-year-old Amy Steward, who is finishing her project: a board game with stops on the Underground Railroad. “I use it mostly for Internet searches.” Last spring, after voters in the middle-class Mehlville school district nixed the third school bond issue in as many years, administrators turned to the broadband Internet media network specializing in education. School district officials say they understood the shiny new technology, which they value at over $ 172,000, would come at a price: Flashy, MTV-esque commercials and public-service announcements run continuously in a corner of each computer screen. But administrators eagerly endorsed the tradeoff and signed a deal to set up computer labs in the district’s five secondary schools.
What school officials say they did not realize Zap Me! could do is track students’ Web-surfing and tie that to such information as names, addresses, and perhaps even their parents’ credit card numbers. “ZapMe! only mentioned the ads. I wasn’t aware they could gather personal data,” says Yvonne Morris, the district’s instructional technology director.
Where the kids are. Increasingly, cash-strapped schools are penning agreements with companies that may collect data from students. ZapMe! computers are installed in 1,784 schools in 45 states, according to corporate officials, who expect the program to be operating in 4,000 schools by year’s end. Why are marketers targeting schools? “Because that’s where the kids are,” says James McNeal, a professor of marketing at Texas A&M University, who says children spent $ 28 billion of their own money last year.
While ZapMe! is leading this effort, other companies are also trading on technology in schools. The pioneer is Channel One Network, which over the past decade has equipped schools with televisions and cable access to carry its commercial-filled news programs. Channel One is said to be piloting an ad-driven Internet-access program for schools. Technology coordinators like Morris say they’re bombarded by come-ons from companies offering computers, E-mail accounts, and database and Web-page maintenance. Yet few of these companies take pains to keep sensitive information out of the wrong hands.
ZapMe!, for instance, reports in its financial filings that it tracks users by age, gender, and ZIP code. Its contract, however, goes a step further: “We understand that during the assignment of E-mail addresses, user participation in contests, promotions, or programs on the network, it may be necessary for students to give out personal information to ZapMe! or one of the network’s sponsors.” Rick Inatome, CEO since October, insists: “I can guarantee that we never tracked individual surfing habits. We had the contractual right to do it, but we never did.” Inatome says the original corporate vision was to sell products in schools through the “ZapMall”; reward schools and students for online use with “ZapPoints,” which could be traded in for CDs and other items; and share students’ surfing and buying habits with sponsors. “But I’ve changed all that,” says Inatome. “I’ve redefined the mission from Internet marketing to education.” Inatome says these changes will be reflected in new school contracts this fall.
Surfing for dollars. Yet ZapMe! has not altered its current contracts to reflect this new focus. And there are no significant changes in company philosophy in its latest filing with the Securities and Exchange Commission. “It doesn’t look like they’ve changed their business model,” says Chris Nerney, an analyst who follows ZapMe! for the Internet Stock Report. “The bottom line is that ZapMe! is still making most of its money through sponsorship fees.”
Like any Internet service provider, ZapMe! has the capability to monitor data that pass through its network. What’s different is how it treats the information. “ZapMe! does intend to monitor the network and compile statistics and demographics with regard to the habits, viewing preferences, and other nonpersonal information about the network’s users,” reads its contract. “It’s worrisome when an ISP says it’s going to monitor Web-surfing activity, particularly if its customers are kids,” says Richard Smith, a Boston computer consultant who helped expose how DoubleClick linked Web-surfing activity to personal user data. The online ad firm later dropped the plan. “After the DoubleClick controversy, I’m surprised ZapMe! planned on profiling students to show them personalized ads.”
Cresencio Torres says he knows firsthand what can happen when schools trade student data for technology. Last fall, an independent contractor working as a salesman for BrainstormUSA asked teachers at San Bernardino’s Kendall Elementary School to send contest entry forms home with students. In exchange, the company promised educational CD-ROMs to the school. Teachers, in turn, promised licorice to students who, like Torres’s two sons, returned forms the following day. Torres says that the BrainstormUSA salesman’s pitch included high-pressure tactics. “He said if I didn’t buy my kids a computer, they’d never amount to anything,” recalls Torres. “That Hispanics would rather spend their money on barbecue and beer than to help their children.” Torres, who says he thought the salesman was sent by the school, signed a contract agreeing to pay $ 2,721 for a computer and CD-ROMs--at a 21 percent annual interest rate. BrainstormUSA responds: “It’s true we generate leads through schools,” says Joe Galluccio, the company’s president. “But we don’t hard-sell, and we terminate anyone who violates our policy.”
Parental consent. Opposition to data digging at schools is creating strange bedfellows. Commercial Alert, a Ralph Nader-backed public-interest group, calls ZapMe! a “Trojan horse” for record collection. Some conservative organizations, including Phyllis Schlafly’s Eagle Forum, agree. New regulations provide protections for children (box), but these groups want more. They say parents need to act on behalf of children who may not yet understand the value of privacy, and they have endorsed legislation that would require parental consent for students under 18 to give information to marketers.
However, some groups, such as the National School Boards Association, want to continue what they view as “productive collaboration.” Says Dan Fuller, director of federal programs for the NSBA, “Besides, it takes school time and expense to compile parental permission slips.” That stance doesn’t sit well with some parents, though. “Schools are brokering the privacy of our kids for corporate profit and hoping to hide it from parents,” says Larry Scott, a parent who unsuccessfully fought ZapMe!’s contract with the Hernando County, Fla., school district. “That stinks.”
Yet the controversy surrounding Zap- Me! hasn’t dimmed Kristi Johnson’s enthusiasm for the computer lab at El Dorado Middle School in Concord, Calif. “If we are a capitalist economy, why shouldn’t schools benefit from capitalism?” asks the technology coordinator, who recently traded in her school’s “ZapPoints” for such necessities as a stapler and light bulbs. But she hesitates a moment and adds: “If kids weren’t tracked so much, that would be good, too.”
WEB PERMISSION SLIPS
How parents can gain control online
Just because a Web site says it has privacy protections or proclaims it’s for “kids only” doesn’t mean it’s so. Fortunately, things just got better for parents who want help in keeping tabs on what information their kids are sharing online. On April 21, Web site operators must begin obtaining “verifiable parental consent” before collecting, using, or disclosing to third parties any information from kids younger than 13. The Children’s Online Privacy Protection Act applies to such data as full names, addresses, telephone numbers, or any other information that would allow someone to identify or contact a child.
“This will make parents more aware of what type of private data their kid is giving out online,” says Alison Pohn, editorial director of FreeZone.com, a children’s Web site known for its model privacy policy. “And now kids won’t be such sitting ducks for marketers.” Pohn says her site has turned down several deals in which advertisers were seeking to gather data from kids for marketing purposes. For example, one popular music group wanted to build an advertising site on FreeZone to collect not only E-mail addresses but home addresses as well.
The law mandates that parents should receive E-mail from each company that wants to collect their child’s data. The Federal Trade Commission, which established the rules, advises parents to carefully read each site’s privacy policy--which must be prominently displayed on the home page-- before deciding whether to give consent. Under the new regulations, parents may also give consent but restrict companies from disclosing the data to a third party, review the information their child has submitted, ask to have it deleted, and forbid further collection or use of their child’s data. Companies can use E-mail to gain consent for internal uses of information as long as they follow up with an E-mail message, letter, or phone call. If a site appears to be violating the rules, you can call the FTC at 877-382-4357 to file a complaint.