At the round tables on privacy held by the Federal Trade Commission, Indiana University law school professor and member of the board of The Privacy Projects, Fred Cate said out loud what long has been silently known about consumer protections based on the notices web sites post to describe their data protection practices and the consumers’ choice to click on or away. Cate said: “Choice is an illusion.”

There is more than a bit of substance behind the bumper sticker.  “The flurry of notices may give individuals some illusion of enhanced privacy, but the reality is far different. The result is the worst of all worlds: privacy protection is not enhanced, individuals and businesses pay the cost of bureaucratic laws, and we have become so enamored with notice and choice that we have failed to develop better alternatives.”

FTC Chairman Jon Liebowitz offered a more basic indictment of “notice-and-choice.”  More than the length or legalese of the written notice, more than the specific liberties they allow, more even than their non-standard  placement, he says “consumers don’t read privacy policies…”

None of this would pose a problem if the cost of violating a consumer’s sense of privacy did not result is real penalties.  It does.  Just ask Facebook.  Or Google.

Charting a new course with more teeth without raising the stakes of consumer participation and offering companies a “safe harbor” will take some doing.  One way may be to focus on encouraging corporate accountability and requiring a specific outcome.  Rather than dictate specific behavior — collect this, not that, hold it for a month or a quarter, require an opt-in or opt-out — government can require outcomes that can be monitored and enforced.  A breach is best prevented by companies focused on customer loyalty, not government guidelines.

While it is best to act online as if you are in public, each of us leaves a mandatory trail of data as we go from one digital public square to the next. The current ability to collect, analyze and link what in an earlier day was dust on our sandals makes the burden of privacy more than our own. If the companies from whom we buy do not buy that, we ought to go elsewhere.

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Recently came news of a new lobbying communications program launched by the Business Roundtable.

Dubbed “Delivering Innovation,” it tells the stories of how “companies across America - led by their CEOs - innovate to create breakthrough products, services, processes and solutions to the world’s most difficult challenges.”  A laudable idea, but if the goal is influence, it is undermined by context.

Visit the site and the first video launched is from Randall Stephenson, chairman and CEO of AT&T urging us to invest in education as his company has done.  At a time when the AT&T network performance has become a subject of comedy and lay-offs have drawn the legal ire of the company’s unions and states attorneys general, flying the education flag seems more misdirection than rallying cry.

It is a matter of context.  Does AT&T, or the Business Roundtable for that matter, have permission to tout innovation?  Here is how I put it:

The attempt to rally support for business by waving a flag of “Innovation!” brings to mind the often quoted comment from Samuel Johnson, “Patriotism is the last refuge of a scoundrel.”

There is much right with innovation and, as is said over and over, it is the key to our economic success, but it is not a substitute for business practices that are a fair compact between company and nation.  Nor should it be a shield when the deal is unfair.

Consider the current “jobless recovery.”  The stock market is up, but unemployment benefits are running out and extending them as been rejected.  Where is business on this?  Downsizing and off-shoring jobs in a global economy are good for the bottom line, but it seems an unbalanced burden.

Consider the cost of health care.  In a difficult economy, insurance companies remain are more profitable than ever yet they seek to raise premiums and reduce the number of people covered.  Where is business on this?  Moving people from a regime of preventive care to the emergency room seems an unbalanced burden.

Consider the cost of public services and taxes.  Municipalities, states and the nation are grappling with shortfalls for basic services — fire, police, emergency services, schools, transportation.  Where is business on this?  Tax breaks and enterprise zones, pitting one jurisdiction against another for the right to site a plant or serve as the corporate headquarter’s Zip Code further unbalance the burden.

A top-line communications and lobbying program like “Delivering Innovation” can be a meaningful and effective element of a multi-faceted campaign –  if the elements are aligned.  The restructuring of the U.S. economy alone (see BusinessWeek on the “Permanent Temporary Workforce” and the “Disposable Worker“) gives individuals a crystal clear view of the burdens we each face.  There is no flag so big that can obscure it.

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A former Fleishman Hillard colleague, Peter Verrengia, has written a take on privacy worth noting, whether you are steeped in the subject or just now coming to grips with the danger misuse of customer data represents.

Writing on the firm’s Reputation Point blog, he offers this caution:

For now, businesses that come to be known as privacy thieves will face a serious reputation problem.  Those companies pushing for the use of more private information from their online users should ask themselves if their advocacy of personal transparency is matched by corporate transparency?  So far, it’s a “heads I win, tails you lose” situation.  Most online information harvesters are saying that their proprietary business interests prevent them from sharing all the information they gather.  Understandable from a business point of view, but perhaps not from a public policy viewpoint.

In fact, companies that have misused their customers data, either by not protecting it, reselling it or using it in ways never intended, have long been subject to such a penalty.  In my comment to the blog I noted:

It was 14 years ago that a group of (mostly) technology executives gathered at the now defunct PC Forum conference in the desert and saw the same thing. The emerging Internet needed the confidence of consumers to thrive and TRUSTe was created to help promote the values of privacy, security and trust.

In the time since then, smart companies have come to embrace a commitment to those virtues in hopes of building stronger customer relationships. For these companies, privacy, in particular, begins with a willingness to inform people of what information is collected, why and how long it will be kept.

All this is a result of the constant negotiation that goes on between customers and the companies they support. Ten years ago, “notice-and-consent” was the rule. Its effect was the adoption of privacy policies for all to read (though few did).

Today, the watch phrase is “data collection and retention,” wherein customers know what is collected, for what purpose, for how long it will be kept and to which they have access to review and limit.

What is clear, no matter which generation, is that information that comprises a person’s identity (a definition that is also still in flux) is protected from loss and abuse, whether by third-parties or the company collecting it.

Companies that are found to be doing less will pay a heavy reputational price.

As the governments in the United States and elsewhere focus more closely on privacy, security and trust, enforcement will go beyond the market’s ability to affect a company’s reputation.  It will, as is often heard in the halls of Congress, add up to real money.

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Today’s New York Times was no optical illusion.  As if often the case when public relations gets significant attention from the newspaper of record, it’s not positive.

The “On Language” column in the Magazine retraced old steps in making the case that “optics” is just the latest bit of industry jargon used to suggest there is some science to the art of public relations.

Here is a pertinent bit: “Of course, elected officials have worried about outward appearances since time immemorial, but optics puts a new spin on things, giving a scientific-sounding gloss to P.R. and image-making.”  Taking more pains to make things look right than be right is not limited to elected officials, though they make a good case study.

Without using the “O” word, the President’s public relations guy, David Axelrod, took it on the chin on page one for much of the same reason.  Here is a pertinent bit from that story: “’The Obama White House has lost the narrative in the way that the Obama campaign never did,’ said James Morone, a political scientist at Brown University. ‘They essentially took the president’s great strength as a messenger and failed to use it smartly.’”

Optics is jargon for the way things look and when they look bad, rehabilitating a reputation is more than a math problem. Ask Toyota after viewing the worldwide Oscars broadcast.  Co-host Steve Martin noted that two best director nominees, James Cameron and Kathryn Bigelow once were married.  He said “the pair congratulated each other by exchanging presents: a gift basket with a timer from Bigelow and a Toyota from Cameron.”  Ouch.

Each case points up a problem the public relations industry has created for itself — arguing that the science of the profession trumps its art.  Science might suggest that once something is proved, it is OK to move on to something else.  Fermat’s Theorem has finally been solved, what’s next? But public relations is far more like art, changing with the popular tastes of the day, with lines being drawn and redrawn.  It is science that helps the artist understand expectations so that they can be met or upended as best works for the task.

There is an earlier version of the Mona Lisa lurking below the surface of the one hanging in the Louvre.  And much like the wisdom in the old joke about how to get to Carnegie Hall (”practice, practice, practice”), persistence is the essential virtue of public relations. Persistence  – practice — make public relations professionals better at the business.  Take care of the small things and the optics take care of themselves or at least the right choices will become obvious.

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