Because good news is so rarely reported, here’s a headline you probably won’t see today: Social Network Funds Grants to Protect Kids Online.

Then again, it’s possible that some reporters will spin that into bad news to make for a flashy headline.  For example, last November PEW came out with research on teens’ use of social networks.  The Washington Post led its story with, “There’s something about the Internet that can bring out the meanness in teenagers.”

While PEW found that 9 of 10 teens have witnessed bullying online, it went on to report that teens encounter far more bullying in-person and in texting than on social networks.  PEW also found many positive benefits to teens’ use of social networks, including the finding that 80% of teens have defended a victim of online bullying.

Yesterday we filed comments on the Federal Trade Commission’s (FTC) proposed changes to the Children’s Online Privacy Protection Act (COPPA).  Our comments advises the FTC about changes that could discourage the developmenet of online services for kids.

So what is COPPA?  Well, COPPA regulates the online collection and use of information about a child (a child is anyone under 13).  While a noble goal, COPPA has unfortunately discouraged many services from developing appropriate content for kids.

That’s because COPPA exposes any online service for those under thirteen to potential legal liability.  As a result, many services forbid those under 13 from using their services. For example, YouTube forbids those under 13 from using its service.  Likewise, Pandora music service is only available to those over 13.

This past September, the FTC proposed changes to COPPA, expanding its scope and legal liability.  When we heard about the changes we worried about the effects.  CCOPPA current rules already discourage most online services from serving those under 13, so what will happen if the rules get tougher and the liability greater?  How many more sites will just avoid serving kids?

In August, Ireland’s Data Protection (DPC) Commissioner Billy Hawks made headlines by airing a laundry list of potential Facebook privacy violations, including the creation of “shadow profiles” and the collection of information about non-Facebook users.

At the same time, the Irish Commissioner declared that his planned audit of Facebook’s privacy practices was, “likely to be the most detailed, challenging and intensive audit ever undertaken by his office.”  The announcement was good for generating headlines, but as the results of his audit show, the alarming headlines were unjustified and, in some cases, wrong.

Fast-forward to today’s news about the audit findings where the Commissioner concluded that, “The audit has found a positive approach and commitment on the part of Facebook Ireland to respecting the privacy rights of its users.”

Well, that conclusion was unexpectedly un-alarming.

Just like last month’s FTC consent agreement, Facebook emerged from an engagement with government auditors without dramatic revelations of plots to build dossiers on every person on the planet.

In 2009, EPIC, a privacy group, filed a privacy complaint about Facebook with the Federal Trade Commission (FTC).  This prompted the FTC to announce last month an agreement where Facebook must create a comprehensive privacy program, delete content after termination of a user account, and do comprehensive privacy audits every two years.  If Facebook fails to comply, it faces millions of dollars in fines.

Unfortunately, after obtaining privacy sanctions against Facebook, EPIC announced today that it considered the agreement a “FAIL” and launched a campaign to demand additional sanctions on Facebook.

I visited EPIC’s site to learn more about their new demands.  EPIC demands the FTC to “prevent Facebook from secretly tracking users across the web.”  That sounds scary, but EPIC never explains what it means by “secret tracking.” I found only one reference to tracking, secret or otherwise, buried in a 2010 EPIC complaint about Facebook’s cookies.  So I can only assume that by “secret tracking” EPIC means Facebook reading their cookies when users visit other sites.  But it wasn’t until I thought more about these Facebook cookies that I realized why EPIC hid their explanation of “secret tracking.”

We’re giving a polite “golf clap” for The Federal Trade Commission and Facebook on today’s announcement of a voluntary agreement designed to protect user privacy while allowing Facebook – and an entire ecosystem of online service providers – to continue innovating.

First off, it’s almost always better to get private industry and federal regulators to reach a mutual agreement on resolving complaints.  Far too often, the kneejerk response from regulators and elected officials is to call for new legislation.   And those new laws usually just restrain innovation by legitimate companies, while those intent on bad behavior ignore new laws just as they ignored the old laws.

It this case, the FTC and Facebook tackled a list of complaints that were raised by a small but media-savvy industry of professional privacy advocates.

In general, the 800 million users around the globe who joined Facebook do so in order to make their information more visible to public and to their network of friends.