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Summary:

As we reported on Tuesday, NebuAd has lost its CEO and, after facing Congressional scrutiny over privacy fears, the will to pursue ISP customers with its deep-packet inspection technology. But its UK rival, Phorm, apparently wants investors to believe it’s still in the game. While NebuAd […]

As we reported on Tuesday, NebuAd has lost its CEO and, after facing Congressional scrutiny over privacy fears, the will to pursue ISP customers with its deep-packet inspection technology. But its UK rival, Phorm, apparently wants investors to believe it’s still in the game. While NebuAd told the Washington Post that it plans to get out of the business of selling its system to ISPs, Phorm is trying to make clear it’s not having any problems with its own plans to roll out advertising based on a consumer’s web surfing habits. A company spokeswoman says the company plans to could use its technology to branch out to track and offer ads on interactive television services as well — a type of offering we’d predicted.

The former adware company said this morning that its deal with BT is going ahead, while its deals with Virgin Media and TalkTalk will proceed later. From its filing with the AIM market on the London Stock Exchange:

Since that time, the Company has been working closely with BT to prepare its network for a trial. Whilst this has taken longer than originally anticipated, significant and accelerating progress has been made. The trial will commence as soon as these preparations are complete.

In addition, Phorm expects that Virgin Media and TalkTalk will commence consumer trials in due course. Following successful completion of these trials and an appropriate planning period, it is currently expected that Phorm’s platform will be rolled out across these networks.

It’s hardly a ringing endorsement of the firm’s success (and looks a lot like NebuAd’s statements when Congress initially started sniffing around its deals), but spokeswoman Stephanie Willerton said Phorm still plans to pursue ISP customers both in the UK and in the U.S. It has a New York office, which it opened earlier this year with an eye to North American expansion plans. Willerton also said the company has adapted its technology to address privacy fears, referring me to the opt-in page on the Phorm web site to learn more.

But the proposed opt-in plan suffers from some of the same problem’s NebuAd’s system did — namely that you opt out once on a machine, that the opt-out is only targeted at the machine, not the person. If I visit other computers that have been opted in, I’m still being tracked. Willerton didn’t dispute this but said that once someone opts out, Phorm doesn’t track anything further.

Despite the British government’s assurances of legality, the European Union hasn’t been as impressed and is asking its own questions as to how legal the Phorm web tracking is. Additionally, since Phorm still plans to market its services in the U.S. (currently is says it has no U.S. customers), Congress may have to be appeased as well. Meanwhile, BT customers should prepare for more scrutiny on their surfing habits, especially once “significant and accelerating progress has been made.”

By Stacey Higginbotham

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  1. Whether they are Opt-out or Opt-in, privacy policies are governed in good part by contract law. Contract law is a two-way street. Just as advertising networks can communicate to visitors/customers what they assert to be the legal terms, customers can communicate back!

    In principle, contract law does not favor either businesses or customers/users. As the future of privacy law unfolds, individuals may be able to use contract law to assert their legal terms on other parties, such as search engines or advertisers. Why shouldn’t a consumer be able to broadcast what she expects to be the legal terms under which she does business? –Ben http://hack-igations.blogspot.com/2008/05/google-privacy-policy-terms-of-service.html

    My ideas are not legal advice for any particular situation; they are just ideas for public discussion.

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  2. no different than what google does or any ad network like revenue science. only difference here is ISP’s looking to do it at the network level, today’s behavioral ad networks do it at the site level. you can be sure google’s new chrome definitely tracks at the browser level, though under the guise of “improving web surfing experience.”

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  3. The tracking Google and Revenue science does is easy to avoid. Having all you network traffic intercepted by deep packet inspection if you are opted in OR OUT is not.

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  4. @peter – YOU ARE RIGHT ON – and most people just don’t get it…..

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  5. Its spyware. It tracks and reads every page you visit. Opt out / in is meaningless, all that happens is you don’t get targetted ads, the spying on your connection continues.
    Hopefully any trial will also give the BT cancellation line a good stress test.

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  6. Peter, I believe the difference comes down to trust, freedom of choice and end-user value. And very soon I think it will also come down to end-user transparency and control.

    I have a choice which browser to use, which site to visit, etc. I have much less of a choice which ISP I can use.

    More at http://kickstand.typepad.com/metamuse/2008/09/behavioral-ta-1.html.

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  7. For DPI also read it as “Deep Packet Injection”, the very seedy side of this system any code or image can be changed or your Browser redirected to totally the Wrong Web Address.

    This is a cocktail for anarchy on the WWW, just because the technology is possible it does not mean it should ever be used when confronted with the complications & massive personal & data protection issues it will cause!

    Why is the nuclear industry subject to such strong regulations, this could have the same sort of Global Implications when it comes to Privacy & Data Protection!

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  8. [...] privacy. This would make Orange the odd man out in the country. BT, Virgin Media and TalkTalk are all still on board with Phorm, although their resolve may be weakening, judging by the fact that none of them have put [...]

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  9. [...] startup called NebuAd to monitor where a consumer surfs the web and serve ads against those visits. Other companies are trying this as well. Since then, Congress has held two hearings on online privacy, with one related to data [...]

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  10. [...] startup called NebuAd to monitor where a consumer surfs the web and serve ads against those visits. Other companies are trying this as well. Since then, Congress has held two hearings on online privacy, with one related to data [...]

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