• by Wendy Davis , Staff Writer @wendyndavis, February 23, 2011

After behavioral advertising company NebuAd folded several years ago, it seemed unlikely that Internet service provider-based behavioral targeting would gain much of a foothold in the U.S.

Not only did several influential lawmakers make clear that they expected ISPs to obtain users' opt-in consent to such targeting, but industry self-regulatory groups also said that ISP-based targeting requires more explicit user consent than targeting by ad networks or other companies that have access to more limited data about users. Additionally, the Federal Trade Commission's recent privacy report indicated that ISP-based targeting, which relies on deep packet inspection technology, requires "enhanced consent or even more heightened restrictions."

One reason why Congress members, the Interactive Advertising Bureau and the FTC advocate for different standards for ISP-based targeting is that ISPs, unlike ad networks, have access to every site users visit -- including search engines and non-commercial sites like those run by doctors or religious groups.

Unsurprisingly, not all ISPs agree. Consider, Verizon recently slammed the FTC's proposal regarding deep packet inspection. "This heavy-handed view unfairly disadvantages ISPs and favors companies, technologies, and business models based on cookies and other technologies and software that collect and use similar (and perhaps a greater amount of) information," the telecom wrote in comments filed on Friday and made available late Tuesday. "The underlying principles of meaningful notice and choice should apply across the board based on the type of information collected and how the information will be used."

For all of the controversy surrounding ISP-based targeting, it appears to have been less profitable for ISPs than promised. Years ago, former NebuAd CEO Bob Dykes said ISPs could expect "several dollars per month for every user that is monitored," according to The New York Times. But court papers filed last month in ongoing litigation stemming from NebuAd's trials don't reflect that sum. NebuAd partner Bresnan Communications, which tested the technology on 6,000 subscribers in a three-month period, said in a court document that it gleaned only $3,500 total for the trials.