• by Wendy Davis  @wendyndavis, June 12, 2008

With debate heating up on whether online ad techniques violate users' privacy, the Senate is expected to hold a hearing next week about interactive advertising.

Potential witnesses so far include aQuantive parent Microsoft and digital rights group Center for Democracy & Technology. The Senate Subcommittee on Interstate Commerce, Trade and Tourism, chaired by Sen. Byron L. Dorgan (D-N.D.) is slated to conduct the hearing Wednesday.

The move comes as Internet service providers have roiled privacy advocates by deciding to enter the behavioral targeting field. In the U.S., Charter Communications, which provides broadband service to 2.8 million subscribers, recently agreed to partner with online ad company NebuAd to serve ads to users based on their Web activity.

Such agreements especially trouble privacy advocates because Internet access companies know every Web site users visit and every search query they make. Older forms of online targeting, by contrast, rely on tracking users across a limited number of Web sites that have deals with specific behavioral targeting companies. Ad companies say that the tracking is anonymous in that they don't collect information about people's names or addresses, but advocates say it's possible to figure out people's identities by examining clickstream data.

Charter's deal with NebuAd has sparked enough concern that two senior lawmakers, Rep. Edward Markey (D-Mass.) and Rep. Joe Barton (R-Texas), recently asked Charter to delay its plans. Late last week, a group of 12 privacy and net neutrality advocates wrote a letter to Barton and Markey calling for hearings into whether Charter's plan violates federal wiretapping laws.

In the last year, even before Charter and NebuAd upped the ante on privacy issues, regulators and lawmakers increasingly turned their attention to online advertising. The Federal Trade Commission late last year proposed new voluntary guidelines for ad companies that engage in behavioral targeting, or serving ads to Web users based on their online activity. At the state level, New York and Connecticut are considering legislation that would require Web companies to enable people to opt-out of online tracking.