• by Wendy Davis  @wendyndavis, August 1, 2008

Phorm recently tapped high-profile lobbying firm Ricchetti Inc., headed by former Clinton administration deputy chief of staff Steven Ricchetti, to represent the company on Capitol Hill. The move, reported this week in The Hill, was confirmed to Online Media Daily by a Phorm spokesperson.

Other clients of Ricchetti's firm include Sirius Satellite Radio and AT&T. In the second quarter of this year alone, AT&T paid Ricchetti $70,000 to lobby Congress about net neutrality issues and about the Federal Communications Commission's auction of the 700 MHz spectrum, according to the nonpartisan research group Center for Responsive Politics.

Meanwhile, NebuAd last week stopped working with its outside public relations firm and is now searching for a representative who will focus on developing a strategy for communicating with lawmakers and the media on public policy issues, Online Media Daily has learned.

Both Phorm and NebuAd work with Internet service providers to collect information about subscribers' Web activity and then serve ads based on sites visited and searches performed.

The companies have come under fire from privacy advocates, who say Web users don't expect Internet service providers to examine their traffic and sell information about the sites they visit. Advocates also say that the platform is more troubling than other forms of online targeting because Internet service providers have access to comprehensive clickstream data, while older behavioral targeting companies only track users across a limited number of sites.

Rep. Ed Markey (D-Mass.) said at a Congressional hearing in July that companies like NebuAd shouldn't collect information without consumers' explicit consent.

At that hearing, NebuAd CEO Bob Dykes expressed frustration with the perception that the company potentially violates users' privacy. "I feel like Galileo when he was viewed with skepticism on demonstrating that the Earth revolved around the sun," he said at one point. Dykes says that the company collects data anonymously, doesn't gather sensitive information and that users can opt out of the platform.

NebuAd has tested its platform with several Internet service companies, including Embarq and Wide Open West, but those companies and others have since distanced themselves from NebuAd pending Congressional investigation.

Phorm has conducted a test in the U.K. and has also said it intends to enter the U.S. market.

Ricchetti's experience with net neutrality could prove relevant to his work for Phorm. Net neutrality raises similar questions as the controversy surrounding behavioral targeting. Both concern how Internet service providers should treat the information flowing through their systems. Net neutrality advocates say that network providers should serve as "dumb pipes," transmitting data without inspecting or interfering with it.

But Internet service providers say need to manage traffic on their networks. And Internet service providers clearly want to sell subscriber information to companies like NebuAd and Phorm, because doing so will allow networks to capture a share of online ad dollars.