• by Wendy Davis  @wendyndavis, November 16, 2008

Internet service provider AT&T is backing a new privacy think tank, the Future of Privacy Forum, which is expected to articulate privacy standards for companies that engage in online behavioral targeting.

AT&T's law firm, Proskauer Rose, is spearheading the effort. The firm has tapped Jules Polonetsky--former AOL chief privacy officer--to lead the new think tank, expected to be unveiled Monday. The same law firm also helms the anti-net neutrality group "Hands Off the Internet."

Some people who are familiar with the new privacy group say it's likely to endorse the view that companies should not track consumers' Web activity for marketing purposes unless they have expressly opted in. Polonetsky declined to specify what stance the group might take.

But AT&T earlier this year clearly endorsed the view that behavioral targeting companies should seek consumers' opt-in consent. At a hearing about privacy and broadband companies, chief privacy officer, Dorothy Attwood said the company will not deploy behavioral targeting techniques through deals with shops like NebuAd or Phorm--which use (or planned to use) deep packet inspection to monitor all traffic--without first obtaining subscribers' opt-in consent.

Attwood went further than just testifying about AT&T's privacy policies. She also said the telecom urged all behavioral targeting companies--those who glean information from broadband providers as well as those who only capture information at certain publishers' sites--to seek consumers' explicit consent before tracking them.

"The largely invisible practices of ad-networks and search engines raise at least the same privacy concerns as do the online behavioral advertising techniques that ISPs could employ," Attwood said in a written submission. "The privacy and other policy issues surrounding online behavioral advertising are not technology-specific."

The move comes as the Interactive Advertising Bureau is gearing up to issue a proposal for a self-regulatory body that would police online privacy. Mike Zaneis, vice president, public policy, said the IAB had tapped a comprehensive range of companies to help develop its proposal.

"We have players from the entire Internet ecosystem--marketers, advertising agencies, Web publishers and everybody in between," Zaneis said.

Meanwhile, lawmakers and the Federal Trade Commission continue to scrutinize behavioral targeting and whether Web companies should obtain consumers' consent before tracking them for ad-serving practices.

Rep. Ed Markey (D-Mass.), who led much of the recent congressional inquiry, has said he believes that targeting based on information gleaned from Internet service providers requires opt-in consent, but that other, older forms of behavioral targeting only require notice to consumers and the chance to opt out.

The prospect of Internet service provider-based targeting alarms privacy advocates, who view it as highly intrusive because Internet service providers know every Web site that users visit and all of their search queries. Older behavioral targeting companies like Revenue Science or AOL's Tacoda, by contrast, usually only know when Web users visit particular sites within a network.

The Future of Privacy Forum will officially launch on Wednesday.