• by Wendy Davis  @wendyndavis, May 15, 2008

Internet service provider Charter Communications will provide information about users' Web-surfing habits to controversial behavioral targeting company NebuAd, which will use that data to serve people Web ads.

Charter, which provides broadband service to 2.8 million people, recently started sending letters explaining the new program--which it refers to as an "enhanced service"--to its customers and telling them that they can opt-out of receiving targeted ads. Charter and NebuAd will start testing the platform in the next 30 days.

Privacy advocates are wary of the program, because Internet service providers have access to a huge trove of information, ranging from sites visited to search terms entered. Older behavioral targeting companies, by contrast, tended to collect information about Web activity on a limited number of sites.

NebuAd has consistently said it does not collect personally identifiable information such as name or address, but rather sorts users into groups based on their Web activity and then sends targeted ads based on users' classifications.

But some privacy advocates say that even without names or addresses, the company is amassing enough data to be able to figure out users' identities. "We consider it to be 'pseudonymous,' meaning that you could identify people if you got enough information," said Ari Schwartz, vice president and chief operating officer of the Center for Democracy and Technology.

Some advocates say they are planning to oppose the program's deployment. "We've contacted a wide variety of consumer groups and also contacted (Rep.) Ed Markey's office," said Jeff Chester, founder and executive director of the Center for Digital Democracy. He asked Markey (D-Mass.), chairman of the House subcommittee on telecommunications and the Internet, to investigate whether Charter Communications is violating the spirit of a 24-year-old law regulating cable companies.

The Cable Communications Policy Act of 1984 was enacted at a time when legislators were afraid that cable operators would attempt to monitor subscribers' viewing behavior. It prohibits cable companies from using the cable system to collect personally identifiable information without subscribers' consent. The ban does not apply to aggregate data that doesn't identify individuals.

A spokeswoman for Markey said the lawmaker is "very concerned" about the privacy issues raised by the deal.

The advocacy group Public Knowledge also expressed unease with Charter's plans to share information with an ad company. "This is not what people sign up with ISPs for," said Sherwin Siy, a staff attorney with the organization.

NebuAd is not the only company trying to use Internet service provider data for behavioral targeting. The company Phorm is attempting to launch a similar service in the U.K., but has run into pushback from privacy advocates who say that the company should first obtain users' express consent. Recently, Phorm reached out to anti-spyware companies in the U.S. to ask them to treat the cookies that it uses to tag users similarly to other ad-serving cookies.