• by Wendy Davis  @wendyndavis, May 19, 2008

Two lawmakers asked Internet service provider Charter Communications Friday to put the brakes on its plan to share data about consumers' Web-surfing habits with behavioral targeting company NebuAd.

Rep. Ed Markey (D-Mass.), chairman of the House subcommittee on telecommunications and the Internet, and Joe Barton (R-Tex.), ranking member of the House committee on energy and commerce, sent a letter to Charter CEO Neil Smith questioning whether the deal with NebuAd violates users' privacy rights.

"Any service to which a subscriber does not affirmatively subscribe and that can result in the collection of information about the Web-related habits and interests of a subscriber ... raises substantial questions," the legislators wrote. They requested that Charter hold off on deploying the plan pending discussions of the privacy issues.

NebuAd collects information about consumers' Web activity from Internet service providers like Charter and then sends users ads based on their presumed interests. The behavioral targeting company 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 people targeted ads based on their classifications.

Charter, which provides broadband service to 2.8 million people, recently began notifying customers about the NebuAd deal--slated to go live on a trial basis by mid-June. Charter said Friday it will comply with any privacy regulations. "Our goal is to bring an enhanced Internet experience to our customer while meeting all privacy protection requirements," the company stated. "We believe we have done that but are pleased to discuss this matter with the Chairman and the Congressman."

NebuAd said it would support Charter in working with Markey and Barton. "The NebuAd system is built from the ground up to protect the privacy of users accessing the Internet," the company said.

NebuAd allows users to opt-out of receiving targeted ads, but some privacy advocates say that companies should not collect information about which sites people visit without first obtaining their express consent.

Digital rights groups are troubled by behavioral targeting generally, but are especially wary of programs that draw on data from Internet service providers because those companies have access to users' entire clickstream data, 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.

The letter from Markey and Barton comes as government authorities are looking more broadly at the privacy implications of online ad techniques. The Federal Trade Commission is currently considering issuing voluntary self-regulatory guidelines for companies that track users across the Web and serve ads based on their activity.

The FTC proposal has drawn criticism from privacy advocates, who argue that the guidelines will not do enough to protect people--as well as groups like the Newspaper Association of America, which argue that the government should not even propose voluntary guidelines because there is no evidence that targeting harms consumers.

There's also increased interest in online targeting at the state level, with both New York and Connecticut considering legislation that would regulate the field.

In their letter, Markey and Barton specifically referred to a 1984 federal law that prohibits cable providers from disclosing certain information about consumers without their written or electronic consent.

Privacy advocate Jeff Chester, founder and executive director of the Center for Digital Democracy, said he was optimistic that Charter would delay its plans. "When (House leaders) hold up a 'Stop' sign, any cable CEO who ignores it does so at their peril," he said. He added that he thinks the Congressional involvement signals that legislators are concerned about online advertising and privacy. "Hopefully, it's a shot heard around the digital advertising world," he said.

But Mike Zaneis, vice president of public policy for the Interactive Advertising Bureau, downplayed news of Congressional involvement. "Clearly this is a nascent and developing business model," he said. "It's not a surprise that legislators and regulators would be interested in looking at how this model develops.