• by Wendy Davis  @wendyndavis, July 1, 2008

One week after Charter Communications voiced concerns about controversial behavioral targeting company NebuAd, two other Internet service providers appear to be distancing themselves from the company.

CenturyTel, which provides broadband to around 500,000 customers, is holding off on plans to work with NebuAd in light of Congressional inquiries about privacy, a CenturyTel spokeswoman told Online Media Daily Monday.

In addition, a spokesperson for Embarq, an Internet service provider based in Overland Park, Kan., said the company isn't currently using online behavioral targeting tools and has no contract with NebuAd.

Embarq, which has more than 1.3 million broadband subscribers, and CenturyTel each recently tested NebuAd's platform. The news about those Internet service providers comes just days after the country's fourth largest cable company, Charter Communications, said it was going to suspend plans to test NebuAd's system in light of questions raised by Reps Ed Markey (D-Mass.) and Joe Barton (R-Texas).

With broadband companies in apparent retreat from NebuAd, it's not clear what the future holds for the behavioral targeting company. NebuAd CEO Bob Dykes said in a statement Tuesday that the company and the Internet service providers it works with "are committed to the core privacy principles of transparency and consumer control regarding NebuAd's services."

"We support CenturyTel's decision to delay its implementation plans so that Congress can spend additional time addressing the privacy issues and policies associated with online behavioral advertising," Dykes said. "NebuAd and its ISP partners are actively working together to refine a rollout plan tailored for each ISP that continues to set the standard for privacy protection in advertising online to consumers. NebuAd looks forward to a continued open dialogue with legislators, regulators, and the advocacy community."

NebuAd's platform draws on information about Web users' activity gathered by their Internet service providers. NebuAd then places people into marketing buckets based on sites visited or searches performed and serves them targeted ads. The company says all data is anonymous because it doesn't collect names or addresses. NebuAd also allows people to opt out of receiving targeted ads.

Privacy advocates hold that Internet service provider-based targeting is potentially far more intrusive than other, more established forms of Web targeting. That's because Internet service providers have access to users' entire clickstream data, including every site visited and every search query entered. With that type of comprehensive information, it's sometimes possible to identify people even without knowing their names.

Digital rights advocates also say that the platform is so intrusive that it should not operate by default, especially since users might not ever see the opt-out instructions. Instead, they say that NebuAd and/or Internet service providers should obtain users' explicit consent before collecting data about Web-surfing activity.

Privacy groups also question whether the platform violates various federal laws, including laws against wiretapping.

After Charter said last week that it would delay plans, Markey called on other ISPs to do the same. "I urge other broadband companies considering similar user profiling programs to similarly hold off on implementation while these important privacy concerns can be addressed," Markey said in a statement.

In addition, the groups Free Press and Public Knowledge recently issued an explosive report based on research by software tester Robb Topolski. He concluded that NebuAd's data mining methods, which rely on deep packet inspection technology, violate Web users' basic expectations about online privacy.

CenturyTel last week sent e-mails about the delay to individual subscribers who had questioned the deal. One of those e-mails surfaced on the Web site DSLReports.com over the weekend.