Key Congressmen Scrutinize Charter’s Ad Targeting Deal

Although other ISPs are working with ad targeting firm NebuAd, Charter Communications was called out by two key members of U.S. Congress Friday after going public with a NebuAd relationship.

Citing the cable privacy provisions in the Communications Act, Democratic Congressman Edward Markey of Massachusetts said Charter’s plans to divulge user data to NebuAd for ad targeting purposes “raises several red flags.” Markey is chairman of the House Subcommittee on Telecommunications and the Internet.

Along with Congressman Joe Barton of Texas, the ranking Republican member of the House Committee on Energy and Commerce, Markey sent a missive Friday to Charter President and CEO Neil Smit. “We respectfully request that you do not move forward on Charter Communications’ proposed venture with NebuAd until we have an opportunity to discuss with you issues raised by this proposed venture,” wrote the lawmakers. (The full letter is available as a PDF here.)

Unlike other ISPs said to be working with NebuAd and ad tech firms like it, Charter recently informed customers in U.S. trial regions of its plans to test the tracking and targeting system in about a month. Letters told customers how the tracking system works and how they can opt-out of the program.

“[I]nnovative new technology enables Charter to provide you with an enhanced online experience that is more customized to your interests and activities,” noted the letter. “As a result, the advertising you typically see online will better reflect the interests you express through your web-surfing activity.”

NebuAd purchases Web media through ad networks to sell to advertisers and targets the ads based on information collected by its ISP partners. NebuAd and other firms like it claim their systems do not store personally identifiable information.

The message from Markey and Barton marks the first publicly-known instance of U.S. government interest in this type of service. Like other detractors, Markey has suggested that consumer privacy is at the heart of his concern. “Simply providing a method for users to opt-out of the program is not the same has asking users to affirmatively agree to participate in the program,” he said in the statement published on his Web site. “These privacy issues and how this venture is consistent with communications privacy laws must be addressed before the company moves forward with this plan.”

Though Markey and Barton indicated they hope to discuss the NebuAd program with Charter, it’s unclear whether a conversation or meeting has been arranged. “We will respond to Chairman Markey, Ranking Member Barton and other members of the Committee and look forward to working with them,” Charter spokesperson Anita Lamont told ClickZ News.

In a statement sent to media outlets Friday, the cable company noted, “Charter has always taken an open approach with our customers, and will do the same with Chairman Markey and Congressman Barton. Our goal is to bring an enhanced Internet experience to our customer while meeting all privacy protection requirements. We believe we have done that but are pleased to discuss this matter with the Chairman and Rep. Barton.”

NebuAd also counts CenturyTel among its ISP partners, though like other alleged partners, CenturyTel will not reveal which market it has tested the tracking system in. NebuAd also is in talks with U.K. ISPs.

U.K. privacy watchdogs have sparked government and consumer interest in similar programs, most notably in relation to Phorm, an ad targeting firm with offices in London, New York and Moscow. The U.K.’s Information Commissioner last month said Phorm’s products must be offered on an opt-in basis to comply with British privacy and electronic communications regulations.

Phorm announced agreements to test its system with large U.K. ISPs BT, TalkTalk, and Virgin Media in March. The company is also hinting at a U.S. expansion. Phorm told ClickZ News that senior U.K. staff are currently in the United States.

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