Private Matters: Senate Hearing To Debate Web-Based Targeted Ads

At the heart of the hearing of the Senate Commerce Committee titled Privacy Implications of Online Advertising are proposed tools used by ISPs to track Website usage and the sale of that information to advertisers.

"There is concern that tracking individuals' Internet activity and gathering information from online users violates their expectations of privacy. Individuals often are unaware what information is being collected about them, how it is being used and to whom it is disseminated," according to a description of the hearing at the U.S. Senate Committee on Commerce, Science & Transportation Website.

On one hand, the Center for Democracy and Technology has expressed concerns that the sale of Web tracking information violates privacy laws.

Leslie Harris, president and CEO of of the CDT is expected to testify, along with executives from Google, FaceBook, Microsoft and others.

"For years, Web sites have entered into agreements with advertising networks to use 'cookies' to track individual users across Web sites in order to compile profiles, the CDT wrote in a report issued Tuesday. "This approach has always been, and remains, a source of privacy concern, in part because the conduct usually occurs unbeknownst to most Internet users. Recent dcevelopments, including the mergers between online service providers and some of the largest online advertising netweorks, have heightened those concerns."

Under the new model, advertising neteworks strike deals with ISPs that allow the network to copy the contents of individual Web traffic streams for each of the ISP's customers, according to the CDT. The advertising network analyzes the usage and users see ads targeted to them based on their previous Internet behavior.

The CDT report mentions Redwood City, Calif.-based NebuAd, as one of those companies' tracking behavior. It states that NebuAd was planning to partner with cable company Charter Communications to test the advertising technology.

"Several other smaller ISPshave also announced plans with NebuAd to trial or deploy its behavioral advertising technology," according to the report. "In response to concerns raised by subscribers, privacy advocates and policy makers, Charter [and others] have delayed these plans, but NebuAd and other similar companies are continuing to seek new ISP partners."

The CDT concludes that the use of Internet traffic content from ISPs may "run afoul of federal wiretap laws" unless the tracking activity is OK'd by the Internet user.

"It seems that the disclosure of a subscriber's communications is prohibited without consent. In addition, especially where the copying is achieved by a device owned or controlled by the advertising network, the copying of the contents of subscriper communications seems to be, in the absence of consent, a prohibited interception," according ot the report. "Affirmative express consent, and a cessation of copying upon withdrawal of consent, would probably save such practices under fedral law, but there may be state laws requiring all-party consent that would be more difficult to satisfy."

NebuAd Chairman and CEO Bob Dykes is also slated to testify at the Wednesday hearing. On Tuesday, the company issued a press release outlining "next-generation online consumer privacy protections" that it hopes will alleviate the committee's concerns.

NebuAd has developed a means to offer consumers "direct, initial online notification and periodic reminders" about using consumers' Internet usage data, according to the company. In addition, the company said it is developing a network-based opt-out mechanism that is not reliante on Web browser cookies.

"NebuAd is committed to driving innovation in online advertising while pioneering industry-leading privacy practices," Dykes said in a statement. "As such, we have taken significant measures to increase awareness and protection of Internet subscribers and offer our ISP partners a means of providing prominent, advance online notice and new technology advancements that provide greater persistency of consumers' opt-out selections."