Markey Still Has Issues with Embarq-NebuAd Test
Rep. Ed Markey unhappy with how phone company informed customers of online-advertising test.
By John Eggerton -- Broadcasting & Cable, 7/24/2008 8:17:00 AM
Rep. Ed Markey (D-Mass.) said he still has issues with the way phone company Embarq conducted a test of online ad-tracking software from NebuAd, specifically with how it informed customers of the test.
Markey joined with other legislators to request information from Embarq about the test. They are concerned with the privacy implications of tracking Web users’ surfing to better target advertising to them.
While Markey said he was pleased that Embarq answered the questions, he added, "I am still troubled by the company’s failure to directly inform its consumers of the consumer data-gathering test and the notion that an ‘opt-out’ option is a sufficient standard for such sweeping data gathering.”
Embarq told Markey and company in a letter Wednesday that it notified its broadband customers of the test with a notice on its Web site and an opportunity to opt out, which it called the "prevailing industry practice" and one that it said its lawyers vetted and found did not violate any consumer privacy laws. Only 15 of 26,000 high-speed-Internet customers opted out, according to the company.
The opt-out notice did attempt to pitch the test, however, with the company saying, "By opting out, you will continue to receive advertisements as normal, but these advertisements will be less relevant and less useful to you."
Markey and others have been holding hearings on online privacy, including questioning the head of NebuAd, the result of which may be new privacy laws that address targeted online advertising.
After a similar letter was sent to cable operator Charter Communications, which was also planning to test the NebuAd software, that test was put on hold.
In Hill hearings, NebuAd chairman Robert Dykes defended the service, which groups online preferences into categories that advertisers can target -- someone who visits a lot of automotive Web sites would get a car ad.
Asked at a hearing why NebuAd's tracking of the surfing, in real-time, of an Internet-service provider’s customers was any different from wiretapping, Dykes said his company was in compliance with the law and does not collect any personally identifiable information, but rather transforms an Internet-protocol address into an anonymous marker for the purposes of allowing advertisers to target market segments.
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One would hope the Reps would at least get a good briefing on the law. They were upset at how consent was (lawfully) obtained for NebuAd's service and then they accuse them of wiretapping. Federal wiretapping is one party consent.
Tim Thomas - 7/24/2008 5:51:00 PM EDT -
One of the problems with NebuAds approach is they're taking the same tack that a lot of banks took back in the 80s--unless there is a law explicitly stating they can't do something, they will do it, until someone stops them. This is then compounded by the fact that legislators are not comfortable with technology (by their own admission) and most lack business skills (yet they get to set regulations for technology businesses). A poorly thought through launch which triggered oversight from people who do not respond well to business or technology issues has probably set the whole behavioral space back several years.
danortega - 7/24/2008 1:43:00 PM EDT
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