Cable One last fall conducted a six-month trial of a network-based technology that tracks consumers' Internet movements in an effort to amass refined data on Web-surfer habits that can be sold to advertisers at premium rates.
The Phoenix, Ariz.-based MSO revealed the trial in an Aug. 8 letter to the bipartisan leadership of the House Energy and Commerce Committee, a group of lawmakers who have expressed concern that Internet-access providers are experimenting with technologies that invade consumers' privacy. With about 700,000 cable subscribers, it's the biggest cabler thus far to say it tested the technology, with the aim of providing “more relevant advertising” to online customers.
Bresnan Communications, a cable operator with about 300,000 video customers, also told the committee officials it had conducted a similar trial (limited to about 6,000 broadband subscribers in Billings, Mont.) this year from April 1 until June 26.
Knology, a triple-play provider with about 230,000 video customers, said it tested the technology with customers from January until July.
WideOpenWest confirmed to the committee that it, as has been reported by public-interest groups and the Web site DSL Reports, that it, like other cable and broadband providers, tested the “tailored advertising” platform of vendor NebuAd Services. The service was “available” to WOW's 330,000 high-speed Internet customers from March until early July, when WOW pulled the plug after consumer-privacy issues were raised, including by the committee.
The committee posted on its Web site responses from 32 Internet-related companies. Comcast, Time Warner, Cablevision, Cox and Insight all said they had not engaged in customer monitoring similar to Cable One.
Cable One's trial started Nov. 20, 2007, and ended after 180 days on its cable systems in Anniston, Ala., serving about 14,000 cable-modem subscribers. An unnamed outside vendor provided the monitoring technology.
Cable One insisted it had complied with privacy laws and gave consumers appropriate notice through its acceptable use policy (AUP) at the time they signed up for service, and through its privacy notice sent annually to subscribers.
“Cable One customers opted in to our monitoring of their Internet usage and content consistent with this third-party test when they agreed to our AUP,” the company said.
Cable One acknowledged that it did not allow customers to opt out of the trial “because doing so would stifle our ability to test new technologies that have the potential to offer significant benefits to our customers.”
Rep. Edward Markey (D-Mass.), chairman of the House Energy and Commerce Subcommittee on Telecommunications and Internet, has called for a new law that would establish an Internet bill of rights designed to protect online consumer privacy from invasion by Internet access providers and Web-based content providers.
Google, in its own letter, told the lawmakers that it endorsed passing “a comprehensive federal privacy law that would accomplish several goals, such as building consumer trust and protections.”
Cable One, which is owned by the Washington Post Co., said it conducted the trial to determine whether customers would benefit from “more relevant advertising,” which could perhaps help “subsidize users' Internet access or other services and applications.”
Cable One said it was “approached by a third-party vendor about a new technology that replaces existing online advertisements with advertisements of greater relevance to users based on anonymized data collected about certain commercial categories of interest.”
Although Cable One did not identify the third party by name or its technology, its description appeared to match deep-packet inspection technology developed by NebuAd.
Privacy advocates fear that DPI technology goes far beyond the data Web sites collect when consumers visit. In fact, DPI allows broadband network owners to collect all data sent across their networks, including the content in e-mail and instant messages.
The highly specific data reaped with DPI has the potential to give network owners a leg up over Google with Internet advertisers. Consumers can defend their data with encryption software, which DPI technology can't penetrate.
Charter Communications, a major cable operator, considered conducting a NebuAd trial, but Markey and Rep. Joe Barton (R-Texas), citing possible violations of cable consumer privacy law, pressured the company to halt the plan.
Jeff Chester, executive director of the Center for Digital Democracy, wants Congress to outlaw some commercial uses of DPI technology, backed up by strong consumer safeguards. Chester complained to key House lawmakers when he heard about Charter's prior plans to trial DPI as an advertising tool.
“DPI for online advertising should be — ideally — prohibited,” Chester said. “But at the very least, the service has to be consumer opt-in. You have to have complete consumer control, including opt-in and full disclosure of what's being collected and how it's being used.”
Knology, based in Georgia, said it began a NebuAd trial in January, starting in Columbus, Ga., followed by Augusta, Ga., Panama City, Fla., Knoxville, Tenn., and Huntsville, Ala.
Consumers, who received prior notification from Knology, had the option of opting out.
The Knology trial ended on July 14, three days before Markey's panel held a hearing on DPI technology and privacy, Knology president Rodger Johnson said in an Aug. 8 letter.
CenturyTel, the seventh-largest phone company in the U.S., told lawmakers that it used NebuAd for a trial on his broadband network in Kalispell, Wyo., that involved about 20,000 high-speed data customers.
The “one-time, limited test” began in November 2007 and stopped in June, company chairman and CEO Glen Post said in an Aug. 7 letter.