NebuAd, Defaulting Users Into Such A Controversial System Is No Way To Inspire Consumer Confidence

27 Jul

The House Committee on Energy and Commerce is continuing it’s look into NebuAd, issuing an initial letter to Charter Communications noting concerns about the controversial technology and has now issued a second hostile letter regarding NebuAd ad-serving technology, this time to Embarq.

Embarq, which offers Internet and phone service, has tested NebuAd’s technology but has so far avoided Congressional scrutiny. In a letter issued today by John Dingell (D-MI), Joe Barton (R-TX), and Ed Markey (D-MA), the Congressmen want to know more about that test. A lot more.

Nebuad Advertising Network

nebuAd Advertising Network

Wanting to grab their share of the US online advertisement marketing which is expected to exceed $25 billion in 2010, NebuAd’s technology looks at web traffic from an ISP and categorizes different users into ad categories by looking at their online activity. The company then sells target relevant ads in conjunction with partnered websites, but there’s some real question as to whether the entire system constitutes anything more than wiretapping, as consumers are automatically “opted in” to the system.

More specifically, the letter puts it:

“questions have been raised regarding the applicability of privacy protections contained in the Communications Act of 1934, the Cable Act of 1984, the Electronic Communications Privacy Act, and other statutes, to such practices.”

“We are concerned,” says the letter, “that Embarq may not have directly notified the subscribers involved in the test that their Web use was being analyzed and profiled. We therefore request that you answer the following questions in order for us to better understand the nature of the test conducted, its impact on consumers, and the broader public policy implications of this technology.”

Those questions include:

  • How did Embarq notify subscribers in the affected community of the test?  Please provide a copy of the notification. 
  • If Embarq did not specifically or directly notify affected subscribers, please explain why this was not done.
  • Did Embarq conduct a legal analysis regarding the applicability of consumer privacy laws on the service used in the test?  If so, please explain what that analysis concluded.
  • Please explain why Embarq chose to conduct the test allowing consumers who objected to “opt out” rather than first asking customers to “opt in.”
  • How many subscribers in the affected community opted out of participating in the test?
  • What is the status of the consumer data collected during this test?  Has it been destroyed?   

To be sure, NebuAd’s troubles would probably diminish greatly were this system “opt-in” rather than “opt-out”. The problem here seems to be incentive, or rather, the lack of. If you were running a company that relies on user volume, and found out that only .06% of your users actualy opt out you might find that difficult to resist as well.

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Posted by on July 27, 2008 in Computing, Public Service


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