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Though the head of the House Subcommittee on Telecommunications and the Internet has urged American ISPs to "hold off" on the use of so-called behavioral ad systems, it seems at least one company has yet to heed the suggestion.

According to a forum post at Broadband Reports, the Midwestern ISP known only as WOW! continues to tell customers that it's pimping their data to Silicon Valley startup NebuAd.

"We are confident we are not violating any current rules, laws or regulations with [NebuAD's technology] and NebuAd has expended considerable resources to ensure that they are in compliance with the law," reads an alleged email from WOW! chief marketing officer Cathy Kuo.

Kuo did not return our request for comment. Nor did vice president of programming Peter Smith, who negotiated WOW!'s deal with NebuAd.

NebuAd's technology hit WOW!'s network in February. Using deep packet inspection, the company's Phorm-like hardware tracks a web surfer's search and browsing activity and shuttles it to various advertising networks, where it's used to target ads. If you search for, say, French vacations, you'll soon see ads for French vacations.

NebuAd says it anonymizes all user data. And users can opt-out of the system. But the opt-out is cookie-based. If you install a new browser or move to a new machine, the tracking starts anew. Plus, US law may require that such a service be opt-in only.

Last month, a larger ISP, Charter Communications, announced limited tests of NebuAD's system, and this sparked an open letter from Congressman Ed Markey, chair of the House Subcommittee on Telecommunications and the Internet, and Joe Barton, a ranking member of the House Committee on Energy and Commerce. These big-name lawmakers questioned whether the trials violated Section 631 of the US Communications Act.

"Any service to which a subscriber does not affirmatively subscribe and that can result in the collection of information about the web-related habits and interests of a subscriber, and achieves any of these results without the 'prior written consent of the subscriber,' raises substantial questions related to Section 631."

Charter soon halted its NebuAd plans - at least temporarily. And with a second open letter, Markey suggested that other ISPs do the same. "I urge other broadband companies considering similar user profiling programs to similarly hold off on implementation while these important privacy concerns can be addressed," he said.

But it looks like WOW! has other ideas. In that alleged email, Kuo defends NebuAd's opt-out procedure, but she also says that NebuAd is considering a change. "The current cookie opt-out is a standard practice for the online advertising industry. That being said, I know that NebuAd is researching other alternate opt-outs that would be a better solution for customers."

We've asked NebuAd about this, but the company has yet to answer. ®

Bootnote

We've also learned that Bresnan Communications - an ISP serving Colorado, Utah, Wyoming, and Montana - ran its own NebuAd tests last month. Spokesman Shawn Beqaj tells us that the company has no immediate plans to officially deploy the system - or similar systems - but it may do so in the future.

"We intended to do a trial and that's what we did," he said. "We're looking with great interest at discussions on this matter both in the regulatory sphere and in the public domain."

Meanwhile, a spokeswoman Embarq - another outfit that has tested NebuAd - tossed us this: "We do not have a contract with NebuAd, and we are not using online behavioral targeting tools."

Like Charter, Louisiana-based ISP CenturyTel froze its NebuAd plans in direct response to words from Congressman Ed Markey.

Update

NebuAd has responded. The company won't exactly say it's exploring new opt-out methods, but it did say this: "As part of our ongoing commitment to driving innovation, NebuAd continues to explore new ways to deliver relevant Internet advertisements, and to incorporate industry-leading privacy practices that offer the greatest protection of consumer privacy.”

So, not just "industry-leading privacy practices," but "industry-leading privacy practices that offer the greatest protection of consumer privacy."

You heard it here first.

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