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Phorm papers reveal BT's backwards approach to wiretap law

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Exclusive BT's long-held claim that legal advice said its Phorm trials did not breach wiretapping laws came under renewed scrutiny today, as documents revealed the firm approached government experts after it had secretly co-opted 18,000 broadband customers into the advertising targeting system.

Papers obtained from the Home Office under the Freedom of Information Act show that the department was first contacted about Phorm on 15 November 2006. The first secret trial of the system conducted by BT Retail ran between 23 September and 6 October that year.

BT's initial approach was followed by further emails to civil servants on 7 December 2006 and 23 January 2007. The content of the correspondence are being kept secret by officials, who cite confidentiality exemptions under FOIA. The Home Office is currently conducting an internal review of that embargo.

The sequence of events means that BT executives did not ask the Home Office whether Phorm's technology might contravene the Regulation of Investigatory Powers Act 2000 (RIPA) until after their experiment to profile customers' web browsing for advertisers without their consent had been judged a success.

And just as Phorm did not disclose the secret trials when it met Home Office officials in August 2007, BT did not mention them when it sought government legal opinion. Home Office spokesmen have said it was not aware that either the 2006 or 2007 trial had taken place until they were revealed by The Register.

On 3 April BT Retail's head of value-added services Emma Sanderson said on television: "We don't believe this is illegal. We have sought extensive advice, both internally and externally, and prior to conducting this trial... It's not illegal."

We asked BT why it queried Phorm's system with government RIPA experts after the trial, if it was certain it was legal beforehand, and why it did not disclose that it had already deployed the technology. It sent us this statement:

Both tests were technical tests to evaluate the functional performance of the platform. For tests of this nature, regulatory authorities are not normally consulted. There was no reason for us take a different approach in this instance, or to subsequently inform the authorities. Our correspondence with the Home Office concerned the overall proposition rather than the technical tests themselves.

Nicholas Bohm, a legal expert at the IT think tank Foundation for Information Policy Research which has questioned the legal advice BT says it took, said the firm's decision to get government approval after it had deployed the system was risky. "If the advice was that it might be legal and it might not be, then clearly they were running a significant risk with this trial. I find it very hard to believe they thought it was completely legal because there was no attempt to seek consent from anyone," he said.

Meanwhile Register sources said there is "significant tension" within BT over the ongoing Phorm fracas, particularly between its Global Services and Retail divisions.

It's understood that elements within Global Services, which on par with Retail generates about 40 per cent of the group's revenues, perceive their international reputation for competence on network security is being damaged by association. A spokesman for the group denied any split. He said: "I don't think that's true... I suppose I am refuting the suggestion."

A further BT trial of Phorm's technology, this time with consent from 10,000 customers, has been repeatedly trailed as imminent since March. At the group's AGM on 16 July BT Retail chief executive Gavin Patterson said it would launch "in a couple of weeks".

BT's spokesman said invitations would be issued "soon". He refused to elaborate, citing fears the project would become a "hostage to fortune". ®

You can find all our reporting of the Phorm affair here.

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