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Phorm secretly tracked Americans too

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Exclusive Phorm has also deployed its behavioral ad targeting technologies in the US of A.

Even before the London-based outfit first tracked thousands of British Telecom customers as part of its grand scheme to target online ads from inside the world's ISPs, it was "operating a number of public commercial services" on various stateside networks.

According to a Phorm spokesman, these so-called services were rolled out by a handful of "emerging Wi-Fi network services providers," including EthoStream, a Milwaukee, Wisconsin-based operation that provides wireless access for hotels.

Phorm says that it's no longer working with these ISPs and that it now has "no business partnerships in the States." But in the spring, rumor had it that AT&T and Qwest were on the verge of deploying the company's ad technologies.

Phorm won't say when its Wi-Fi deployments occurred, but they date back to at least November 2005, when the company was still known as 121Media and was still using an early version of its ad targeting technology dubbed PageSense. Like the company's current technology - Webwise - PageSense targeted ads by tracking the browsing activity of ISP users.

"It is a matter of public record - announced to the London Stock Exchange on 11 Nov. 2005, 12 Jan. 2006 and 19 June 2006 and on our web site - that we previously operated a number of public commercial services in the USA using the PageSense technology," the company tells us.

"We primarily partnered with emerging Wi-Fi network service providers that wanted to partially or fully subsidize the costs of deploying their networks through advertising. For example, we worked with a free metropolitan wireless ISP to serve session based contextual advertising to users that chose to access the Internet via this free service. We also partnered with a hotel Wi-Fi provider and a number of others."

Phorm acknowledges that the hotel Wi-Fi provider was EthoStream, but it won't name the other ISPs. One source tells us these providers also included MetroFi, the now-defunct municipal Wi-Fi provider. EthoStream has yet to respond to our request for comment.

As a means of retrieving targeted ads, PageSense inserted JavaScript tags into every page visited by an ISP user. Webwise doesn't use JavaScript, and according to a BT report obtained by The Reg, Phorm dropped the JavaScript technique because it meant ISP users were more likely to realize they were being profiled.

Nonetheless, the Phorm spokesman says the company's stateside trials were in not secret. "The services were transparent to users and information such as how to opt out, who provided the service and the privacy policy was easily accessible," he told us. "For example, each ad had a link that allowed users to find more information on opting out and the service. This was a level of disclosure ahead of its time."

But it may not have been the level of disclosure required by US law. Congressman Ed Markey, chairman of the House Subcommittee on Telecommunications and the Internet, and other high-ranking lawmakers have questioned whether an opt-in-less third-party behavioral ad targeter runs afoul of the US Communications Act of 1934, the Cable Act of 1984, the Electronic Communications Privacy Act, and other wiretapping-related US statutes.

Here in the States, companies such as NebuAd and Front Porch have deployed similar ad targeting systems. But Markey and his cohorts have asked all US ISPs to freeze such partnerships while Congress investigates their legality.

Like Phorm, Front Porch has run its system on Wi-Fi hot spots - all of them of the free, ad-supported variety. Users were notified during sign-up that the service served up targeted ads, and if they didn't want targeted ads, they could choose a for-pay version of the service.

"If you're traveling through one of our airports or hotel chains or whatever, and it's offering free internet access, in that first page there's a clear part that says we will give you targeted advertising while you're on this network," Front Porch CEO Zach Britton has told us. "This is a free service, so if you don't want targeted advertising, you just say no to the free access."

We can (partially) forgive Phorm for its deployments on free networks. But for-pay networks are another matter. In either case, it's unclear whether - or how - users were notified at sign-up. ®

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