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A member of Phorm's board also works as a taxpayer-funded broker at the heart of UK internet policy, in the very department tasked this week with responding to European Commission demands to tighten privacy laws.

Kip Meek defended his dual role today, insisting his job for the Digital Britain review was completely separate to any dispute between the UK government and Brussels.

The Commission yesterday began infringement proceedings against the UK over the lack of a regulatory response to BT and Phorm's secret trials of internet interception and profiling technology in 2006 and 2007. The Department for Business, Enterprise and Regulatory Reform (BERR) is coordinating the government's response, which if unsatisfactory could lead to heavy fines from the European Court of Justice.

The action raises questions over the position occupied within BERR by Kip Meek, a Phorm non-executive director. Today the government said there was no conflict of interest and he will not be leaving the job.

"I can say with absolute certainty there has been no discussion about Phorm between Kip and anyone here in the department," a spokeswoman said.

"Kip Meek is not Stephen Carter's internet advisor. He is the Independent Spectrum Broker - appointed following recommendations in the interim Digital Britain report."

She added that Meek is paid a day rate by BERR, but would not disclose the figure.

The Independent Spectrum Broker's job is to divide up radio spectrum among mobile phone operators and encourage them to deliver on Carter's commitment to universal broadband coverage. One of Phorm's central lobbying claims, throughout the controversy prompted by its secret trials, has been that its systems will help ISPs pay for new infrastructure.

BERR's spokeswoman maintained there is no conflict. "Kip Meek is not working on delivering universal broadband," she said.

"He is working on producing a report to Government about a possible solution to the current road block on the release of spectrum, to ensure we have the infrastructure for future developments in mobile broadband. He is not looking at possible funding models for mobile broadband, only the way spectrum is used. There is no conflict of interest in this."

Meek echoed BERR's position. "I am consulting on spectrum. These things are totally separate as far as I'm concerned," he said. "It's completely unrelated to anything Phorm might do."

Meek joined Phorm in December and was quickly granted 100,000 share options. Soon after, Phorm announced that Andrew Croxon, a consultant at Meek's strategy group Ingenious Media (located a stone's throw from Phorm's Soho HQ), had been hired as its finance chief.

Meek is chairman of Ingenious Media, and describes it as a "2 plus 2 equals 5 situation". It offers investment, regulatory and strategy advice to media and technology companies. Ingenious Consulting, the arm led by Croxon, predicts that in 2009, "ISPs will... launch behavioural targeting and contextual advertising programs (e.g. Phorm, the behavioural advertising platform)".

With cash at Phorm dwindling, Meek and Croxon surely hope so.

At BERR, Meek works with Lord Stephen Carter on delivering the Digital Britain report's commitment to universal broadband coverage. The final report is due to be published in summer and will set policy on internet regulation.

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