Internet Firm Says It Targeted Ads To Customers' Web-Surfing Habits

Regional Internet company Embarq told lawmakers this week that it notified 26,000 high-speed Internet customers in Kansas that it was conducting a targeted advertising test based on their "anonymous" Web-surfing behavior and offered them the ability to opt out.

Embarq posted a notice in its privacy policy on its corporate Web site more than two weeks before the controversial test was conducted earlier this year, company officials wrote in two letters to leaders of the House Energy and Commerce Committee. The lawmakers are investigating the practice and whether privacy laws adequately protect consumers in this area.

Some committee members were not satisfied with Embarq's action.

"I am still troubled by the company's failure to directly inform their consumers of the consumer data gathering test and the notion that an 'opt out' option is a sufficient standard for such sweeping data gathering," said Rep. Edward J. Markey (D-Mass.), chairman of the House subcommittee on telecommunications and the Internet.

The test in Gardner, Kan., used deep-packet inspection technology provided by the Silicon Valley company NebuAd. When installed in an Internet service provider's network, the technology permits a window into potentially all of a consumer's online activity, from Web surfing and search terms to any unencrypted Web communication.

"Embarq may use information such as the Web sites you visit or online searches that you conduct to deliver or facilitate the delivery of targeted advertisements," the online notice said. "The delivery of these advertisements will be based on anonymous surfing behavior and will not include users' names, email addresses, telephone numbers or any other personally identifiable information."

It also said that "by opting out, you will continue to receive advertisements . . . but these advertisements will be less relevant and less useful to you."

Fifteen subscribers opted out, Tom Gerke, Embarq president and chief executive, wrote in a letter Wednesday to committee chairman John D. Dingell (D-Mich.), Rep. Joe L. Barton (R-Tex.) and Markey.

Gerke wrote that Embarq's approach to the test followed "the prevailing industry practices" and was "consistent" with the Federal Trade Commission's proposed guidelines for self-regulation in online advertising.

But at a hearing last week, Markey asserted that an opt-out standard was insufficient. "It's like saying that the mailman can open up any letter . . . find out what's in it, then . . . partner with other companies, letting them know what individual Americans are receiving in the mail," as long as a person has not objected in advance, he said.