ISPs and revenue streams

“Unlimited” broadband packages were highlighted on The Gadget Show on Channel 5 last night. Mike Fairman, Head of Broadband for O2 attempts a pathetic analogy to some guy in front of you in the queue taking all the food in an all you can eat buffet. If that happened to me I would expect the restaurant to give me more food. Besides, the general concept is not an exercise in gluttony. Instead of all you can eat it should be all you care to eat.

Anyway, I digress. It merely served to remind me of the less-than-transparent practices of ISPs. Something that has been flagged as potentially downright illegal and not just small print is the emergence of click tracked advertisement serving. This deep packet inspecting exposes everything you send to the Internet via your ISP: every web page you visit, email you send and search you perform. This is then sold on to advertisers so they can target you more effectively. The defense is that no personally identifiable information associated with your data is released to these marketers.

This thankfully seems to be in its death throes in the USA. Here in the UK however, a company called Phorm (formerly known as 121Media) ran trials on BT customers in 2006 and 2007 without their knowledge. This is tantamount to spyware and still disgusts me. These trials were labeled as “illegal” by Nicholas Bohm of the Foundation for Information Policy Research. Despite the assurances of no identifying data being stored, a report on Wikileaks would seem to suggest that IP addresses were in fact logged and opt out cookies would be unlikely to work.

Undeterred, Phorm appear to be pushing full-steam ahead and were also rumoured to be partnering with Virgin Media and Carphone Warehouse. The Guardian newspaper went up further in my estimation when they pulled out of an agreement with Phorm. If all goes according to plan, analysts estimate BT will earn £85m from this ad revenue in 2010.

Now this targeting is no different to the way Facebook or Google implement their ads on their own pages but at least you know about it. Companies like Phorm and NebuAd work in conjunction with your ISP and you probably won’t even know that you’re being tracked. The agreement and details of how to opt out will no doubt be buried deep in the terms and conditions.

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