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Charter to track customer browsing; pilot program outside Wisconsin

Jeff Richgels  —  5/16/2008 8:03 am

Charter Communications is preparing to begin testing a program under which it will track the browsing habits of its high-speed Internet customers in order to send them targeted ads, providing a new revenue stream for the company but raising privacy and legality concerns.

The program was reported Tuesday by Broadbandreports.com and confirmed Thursday by Ted Schremp, senior vice president of Product Management & Strategy for Charter.

Schremp said in an e-mail interview Wednesday that Charter last week began sending explanatory e-mail letters to its broadband customers in the pilot markets of San Luis Obispo, Calif.; Fort Worth, Texas; Newtown, Conn.; and Oxford, Mass., but that the program does not start for 30 days. 

Charter, which has thousands of broadband customers in the Madison area, said it has no immediate plans to expand beyond the test markets.

"The pilot will be monitored into the summer and then future rollout determined," Anita Lamont, corporate spokeswoman at Charter's St. Louis headquarters, said in an e-mail.

Customers can opt out of receiving the targeted ads by going to Charter's Web site and installing an opt-out cookie, but the cookie doesn't stop the tracking of online usage, Broadbandreports.com said. (A cookie is a text file placed on your computer by a Web site to store information. For example, when you return to a Web site you've previously logged into, a cookie enables the site to recognize you so you don't have to log in again. Computer security systems can be set to prevent the use of cookies.)

Besides the "critical privacy concerns," Broadbandreports.com also said a system should be used that takes the burden off of customers to opt out. For example, Charter could offer an opt-in system where customers would be asked if they want the service and would only get it if they took action to opt in.

The opt-out system also means that customers must opt out for each computer they own and if they delete cookies in accordance with safe Web browsing techniques, they will have to opt out again, Broadbandreports.com said.

Broadbandreports.com said one Charter customer commented that "Charter sells your browsing information for profit, while you get no reduction in service price and are forced to use an opt-out process that doesn't entirely work. Sound like an enhanced online experience to you?"

Schremp said that in addition to the "growth opportunities" for the company, "the benefit of this service is the ability to enhance the experience of our customers by leveraging the power of the technology we have."

Asked if the company has done enough to inform customers of the program and allow them to opt out, Schremp said: "We believe that one of the most important things is to be as forthright and transparent about this service as we can be. We've conducted focus groups with high-speed Internet customers and the majority of those folks reacted favorably to the service once they had a full understanding of how it works and received assurances that their privacy is being protected. Our aim is to thoroughly inform them."

Charter believes that it's "appropriate" to use an opt-out system rather than an opt-in system for a service that "doesn't collect personally identifiable information," Schremp said, "and it meets or exceeds industry consumer information and privacy standards, which is most important."

"Everything about the way this service was created was done with the customer's privacy in mind, and it was designed to collect and store only anonymous information that can't be used by anyone to identify them," Schremp said. "The original data on which online activity is based -- such as historical logs of Web pages visited, search queries used and ads clicked on by an individual -- is not stored."

Schremp did not directly answer whether customers could also opt out of the tracking, as well as the ads, and Charter did not respond to follow-up attempts to clarify the issue.

Also unclear was the impact on companies that own Web sites and their advertisers: whether the technology involves relatively benign replacement of ads with targeted ads in slots that already were Charter's (or NebuAd, Charter's third party technology provider, according to multiple reports) or whether it's a system where the targeted ads are injected to supersede those placed by the Web site owner. An injection system almost certainly would be protested by companies that were impacted and raises legal issues.

A message seeking clarification on that issue also was not responded to by Charter.

Other Internet service providers (ISPs) also use tracking and targeted ad technology, Broadbandreports.com said, naming WOW, Embarq, and CenturyTel.

AT&T and TDS officials said in e-mails to The Capital Times that they do not use tracking and targeted ad technology, while no one could be reached at Verizon.

Barry Orton, a UW-Madison professor of telecommunications who closely follows such issues, acknowledged that people should follow the philosophy of assuming that whatever they do online is not private, particularly when surfing at work, but added that the Charter program raises things to a "whole level most people didn't know existed."

"I expect Google to do it because I'm using Google," Orton said. "If my home page is Yahoo! I would expect Yahoo! to do it. But I don't expect the company I pay to provide just the (Internet service) pipe to also do it. It would provide a serious reason not to get high-speed Internet from Charter" if a customer can choose a provider that doesn't do it.

"If this is true, there's a sense of betrayal," Orton added, saying it provides the same sense -- but not at the same level -- as when people learned that AT&T was secretly cooperating with the National Security Agency in domestic wiretapping aimed at uncovering terrorists. That hugely controversial program caused a political furor and has resulted in a class action lawsuit against AT&T.

Tracking and targeted ad technology would be more fair if customers were compensated for participating "but nobody ever gets paid" for such things, Orton said. "You might get coupons at the least."

Electronic Frontier Foundation, a California-based civil liberties advocacy group similar to the American Civil Liberties Union, is concerned about the Charter situation and investigating it but has no immediate plans to take action, said Lee Tien, EFF senior staff attorney.

"It definitely raises privacy concerns," Tien said. "When your ISP gets into this ball game there's really no escape. I wish I knew more about how they were doing this."

What is "so disturbing" and should be the focus is the tracking of people's online activity and the content they are viewing, not the ads, Tien said.

To target ads, a company needs to know more than just the Web sites you visit ndsh it needs to know the content of those sites, which is akin to knowing the content of a phone call rather than just what number you called, Tien said.

"What I don't know is how they actually go about sucking down the data," he said.

NebuAd's Web site states that "NebuAd combines web-wide consumer activity data with reach into any site on the Internet. The result is vastly more data and relevance than existing solutions that are limited to one network or site." But it doesn't provide details of how the technology works.

The site also states that "NebuAd is dedicated to the highest standards of consumer privacy. This is evident in our technology (which does not collect or use any personally identifiable information), in how we operate as a company, and in the structure of our relationships with ISPs and their consumers."

However, an ISP like Charter has a customer's personal information and could link it to browsing activity, Orton and Tien said.

Because he doesn't know how the technology works, Tien said he had to be "real careful" when asked if the Charter program was illegal.

He said it feels "very much like" the AT&T domestic wiretapping "only for advertising purposes" rather than to seek terrorists. (EFF is suing AT&T over the domestic wiretapping.)

Tien said he was concerned about the amount of information Charter was providing to customers, and said it would be better if Charter allowed its customers to opt out their IP (Internet protocol) addresses ndsh essentially their cyberspace IDs ndsh so they wouldn't be tracked.

"As soon as you go online they know it's Lee or Jeff and they don't want to be part of this program so we won't track them" Tien said.

Jeff Richgels  —  5/16/2008 8:03 am