Under Pressure From Congress, ISP Admits To Secret Snooping In Kansas
Wednesday, July 30, 2008
When I wrote earlier about behavioral targeting and the role Internet Service Providers (ISPs), this news report highlighted exactly the abuse I feared. ISPs sit in a power position with access to massive amounts of very personal and private consumer information. The vast amounts of money ISPs can make from targeted advertising represents a fundamental imbalance in power between ISPs and consmers. Part of Congress recognizes this, and most of the industry doesn't want to admit it.
Where there are shifting imbalances, consumers need to take notice. Consider the story of Embarq. Wired reported:
"Internet service provider Embarq eavesdropped on the web surfing habits of 26,000 customers in Kansas without notifying them personally, as part of its test of new, controversial advertising technology that profiles users, the company told federal lawmakers Wednesday. Embarq, an offshoot from Sprint, tested the service in Gardner, Kansas, saying it was their smallest facility. The secret test ended earlier this year, though no dates were given for when it started or stopped."
Embarq claims that the test was legal and above board. What? Are they serious?
The company's claim stretches believability. Listed below are siz reason why Embarq's claims are a bunch of bull. First, the Embarq was not upfront and honest:
"The letter (.pdf) comes just two days after the company attempted in a Monday letter to justify, rather than explain, the trial to powerful House Commerce members, who have already shown they are highly dubious of any ISP's plan to monitor its customers' web usage for profit. According to one congressional aide, the follow-up letter came after staff made it clear the first letter didn't suffice. The three have already forced Charter Communications to cancel its proposed trial of ISP eavesdropping technology from a NebuAd, the same company that powered Embarq's secret test."
Second, even under a Congressional spotlight, Embarq still hasn't announced the days of the test. Third, the "test" claim is dubious. I have participated in many product market tests; both as a marketing manager and as a consumer participant. If this was a real, sincere test, the company would have surveyed consumers both before and after to determine the effectiveness of the targeted ads. Embarq didn't do this, nor did the company even try to attempt this.
Fifth, Embarq (and behavioral advertising proponents) claim that only 15 subscribers opted out of the test. How many of the 26,000 consumers knew about the test? That is the valid comparison: the number of consumers who opted-out compared to the number who knew about the test.
With honest and transparent notice, Embarq could have evaluated customer satisfaction both before and after the test, plus evaluate the copy explaining the benefits of behavioral advertising. A company with smart, honest, and transparent management would have done this, with a focus on customer satisfaction.
Instead, Embarq chose to operate in the shadows. The company showed its real concern... only itself and not its customers... and conducted the test on an opt-out basis without informing its customers and with a difficult-to-find notice. This is not how an honest and transparent company treats its customers.
Embarq tried to operate in the shadows and got caught. Good. Maybe its executives will learn something from this debacle. They made several poor decisions that lacked a customer focus. As a result, at least a couple of the company's executives should lose their jobs.
Congratulations to Congressional Representatives Edward J. Markey (D-Massachusetts), chairman of the House subcommittee on telecommunications and the Internet, John D. Dingell (D-Michigan), and Joe L. Barton (R-Texas). They are representing consumers' interests and I hope that the rest of Congress pays attention. I hope that you'll send them a thank-you note. I also hope that Congress views Embarq's actions as an indication of attitudes throughout the ISP industry, plus and modifications the FTC needs to make to its proposed regulations.
You can easily tell Embarq's deceit this way. The company claimed that 26,000 consumers were affected and only 15 objected. What independent verification is available? None. How many of the 26,000 customers knew about the test? Embarq doesn't say (or worse doesn't know). Beyond a hidden opt-out link, did Embarq provide its customers with a method to provide feedback about the company's plans? No.
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