House Subcommittee on Telecommunications and the Internet

Internet service providers engaged in the tracking of user behavioral patterns are backpedaling in the wake of a new Congressional inquiry into the privacy issues surrounding such practices.

In a letter addressing questions from members of the House Subcommittee on Telecommunications and the Internet, David Hantman, Yahoo's vice president of global policy, said his company realizes that some Web surfers would prefer not to receive customized online ads. As a result, the search engine giant will allow consumers to decline ads based on the tracking of their online behavior at Yahoo.com.

Google is seeking to draw clear distinctions between the methods it uses to target ad placements based on search queries and a controversial data-mining practice known as deep-packet inspection. The deep-packet technique gathers and stores information on an individual's Web-site visits and Internet usage without first obtaining the user's consent.

The chairman of the House Subcommittee on Telecommunications and the Internet said he thinks online monitoring services working on behalf of the advertising community should be required to obtain clear approval before tracking the online activities of individuals.

There are notable differences between the typical data gathering that individual Web sites conduct and those deploying deep-packet technologies in broadband networks, Rep. Edward Markey (D-Mass.) noted during a hearing on the impact of deep-packet technologies on consumers, Internet service providers, and the Internet.

Congress has asked Embarq Corp. about its work with a company that tracks online subscribers' Web traffic for advertising purposes, part of growing concern about Internet privacy.

Overland Park, Kan.-based Embarq is the nation's fourth-largest traditional telephone company with 1.34 million high-speed Internet subscribers in 14 states. It has been linked in the past with NebuAd Inc., a company that works with Internet service providers to tailor targeted ads based on what Web sites a particular subscriber visits.

Although a large Internet service provider has backed away from technology that tracks subscribers' Web use in order to deliver personalized advertising, two other broadband companies said Wednesday they are still considering whether to deploy it.

Phone companies Embarq Corp. and CenturyTel Inc. have both completed trials of the same tracking system, from online advertising company NebuAd Inc., and are now considering whether to proceed.

Charter Communications on Wednesday abandoned plans to deploy NebuAd's user-tracking system after objections from Congress and privacy advocates. Its stock dropped slightly after the announcement.

The NebuAd system places tracking cookies and sells users' Internet data to advertisers for targeting ads. Charter had been testing the system that privacy watchdogs Free Press and Public Knowledge called a "classic man-in-the-middle attack."

Verizon Wireless' deal to buy Alltel Corp. for $5.9 billion was applauded by investors and should mean a greater range of choices for Alltel subscribers, but some worried that Alltel's commitment to rural coverage will get lost.

Dan Yahro in Bishop, Calif., close to the border with Nevada, has two options for wireless service: Alltel and Verizon Wireless. Now that one is buying the other, he wonders what will happen.

The Internet neutrality issue has once again taken center stage in Congress, where two bills are under scrutiny. During a hearing to discuss pending legislation, the chairman of the House Subcommittee on Telecommunications and the Internet noted that commercial success for many Internet-based companies depends on an open Internet.