Controversial Silicon Valley advertising startup NebuAd drops its plan to sell deep packet inspection technology to ISPs after Congress and public interest groups slam the privacy implications of deep packet inspection. NebuAd suffered through a summer of losing customers and congressional hearing before bailing on the plan that promised ISPs additional revenue sources through DPI.
The year began promisingly enough for NebuAd, a Silicon Valley
advertising startup promising a new source of revenue for ISPs through the use
of deep packet inspection. DPI allows ISPs to track the behavior of Internet
users without their consent in order to more accurately target advertising.
Charter Communications, the nation's fourth-largest broadband provider,
signed up for the service, as did several other ISPs.
That was then and this now. After a spring and summer of harsh criticism
from Congress and public interest groups over the privacy implications of DPI,
the Charter deal is gone, NebuAd CEO Bob
Dykes has resigned and, according to the Washington Post, NebuAd
has abandoned pushing DPI to ISPs.
"Our platform was architected to be a multichannel ad system,"
NebuAd spokesperson Janet McGraw wrote the newspaper in an e-mail. "With
the Internet service provider channel currently on hold with the events of the
summer, we have broadened the focus of our business but continue to enhance our
technologies for that ISP channel."
U.S. Sen. Byron Dorgan immediately hailed NebuAd's decision.
"NebuAd's decision to put this plan on hold is a significant victory
for the privacy rights of Americans," Dorgan, who held a July hearing on
NebuAd's ability to track users' Web travels, said in a Sept. 4 statement. "This
decision should put broadband providers on notice that turning data on users'
behavior over to third parties, particularly without their clear consent and
understanding of the practice, is not in line with good privacy practices."
NebuAd's problems began in May when Rep. Ed Markey, the chairman of the
House Subcommittee on Telecommunications and the Internet, and Rep. Joe Barton,
the panel's ranking Republican, wrote a letter
(PDF) to Charter urging the broadband provider to drop its plans to use NebuAd's DPI
package. That was followed by a critical technical
(PDF) on NebuAd's DPI process by Free Press and Public Knowledge.
According to the report, NebuAd uses special equipment that "monitors,
intercepts and modifies the contents of Internet packets" as consumers go
online. The report found that NebuAd inserts extra hidden code into users'
Web browsers that was not sent by the Web site being visited.
In turn, the code directs the browser to another site not requested or even
seen by the consumer, where more hidden code is downloaded and executed to add
more tracking cookies. Using the secretly collected information, NebuAd
serves up ads based on the user's browsing habits. NebuAd allows users to opt
out of the customized ads program but not online tracking.
soon cancelled its deal with NebuAd
found himself testifying before Congress.
"I feel like Galileo when he was viewed with skepticism on
demonstrating that the Earth revolved around the sun," Dykes told skeptical
lawmakers July 18. "The science exists today and NebuAd is using it to
create truly anonymous profiles that cannot be hacked or reverse-engineered."
Markey was unimpressed.
"From a privacy perspective, given the sheer sophistication of the
technology's capability and the obvious sensitivity of the personal information
that can be gleaned from a consumer's Web use, I believe broadband providers
deploying deep packet inspection technologies must adopt clear privacy
policies," Markey said.
regime when deploying NebuAd's DPI technology, a notion Dykes said would dilute
the effectiveness of the program. "No one, not even the government, can
determine the identity of our users," Dykes argued.
Dykes' testimony before the committee turned out to be
one of his last public appearances for NebuAd, which he joined in 2007. Dykes
resigned Sept. 3 and plans to join VeriFone Holdings as a senior vice president
and chief financial officer.