Privacy Advocates Not Suite on Nortel

Analysts saluted, but privacy advocates squawked when Nortel Networks introduced a suite of smart switches last week designed to tap into users Web surfing habits and learn things such as what banner ads would most likely seduce them.

Executives for the giant Canadian equipment maker said the new suite will revolutionize the delivery of Internet content while making it faster, more personal and easier to use.

“Nortel is putting out a good, cohesive marketing message” with its Personal Internet suite, said Christin Armacost, data networking analyst at S.G. Cowen. “It gives them an opportunity to more aggressively pursue the metro market, data centers and hosting centers — and thats clearly where the growth is.”

But privacy advocates are worried.

“Its not appropriate for telcos and Internet service providers to be monitoring where the subscribers are going,” said Jason Catlett, president of Junkbusters, a Washington, D.C., privacy advocacy and consulting firm. “It would be like the phone company monitoring your calls or doing marketing based on the phone numbers you call. Thats illegal. But the law hasnt caught up with ISPs, so its still legal to do that in the United States.”

Personal Internet uses the technology Nortel acquired when it bought AlteonWebSystems for $8 billion to boost delivery speed. It also uses the equipment the company acquired through its purchase of Shasta NetWorks to offer new services.

“We know who the subscriber is and can hook them up with the content they want,” said Selina Lo, vice president of marketing at Nortels Content Networking business. “The Internet has to move from the days of user-blind conductivity to a user-optimized infrastructure.”

When a user requests an address, Nortels switches record that information, predict what might be requested next and get ready to deliver it.

If someone is searching the Web for a 1959 Ford Thunderbird, Nortels personal Content Director will note that the request came in English and from a handheld device. If the user takes a break and comes back on, Personal Internet knows that hes searching in the San Jose area, so it wouldnt direct him to a Web site that specializes in Chevrolets available on the East Coast.