Business scams

Phorm fails

I read on Monday that BT had abandoned Phorm. I didn’t consider this worth commenting on. Today I see that Talk Talk has also dropped the behavioural advertising company.

From a consumer’s perspective I say hooray. As an ISP I don’t have a big enough business to make the Phorm business model work so I haven’t had the moral dilemma myself.  Apparently BT has said it has nothing to do with the furore over privacy rights but I doubt that anyone believes this.

Phorm is now having to say that it is concentrating on faster moving markets such as Korea and talks about live trials with Korea Telecom.  All I can say is that for it to work Korea Telecom has to have a thicker skin than any western based ISP.  Perhaps there isn’t the same privacy rights activity  in Asia.

Business internet

dephormation #phorm

I was doing some site maintenance on this blog this morning and came across a widget that prevents phorm from detecting that users have visited this website.

The authors have a website which provides the most comprehensive source of information on the subject of phorm I have seen.  It contains quotes and videos from pretty high profile people including  Tim Berners Lee and a letter from Communications Minister, Stephen Carter.  It’s definately worth a look.

It also has lots of stuff to download – I’m not endorsing it and haven’t tested any of it –  just pointing out it is there.

Business internet ofcom

EU threatens to sue UK over Phorm

EU Telecoms Commissioner Viviane Reding has issued a statement threatening to sue the UK over their stance concerning behavioural advertising and Phorm.  I covered this last October – Ofcom was saying it was OK for ISPs to use Phorm provided they were transparent about it despite the fact that the EU was saying it was illegal.

In the UK the use of Phorm is being driven by BT, other ISPs having stepped back, afraid of the negative publicity. The reality is that the whole industry would jump at the opportunity to make more money out of advertising, at least the consumer ISPs who have the volume subscriber bases.

Although there are huge privacy issues involved I think the momentum is beginning to gather to the extent that the use of behavioural advertising is bound to grow.  Facebook, for example, must already use this form of database mining because when I visit Facebook, as I am wont to do,  I often see adverts for golf and guitar related subjects – those being two of my stated interests.  Google is also talking about selling advertising based on a given user’s recorded web searching habits.

The UK Government has two months to respond.  The EU press release can be read here.

Business internet

Digital Britain Interim Report

The UK Government has today published Stephen Carter’s interim report on Digital Britain (see previous post). I am a big supporter of what the Government is trying to do here though it is such a huge task or set of tasks that it remains to be seen how successful they will be.

The report is 80 pages long with an 11 page executive summary so I need here to focus on what matters in my world:

  1. Universal Service Obligation to provide all households with a 2Mbps broadband capability by 2012. This is independant of technology so it could be via fixed/mobile/wired/wireless means (in fact any technology that can make it happen – high speed carrier pigeon flocks!?). The detail of how to fund this will be developed.
  2. Check out the regulatory/government  assistance needed to provide the right environment for investment in a Next Generation Access network. I guess this really is already probably underway following the Caio report. It looks as if it includes making it easier/cheaper to roll out fibre by allowing use of drains etc
  3. Establishment of a Rights Agency to help industry put together a framework for promoting legal music downloading. Also to assist with the education process (eg with parents) to inform of the illegalities of P2P music piracy and to try and facilitate a way for the ISP industry to participate in the policing of this problem. The Government seems to have stopped short of forcing ISPs to cut off the broadband connections or persistent offenders. This has been somewhat of a sticking point for large consumer ISPs who might have incurred considerable costs in having to do this. I should also note that the whole “Rights Agency” proposition is also of concern because it smacks of adding overhead and cost to an ISPs business.
  4. What is also interesting though not immediately directly relevant to me is the idea of setting up a digital distribution platform organisation that could enable content providers to compete directly with the BBC. This might be in the way of an open, standards based iplayer equvalent. 

Also referred to is the establishment of the UK Council for Child Internet Safety  (UKCCIS) as part of the media literacy section. The report is perhaps a little light on policy in respect of the wider online economy. For example new advertising models such as offered by Phorm are not discussed as far as I can see. There is yet time for this to be included in the final report.

The whole document is worth a read for anyone involved in internet and communications markets in the UK.

You can download the pdf here digital_britain_interimreportjan09.

Business internet ofcom

Ofcom And Behavioural Marketing

If you are a tecchie you will already know about Phorm and already have formed your own views. If you are not the whole storm may have passed you by. That Phorm storm however is still a blowin’ strong.

Phorm is a system that allows an ISP to monitor the internet browsing behaviour of its customers and to thereafter provide targeted advertising based on your surfing history. The pitch from an ISP to its customers is that it will make advertising, which is going to happen anyway, more relevant and that noone could possibly object to this. The ISP benefits from enhanced click through revenues.

The objection from some consumers is that it invades privacy. It opens the door to potential problems. For example one member of the family secretly looks at pornography whilst everyone else is out of the house. Phorm recognises this and starts pushing adverts for pornography to that computer which is also being used by the kids during the day. Not good.

In principle the government is saying it is not illegal provided consumers are informed as to what they are signing up for and privacy is respected. In actual fact during early trials of the system in 2006 and 2007 by BT customers were allegedly not informed of what was happening and this is potentially being seen as illegal by the EC.

BT seems to have actually started using Phorm in a new trial under a service banner called Webwise. It is based on an opt-in policy but no mention is made, naturally, of the controversy surrounding the technology.

Yesterday a meeting was held between Ofcom and various representatives of Government and the ISP industry to discuss the subject. Present were most of the major consumer ISPs, BERR and Phorm itself. The Government doesn’t really want to get involved here and wants industry to draw up it’s own voluntary Code of Practice. “Helpfully” it has also provided an example of such a Code.

Industry, I sense, is steeling itself for another bout of legislation. It doesn’t really want to get further embroiled in red tape/codes of practice and certainly the ISPA has not begun working on one.

This certainly is an interesting industry. As a member of the ISPA Council I need to look at the subject from the perspective of the ISP membership.  Consumer ISPs will be interested in whether they can upside their margins during tough times, and who can blame them. As a director of a Business to Business ISP I have no interest in Phorm. We provide uncomplicated quality connectivity to our customers without the additional unwanted addons (plenty of wanted addons though 🙂 ). As a consumer I might or might not like the idea of Phorm.

I’ll keep you posted.