BT to begin third Phorm trial

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Tom Espiner ZDNet.co.uk

Published: 29 Sep 2008 12:49 BST

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BT is to perform another trial of Phorm's ad-serving technology, after delays of over half a year.

Phorm's technology, which BT will use under the brand of 'Webwise', has attracted protests from peers, politicians, technologists and thinktanks, who have expressed concerns over legal and privacy issues. The technology is also the subject of a probe by the European Commission.

Phorm's ad-serving technology works by assigning a user a unique identifier, through which the user's browsing habits are observed so as to target advertisements at them.

BT will commence the third trial of the technology on Tuesday, a BT spokesperson said on Monday. "Around 10,000 customers will be invited to opt in to the trial when they commence their browsing session," said the spokesperson. "We will issue invitations at random."

The interstitial landing page will let customers accept or decline the invitation, or ask for more information about the trials, the spokesperson added.

BT announced a trial of Phorm's technology in April, but then delayed the trial, apparently due to technical issues. The BT spokesperson declined to say what those issues had been.

"We can't go into the technical issues; they are confidential between us and Phorm," said the spokesperson. "We're not going to be peering behind the curtain. You can assume, as we're going ahead with the trials, that we've resolved any outstanding issues to our entire satisfaction."

The spokesperson said that BT had been exploring network-based ways to track anonymised users without having to use cookies, but said that this had not been the reason for the delay, contradicting earlier BT statements.

"In parallel, we have continued to explore network-based options," said the spokesperson. "The trial will not involve network-based options."

The trial will follow previous trials which took place in autumn 2006 and summer 2007. These earlier trials caused an outcry amongst privacy campaigners, as they were conducted without gaining the consent of customers and without their knowledge. Phorm's opponents claimed the trials were illegal under the Regulation of Investigatory Powers Act (RIPA) and the Data Protection Act.

One opponent of the trials, the Foundation for Information Policy Research (FIPR) thinktank, still has legal concerns about the upcoming trial. Richard Clayton, FIPR treasurer, told ZDNet.co.uk on Monday that the organisation was concerned not only about the privacy implications but also about interception and copyright issues.

"We don't see how an opt-in system can work when one adult in a house can opt in on behalf of another adult or children in the house, or children can opt in on behalf of their parents," said Clayton. "We're also surprised they are going ahead with the trials because of the interception element."

Clayton said that, to be legal under RIPA, both sides of the interception have to give their consent. As the other end of the interception would be search sites like Google or Yahoo, or websites such as FIPR's, Clayton said he failed to see how consent could be gained by all parties.

"We haven't given permission for third parties to intercept the traffic from us to our viewers," said Clayton. "If not, then RIPA has been broken. There is also a whole pile of legal issues around interception and copyright and intellectual property, because we haven't waived the IP rights we have in our content."

However, Kent Ertugrul, chief executive of Phorm, told ZDNet.co.uk on Monday that he expected FIPR's legal concerns to be allayed.

"Over the course of several months, the people at FIPR have expressed concerns and virtually all of them have turned out to be unfounded," said Ertugrul. "Over the past few months, a number of people have raised concerns and we have addressed every point that has been raised."

Ertugrul said that Phorm had been working with the European Commission in its probe into the legality of Phorm's technology, and said he was confident that the Commission would be satisfied.

"There is a pattern that people become more confident through engagement with the technology, including the [Commission]," said Ertugrul. "We're confident that people will not only tolerate it but welcome [Phorm] as a big step forward. The fact is [that Phorm] is something that is being welcomed by all of the websites we've spoken with and with advertisers. Market research by ISPs suggests [Phorm] is welcomed by consumers."

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