(New York Times) AT&T is “carefully considering” monitoring the Web-surfing activities of customers who use its Internet service, the company said in a letter in response to an inquiry from the House Committee on Energy and Commerce. While the company said it hadn’t tested such a system for monitoring display advertising viewing habits or committed to a particular technology, it expressed much more interest in the approach than the other big Internet providers who also responded to the committee’s letter. AT&T did however promise that if it does decide to start tracking its customers online, it will “do so the right way.” In particular, the advertising system will require customers to affirmatively agree to have their surfing monitored. This sort of “opt-in” approach is preferred by privacy experts to the “opt-out” method, practiced by most ad targeting companies today, which records the behavior of anyone who doesn’t explicitly ask to not to be tracked.

Mystech: Because illegally patriotically spying on us to keep us safe wasn’t enough. Now, AT&T is going to do it for profit.  Welcome to America, best democracy money can buy.

The Congressional committee began looking at advertising that targets ads based on the behavior of Internet users after reports emerged that several Internet service providers, including Charter Communications, were preparing to begin selling the chronicles of of their customers’ Web-surfing activities to a company called NebuAd. It sent letters to 33 companies asking about the targeting practices. (All of the responses the committee has received so far are here.)

Charter, which has since put the plans on hold, was planning to use an opt-out approach. It told the committee that 1.6 percent of those customers who were notified by mail of the NebuAd system elected not to have their Web surfing monitored.

Of the other major Internet service providers who have responded, most including Comcast, Verizon, Time Warner Cable, and AOL said they did not monitor the surfing behavior of their customers on sites they don’t run. Some, especially AOL, do have targeting systems in place for their own sites.

In contrast to the terse statements from the other Internet providers, AT&T’s letter, from Dorothy Attwood, the company’s senior vice president for public policy, was a spirited defense of behavioral targeting. Such a system, she wrote, “could prove quite valuable to consumers and could dramatically improve their online experiences, while at the same time protecting their privacy.”

Ms. Attwood also took a rather combative approach toward Google and other Internet advertising firms. Their targeting methods, she said, “are as effective as any technique that an I.S.P. might employ at creating specific customer profiles and enabling highly targeted advertising.” She added:

Advertising network operators such as Google have evolved beyond merely tracking consumer Web surfing activity on sites for which they have a direct ad-serving relationship. They now have the ability to observe a user’s entire Web browsing experience at a granular level.

Indeed, the letter was quite critical of Google’s own response to the committee’s inquiry. Google deflected most of the specific questions by saying it interpreted the committee as being interested in “deep packet inspection” the technique used by Internet service providers to monitor surfing behavior of their customers. By doing so, it didn’t provide specific information on the other targeting methods it uses. AT&T challenged Google’s view:

The responses of certain companies such as Google suggest that your inquiry is narrow and focused only on a single technology: deep-packet-inspection. We do not read the questions so narrowly. Indeed, to do so suggests that the significant policy questions posed here depend on the technology at issue. We understand your letter to be a clear inquiry into end-user/customer privacy as a whole and are responding accordingly.

I’ve written to Google and it’s comment is below will post its response when I get one.

Until now, it looked like the spotlight of public attention had substantially inhibited the interest of Internet providers in using surfing data for advertising systems. Given AT&T’s assertive stance in this letter, it will be interesting to see if the company is willing to brave what will doubtless be a loud outcry to attempt deep-packet inspection in what it defines as “the right way.”