BT ditches Phorm, ISPs looks closely at privacy concerns

BT has ditched a controversial trial and proposed national rollout of web monitoring and customer profiling and advertising targeting platform from software development company Phorm.

The platform had attracted the ire of privacy watchdogs in the UK for some time with the European Commission weighing in on an early trial on the technology in 2006 and 2007, expressing concern that BT’s ISP customers were not informed of the extent of the software’s behavioral targeting capabilities.  

The proposed roll-out of Phorm’s platform known as Webwise, had been regarded within the ISP and online publishing industry as a test case for its technology.

The carrier issued a statement today announcing the end of the relationship with the listed software company, "we continue to believe the interest based advertising category offers major benefits for consumers and publishers alike. However, given our public commitment to developing next generation broadband and television services in the UK, we have decided to weigh up the balance of resources devoted to other opportunities," it said.

Bt added, "given these resource commitments, we don't have immediate plans to deploy Webwise today. However, the interest based advertising market is extremely dynamic and we intend to monitor Phorm's progress with other ISPs and with Webwise Discover before finalising our plans."

Virgin Media, which was closely monitoring the situation and assessing its own behavioural targeting advertising strategy and has signed an MOU with Phorm  issued a statement in response to BT’s decision confirming  an ongoing interest in the platform but taking a more balanced view privacy issues.

 “Given the fast moving nature of the sector, Virgin Media intends to extend its review of potential opportunities with suppliers, including Phorm, prior to making any commitment to launch any of these technologies. We recognise some consumers have significant concerns about the potential implications of interest-based advertising for their privacy,” Virgin Media said.

Phorm responded claiming, “Phorm’s activities remain ongoing and we look forward to creating the conditions necessary for UK ISPs to move to deployment. In parallel, we continue to focus considerable effort on faster moving overseas opportunities. In so doing we have already minimised our dependency on the deployment by any single ISP or in any particular market.”

Phorm signed its largest international deal in March with KT Telecom rolling out the platform to an estimated at 100,000 to 150,000 households.