Regulating Before Regulation, Ctd.

Maybe the writing is on the wall after all:

A week after Charter Communications backpedaled on plans to implement NebuAds' controversial behavioral tracking and ad serving platform, another of the vendor's ISP partners has put on the brakes.

CenturyTel, which was among the first ISPs to test the NebuAd platform, will no longer put it into action across its whole network, as had been its plan. A spokesperson, Annmarie Sartor, said the company had not determined a definite date to flip the switch, but "we were looking at some time this summer," she said.

Now the deal is off until further notice.

Unlike Charter's statement, which cited subscribers' concerns, CenturyTel said it was motivated by the urgings of Congressmen Edward Markey, a Massachusetts Democrat, and Joe Barton, a Texas Republican, who said the technology "raises several red flags."

Regulating Before Regulation

The Interactive Advertising Bureau is working to self regulate the online marketing community before federal regulators step in. With increased scrutiny from regulators and proposed state and federal legislation regarding consumer data privacy, spyware, ISP ad targeting and other issues, the IAB is working to simultaneous self regulate and resist government mandates.

"We saw these bills coming down the pike in the states and what the FTC was doing and it just didn't look good," IAB President Randall Rothenberg told ClickZ News.

The stakes are high. Interactive advertising revenues for the first quarter of 2008 were estimated at $5.8 billion, up 18.2 percent from the first quarter of 2007. Revenues from 2007 totaled more than $21 billion.

“Millions of people are making their livings creating and operating Web venues that house well-targeted advertisements, but these entrepreneurs are being threatened by the specter of unnecessary government regulation that would destroy or severely limit their ability to advertise their wares and services online,” Rothenberg dramatically told a Congressional committee recently.

The IAB would be wise to institute strong self regulation or face the consequences. Recently, 15 privacy and consumer organizations called for a congressional investigation into television and Internet provider Charter Communications' proposed "major threat to privacy" through ISP ad targeting. (Charter has since cooled to its plan.) More such calls are sure to follow as other companies implement ISP targeting.

I wonder, though, if any self regulation would be strong enough to lessen criticism from privacy advocates in and out of Congress and the state capitols. I doubt it. Therefore, I think the IAB should pick and choose its battles. Some practices, like handling of freely given consumer data, may require a code of conduct, while others, like ISP targeting, should just go away.