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Embarq: Selling User Browsing Data 'Empowers' Users
Sprint spinoff responds to Congressional inquiry. Sort of.

The House Subcommittee on Telecommunications and the Internet is investigating whether the use of NebuAD user-tracking technology violates wiretap and privacy laws, and at least one law is being crafted that would force carriers to make such systems opt in. As part of that investigation, last week Embarq received a letter from Congress, asking pointed questions about the ISP's trial of NebuAD technology.

Behavioral advertising is about "empowering

individual and business internet users by making their experience more accessible and relevant."

-Embarq
An Embarq spokesperson e-mailed me their response letter (pdf) this morning. The letter starts off on a disingenuous foot, by insisting that the selling of user browsing data for profit is actually about "empowering individual and business internet users by making their experience more accessible and relevant." Cable operator Charter also insisted it enhanced the "user experience."

The letter goes on to suggest that use of such systems "supports the provision of services to online customers at free or reduced rates." Interesting, considering I've yet to see a free or reduced rate NebuAD funded ISP. In fact, consumers see absolutely no price reduction from the estimated $2 per user, per month ISPs stand to make by selling user browser histories to NebuAD.

Click for full size
The letter fails to answer Congress's inquiry concerning exactly how many users were impacted, and in what markets. Embarq repeatedly insists that all collected data was anonymous (for whatever good such promises usually do), and admits their method of alerting consumers to the trial was by including new fine print in the Embarq privacy policy.

According to Embarq, that's enough to adhere to the FTC's privacy guidelines, though of course the FTC has increasingly believed that allowing companies to do whatever they'd like (aka: self-regulation) is a substitute for sound consumer protection policy. For those interested, you can catch a glimmer of the FTC's mindset on such issues in this interview with the FTC bureau of consumer protection in yesterday's NY Times.

Given Embarq doesn't pony up any real specifics, it's unlikely their response is going to satiate Markey, Dingell and Barton. Markey will still probably push to make such systems opt-in, but I continue to have doubts he'll be able to best the combined lobbying influence of the nation's largest ISPs and the entire online advertising industry (including Google), who won't want an "opt in" mandate impacting their own business models.
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Glaice
Brutal Video Vault
Premium Member
join:2002-10-01
North Babylon, NY

2 edits

1 recommendation

Glaice

Premium Member

Lies!

That's complete bullshit, Embarq...and you know it. How would you feel if I sold the browsing habits of your employees (normal joes, managers and execs) that off the clock/at home?

I'll just make some lame excuse the way you are doing with your customers.

cdru
Go Colts
MVM
join:2003-05-14
Fort Wayne, IN

cdru

MVM

Re: Lies!

said by Glaice:

How would you feel if I sold the browsing habits of your employees (normal joes, managers and execs) that off the clock/at home?
Corporations don't have feelings. The company itself could care less employee's browsing habits were tracked. The actual person you might be asking the question to probably cares, but official company stance is determined by one or more individuals that collectively doesn't have a soul to care about things like this.

Hazy Arc
join:2006-04-10
Greenwood, SC

Hazy Arc

Member

Empowering...?

Being an Embarq customer, I must say that I feel quite "empowered" by having behavioral advertising shoved down my throat whether I like it or not.

Hell, it even reduces my monthly bill. Oh...wait a minute......
Kearnstd
Space Elf
Premium Member
join:2002-01-22
Mullica Hill, NJ

Kearnstd

Premium Member

Re: Empowering...?

Ads increase monthly profit for the ISP, they also raise rates.

N3OGH
Yo Soy Col. "Bat" Guano
Premium Member
join:2003-11-11
Philly burbs

N3OGH to Hazy Arc

Premium Member

to Hazy Arc
Behavioral advertising is about "empowering violating
individual and business internet users by making their experience more accessible and relevant to advertisers so we can line our pockets."

100% NOT ACCEPTABLE
MASantangelo
Premium Member
join:2004-07-19
Pittstown, NJ

MASantangelo

Premium Member

Curious...

I'm curious to see if any of these ISPs raised rates/prices/fees in order to pay for NebuAD hardware/software and then proceeded to pocket the profit.

Seems like a perfectly reasonable thing to do if I were a money-grubbing ISP.

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Re: Curious...

said by MASantangelo:

Seems like a perfectly reasonable thing to do if I were a money-grubbing ISP.
Ah, the demand that ISPs don't make a reasonable profit. Of course, to some, any company that actually makes money is by definition "money grubbing".

Check out their income statements:
»finance.yahoo.com/q/is?s ··· Q&annual
They are only making 14%, 12.3%, & 10.6% the last 3 years. Just enough to keep investors interested enough in their company to fund capital improvements.

Income last 3 years
683,000,000 784,000,000 878,000,000

Capital expenditures last 3 years
829,000,000 923,000,000 828,000,000

So the last 2 years they actually had to borrow money to fund improvements. Sure doesn't sound like a money grubbing operation to me. But I am sure it does to those who think they should get everything for free and other people should invest and not get a return(except for themselves of course).

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: Curious...

said by FFH5:
said by MASantangelo:

Seems like a perfectly reasonable thing to do if I were a money-grubbing ISP.
Ah, the demand that ISPs don't make a reasonable profit. Of course, to some, any company that actually makes money is by definition "money grubbing".
When I pay them to ship my bits across the Internet, and they betray my best interests by reselling my data to a third party, that's money-grubbing.
Check out their income statements:
»finance.yahoo.com/q/is?s ··· Q&annual
They are only making 14%, 12.3%, & 10.6% the last 3 years. Just enough to keep investors interested enough in their company to fund capital improvements.
Only 14%, 12.3% or 10.6% -- in today's economy? -- that's pretty damned good return on investment.

Like it or not, Broadband is a commodity. It's not the place to invest if you want 20%+ growth. It's slower and more assured, like a utility.

Also, Investors don't fund capital improvements. Investors authorize the seeking of new funding or fire boards of directors. But Investors are investors because they have already invested. What they then want to see is return on their investment either in increased stock prices or dividends.

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Re: Curious...

said by funchords:

Also, Investors don't fund capital improvements. Investors authorize the seeking of new funding or fire boards of directors.
Of course they do. Thru new stock offerings and reinvestment of money that could have gone for bigger dividends is reinvesting by the shareholders. Borrowing is mostly used to fund improvements, but that isn't the only way.

supergirl
join:2007-03-20
Pensacola, FL

supergirl to FFH5

Member

to FFH5
said by FFH5:
said by MASantangelo:

Seems like a perfectly reasonable thing to do if I were a money-grubbing ISP.
Check out their income statements:
»finance.yahoo.com/q/is?s ··· Q&annual
They are only making 14%, 12.3%, & 10.6% the last 3 years. Just enough to keep investors interested enough in their company to fund capital improvements.

Income last 3 years
683,000,000 784,000,000 878,000,000

Capital expenditures last 3 years
829,000,000 923,000,000 828,000,000

So the last 2 years they actually had to borrow money to fund improvements.
You forget cash flow, which funds infrastructure (pays all the bills then some is great cash flow). The OCF is $1.74 billion. Their EBITA is $2.67 billion. Their operating margin is nearly 26%. I'd say Emarq has become a nice little investment. The only have $5.67 billion in debt as well. Cash Flow is always a key number. Their book value is $29.98 billion. And, their dividend number would make some companies drool.

Ian1
Premium Member
join:2002-06-18
ON

Ian1 to FFH5

Premium Member

to FFH5
said by FFH5:

So the last 2 years they actually had to borrow money to fund improvements. Sure doesn't sound like a money grubbing operation to me. But I am sure it does to those who think they should get everything for free and other people should invest and not get a return(except for themselves of course).
A company needing to borrow money, particularly a young one, to fund improvements is hardly unusual. And making 10-15% NET profit, even after paying interest on that debt is financial performance to envy.

Which is not to say that I'd buy Embarq stock. Their entire sleazy business model is under a microscope now. That enviable revenue figure could plummet by 50% or more in short order should they be required to need an opt in and the debt would soon bankrupt them.
Kearnstd
Space Elf
Premium Member
join:2002-01-22
Mullica Hill, NJ

Kearnstd to MASantangelo

Premium Member

to MASantangelo
when they make their profits off selling a product that is one thing, when they make profits off selling out their customers that is money grubbing.

Dezbend
MVM
join:2001-04-20

Dezbend

MVM

Re: Curious...

Just out of curiosity (and I don't want to put myself in the position of defending this) is it ok for Embarq to put a google search bar on the myembarq.com home page (they get revenue from google everytime someone uses that search option)?

If so how is that different?

If not why?

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: Curious...

said by Dezbend:

Just out of curiosity (and I don't want to put myself in the position of defending this) is it ok for Embarq to put a google search bar on the myembarq.com home page (they get revenue from google everytime someone uses that search option)?
Good question!

I think it's okay because myembarq.com is not synonymous with Internet service, it's a value-added and alternative service. You never "have" to use it. It's just like embarqmail, and why you put up with their decisions on spam filtering even if they're aren't always good decisions. It's okay because you have other options and aren't locked in to their email service.

Dezbend
MVM
join:2001-04-20

Dezbend

MVM

Re: Curious...

That is the answer I was expecting, and that is basically the answer I would give... so the issue isn't really about money-grubbing (via finding new revenue streams) but indeed privacy.

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

That's a big part of it, but remember that NebuAd did not just passively monitor, it also used exploits to force-load its cookies.

And while privacy is a big concern, there is a resulting and real chilling effect that affects the future of the internet.

inteller
Sociopaths always win.
join:2003-12-08
Tulsa, OK

inteller

Member

well but...

"Interesting, considering I've yet to see a free or reduced rate NebuAD funded ISP."

and hence is the crux of their argument. They will tell you that you are getting a discount because if they didn't sell your data they would have to raise your rates.
PrntRhd
Premium Member
join:2004-11-03
Fairfield, CA

PrntRhd

Premium Member

Re: well but...

said by inteller:

"Interesting, considering I've yet to see a free or reduced rate NebuAD funded ISP."

and hence is the crux of their argument. They will tell you that you are getting a discount because if they didn't sell your data they would have to raise your rates.
No raise your rates MORE.

DoRight
join:2007-07-20
East Petersburg, PA

2 edits

DoRight

Member

Reminds me..

This reminds me of those Direct TV commercials.. Let's make something up so it sounds good 80% of the time for 20% of our customers.. Something like that.. lol... This has nothing to do with customers getting a better service.. More money in Sprint, I mean Embarq's pocket..

JasonOD
@comcast.net

JasonOD

Anon

Welcome to marketing in the digital age boys.......

There are pluses and minuses to increasing technology. Just like your connection at work, there can be no expectations of privacy when using your home connection. In this case though, your employer can use your habits against you, while your home ISP uses your browsing to make money.

PhoenixDown
FIOS is Awesome
Premium Member
join:2003-06-08
Fresh Meadows, NY

PhoenixDown

Premium Member

I'll PAY $2 a month to keep my info private

How about that?
tshunter
join:2007-06-10
Cedarpines Park, CA

tshunter

Member

Exactly!

Yeah no shite. Anybody that believes otherwise is a damn markerter or shister or spammer themselves. Amazing to me how many people don't think it is a big deal now but 20 years down the road they wonder why everything is "so hard" and "unfair". Take it from someone who has already been using the internet for 25+ years.. it doesn't get better, it gets worse with time, and so many big corps with no soul will sell all your data for a penny because it's not their personal info, it's yours. Oh yeah, and I already spend $59.99+ per month for high speed internet, so why exactly should I have to also pay with my personal data? Wake up people or you will have to whether you like it or not after it's way too late, right about the time your social security number is being used by someone else on the other side of the planet, and every email provider you try to jump ship to in the future because of all the spiders gets hijacked oh waah and now the internet's no fun anymore, so different from your television back before it started doing the same thing. Reconsider your stance because it's real hard to do "asshole-reallocation" when all the accepted norms say it's okay for the big corps to ignore that you have the right to choose whether or not all of your self can be bought or sold by them for whatever cost they conclude (and of course you don't get the royalties from it either). :O

tshunter

Dogfather
Premium Member
join:2007-12-26
Laguna Hills, CA

1 recommendation

Dogfather

Premium Member

Then make it opt in

Is the service is so bitchen, then they'll have no problem suckering signing people up.

Scatcatpdx
Fur It Up
join:2007-06-22
Portland, OR

1 recommendation

Scatcatpdx

Member

Much ado about Nothing

Contextual advertising has been going on for some time, for example I was researching Hello Kitty items looking and bid history on Ebay to see what they were going for. as a result I getting plush and Hello Kitty suggestions from Ebay. The there contextual ads on Live Journal.
IF there is anything I am bothered with is how business today are trying to see revenue outside their main buissness, be it internet or airlines.

"empowering individual and business internet users by making their experience more accessible and relevant."

This is true for the advertiser allowing them to target their ad on only on people who will buy their product. I would like to see more of it because I am sick and tired as a bible believing (reformed ) Christian getting ads for anti Christian programing and gay bear dating sites because I have the word bear and Christ in my Live Journal.

I do not see the need for grandstanding Congress critters or corporate wonks need to get involve in this issue. If any thing the free market shroud sort things out by letting a entrepreneur create a encryption service or router that can thwart deep packet scanning. I be first in line to buy it.

AVD
Respice, Adspice, Prospice
Premium Member
join:2003-02-06
Onion, NJ

AVD

Premium Member

Re: Much ado about Nothing

said by Scatcatpdx:

free market shroud sort things out by letting a entrepreneur create a encryption service or router that can thwart deep packet scanning. I be first in line to buy it.
Is there a anonymiser proxy which encrypts traffic from the browser to the proxy server?

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: Much ado about Nothing

There are several. COPOWI (Community Powered Internet) is one that I have used.

Be sure to sign up for a few of these for a short term, and test them well. Distance is a factor, since going through a proxy creates significant bandwidth increases.
lordofwhee
join:2007-10-21
Everett, WA

lordofwhee to Scatcatpdx

Member

to Scatcatpdx
A free market solves nothing. We've seen that time and time again. I'd be all for a totally deregulated market if companies weren't granted monopolies and allowed to continue unchecked in blatantly anti-competitive practices.

Telecommunications is one of the few markets where we need MORE regulation, or at least a branch of government with the power to enforce current regulations (and have those regulations written into law, unlike the FCC's 'rules').

Scatcatpdx
Fur It Up
join:2007-06-22
Portland, OR

1 edit

Scatcatpdx

Member

Re: Much ado about Nothing

A fundament flaw is the Orwellian use of competition. Completion will allow other to install wire to the premises rather than forcing redistribution of bandwidth to companies who did build the physical network. I think of the Brand X / EarthLink case. IF we want true competition then do way with local franchising and force government to grant easements to any company who want run copper or fiber networks.

AVD
Respice, Adspice, Prospice
Premium Member
join:2003-02-06
Onion, NJ

AVD

Premium Member

Re: Much ado about Nothing

said by Scatcatpdx:

A fundament flaw is the Orwellian use of competition.
Orwell or Darwin?

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords to Scatcatpdx

MVM

to Scatcatpdx
I thought that was the case already. No?
SilverSurfer1
join:2007-08-19

SilverSurfer1 to Scatcatpdx

Member

to Scatcatpdx
said by Scatcatpdx:

I do not see the need for grandstanding Congress critters or corporate wonks need to get involve in this issue. If any thing the free market shroud sort things out by letting a entrepreneur create a encryption service or router that can thwart deep packet scanning. I be first in line to buy it.
It's funny how those who worship at the altar of the free market see absolutely nothing wrong with direct invasion of privacy by entities who stand to make a lot of money from it at the same time they tell you how good it is for you. Since you're so happy with this sort of arrangement and don't see a need for government intervention to prohibit the practice and/or at least have regs in place that said entities must notify customers, why don't you just hand over all your personal financial info and such to me. I promise it's good for you and I'll send you a coupon for a free pint of Ben & Jerry's.

••••••

fatness
subtle

join:2000-11-17
fishing

fatness to Scatcatpdx

to Scatcatpdx
said by Scatcatpdx:

This is true for the advertiser allowing them to target their ad on only on people who will buy their product. I would like to see more of it because I am sick and tired as a bible believing (reformed ) Christian getting ads for anti Christian programing and gay bear dating sites because I have the word bear and Christ in my Live Journal.
So you want more targeted advertising for other people and less for yourself?

gatorkram
Need for Speed
Premium Member
join:2002-07-22
Winterville, NC

gatorkram

Premium Member

Disapointing

Well, I can't say I didn't expect their BS reply, but I can still say I was hoping for more.

Why would a company destroy themselves for $2 a month per user?

They aren't that wonderful of a company in the first place, and as a paying customer, I have felt nothing but taken advantage of, and overcharged.

Thanks Embarq
Relic (banned)
join:2003-09-29

1 recommendation

Relic (banned)

Member

Of course

.. and stabbing me multiple times with a knife empowers the health care industry.

Nothing new here.

rcdailey
Dragoonfly
Premium Member
join:2005-03-29
Rialto, CA

rcdailey

Premium Member

Re: Of course

said by Relic:

.. and stabbing me multiple times with a knife empowers the health care industry.

Nothing new here.
It's more like this: Being stabbed multiple times with a knife increases the probability of your getting emergency care, as opposed to just walking into an ER and sitting down to wait for a nurse.

Dezbend
MVM
join:2001-04-20

Dezbend

MVM

Price Increases

I don't support the use of NebuAD and especially the method Embarq chose to employ it, but it has been suggested that there have been no price decreases or even price increases in tangent with this. As it is true that no price changes were tied into the use of NebuAD, Embarq did lower the price of their DSL in January and has a history of dropping prices... I don't recall any price increase on the general price (some promotions were limited time).

8 years ago Sprint sold 512k DSL @ $52.99/month - technology has improved, Embarq has found more efficient ways of doing business including new revenue streams (google bar on the myembarq.com website, web packs with paid online services, etc.).

This latest attempt is definitely a failure, but I have seen the prices go down over the past few years, not up.

Titus
Mr Gradenko
join:2004-06-26

Titus

Member

There is no privacy

once you leave your front door (and sometimes even when you haven't!).

The more the MBA generation insults my intelligence with corporate doublespeak, the more I steel my resolve not to buy. It's an action/reaction sorta thing. But they fail to get that part because to them we're all stupid asses with direct-pay.

Idiots
--

telcolackey5
The Truth? You can't handle the truth
join:2007-04-06
Death Valley, CA

telcolackey5

Member

Privacy in general

I agree this is a very slippery slope. When my ISP started this I immediately opted out and looked for an alternative.

Just as concerning is the level of private information collected by the Google browser pluggins, Gmail, Google desktop, etc. While to some extent this is user selectable (as ISPs are), Google does really own search on the Internet (~70%) and all the information that goes with it.

The growing monopoly and privacy issues Google does have are around the Adsense world. This should be even more concerning to the entire Internet population. Funny how there are no FCC or government limits on the level of ownership in this space.

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Karl and his Anti-Depressants

said by karl :

but I continue to have doubts he'll be able to best the combined lobbying influence of the nation's largest ISPs and the entire online advertising industry (including Google), who won't want an "opt in" mandate impacting their own business models.
Karl, why are you so cynical? Of course the Congress-critters are going to listen to the people before they listen to the lobbyists. Maybe you and your doctor ought to have another discussion about your daily dose. You seem a little down.

PS: Another kick-ass article! Great job, Karl!

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

2 edits

FFH5

Premium Member

Re: Karl and his Anti-Depressants

said by funchords:

PS: Another kick-ass article! Great job, Karl!
N/M take me back
prack
join:2003-08-31
Columbus, OH

prack

Member

Soon the Class Action Law Suits

I'm willing to bet that as soon as the use of Nebu-ad technology is deemed as an invasion of privacy, companies like WideOpenWest who used it will be caught in a court battle.

There's a reason that so many of these companies who were using this technology suddenly stopped it. The other shoe will drop and the ISP's will suddenly start acting like they were just innocent bystanders in all this.

funchords
Hello
MVM
join:2001-03-11
Yarmouth Port, MA

funchords

MVM

Re: Soon the Class Action Law Suits

said by prack:

I'm willing to bet that as soon as the use of Nebu-ad technology is deemed as an invasion of privacy, companies like WideOpenWest who used it will be caught in a court battle.
Especially those that didn't notify users before using it. Add Knology to that list: »www.publicknowledge.org/ ··· ode/1664

fatness
subtle

join:2000-11-17
fishing

fatness to prack

to prack
said by prack:

There's a reason that so many of these companies who were using this technology suddenly stopped it. The other shoe will drop and the ISP's will suddenly start acting like they were just innocent bystanders in all this.
ACLU Asks FCC to Scrutinize ISP Surveillance of Customers’ Internet Habits
quote:
Deep Packet Inspections (DPI) violate online privacy and Net Neutrality

WASHINGTON - July 21 - Today as part of the FCC field hearing at Carnegie Mellon University on broadband and the digital future, the American Civil Liberties Union will submit written comments about how Deep Packet Inspections (DPI) and other practices threaten Americans’ online privacy and a neutral Internet.

SHABAZZ
join:2008-07-13
Seattle, WA

SHABAZZ

Member

Reality check133;

This is why I don’t understand people who say “Let private enterprise evolve and operate without government oversight.” All industries need to be regulated! Because if they aren’t they pull this kind of sh**.

FastiBook
join:2003-01-08
Newtown, PA

FastiBook

Member

It empowers them...

To seek damages & file lawsuits.

CPUYODA
join:2003-01-25
Johnson City, TN

CPUYODA

Member

well..

The real problem is,..is that Embarq is the only DSL provider in alot areas,....and like me for example,..my only alternative is Comcast....so it's not like I have a real choice.
Rob_
Premium Member
join:2008-07-16
Mary Esther, FL

Rob_

Premium Member

block the ads

take the time to block the ads. run ad filtering software such as admuncher

bingo.. PROBLEM SOLVED.

spend $24.00 and get rid of them.

(firefox extensions do NOT work on flash animated ads)

Phatbouy
@wideopenwest.com

Phatbouy

Anon

Re: block the ads

They do if you run the "flashblock" plugin.

Karl Bode
News Guy
join:2000-03-02

Karl Bode to Rob_

News Guy

to Rob_
bingo.. PROBLEM SOLVED.
Again, that stops ad delivery but not the sale of your browsing data for profit, which some users might prefer, especially considering that not giving them the choice could violate federal law.
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