Over the last few weeks, behavioral advertising firm NebuAD has seen their entire business model jeopardized. Charter, Embarq, CenturyTel and Wide Open West, all of whom were either testing or deploying behavioral advertising technology from NebuAD, have either suspended or terminated those plans. The decisions were prompted largely due to concerns that selling user browsing histories violates several Federal wiretap and privacy laws.

One primary concern was that NebuAD's current cookie-based opt-out system only opts users out of custom ad delivery, not browsing tracking. ISP insiders had told me that NebuAD was working on a new opt-out system -- something that has been confirmed this morning by a NebuAD press release, which says they're developing a "network based-opt out mechanism" that doesn't rely on cookies.While NebuAD's press statement today pays lip service to privacy advocates across nearly a dozen paragraphs, it's fairly obvious their primary concern is pleasing lawmakers. Last month, the ranking members of the House Telecommunications Subcommittee, Edward Markey (D-MA) and Joe Barton (R-TX), sent a letter to Charter CEO Neil Smit asking him to suspend his company's NebuAD trials until the systems could be investigated.

At least three wiretapping-related federal laws limit what broadband providers can do with your data: the Electronic Communications Privacy Act of 1986 (ECPA); the Communications Act of 1934; and the Cable TV Privacy Act of 1984 all in one way or another limit an ISPs ability to collect and sell your online activity without your (fairly comprehensive) authorization. It's not yet clear whether simply having an opt-out system that actually works is going to be enough to save NebuAD's skin.