The cable giant's latest problem stemmed from reports Tuesday that it had installed software that compiled detailed records of its customers' Web usage. The software--part of a newly built high-speed Internet service created since the Excite@Home bankruptcy--was apparently intended to speed service and cut costs by "caching," or preloading, sites most requested by its customers.
Stephen Burke, president of Comcast's cable division, said Wednesday that the company began storing people's Internet Protocol and URL information six weeks ago when it set up its new network.
"This information has never been connected to individual subscribers and has been purged automatically to protect subscriber privacy," Burke said. "Beginning immediately, we will stop storing this individual customer information in order to completely reassure our customers that the privacy of their information is secure."
Although caching procedures are common among Internet service providers, with data collected usually appearing in aggregate, civil libertarians and angry customers denounced Comcast for storing the data.
The data could be subject to subpoena by the government or by parties in civil litigation, said David Sobel, general counsel for the Electronic Privacy Information Center. Even if Comcast doesn't use the data, it might be forced to turn it over to someone else.
"The question is who else will have access to the information once it's archived and maintained," Sobel said. "That's something that Comcast, regardless of what they might believe or say, will not have control over."
The conflict between privacy rights and security issues has come under renewed scrutiny since the Sept. 11 terrorist attacks. Last year, the U.S. Senate approved a bill that would give the government greater liberty to use surveillance technology, including Internet wiretaps, to combat terrorism.
News of the data tracking this week had some concerned Comcast subscribers considering whether to continue with the service. David Zatz, an engineer from the Washington, D.C., area, said he would drop his Comcast service if the company continued to monitor his Web use in this way.
"I felt very uneasy that this was going to be going on, and there was no policy where we were going to be informed about it," he said. "If it goes through and they continue to do (this) I definitely will be switching. In my case, Comcast is my only option for broadband, but I'm not going to put up with that. I'll revert back to 56K."
Comcast stressed that consumers' privacy has not been breached.
"Comcast respects the privacy of all our subscribers and is committed to fully (protecting) their rights," Burke said. "Comcast has not shared and will not share personal information about where our subscribers go on the Web, either for any internal purpose or with any outside party, except as required by law.
Civil libertarians were quick to point out the contradiction in Comcast's statement but were pleased with its promise to stop storing data.
"Either they were collecting (private) data or they weren't," Sobol said. "Aside from that, pending clarification, if Comcast was saying it was engaging in the unnecessary collection of consumer data and now they are no longer doing that, it's obviously a positive development that reflects the sensitivity that users have when this kind of activity is made known."
Sobol said that if Comcast had been collecting sensitive data on consumers, the company might have violated the Communications Act, legislation that governs the activities of cable companies in the United States. Because subscribers were not notified of the company's alleged data-gathering practices, Comcast may have violated a privacy provision in the Act that requires cable companies to obtain permission from consumers before collecting personal information, he said.
As a result, Rep. Edward Markey, D-Mass., sent a letter to Comcast on Wednesday asking whether the cable company used its facilities to gather personal data from consumers online. The letter cited the general requirement of cable operators to gain "prior written or electronic consent" to use any personal data collected through customers' use of a cable service."
"I have concerns about the allegations raised in (recent news) reports and the nature and extent of any transgressions of the law that may have resulted in consumer privacy being compromised," stated the letter from Markey, who belongs to the House Subcommittee on Telecommunications and the Internet.
Markey's office said it was pleased with Comcast's decision to stop gathering data.
Comcast has faced a range of thorny issues as a result of the Excite@Home bankruptcy. Excite@Home, which provided the fiber-optic backbone for customers whose cable modems were supplied by Comcast, Cox Communications, AT&T and other providers, declared bankruptcy in September and is preparing for a total shutdown Feb. 28.
The move hurt financially, with Comcast announcing last week that its fourth-quarter cash flow fell 3 percent because of the one-time $140 million cost of moving customers to its network. Last fall, Comcast agreed to pay Excite@Home $160 million to keep its customers on the Excite@Home network for three months while Comcast switched them over to its new network.
And customers are upset at the changes forced upon them by the switch, from having to change their e-mail addresses to slower connections and higher fees for the same level of previous service.
The transition from Excite@Home to Comcast and other cable partners' optical backbones has not been smooth. Although Comcast customers haven't been nearly as inconvenienced as many former Excite@Home customers--notably, former AT&T customers--many say they're enduring slow or flaky connections. Problems resulting from the Excite@Home collapse have become so widespread that many are clamoring forof the nascent broadband sector.
Former Excite@Home customers also worry that many benefits of Excite@Home will disappear when the transition to Comcast, Cox and other cable partners is complete at the end of the month. Few cable partners provide connections as fast as Excite@Home provided, and many customers are grumbling about connection speeds that are roughly half of those offered by their former provider.
"I cannot, in all consciousness, pay the premium price that Comcast is commanding for a crippled ISP," computer consultant and Comcast cable-modem customer Eric Guy wrote in an e-mail. "I would expect to see many of (Comcast's) current and future customers reconsidering their broadband provider."
Comcast has also angered small-business owners, telecommuters and others who use their cable modem to connect to office networks using virtual private network (VPN) software. Excite@Home allowed the more secure VPN access, but Comcast does not. Customers can get it as a business service for $95 a month instead of $39--an almost threefold increase that many small-business owners and telecommuters are loath to pay.
Comcast has also upset subscribers by saying it will not provide access to Usenet newsgroups, a sprawling bulletin board system where thousands of groups, dedicated to every imaginable interest, trade everything from technical information to copyrighted movie files.
News.com's Margaret Kane contributed to this report.