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BT to begin third Phorm trial

After a delay of more than half a year, BT on Tuesday will begin another trial of the ad-serving tech that has been opposed by peers, privacy groups, and think tanks.

BT is to perform another trial of Phorm's ad-serving technology, after delays of more than half a year.

Phorm's technology, which BT will use under the brand of "Webwise," has attracted protests from peers, politicians, technologists and think tanks, who have expressed concerns over legal and privacy issues. The technology is also the subject of a probe by the European Commission.

Phorm's ad-serving technology works by assigning a user a unique identifier, through which the user's browsing habits are observed so as to target advertisements at them.

BT will commence the third trial of the technology on Tuesday, a BT representative said Monday. "Around 10,000 customers will be invited to opt into the trial when they commence their browsing session," the representative said. "We will issue invitations at random."

The interstitial landing page will let customers accept or decline the invitation, or ask for more information about the trials, the representative added.

BT announced a trial of Phorm's technology in April, but then delayed the trial, apparently due to technical issues. The BT representative declined to say what those issues had been.

"We can't go into the technical issues; they are confidential between us and Phorm," said the representative. "We're not going to be peering behind the curtain. You can assume, as we're going ahead with the trials, that we've resolved any outstanding issues to our entire satisfaction."

The representative said BT had been exploring network-based ways to track anonymized users without having to use cookies, but that this had not been the reason for the delay, contradicting earlier BT statements.

"In parallel, we have continued to explore network-based options," said the representative. "The trial will not involve network-based options."

The trial will follow previous trials which took place in fall 2006 and summer 2007. These earlier trials caused an outcry among U.K. privacy campaigners (click here for similar U.S.-based concerns), as they were conducted without gaining the consent of customers and without their knowledge. Phorm's opponents claimed the trials were illegal under the Regulation of Investigatory Powers Act (RIPA) and the Data Protection Act.

One opponent of the trials, the Foundation for Information Policy Research (FIPR) think tank, still has legal concerns about the upcoming trial. Richard Clayton, FIPR treasurer, told ZDNet.co.uk on Monday that the organization was concerned not only about the privacy implications but also about interception and copyright issues.

At a protest against the trials of the ad-serving technology, peers, protesters, and BT shareholders aired their grievances.

"We don't see how an opt-in system can work when one adult in a house can opt in on behalf of another adult or children in the house, or children can opt in on behalf of their parents," said Clayton. "We're also surprised they are going ahead with the trials because of the interception element."

Clayton said that, to be legal under RIPA, both sides of the interception have to give their consent. As the other end of the interception would be search sites like Google or Yahoo, or Web sites such as FIPR's, Clayton said he failed to see how consent could be gained by all parties.

However, Kent Ertugrul, chief executive of Phorm, told ZDNet.co.uk on Monday that he expected FIPR's legal concerns to be allayed.

"Over the course of several months, the people at FIPR have expressed concerns and virtually all of them have turned out to be unfounded," said Ertugrul. "Over the past few months, a number of people have raised concerns and we have addressed every point that has been raised."

Ertugrul said that Phorm had been working with the European Commission in its probe into the legality of Phorm's technology, and said he was confident that the Commission would be satisfied.

"There is a pattern that people become more confident through engagement with the technology, including the (Commission)," said Ertugrul. "We're confident that people will not only tolerate it but welcome (Phorm) as a big step forward. The fact is (that Phorm) is something that is being welcomed by all of the Web sites we've spoken with and with advertisers. Market research by ISPs suggests (Phorm) is welcomed by consumers."

Tom Espiner of ZDNet UK reported from London.