Charter Communications, the fourth-largest cable system in the United States, has started telling its high-speed Internet customers that it is going to keep track of every site they visit on the Web.

The cable company will sell the data to a firm called NebuAd, which in turn will use it to show ads to Web-surfing Charter customers that are meant to be related to their interests. (Visit a knitting site yesterday and see yarn ads today.)

Charter started sending letters out to several hundred thousand customers in four markets: Fort Worth, Tex.; San Luis Obispo, Calif.; Oxford, Mass.; and Newtown, Conn. (The letters were first reported by DSLreports.com.)

Charter said it will start testing the system within 30 days and will make a decision whether to introduce it to its 2.8 million Internet customers a few months after that.

Using data from Internet service providers for what the advertising people call behavioral targeting raises all kinds of questions about privacy, disclosure and who owns the information about where Internet users surf.



I called Charter to ask about this Tuesday, and the company quickly put Ted Schremp, its senior vice president for product management and strategy, on the phone. That immediately set Charter apart from the other Internet companies in the United States that have been identified as working with NebuAd: Embarq and Wide Open West. Neither of them would discuss the matter when I last asked.

Charter is taking “for the most part, a high road approach,” according to Mr. Schremp. “We have told customers exactly what we are doing,” he said. The letter to customers, he added, was “very forthcoming” and “not buried in mouse type and legal disclosures.”

The five-paragraph letter positioned the monitoring program as an “an enhanced online experience that is more customized to your interests and activities.”

“As a result,” the letter said, “the advertising you typically see online will better reflect the interests you express through your web-surfing activity. You will not see more ads — just ads that are more relevant to you.”

The letter contained a link to a Web page with answers to some common questions. A second link in the letter goes to a page that allows users to opt out of the system.

I suggested to Mr. Schremp that there would probably be a fair number of customers who don’t consider having their Internet activities tracked to be an enhancement.

He responded several ways. He said that Charter convened focus groups of customers in two cities and found that most didn’t object when the program was explained to them. (A crucial aspect of the NebuAd system is that it claims not to record any personally identifiable information about users. Rather, it associates each user’s behavior with 1,000 categories of interest to advertisers.)

He offered his personal view that the system was harmless and well within the norms of the Internet these days. “The mainstream Internet user is hugely aware of the fact that the fundamental economic model on the Internet is advertising,” he said. While some people object to targeted advertising systems like Google’s Gmail, which displays ads related to the text of e-mail users are reading, many others don’t.

“All we are doing is, in an anonymous format, providing additional context to serve those ads. To the extent those ads are more meaningful to me as Ted Schremp, I will have a better Internet experience than the generic ads that are part of Yahoo and everything online.”

For those customers who disagree, Mr. Schremp said that Charter was offering the ability for them to choose not to be part of the system. I suggested that most privacy experts prefer opt-in systems where information isn’t collected until the user explicitly grants permission. He said that opt-out has become the norm for all targeting on the Internet.

How much money is NebuAd paying Charter for access to information about its customers’ surfing behavior? Mr. Schremp wouldn’t say. (Robert Dykes, NebuAd’s chief executive, said last month that the company was willing to pay Internet providers several dollars per subscriber a month.)

Mr. Schremp did acknowledge that raising revenue was a main goal for Charter in this: “We want to leverage technology in a way that makes sense for our economic model.”