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For any of us who recognize that personal privacy on the web is an illusion, the response to a Congressional inquiry asking how various ISPs and online portals target advertising and collect data will come as no surprise. Aside from the use of deep-packet inspection technology used by ISPs to insert advertising based on surfing habits, Congress discovered cookies and data retention policies. In a shocked tone, the Washington Post reported that Google is using DoubleClick’s tracking cookies to monitor where people go on the web in order to serve ads.

Is this really all that surprising? Wasn’t that one of the reasons Google paid $3.1 billion for DoubleClick? AOL also confessed to using tracking cookies and said relatively few (tens of thousands out of more than 100 million) users opted out of its targeted advertising program. Yahoo said it also uses behavioral ads but noted in its letter that it plans to announce the ability for consumers to opt out of such “customized ads.” It will still track users, though.

Looking beyond the major portals (excluding Microsoft, which hasn’t yet responded), the letters from the companies surveyed by the House Committee on Energy and Commerce turned up a few surprises such as Cable One, CenturyTel and Knowlogy using NebuAd’s deep-packet inspection technology in trials. I also noted that business providers such as Cbeyond, TW Telecom, and even large bandwidth providers Covad and XO Communications don’t use targeted advertising to their customers. Cablevision, Windstream, Comcast and Cox were the rare ISPs who aren’t using any real advertising efforts on their subscribers. Many providers did confess to typo squatting, however.

I’m not impressed by ISPs using invasive measures to track surfing habits to sell advertising, unless users are given some sort of price break and have a choice on whether they can opt-in. To me such tactics are undisclosed and give the consumer few outs if they don’t want to be tracked.

However, for free services, such as Google’s search engine or other web content providers, advertising is their lifeblood, and consumers (and Congress) should expect as much information tracking to take place as the portals can both devise and get away with. In the absence of regulatory protection and any other way of making money, it’s no surprise that advertising has become more invasive. Nothing in life is truly free.

For more on the topic check out these posts:

• Of Course the Government Cares About Your Privacy
• Bob Dykes CEO of NebuAd on DPI
• A Privacy Manifesto for the Web 2.0 Era
• How to Safeguard Your Privacy Online

image courtesy of Congressman Ed Markey

The 700MHz auction kicks off today, and like kids waiting for Santa Claus, the technology and business publications are tense with anticipation. But FCC chairman Kevin Martin is keeping a lid on this auction, rather than post periodic updates as was done in the AWS auction in 2006.

While you wait to learn who gets the goods who gets a lump of coal, here’s a quick list of everything you need to know about the upcoming auction and why it matters. Check out all the links, because the bidding doesn’t conclude until March 24 and down payments aren’t due until April 11. You’ve got time.

• Setting the rules for this auction took a lot of time — and lobbying.
• There are a lot of bidders: Out of the 214 of them, the big ones to watch are AT&T, Verizon and Google. Interesting no shows are Sprint Nextel and Time Warner.
• It costs a lot to bid: Reserves are set high at $10 billion, but several people think that the current economic crisis might make it hard for those reserves to be met. Heck even Google has seen $16.15 billion lopped of its market cap so far this week.
• Already some have failed. Both Frontline Wireless and Cyren Call, both of which were going after the “D” block of spectrum and its heavy load of public safety requirements, have already bailed.
• Google is bidding, but may not be playing to win against the carriers.
• The winners have to create an open network. The dream of having a network that would allow any device onto it is still alive.
• Or maybe not. Om would like to see the spectrum become unlicensed and treated much like Wi-Fi is today for it to be truly open.

And like childhood obesity, short attention spans and the general decline of Western Civilization, you can blame all of this controversy on television — the shift from analog to digital TV signals, to be exact.

For the past few months, Google CEO Eric Schmidt has hinted at every opportunity that Google (GOOG) will bid for the auction of the 700 MHz spectrum. So it shouldn’t come as a surprise that they issued a press release today and confirmed that they will bid on the so-called C-block of the 700 MHz spectrum.Big deal — because Google is not in it to win it. Like in an opening move in a game of high-stakes poker, Google will place an opening bet, but is unlikely to raise it.Google CEO Eric Schmidt in the press release said:

No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet.

Excuse me, that ain’t the language of a winner. Chris Sacca, Google’s head of special initiatives, in a blog post continues this “consumer-a-winner” theme, though clearly if Google did win this one, it is the winner first, and maybe…just maybe consumers. [Paint me cynical, but I like this change-the-world-consumer-first drivel from presidential candidates, not from for-profit companies with lofty valuations to protect.]

As I had pointed out earlier, FCC Chairman Kevin Martin included some of the Google proposals as part of the rules for this auction, hoping that would attract Google to the bidding process, and help drive up the prices of the spectrum being auctioned.The other companies playing with some seriousness here are AT&T, Verizon and a bunch of others. AT&T CEO Randall Stephenson confirmed his intentions at a Churchill Club event, while Verizon has been doing its best to ensure its win.

In case you want to know what the whole 700 MHz fuss is all about, here are two posts that tell you everything about 700 MHz.

• 700 MHz explained in 10 easy steps.

• Inside the 700 MHz Landgrab

As Google (GOOG) and Verizon (VZ) duke it out over the forthcoming 700 MHz spectrum auction, AT&T (T) has decided to spend the money and buy its way into the market. The company has announced that it is acquiring licenses in the 700 MHz spectrum from Aloha Partners, a privately-held spectrum speculator, for about $2.5 billion.

The licenses cover roughly 196 million POPs in 281 markets, including 72 of the top 100 and all the top 10 markets in the U.S., according to the AT&T press release. UBS analysts estimate that this works out to about $1.06/MHz/POP, which is twice the price paid last year as part of the AWS auctions.

The upcoming auction in the A and B spectrum blocks has reserved prices of $0.50/MHz/POP and $0.38/MHz/POP. UBS expects that will rise to at least $1/MHz/POP. AT&T just set that price.

Related Posts:

1. Inside the 700 MHz landgrab
2. 700 MHz Explained in 10 Easy Steps