In Letter to Congress, AT&T Snipes at Google

Another update on Congress’s continuing investigation into online targeted advertising. Google responded by stating that the company does not engage in Deep Packet Inspection, unlike ISPs that use NebuAd or Phorm. Yahoo, however, soundly defended targeted ads with a laundry list of positives. The company concluded its exposition on the generally-ignored benefits of behavioral advertising with a wonderful summary:

Given the wide range of benefits to society to customers, bloggers, small businesses, and even advertisers who can more efficiently find the right audience for their messages and offers, it is important to give due weight to these benefits when exploring the appropriate framework for discussions of online advertising issues.

AT&Ts view of Google, apparently

AT&T's view of Google, apparently

Today, quite a few responses from other companies went up on the FTC’s site. Verizon and Comcast just stated that they did not engage in DPI, without chastising their competitors. AT&T took a very different approach. Though bloggers have gotten up in arms over other portions of AT&T’s letter to Congress, I want to focus on the company’s overall approach.

Like Verizon and Comcast, AT&T stated that it does not perform DPI or engage in what the company calls “Overall Behavioral Targeted Advertising” – targeting ads based on a customer’s whole browsing history. But it sounded the alarm that ad networks like Google could do so. It’s worth quoting at length:

Advertising-network operators such as Google have evolved beyond merely tracking consumer web surfing activity on sites for which they have a direct ad-serving relationship. They now have the ability to observe a user’s entire web browsing experience at a granular level, including all URLs visited, all searches, and actual page-views. Techniques include the ad network ‘dropping’ third-party tracking ‘cookies’ on a consumer’s computer to capture consumer views to any one of thousands of unrelated websites; embedding software on the PCs; or automatically downloading applications that – unbeknownst to the consumer – log the consumer’s full session of browsing activity. Ad networks and other non-ISPs employ these methodologies at the individual browser or computer level and they are as effective as any technique that an ISP might employ at creating specific customer profiles and enabling highly targeted advertising… [Google] even scans emails from non-Gmail subscribers sent to Gmail subscribers for contextual advertising purposed. Thus, if anything, the largely invisible practices of ad-networks raise even greater privacy concerns than do the behavioral advertising techniques that ISPs could employ, such as deep-packet-inspection, which have primary application beyond mere targeted advertising, including managing network congestion, detecting viruses and combating child pornography.

AT&T is clearly trying to deflect Congress’s prying eyes away from ISPs like itself and onto websites like Google. Admittedly, one could argue that Google had it coming. Google’s push for net neutrality and its spectrum auction shenanigans certainly adversely affected AT&T.

But companies should learn not to use government to fight amongst themselves. The market is where competitive battles should be fought, because those battles benefit customers by leading to the sort of creative destruction that Schumpeter lauded.