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UPDATE4 BT Finally Ditches Phorm from its UK Broadband ISP Service

Posted: 06th Jul, 2009 By: MarkJ
Privacy campaigners can celebrate today after it emerged that BT has quietly decided to stall deployment of Phorm (WebWise), which controversially works with UK ISPs to monitor what websites you visit for use in targeted advertising campaigns. BT had been due to deploy Phorm to its 4.8m Total Broadband customers later this year but now claims that the resources are needed elsewhere, such as to deploy its £1.5bn next generation fibre optic broadband network.

BT has been under immense pressure to abandon Phorm ever since it emerged early last year that they had run secret 2006 and 2007 trials on customers without user consent. That combined with pressure from the EU to investigate said trials, doubts being raised by senior BT figures, major websites pulling out (Amazon, Wikipedia etc.) and a mass of angry consumer voices probably hasn't helped their plans.

However BT's official line on the matter remains unnervingly ambiguous and potentially even leaves the door open for a return to Phorm in the future. Though this is more likely to be a ‘face saving’ exercise that has been designed to help comfort what could be a killer blow for Phorm's ambitions in the UK.

"We continue to believe the interest-based advertising category offers major benefits for consumers and publishers alike," said a spokesman for BT to The Guardian newspaper today. "However, given our public commitment to developing next-generation broadband and television services in the UK we have decided to weigh up the balance of resources devoted to other opportunities."

"Given these commitments, we don't have immediate plans to deploy Webwise today. However, the interest-based advertising market is extremely dynamic and we intend to monitor Phorm's progress …before finalising our plans."

Phorm claims that the move is "not a great surprise" because they have "never had a definitive date [FOR] launch", adding that their business model is not just dependent on the UK and a single ISP. This will of course switch attention back to TalkTalk and Virgin Media , which have both expressed strong interest in deploying Phorm but are believed to have been playing a 'wait and see' style game with BT.

We suspect that the loss of BT in Phorm's plans will make both TalkTalk and Virgin Media think again about their somewhat uncertain positions towards the technology. Still, it's hard to imagine how either could press ahead now, without risking an even greater consumer backlash; even though it took BT well over one year of that before it finally called time on the matter.

Meanwhile one of the most prominent anti-Phorm campaigners, Alexander Hanff, has spoken of his tearful delight at this morning’s news. It's no doubt a view that will be shared by many others too.

"Wow, I went to bed early last night after being up for almost 3 days straight so I missed this. Now I am typing through a stream of tears I guess I have put so much into this campaign that the news is just a little overwhelming. I hope it is true," said Hanff on the NoDPI forum this morning.

It's worth pointing out that BT's related webwise.bt.com domain still remains active within the operator’s network and it will say a lot if this situation changes over the coming days or weeks.

UPDATE @ 1:15pm:

Phorm's shares have now fallen by more than one third (37.57%) since the early hours of this morning when the news was first posted. The firm has also just issued an updated statement on its UK operations:

Phorm Statement:
As regards our UK deployment, Phorm's activities remain ongoing and we look forward to creating the conditions necessary for UK ISPs to move to deployment. In parallel, we continue to focus considerable effort on faster moving overseas opportunities. In so doing we have already minimised our dependency on the deployment by any single ISP or in any particular market. In addition to making excellent progress in South Korea, we are engaged in more than 15 markets worldwide including advanced negotiations with several major ISPs.

These discussions have been greatly accelerated by the launch of Webwise Discover and its clear benefit to consumers, which has been viewed as a key step forward by all of our partners, including those in the UK. We remain very confident in our ability to deliver on the promise of this substantial opportunity.


UPDATE @ 7th July:

Here's what TalkTalk said:
"On Phorm, we've always been clear that if we deployed the technology it would be on an opt in basis only. We haven't got a timescale for any possible introduction of this technology and any update will be reported on this blog."

Cable operator Virgin Media also took a similar stance by largely reiterating their previously uncertain position on the matter and offering no clear answer for its future adoption.

UPDATE @ 7th July - 1:13pm:

Charles Dunstone, Boss of The Carphone Warehouse ( TalkTalk ), has just told The Times:
“We were only going to do it if BT did it and if the whole industry was doing it. We were not interested enough to do it on our own.”

It looks like Phorm have now lost TalkTalk as well as BT .

UPDATE @ 8th July - 3:01pm:

Phorm has confirmed that TalkTalk has now cancelled its contract with them which, given Dunstone's remarks above, doesn't come as much of a surprise.
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