The nations top three ISPs have denied keeping tabs on customers’ internet activity in order to serve up more targeted online ads, but reserved the right to do so in the future.

AT&T, Time Warner Cable, and Verizon denied using online behavioral advertising and called on all Internet companies to adhere to standards that require customers to opt in to the tracking of their online activities.

A study released by the Consumers Union said 72 percent of Americans are concerned that their online behaviors were being tracked and profiled by companies. 

 ”AT&T does not today engage in online behavioral advertising, but we understand the uniquely sensitive nature of this practice,” said Dorothy Attwood, senior vice president of public policy and chief privacy officer at AT&T, at the Senate Commerce Committee hearing.

Attwood said that AT&T would not use customer information for targeted ads “without an affirmative, advance action by the consumer that is based on a clear explanation of how the consumer’s action will affect the use of her information.”

“Presently, Time Warner Cable does not engage in targeted Internet advertising as an ISP or as a Web site operator,” said Peter Stern chief strategy officer for Time Warner Cable. “Should Time Warner Cable decide to engage in such activities, our customers’ privacy will be a fundamental consideration.”

“Any technology that is used to track and collect consumer online behavior for the purposes of targeted advertising – regardless of which company is doing the collecting – should only be used with the customer’s knowledge and consent,” said Tom Tauke, executive vice president of public affairs, policy, and communications at Verizon.

Internet companies typically collect user data such as IP address, location, and browser. Most insist that this type of information is non-identifying and that search data is anonymized after a certain period of time, but the technology exists to take it one step further and serve up targeted ads based on Internet activity.

Does your search history show that you were looking for a new DVD player? Why not display an ad for Best Buy DVD player deals? Seems easy enough, but most users do not even realize this is going on; companies typically require users to opt out if they object, rather than opt in before the practice begins. 

NebuAd, is one such company which takes customer information from ISPs and helps them serve up more targeted ads. NebuAd chief executive Bob Dykes resigned earlier this month, and the company scaled back its online ad business after a hearing lead by Rep. Edward Markey, of Massachusetts (D) chairman of the House Energy and Commerce subcommittee on telecom and the Internet. He has also been leading the charge to require an opt-in behavioral advertising policy. He called on ISPs to provide details about their online ad practices, most of whom denied invasive practices.

The ISPs said that any legislation should involve all facets of online advertising – ad networks, publishers, search engines, ISPs, browser developers, and other application providers. But stressed that it might be most prudent to leave it to the industry and the Federal Trade Commission, which has developed behavioral advertising guidelines of its own, said Tauke.