Leading UK ISPs BT, Virgin Media and TalkTalk, along with advertisers, agencies, publishers and ad networks, work with Phorm to make online advertising more relevant, rewarding and valuable.

Phorm, the advertising company that wants to pay your ISP to hand over information on which websites you visit, has convinced the UK's three largest providers to trust it, but regulators and the rest of the industry are less impressed.

Phorm's deals already mean it has already snagged more than ten million streams of UK users' browsing information.

Its remaining targets are surely Tiscali, Sky and Orange, who complete the six members of the UK broadband millionaires' club, which controls more than 95 per cent of the market.

Tiscali, which has more than two million broadband customers, told The Register it has looked into Phorm's system, but no decisions have been made.

Meanwhile a spokesman for Sky, the UK's fastest growing broadband network with about 1.2 million lines, said: "Sky is interested in exploring the potential for targeted online advertising and is talking with a number of companies operating in this area.

"Of paramount importance is the online safety of our customers and will only implement a solution when we can use customer data in a responsible way which safeguards privacy."

BT, Virgin Media and Talk Talk argue that Phorm's anonymising techniques will achieve this feat. When discussing Webwise, the consumer brand for Phorm's advertising targeting system, the existing partners all place heavy emphasis on its widely-available and standard anti-phishing features.

Sky and Tiscali both seem keen to gauge consumer reaction to their browsing habits being sold off before committing.

Orange, which occupies the number six spot in the UK broadband league, said: "We're always looking at ways to make the internet experience safer and more relevant for the individual. We have been in discussions with a number of companies - including Phorm - about this very interesting area."

"We are currently evaluating a number of options and continue to evaluate both the customer and business benefits of targeted advertising."

The Information Commissioner's Office learned that the trio of giants had signed on to implement Phorm's ad targeting technology a couple of days before it was announced on Valentine's day. A spokeswoman told The Register today: "We have now met with them [Phorm] and asked for some more information that we're now looking at."

At the smaller end of the ISP scale, where the pressure to compete on super-cheap broadband but then gouge for so-called "incremental" revenues on the side is lower, the reaction to Phorm is more frosty. "We have not spoken to them and we would not speak to them," a Zen Internet spokeswoman said. The firm specialises in business broadband. "Zen Internet will continue to monitor OIX [Open Internet Exchange, Phorm's advertising network] with regards to protecting its customers."

Small outfits such as Zen are unlikely to be a target for Phorm, however. Its system involves it paying ISPs to insert hardware into their networks, so the greater the volume of subscriber browser data they can deliver in exchange, the better.

BT Retail's deal with Phorm does not affect BT's dozens of wholesale ISP customers, including PlusNet, which BT Group owns. A spokesman at the Sheffield-based provider could not be reached today, but product manager Ian Wild told subscribers in its forums: "We'd certainly do an opt-in or opt-out with something like this if we ever did it.

"Just to say again though, I'm pretty neutral from a product manager perspective as long as our customers are happy, and from a personal perspective it's something I might well choose to opt-out of unless the reason not to was very compelling."

Anyone out there compelled by Phorm's "safer, more relevant" internet yet?

We'll have fuller, technical details of how the system works later today.

So, what's all the fuss about?

Simply put, three of the UK's largest ISPs (Virgin Media, BT and TalkTalk) have decided to sell your private browsing history to an advertising broker. Yes, the entire list of every web page you visit gets sent to Phorm (the broker) in real time, as you click, so they can send you 'targeted advertising'. Naturally the ISP's are not too keen on telling their users this, they'd much rather feed us all platitudes about how it'll help combat phishing and how the targeted adverts will be so much better than the random ones we see today. In fact, they didn't even announce it to the UK press, we had to find out about it from the New York Times!

Here's what the NYT had to say on the subject of Phorm...

LONDON — For years, Internet service providers have watched with envy as the likes of Google, Yahoo and Microsoft sliced up the online advertising pie. Selling Internet access has been a good business, but selling Web advertising has been an even more lucrative one. Now, three Internet providers in Britain have teamed up to try to obtain a piece of online advertising for themselves. The three companies — BT, Carphone Warehouse and Virgin Media — announced a deal last week with a company called Phorm, whose technology tracks Web users and sends them ads related to their interests. .....(snip) The three Internet providers have agreed to give Phorm access to customers’ browsing records, letting it track a Web user’s every move. That way, the Internet exchange can send an ad directly to a select audience anywhere on the Web, rather than hoping that the user lands on a site displaying the ad.

It's important to understand there are two distinctly separate processes in the Phorm system: data capture and ad serving. The data capture system only stores one item of information on your computer -- a random number. The random number is the only thing that distinguishes your browser from the millions of others on the internet. It does not contain any information about you or your computer. The only person able to make that connection is you, as you have that cookie in your browser.