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Without regulation or a sudden increase in awareness, this sort of activity will only increase in the near future. Internet service providers who measure their success solely by profit are not going to forgo this revenue opportunity otherwise. It's just where their incentives are aligned (other than in places like Germany perhaps, where people tend to give more thought to information privacy issues).

Any thoughts on the best way to use the Internet while exempting oneself from this sort of analysis, without significantly degrading the experience? VPNs are the first obvious answer, but what's the best approach? Are there others?

Even with a VPN, there's quite a bit of data-mining that can be done just by looking at the total traffic, ignoring destinations. An interested ISP could probably still guess when you're watching streaming video, when people in your household typically wake up, sleep, and leave for work, etc. You could make that harder by padding the link with dummy traffic, though, like some darknet software does. That'd probably work, especially if we assume the ISP is just doing aggregate data-mining on usage data, not targeting you specifically and willing to spend much time de-obfuscating your obfuscation scheme. But it might be expensive to be pumping dummy data 24/7 if your VPN or home connection has traffic limits or bills by the GB.

Something similar is a concern with power companies as well. Even though electric meters only record total usage (kW being used by the apartment, not tagged with what it's being used for), the move to smart meters that record power usage frequently has led to some concern, because you can do all kinds of analysis just from the raw electric-usage data. Different devices/appliances tend to have noticeable signatures, so an interested power company can tell when the washing machine goes on, when the TV is in use, arrive at good guesses of your sleeping and cooking patterns, etc.

Not just when the TV is on, but also which programme is on TV.
Indeed, my power company shows a chart of which of my appliances use the most power, deduced from their usage patterns.
This is unrelated to IP - the telcos are looking at mobile phone position, even for simple voice phones. They argue that they aren't violating privacy as data is only provided in aggregate for eg postal districts, but that's only their position.
This can in theory be used for good things. Take Say a random 1% of the population each day and track there position and you can get vary good data on where traffic problems are. And not just where accidents are but also where people slow down which can be a sign of a pothole or something in the road etc.

Granted there are huge privacy issues with this, however if you could track most cars you would get much better idea how to change traffic lights / patterns based on time of day and day of year. Because, small issues tend to propagate all over the place so small and cheap changes can make a rather large difference.

The projects I was involved with were more about appraising the value of a shop's position, the value of billboards, and also some time and space related thing (like "where do the people passing in front of my shop sleep?" and "what's the peak in my street?", "how many out-of-area people pass in front of my shop?").

But it's true that I also know of one project that uses phone data to check highway traffic congestion (A6 in Provence, France). It's also ad-related, because the data is sold to media companies whose major income is form advertisement.

My initial thoughts were about combining web browsing history and internet usage with location information, but you're right--a lot of analysis could be done purely with your location history and your personal information that the telco has on file. That analysis is much less preventable, short of not using mobile telcos.

This sort of thing really should be opt-in--otherwise, the by-product (personal data) will become the business, and the mobile service will move towards being merely a means to that end.

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What we need here isn't regulation -- the cell business at least in the U.S. has all kinds of regulation. What we need is the ability of the consumer to sue these companies if any of their data gets released.

Regulation puts all the risk in one bucket, the regulator. If the company can deal with the regulator, they're good to go. And we've seen how good government oversight of privacy is going to be.

Open things up for civil suits, on the other hand, changes the economics drastically. Companies don't have to worry about making one agency happy. Instead, they have to worry about each and every customer. That's exactly the kind of care we expect from these bozos in the first place.

Operators might have shit load of data flowing through their network but they need the ways to structure that so its a big investment, on the other hand, mobile aggregators are freaking obsessed about mining every bit of info they have (i know this because I was hired to squeeze that juice) so they could push you more crap. Even if you don't participate in SMS games (quizzes, tv voting, etc) there services like emergency top up (for prepaid sims) that you probably used at least once or twice. Those are usually also provided by mobile aggregators itself or through MA partners, and they do know on which channel request came, what VAS app is that, how often you do this and etc. Ideally they can cross check your phone number on all of their services and content provider services to get plenty info to know who you are and what you will buy next.
Obama's "reform" of the NSA spying practices makes this worse. He continues the data collection but leaves the data at the telcos. It is certain that they will 1> ask to be paid for the "burden" of collecting this info and 2> will monetize other ways as well since it's already lying around.

I really like O but sometimes he can be bone-headed.

I have worked around monetizing telco customers location in the past, and I don't think it was smart actually. And there is also a big economic issue, if I'm tracked for money as a customer, where is my share of the loot?
You get tailored advertisements so you just know what you really want to buy and so you don't need to invest time researching what product might better.
Assuming that any of the advertisements are genuinely informative rather than manipulative.
yeah, last time I clicked a related article on a news site, it happened to link to an article to a women's magazine, I got women's underwear advertisement for weeks afterwards.

So, no, I don't want to receive advertisement for perfume because I waited for my GF in front of a perfume shop, thanks.

People complain about Facebook and Google, but it's the carriers that are the real problem.

We shouldn't forget that there are tools to avoid tracking by both Google and Facebook, but AFAIK there is no way to avoid cell tower triangulation and tracking. Nor am I aware of any laws regulating it.

Somewhat ironic this webpage contains dozens of trackers.