A technical evaluation done by Dr Richard Clayton, a computer security researcher at the University of Cambridge, found out that Phorm, the controversial ad system that BT and other ISPs are planning to implement soon, is "illegal" in nature.
On his blog, Clayton published a very detailed appraisal of how Phorm worked and reinforced his views that "the system performs illegal interception as defined by s1 of the Regulation of Investigatory Powers Act 2000."
But he also adds that "Phorm argue, with some justification, that their system does not permit them to identify individuals and that they meet and exceed all necessary Data Protection regulations -- producing a system that is superior to other advertising platforms that profile Internet users."
Phorm was quick to highlight this positive-looking paragraph on their blog and responded to the BBC through a spokesperson commenting that their technology complies with all the appropriate UK laws and that they have consulted a number of experts on this.
In the end though, the privacy debate seems to be a lost battle as the online advertising gold goose will attract cash-strapped and beleaguered telecom companies, ready to make concessions to marketing firms.
You can read out more about our complete Phorm Coverage here.