Internet Service Provider Charter Communications has cooked up a new scheme to fill the coffers, and are rolling it out with a letter campaign to customers advising that the new policy will be pennies over privacy.

The plan — which is anything but new — is to use cookies to track customer activities and force targeted advertising on them. The practice was rampant in the dial-up days of the internet, where secret advertising cookies tracked users and piped in pop-up ads. More recently, the method has been used by legitimate ad networks like DoubleClick, as well as more sinister operations, including spammers and phishers. The difference between Charter's plan and third-party systems like DoubleClick is a matter of scope: While DoubleClick can only track users on sites that use DoubleClick advertising, Charter will be able to track users everywhere — to the bank, to Social Security, to that "special" website the wife isn't supposed to know about — and use that data just about any way they want to. Ted Schremp, a Charter exec, says the system won't be tracking personal information — but we're skeptical, since he also admits he has no clue how long gathered information will be kept.

The program is frighteningly similar to the UK-based Phorm, which lit a firestorm that spread as high as the House of Commons when it was revealed that the company partnered with British Telecom to run secret trials of the service. The UK government eventually decided the service would probably be declared illegal unless it was handled on a strict op-in basis. Charter's move is not entirely unlike one taken recently by Earthlink, to begin serving its own ads to customers who try to visit nonexistent domains, a practice that has courted its own share of controversy for its potential for security breaches.

Charter is, predictably, spinning the service as an innocent and innocuous move to provide users with a better experience — as though being bombarded with advertising flashing brighter than Studio 54 has ever enhanced anyone's browsing — but we have a feeling they'll be surprised once the torch-wielding mob shows up. Even more likely to win them a customer revolt is the opt-out nature of the plan, which uses an opt-out cookie that can only be obtained by entering a full name and address; because it is cookie-based, the procedure must be performed for every browser on every computer the customer uses, and would have to be repeated anytime the browser's cookies were cleared. We're no Kreskin, but we predict an interesting road ahead.