Charter Communications on Wednesday abandoned plans to deploy NebuAd’s user-tracking system after objections from Congress and privacy advocates. Its stock dropped slightly after the announcement.

The NebuAd system places tracking cookies and sells users’ Web input to advertisers for targeting ads. Charter had been evaluating the system that privacy watchdogs Free Press and Public Knowledge called a “classic man-in-the-middle attack.”

While NebuAd has worked with small Web service providers, Charter is the country’s fourth-largest ISP as well as a cable-TV and phone-services provider. That attracted the attention of Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas) of the House Committee on Energy and Commerce, who sent Charter a second letter expressing concerns and asking it to wait while Congress looks at the technology. The congressmen had additionally asked Charter to desist when it announced plans for the checking in May.

Markey, chairman of the House Subcommittee on

Telecommunications and the Web, said he was “pleased to build out that the company has decided to delay implementation of that program, which electronically profiled individual consumer Web usage.” He added, “I urge other broadband companies considering similar user-profiling programs to similarly hold off on implementation while these critical privacy concerns can be addressed.”

That warning could effectively hamper plans by NebuAd and United Kingdom-based Phorm to expand their tracking technologies in the U.S. So far, their attempts have not progressed beyond checking.

Charter began evaluating tracking that month in Ft. Worth, Texas; San Luis Obispo, Calif.; Oxford, Mass.; and Newtown, Conn. Charter Senior Vice President Joe Stackhouse had assured high-speed Web subscribers that targeted ads “will better reflect the interests you express through your Web-surfing activity. You will not see more ads — just ads that are more relevant to you.”

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