Opponents claim that the technology violates The Regulation of Investigatory Powers Act 2000 (RIPA), which makes intercepting internet traffic without a warrant or consent an offence.
Documents which appear to originate from inside BT Retail show how it might work led Professor Peter Sommer, the author of the groundbreaking 1980s book "The Hacker's Handbook" and a frequent expert witness in data crime trials, to say that
this appears to be an interception under RIPA. The real issue will be about how consent is obtained.
BT chose to market the system as "Webwise," focusing on an anti-phishing angle to ensure that customers didn't opt out of a service that they had automatically been opted-in to.
BT's original FAQ on Webwise (no longer available*) made it clear that subscribers would be opted in by default. "I didn't switch on this service. Why do I have to switch it off?," one 'FAQ' asked.
The response said: "We believe BT Webwise is an important improvement to your online experience - giving you better protection against online fraud and giving you more relevant advertising. We realise that you may not want to use the free service, so we've made it quick and easy to switch on and off."
Other potential customers for the technology, Carphone Warehouse and Virgin, quickly fell by the wayside as the negative publicity grew, followed soon after by website partners such as the Guardian.
The technology was even criticized by the US Congress and eventually The European Commission considered intervening over the failure of UK data watchdogs to punish BT.
It now seems that CPS is assembling a case, a worry for CEO Livingston who was running BT Retail throughout most of this sorry and shameful affair.
*BT's current Webwise holding page is here.