The Center for Democracy & Technology’s analysis of behavioral ad targeting done at the ISP level, which claims such targeting "may run afoul of federal and state wiretap laws," comes at a pretty convenient moment for Google. Both the search ad company and the CDT are testifying in front of the Senate Commerce Committee this morning for a hearing about behavioral targeting and privacy.

Google’s senior privacy counsel Jane Hovarth takes her seat next to representatives from the Federal Trade Commission, Microsoft, NebuAd, Facebook, and the Competitive Enterprise Institute. Noticeably absent from the hearing: any shill from AT&T, Verizon, Comcast, or any other Internet service provider.

Their absence is interesting only because Hovarth is certain the conversation will center on ISPs and not Google itself, in light of CDT’s recent analysis. CDT’s concern is over a new scheme promoted by ISPs allowing "an advertising network" to copy content traveling along subscriber traffic streams and create individual records of online behavior for targeting purposes.

"Based on what we know so far, this new advertising model appears to defy reasonable consumer expectations and may violate communications privacy laws,” said CDT President and CEO Leslie Harris.

That is, for certain, a huge issue and immediately reminds spectators of AT&T’s and Verizon’s past willingness to hand over data to federal authorities. ISPs and the Bush Administration have sought amnesty for telecoms against citizen lawsuits in highly controversial immunity legislation.

Google appears to be using a broader, more ominous concern to deflect criticism of its own behavioral targeting aspirations lain open by its acquisition of DoubleClick, a question burning a hole in the trump-card pocket of Microsoft’s Mike Hintze, who’s sure to bring it up at the hearing.

On the Google Public Policy blog, Hovarth predicted "the focus of the hearing is likely to be on the emerging issue of ad targeting at the Internet Service Provider (ISP) level," suggesting there are worse things in the digital privacy world than DoubleClick. That doesn’t exactly match the Committee’s posted statement about the hearing in general, which aims "to consider the current state of the online advertising industry and that market’s impact on users’ privacy. Witnesses are expected to focus on the key factors driving online behavioral advertising."

One of those key driving factors would be Google and DoubleClick, though Hovarth would rather the Committee focus on other things like:

• A comprehensive federal privacy law enhancing consumer protections, establishing a uniform privacy framework, and penalizing "bad actors"
• Adoption by the advertising industry of the FTC’s principle’s relating to online privacy and behavioral targeting
• The government and the private sector working in concert to provide more education to consumers about what type of personal information websites collect about them, how the data is used, and what steps they can take to protect their privacy.
• Better labeling of display ads to clearly show they are advertisements, the way Google has done with text ads, and opt-out mechanisms consumers can use to remove themselves from behavioral targeting

Also not present at the hearing is the Center for Digital Democracy, a nonprofit group that has been extremely vocal about both Google’s DoubleClick acquisition and tracking of viewing habits on YouTube, and the privacy concerns both present. With Viacom’s recent success in subpoenaing YouTube viewer records, the CDD writes, "Users and policymakers should expect their online viewing will be private–and not to be spied upon. Whether by Viacom, the government, or Google itself."

Google is obviously trying to diffuse such concerns. Luckily for those who hold the CDD’s point of view, Microsoft is there to do some needling—whether its self-serving or not—and pull Google back to center stage in the hearing.