Late yesterday, the Digital Advertising Alliance (DAA) announced that it was pulling out of the W3C’s effort to establish comprehensive guidelines regarding Do Not Track.

This wasn’t exactly a surprise: earlier in the summer, the DAA, along with the Network Advertising Initiative (NAI), the Internet Advertising Bureau (IAB), and several other industry groups, filed a long list of proposed amendments to the current DNT proposal, which had been in process since Tracking Protection Working Group began drafting a standard in September 2011. Last Friday — and just a few days ahead of the resignation — they renewed their objections. W3C officials tried to make a save, but to no avail. The DAA and IAB also have been leading the charge against Mozilla’s impending ban of third-party trackers.

Working group members from the privacy, consumer advocacy and academic communities have been less than pleased about the trade groups’ actions — reading the email archives from June and July shows the full measure of their dissatisfaction. One prominent core member, Jonathan Mayer from Stanford, resigned in late July, declaring the group had reached an impasse. New group chair Peter Swire recently departed to join an Obama administration investigation into NSA data collection, and a permanent replacement has not yet been named.

AdWeek ran a good summary of the history today when announcing the DAA decision. Dissension isn’t a recent development within the DNT effort, which has zigged and zagged since its inception. Having a roster of 110 members representing a wide continuum of views has led to both inclusiveness and fragmentation.

Our view is that the presence of a middle ground amongst trade groups, digital publishers, and privacy advocates has mostly evaporated in recent years, as the threat of meaningful regulation has diminished due to Congress’s reluctance to constrain business interests. Even FTC consumer-friendly action has met with trade group ire. Same with moves in California to implement privacy guidelines for mobile and DNT. Interestingly, at the same time, we’ve seen a consolidation of the viewpoints of publishers and advocates — witness the OPA’s reaction to Mozilla’s proposal.

The DAA and others say that existing safeguards, such as AdChoices, along with consumer-friendly developments in the industry, diminish the need for standards. But there is a decided lack of hard external verification in any of these efforts, and limited transparency regarding enforcement efforts. As they say in Latin, “Quis custodiet ipsos custodes?”

We hope that the W3C effort gets back on track and finishes with a set of guidelines that can be widely adopted. Mezzobit and our sister non-profit DataNeutrality.org have been watching these efforts closely and plan to incorporate most, if not all, of the W3C DNT guidelines irrespective of the outcome, as they seem to make sense for enterprises wishing to adopt socially responsible data collection practices.

But W3C’s looming failure also underscores the need for a “third way” in the industry, which is why we launched Mezzobit. Broad industry groups have to “boil the ocean” in terms of member viewpoints and have been ineffective in setting standards on sensitive areas, which is why Regulation 2.0 efforts are a good alternative. Our business model is to be open regarding how Mezzobit’s data collection and transfer protocols are set and provide independent verification to our customers of how we follow them. We involve a smaller set of pragmatically minded and centrist stakeholders from the digital brand, consumer advocacy and data collection communities to help us do this work.

This permits the marketplace to choose the solution that best aligns with an individual company’s ethos. And numerous conversations with potential customers have shown us that digital brands truly want to respect their audiences’ privacy rights as well as have more control over their own data flows. This lets the battle for responsible data collection to be fought incrementally, leading the way to a dynamic internet that truly respects — rather than tramples — consumer privacy.

W3C and DAA part ways