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Whos Tracing Your Steps?

Carriers see big potential for location-based services, but privacy advocates raise concerns.

Its the kind of nightmare every vacationer wants to avoid. You and the family have been on the road for hours. The kids are hungry and youre dying to put your feet up on a comfortable bed. But you dont know where you are or where the next Holiday Inn or Motel 6 might be located.

Not a problem. Hit a few keys on your Web-enabled cell phone and that location service youve just subscribed to sends back a message telling you theres a hotel with a restaurant and pool just off the next exit, only a mile away.

That kind of scenario has got the still-emerging, location-based industry very excited. In a few years, they figure millions of Americans will be happy to pay for a service that tells them where they can find the nearest hotel, bank or movie house. Or, if their car breaks down on a stretch of lonely highway, drivers can call a number that pinpoints their location and sends for help. Businesses are expected to use the same service to track assets. And kids could use cell phones outfitted with GPS receivers to play location games.

"This is truly a breakthrough technology," said John Jimison, executive director and general counsel for the Wireless Location Industry Association (WLIA). "Every time you turn around, you can think of another application."

The technology also has privacy advocates and consumer groups concerned. They believe its quite possible that data on the whereabouts of a particular person could end up in the hands of a third party, such as a direct marketing firm, an insurance agency or the police.

"This technology has the ability to track location information over time and store it," explained Alan Davidson, associate director of the Center for Democracy & Technology (CDT). "That can lead to the creation of a detailed picture of a persons life. Were concerned with how these companies will collect this information, how they will use it and how consumers will control its use."

A Mandate Begets a New Market
Location technology is a byproduct of a mandate set down by the Federal Communications Commission (FCC) in 1997 to deal with the rising number of emergency 911 calls made by cell phone users. Unlike 911 calls made on a line phone, wireless phones dont provide emergency dispatchers with an address location. To fix the problem, the FCC required carriers to find a way to pinpoint a callers location to within 300 feet by October of this year.

At first, carriers saw the mandate as a cost problem and not a marketing opportunity. With some reluctance, they proposed either to install GPS transceivers in cell phones or create a network-based solution for locating wireless calls. But with the introduction of Web-enabled phones, capable of displaying small bits of information, carriers and wireless firms realized they could do more than just locate a wireless caller; they could deliver services to the callers location as well.

This fall Sprint PCS and other carriers plan to deploy location services that will provide subscribers with traffic information as well as route and roadside assistance. Other potential services involve location-based information for entertainment and shopping. Coca Cola recently signed an agreement with Go2 Systems that will provide the location of the nearest fast-food outlet, convenience store or gas station serving Coca Cola products to customers with a wireless-Web phone.

Businesses also are interested in the technology to track assets using embedded GPS transceiver chips which mark their location over time. We may even see games similar to the kind found overseas, where kids play a form of location-based hide and seek with their GPS-enabled phones and pagers.

The most conspicuous example of location technologies so far are telematic services for cars. General Motors OnStar service can automatically locate and call for assistance when a subscribers car breaks down or an airbag deploys. Remote unlocking of car doors is another service now, or soon to be, available. The telematic market is expected to mushroom in growth to more than 17.2 million subscribers by 2005, according to some estimates, generating more than $2.5 billion in annual revenue.

Privacy Worries Prompt Caution
Marketers love the idea of location technology and its potential, but they also see the downside. Collecting all this data on the whereabouts of drivers over time is going to make many people uneasy. "The idea that a device you keep with you all the time can be turned into a location beacon has so many problems," said CDTs Davidson, who pointed out such information could be passed on to third parties, such as insurance firms wanting to check on driving patterns of a policyholder.

Of even greater concern to privacy experts is what happens if the government gets hold of the information. "A big part of the problem with location information is that we have a weak level of protection as to when government can get access to the data," explained Davidson. "Right now, the standard for getting access to location information is very low. All thats required is a subpoena without showing probable cause."

Davidson gives a hypothetical case where law enforcement decides to track a persons whereabouts by following his wireless Web phone in his car. If a friend happens to be riding in the car at the same time, he may end up being tracked as well.

To counter these concerns, the wireless industry has moved quickly to put into place standards for privacy protection even before the services are rolled out, because, as Davidson pointed out, "The industry understands that without trust people wont use these services."

Last November, the Cellular Telecommunications & Internet Association (CTIA) submitted a list of location-based privacy principles to the FCC, asking the agency to set rules regarding location information and privacy. The move was seen by many as a preemptive strike against the kind of backlash that has occurred with information privacy on the Internet. "We saw how the Internet companies developed privacy policies in a reactive way," said Travis Larson, a spokesman for the CTIA. "So we decided to take a much more proactive approach. All of our members will adhere to these principles."

The CTIAs principles call for wireless location providers to inform customers about the collection and use of location information, to provide effective data security measures and to set uniform rules about privacy expectations. But the most crucial aspect of the principles is the "opt-in" provision. Unlike other businesses, such as banks, which only offer customers the chance to "opt-out" of data collection and marketing efforts, the wireless industry has taken the unusual step of telling customers they must want data about their location collected, otherwise it wont happen.

The WLIA supports these principles, including opt-in, according to Jimison, but he has questions about the best way to obtain the customers consent to collect tracking information. "It shouldnt be too burdensome where consent is required every time a new location is involved. As long as the consumer knows whats collected and has confidence about its protection, then theres no reason why that shouldnt be considered effective consent," he said.

But some carriers, including AT&T, Verizon and Sprint PCS have told the FCC that its premature to adopt any rules governing location privacy practices, including an opt-in provision. In fact, the Direct Marketing Association is urging the FCC to allow the industry to regulate itself and has argued that the opt-in provision for customer consent is not only too burdensome, but has been ruled unconstitutional in the past.

Meanwhile, some wireless firms that sell location services have said they will not collect any information on the whereabouts of their customers. Telvigation, a company providing telematic services, keeps location information for only one day and then destroys the information. Others have said they will not forward the data to wireless advertisers or service providers.

One thing the wireless location industry doesnt want to see is a wave of differing state laws addressing the issue. Already, eight states have introduced legislation involving wireless communications and privacy of information, according to the National Conference of State Legislatures.

"There should be national standards," warned Jimison. "This is an interstate issue and it needs consistent national policy so consumers can have the confidence and knowledge that the same services and standards will be applied wherever they travel."
With more than 20 years of experience covering state and local government, Tod previously was the editor of Public CIO, e.Republic’s award-winning publication for information technology executives in the public sector. He is now a senior editor for Government Technology and a columnist at Governing magazine.