'Huge' Privacy Questions Loom as Wireless Use Grows

Computerworld - For policy makers, wireless e-commerce is emerging as both a devil and a saint: It's capable of delivering very helpful, location-specific information while also building detailed, Big Brother-like profiles of an individual's travel patterns and other habits.

No Place to Hide The rollout of location-enabled cellular phones is to begin by October. The government’s goal is to make it easier for emergency services to locate people. Benefit: Location-specific information can be used by businesses to customize and personalize data for end users. Pitfall: Location-tracking information gathered by businesses will likely be tantalizing to law enforcement officials. Privacy issues loom.

Over time, location information gathered by businesses could create "a very detailed and invasive dossier of a person's movements," he said.

As wireless is becoming more pervasive, it's ushering in a host of location-based services that could, for instance, let companies send advertisements to people as they approach a store. In that context, if a wireless end user's location isn't available, "your smart device becomes meaningless," said Lawrence Ponemon, a partner at PricewaterhouseCoopers in New York. "You need very significant personalization to have success in the wireless environment."

Those opinions were shared at a workshop held by the Federal Trade Commission (FTC) last week. The FTC is examining the privacy issues in advance of a federal law that will require police, fire departments and other emergency services to have the ability by October to locate people via their wireless handsets.

Changes Ahead

The FTC, which has been urging Congress to set privacy standards for online commerce, hasn't taken a position on wireless mobile commerce.

But the incoming Bush administration could have an impact on the FTC's emphasis on regulation. Commission Chairman Robert Pitofsky, whose term is set to expire next fall, is one of three Democrats on the five-member commission. A likely replacement as chairman may be Commissioner Orson Swindle, who, unlike Pitofsky, has generally opposed regulation.

Providers of wireless services are pushing for self-regulation. But unlike the self-imposed standards that are being sought for the wired world, the privacy standards advocated by wireless trade groups such as the Cellular Telecommunications Industry Association in Washington appear to be more rigorous in that they require end users to "opt in" by actively contributing to data collection. The "opt-out" standard - where users typically uncheck a box on an online form - is considered a looser standard.