Cellular Web phones bringing new wave of privacy issues

Kevin Ferguson

Tuesday, March 27, 2001 | 10:59 a.m.

Matt Tesdall can hardly survive without his cell phone. The Las Vegas-based account manager for Qwest Communications is on the road so much, he logs an average of 3,000 minutes a month on his mobile phone chatting with clients, co-workers and friends.

He shops online and shoots e-mails to other users and other devices, such as his Palm Pilot. He also tracks stocks and airline flights with his cell.

In fact, he threw out his Rolodex years ago, keeping all phone numbers in a computer, information he can access from his mobile phone.

"The wireless web is great for technology because it allows us to be mobile," Tesdall said. "You can move away from the desk."

Sometime next year, businesses in the area in which he is cruising will be able to stream e-mail and electronic ads to his cell phone to alert him of their discounts and specials.

Similar to the wired-cyberspace, e-retailers will be creating a profile of his likes, dislikes and common locations he frequents in order to tailor the ads to his interests.

This is re-igniting a debate over consumer privacy that the wired world went through not too long ago.

Some retailers and industry observers see expansion of the Web to cell phones as a way to better serve tech-savvy customers, who are increasingly trying to eliminate wasted-time from their schedules.

"If you are in (an unfamiliar city) for a conference and want to know where there is a good steakhouse, you type in a few key words on your cell phone and some suggestions pop up," explained Travis Larson, spokesman for the trade organization Cellular Telecommunication & Internet Association.

This so-called location-based information technology, or L-commerce, movement is being pushed by cell phone providers in an attempt to recoup the cost of investing millions in a government-mandated technology called E-911, or Enhanced-911 standards.

This system, which goes into effect in October, will enable emergency dispatchers to pinpoint 911 calls from cell phones within 50 meters.

While its hard to argue against the safety benefits of an E-911 system, some privacy advocates find it disturbing that people will be able to be tracked by businesses and others just by carrying a cell phone.

"The major issue is 'can companies sell the information (to third parties), and when can they sell it?"' said Jim Dempsey, deputy director of the Center for Democracy and Technology. "No more information should be collected than what is necessary to process a transaction."

Because this is a budding industry, standards and governmental regulations do not exist, yet. But more than 5,000 bills regarding some form of Internet privacy have been introduced throughout state legislatures, Federal Trade Commission member Orson Swindle said last week at a Las Vegas wireless industry conference.

In Nevada, Senate Bill 48 addresses the broad issue of Internet privacy, prohibiting those who operate or administer websites from collecting certain data from those who access the site.

Lawyer Mark Tratos, who helped draft the bill, said it doesn't specifically address the wireless web, but the bill was written broadly enough that it could apply to mobile technology.

The bill has yet to be discussed in the 2001 legislative session.

Congressional leaders are also slated to debate the Wireless Protection Act, a bill proposed by Rep. Rodney Frelinghuysen, R-N.J., that would require wireless firms to give clear notice when disclosing consumers' information and to obtain written consent before using their data.

"That bill stems from the E-911 standard," said Tratos, who also teaches cyber-law at UNLV's William S. Boyd School of Law. "This location-based information technology can help law enforcement with targeted wiretaps on criminals. But it's a mixed bag, because the technology could be used against the rest of the community."

That's the concern Cort Christie has with the technology. The chairman and chief executive of the Las Vegas-based National Audit Defense Network plans to put his staff of 300 employees on a wireless internal phone system in the next three months. The company helps people deal with the IRS.

"It bothers me tremendously that where you go and what you do can be tracked," Christie said. "One of the companies we work with -- our goal is to help them achieve financial privacy."

Christie also cited concerns about national databases that are being gathered that keep track of individuals' assets. That type of information could be damaging in a lawsuit, he said.

"That would give them some indication on how much to sue for," Christie said. "It's sort of insane about the amount of information you can get these days. Technology is getting way ahead of consumer protection laws."

CTIA general counsel Mike Altschul said the trade organization is pushing for an "opt-in" policy, where users who want the streaming ads could tap a button on their phone to accept the ads and e-mail alerts.

But analysts say wireless firms have a big challenge in convincing consumers that this technology should have a place in society.

"Right now, consumers can't see the benefit for having the service with all these privacy advocates talking about intrusion," said Eugene Signorini, an analyst for Boston-based Internet research firm the Yankee Group.

Wireless companies say there are benefits for the consumer.

"We see this technology more as an opportunity than a concern," said Bob Kelley, Las Vegas spokesman for Sprint PCS, referring to the opt-in opt-out policy. "It'll come down to if the customer wants to pay the regular rate for a monthly phone bill, or a lower one that is subsidized by advertising."

Kelley said it's premature to discuss how those rate plans would be structured, noting it will likely take 12 months for these plans to be formalized.

Streaming ads on cell phones won't be available until late 2002 or early 2003 when the cellular industry advances to third generation, or 3G, technology, which will bring high-speed Internet access and graphics to the wireless web.

"These technology advancements are generally a good thing," said Michael Jabara, chairman of Las Vegas-based Truckers Inc. and a mobile phone user who logs 2,500 cell minutes per month. "But technology is a double-edged sword. There is always potential for abuse."