Telcos prepare for pervasive marketing

When IBM coined the expression 'pervasive computing' to describe the ability to access your information no matter where you are, they should have called it pervasive marketing, the ability of companies to access you wherever you are.

When IBM coined the expression "pervasive computing" to describe the ability to access your information no matter where you are, they should have called it pervasive marketing, the ability of companies to access you wherever you are.

My last column (FBI phone tapping: Is it privacy or paranoia?) touched on some of the privacy issues surrounding location-based access due to the Federal Trade Commission's ruling, called e911, that requires all cellular devices to make known their position within 100 yards during a 911 call. This ruling goes into effect in the US in October.

Last week I wrote mainly about government snooping and the right to privacy. But the privacy issue has a commercial side as well.

The wireless network providers are investing hundreds of millions of dollars to comply with e911. Surely they will want to generate new revenue as a result of that investment.

The ROI will be generated either by providing location-based services to customers directly or by reselling the information to third-party service providers. If a wireless telecommunications company provides the service directly, it may safely skirt certain legal issues because it isn't reselling the information -- just marketing the services itself.

The trick is to make the services enticing enough that many people will willingly relinquish a piece of their privacy for a discount.

Here are some examples.

You as a consumer will be offered location-based billing -- perhaps a flat rate -- as long as you stay within your local calling area. If you go outside this area, you pay more.

In this case, of course, the network provider needs to know where you are whenever you place a call. Is it worth it? That's up to you.

The wireless network provider benefits by attracting new customers: the kids, or a househusband or housewife who never strays far. The same concept could work on college or corporate campuses.

In addition, location-based billing will give wireless providers the ability to compete against the landline providers. As long as you are in your home calling area, you might as well rip the jack out of the wall.

If you are willing to give advertisers your location and receive messages, you may get a certain number of minutes added to your voice time.

Vicinity is a Sunnyvale, California company that already has relationships with Wal-Mart, McDonald's, Nike, Levi Strauss, Starbucks, and Barnes & Noble, as well as Verizon, OmniSky, and AT&T. Expect to see location services from them as soon as the technology becomes available.

Location-based services can also help you find the nearest ATM from your bank so you're not charged that extra $US1.50. Bank of America, another Vicinity customer, currently gets 150,000 calls per month to its ATM-locator 800 number.

But what about those who don't want to be located anytime, anyplace. Will they be able to opt out of the location-based technology? It depends on whom you talk to.

(By the way, perhaps you will have to pay for that "service." Sound crazy? Answer this: Which costs more, to be listed in the phone book or to remain unlisted?)

Scott Petronis, at MapInfo, in Troy, New York, says turning off the location-based signal will be as easy as dialing *69.

David Hayden, CEO of MobileID, in Los Gatos, California, another wireless ASP (application service provider), does not agree. Hayden says wireless providers will not make it easy to turn off the location technology and will require a user to go through layers of embedded menus.

"Why would a company want to turn off the cash register?" Hayden asks.

Finally, sometimes it is easier to get the genie out of the bottle than to keep it in. Some of you may recall that Intel released a Pentium III chip about two years ago that made the serial number available to certain websites, ostensibly to be used for asset tracking or to validate that the processor belonged to a good guy.

There was a hue and cry about privacy rights, and Intel retrofitted those systems with an applet to turn off the ID unless the system was rebooted. But hackers quickly found a way to get the ID after it was supposed to be turned off.

"As soon as you tell people to keep out, you know there are those who will spend all of their efforts to get over that fence," says Nathan Brookwood, chief analyst at Insight 64, in Saratoga, California, and one of the leading chip analysts in the country.

The point is to beware of promises that you can opt out of, because they will serve only to challenge folks with this very mind-set.

Intel simply discontinued the technology in the Pentium 4.

For more information, check out the fledgling Wireless Location Industry Association. Approximately eight or nine companies in the wireless location industry are members.

What's the thinking at your company about privacy? Send an email to ephraim_schwartz@infoworld.com.

Ephraim Schwartz is an editor at large in InfoWorld's News Department.

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