Concerns mount over wireless location technology

Worries over privacy in wireless location-based services dominated the start of the Mobile Commerce Conference in San Jose, Calif., although vendors and carriers say they are prepared to protect user privacy.

“I just think the vendors and carriers are being naive [about wireless privacy concerns from consumers] and haven’t done the proper market research to detect that concern,” said Richard R. Jaffe, CEO of Stork Ventures Inc., a market research company in Addison, Tex. “Privacy over wireless will be a very, very major issue.”

The two-day conference has attracted 500 people from wireless applications companies as well as representatives of companies that want to make their Web sites interact with wireless devices, basing the contact on where a person is located.

In some wireless Web models, users will say they are in the vicinity of a certain ZIP code or city to receive weather, restaurant, travel and other information specific to that location.

In other models, the information can be sent automatically using several location-detection technologies that are beginning to roll out. The U.S. Federal Communications Commission has mandated that by this fall, cell phones must be enabled to allow fire and rescue crews to find cell-phone users who dial 911 within 50 to 100 meters, depending on the technology being used. The technologies include Global Positioning System (GPS) phones and network solutions that use two cellular towers to describe the interconnection of signals with a user. Another method relies on the time delay of the last transmission.

Jaffe spoke from the audience to several panel members who are vendors, and asked how they can expect people to agree to have their cellular phone location used to receive wireless information and advertising when so few wired Internet users have been willing to give credit-card information in online transactions.

The general response from the vendors was that privacy would be a concern. But they added that users must be assured that they have several ways to request receipt of location-based information (known as opt-in), as well as have opportunities to opt-out.

Mark Flolid, executive vice president at SignalSoft Inc. in Boulder, Colo., said his company has sold location gateway equipment that’s used by dozens of carriers to allow location information on 53 million worldwide users. He said there has been no user backlash over privacy.

The reason is that the carriers are protecting the location information and not forwarding it to wireless advertisers or service providers. They also don’t intend to send the information unless users authorize it, Flolid said. “Privacy is important to us and everybody,” he said. “It adds value to location technology.”

One vendor, Gravitate Inc. in South San Francisco, has been developing a technology platform for large companies and carriers that relies on a “user location privacy filter.” This software would tell each carrier which users want ads or location services and which do not.

Users would set profiles describing which products or services they are interested in. Or they could request the information only when traveling to a certain location or at a certain time, said Geoff Hendrey, chief technology officer at Gravitate.

Ed Ho, CTO at in San Mateo, Calif., said that wireless users in a recent wireless advertising trial in Boulder, Colo., showed a willingness to receive advertising – if it was based on their needs and interests.

“Yes, I’d see something as spam if I’m in my 20s and keep getting ads for people in their 50s,” Ho said.

Several analysts at the conference said that younger users have shown a willingness to receive location ads and services, while worries about privacy tend to come from members of the baby boom generation.

Yahoo Inc. is already offering wireless purchasing of books and CDs at and is taking a hard line on privacy issues with location services. Sridhar Ranganathan, general manager of Yahoo Everywhere, a division of Yahoo, advised other companies to give users frequent opportunities to decide whether they want information or not.

“People do not like being watched over, and they’re afraid of spam,” Ranganathan said in a keynote address. “Let’s make sure we present what the user wants.”