This Man Knows Where You Live And Work And Play

From his own tiny corner of the universe — 164th Ave., Redmond, Wa., (lat/long 47, N, 40, 122, W, 07) United States, North America, Northern Hemisphere, Planet Earth, Milky Way Galaxy, Local Group, Virgo Supercluster, Universe 1 — Andre Dahan will find you. Wherever you are, wherever you're going. Once, when a co-worker wasn't returning his calls, Dahan admits he angrily pulled out his mobile phone and pinpointed his associate's whereabouts.

Locating people using mobile technology is what Dahan does, mind you. In June 2001, he was appointed president of AT&T Wireless' Mobile Multimedia Services. A year later, the carrier began offering Find Friends, the country's first look at commercial location-based services — and the wireless industry's first tentative step into reconciling its need for revenue-generating location services with consumers' fierce desire to retain their privacy.

Find Friends focuses on bringing people together — parents and their teenagers, bosses and their employees and, of course, any other AT&T Wireless customers who want to remain in touch. It's a simpler take on commercial location services, which have long been characterized thusly: A coffee drinker and frequent cell phone user passes by a Starbucks, and receives a mobile text message from the omnipresent café chain redeemable for a discount on a latte. (The example in question has been used so often, in fact, that many joke it's become a prerequisite to include the name “Starbucks” when describing location services.)

Ever since the FCC first mandated in 1996 that all wireless carriers must accurately locate 911 callers, market studies have pointed to millions in revenues that can be made from allowing users to locate people, places and maybe even lost pets with the stroke of a mobile phone key — millions that could go far in helping carriers recoup their mandated investments in E-911 technology.

All operators must have E-911 capability by 2006. In the meantime, they are still pondering their place in this market. Are they treading into dangerous territory when it comes to privacy issues? And can they really generate enough market demand to justify investing even more into commercial applications?

Offering customers a choice of whether they want to participate is a fundamental requirement under privacy laws governing the telecommunications industry, of course. So is giving people notice about what their location information will be used for. But carriers are finding the privacy issue will become a key market differentiator in offering commercial location services.

For many, the practice of tracking someone's whereabouts via technology conjures visions of a dystopian society without secrets, like the one in George Orwell's classic novel “1984.” What if a stalker obtained your location? How about muggers waiting for you down the street? Or an ex-lover tracking your every move?

A recent study conducted by The Yankee Group found that many wireless users are concerned about the idea of a wireless phone provider having detailed information about their whereabouts. Twenty percent said they were greatly worried, while 32% said they were “somewhat” worried (see figure).

Location-based service providers must overcome the thorny issue of privacy
Percentage of users who are still concerned with the idea of a wireless service provider having their detailed information
20%	32%	25%	11%	5%	7%
Greatly worried	Somewhat worried	Neutral	Not really worried	Not worried at all	No answer

Source: The Yankee Group

“Customers are concerned,” said Wally Hyer, AT&T Wireless' chief privacy officer. “They don't want surprises, and they don't want to feel there is a Big Brother operation gathering information about them and being shared without their knowledge.”

Creating a “friends list” is a basic privacy tenet of the Find Friends service. A user can add a friend's phone number to his list, which in turn sends a text message to the friend asking for permission to add them to the list. The friend can either grant or deny access, with the option to deny all future requests or to have access reciprocated.

From there, the two friends can obtain information about each other's location. One of the friends can call, send a text message or select a place to meet by using a meeting menu that will set up a time of day and location, RSVP the request and even offer driving directions to the location. Users can also opt out of the service at any time, or later choose to make themselves invisible to everyone whom they have granted access in the past.

Efforts like Find Friends now define AT&T Wireless. In recent months, it's become increasingly evident that the carrier is no longer part of the stodgy Bell-head mentality that often made it a market follower in the past. For example, AT&T Wireless was the first to offer inter-carrier short message services, causing an explosion of SMS use across the country once other carriers followed suit. It introduced the first U.S. consumer platform: mMode, an ecosystem of content providers, billing infrastructure and content delivery mechanisms that makes it easier and quicker to do business with third parties to offer services on its GPRS/GSM network. And soon, it will likely introduce the country's first taste of mobile media messaging, allowing subscribers to send picture text messages.

“It's healthy trial and error,” Dahan said of AT&T's new services. “You hope you get a degree of adoption. If not, you take it out.”

This new attitude — not at all characteristic of the overriding operator mentality in the U.S. — comes from a plethora of sources, perhaps most notably the influence of 16% stakeholder Japanese carrier NTT DoCoMo, considered the world's most successful wireless data operator because it has taken the most market risks.

When AT&T Wireless Chairman and CEO John Zeglis went looking for someone with a mentality outside the traditional wireless business to run the Mobile Multimedia Services division, he wanted a leader who could not only bring together complex technology, but deliver new and innovative offerings quickly and aggressively in the infant wireless data market. He looked to the computing industry, in large part because the new data applications the wireless industry has talked about for so long are coming from computers.

Dahan was coming off a 25-year career that he began as a database architect with the Israeli government and ended as an executive with IT solutions provider Dun & Bradstreet. Yet after a little more than a year in the wireless industry, he already seems like a veteran, rattling off technology terms and weighing the strengths and weaknesses of his competitors.

“I was fortunate to be in an industry that understands risks relative to opportunities,” he said. “Voice has been the killer application, and the Internet has taken consumers by storm in the U.S. Data will be the next inflection point on wireless platforms and devices.”

Very few long-time AT&T Wireless veterans still work in the Mobile Multimedia Services division — when Dahan came on board last June, he quickly cleaned house, assembling a new team focused on marketing and wireless offer management. Dahan's crew now has the agility and speed to introduce new data applications into the market, often causing competitors to scramble.

“I have the best job in the industry, and I'm not saying that jokingly,” said Dahan. “There's been a significant effort on our part to make the investment and dedicate an organization to wireless data. We have the strongest team of people in the wireless data industry.”

When AT&T Wireless spun off a year ago from parent AT&T, it immediately set out to establish its own privacy initiative, creating Wally Hyer's chief privacy officer position as a way to garner consumer confidence, keep up with changes in federal and state privacy laws, conduct privacy assessments and make sure every new application meets the privacy policies the company has spelled out to customers on its Web site.

“Carriers are going to tread carefully because they don't want to alienate, or even make current customers less loyal,” said Linda Barrabee, senior analyst with The Yankee Group.

That's why the Cellular Telecommunication & Internet Association was so disappointed last month when the FCC turned down its request to adopt new wireless location information privacy rules that would govern the notice, consent, security and integrity of consumer data. “As these data services roll out, if there isn't consistency in terms of letting customers know what's being collected and how it's used, there is a trust factor,” said a CTIA spokeswoman.

Within CTIA, carriers have established four basic voluntary guidelines for consumer protection — reasonable notification requirements, opt-in guidelines, data integrity and uniform rules, and privacy expectations — so that consumers are not confused as they roam or use different location technologies. But the processes by which these guidelines are met are unclear.

Some operators are going a step further. AT&T Wireless, Verizon Wireless, and various Internet service providers and manufacturers are working to develop consistent user privacy standards. The goal is to come out with a set of standards by the end of the year.

AT&T Wireless is also working with TRUSTe, an independent, nonprofit organization that studies the privacy policies of organizations and then gives it a seal of approval. Studies have shown such third-party verification give consumers a greater sense of comfort, Hyer said.

But operators must also worry about how their technology partners will treat personal information. The laws that govern the telecommunications industry don't govern the companies providing applications like mapping or directory services.

“We could have used help from the FCC to handle the lack of regulatory parity,” said Joe Assenzo, general attorney with Sprint PCS. “Once information leaves the carrier's network, it's instantaneously deregulated.”

That means each carrier will have to do their own due diligence into the information practices of every third-party application provider they acquire services from, giving the industry even more inconsistencies in privacy policies. In turn, the Wireless Location Industry Association, whose members provide hardware, software and other products related to location services, has taken it upon itself to establish a set of privacy guidelines for its members to follow.

“The [Federal Trade Commission] has indicated in the past that the self-regulatory approach is the best option, as opposed to a detailed, government-prescribed set of rules,” said John Jimison, executive director and general counsel with WILA. “Our members universally understand that if you alienate a customer by abusing his privacy, you've lost the customer.”

With privacy issues proving to be a gut-wrenching experience for most carriers, finding a business case brings on another upset stomach. Most U.S. wireless service providers believe in the compelling nature of commercial location services, but such applications have yet to prove their financial viability.

“The big key is to make sure we can be profitable,” said Lee Daniels, director of cross-platform services for wireless data and Internet services with Verizon Wireless. “We don't want to put more costs than we have in E-911. There is additional cost. As you get more accurate, the costs go up, and are customers willing to pay for that level of detail? We think there is a future for location. It's just a matter of where and when.”

There is hope: A recent survey from Driscoll-Wolfe Marketing & Research showed that 53% of respondents who use their phones at least once a week would pay $10 or more for location capability on their handsets (see figure).

How much are potential users willing to pay for location services?
53%	61%	62%
of people who use their mobile phones at least once a week would pay $10 or more for location capability	of frequent cellular users (41+ calls per week) would pay $10 or more for location capability	of PDA users would pay $10 or more for location capability

Source: Driscoll-Wolfe Marketing & Research

“Clearly there is a considerable amount of interest among consumers, and they are willing to pay,” said Clem Driscoll, senior partner with Driscoll-Wolfe.

Still, Dahan doesn't envision location services as a big revenue driver, but more an opportunity to create a loyal customer. AT&T Wireless subscribers can access location services for free, only paying for the amount of information they download.

“This is not a significant revenue generator,” Dahan said. “It's a fundamental enabler that provides significant value to customers in terms of connection between them and AT&T Wireless.”

To return to the standard example, “Starbucks can just put an advertisement in the window,” said Mark Strassman, vice president of product marketing with Kivera, a location engine provider that translates latitudinal and longitudinal information into addresses for AT&T Wireless' Find Friends service. “It's more about the traditional things.”

And if carriers have learned anything about location services before they've put any in the market, it is K.I.S.S. — keep it simple, stupid. Unlike the promises of still undefined 3G services, location services are here today. Strassman expects to see a wide expansion of location capability added to services customers already understand. For instance, if wireless customers call 411, they could receive not only the phone number of a particular business, but driving directions as well.

Larry Delaney, general manager of MapInfo, another location engine provider, believes that concierge services like MapInfo's miGuide are table stakes in the location services business. The company has developed a suite of applications for travel directions, fleet tracking, workflow and find-me, concierge-type applications. And with these services out in the market, the public will take notice, and the demand will spark more innovation.

Jason Angelides, marketing director with location services provider TruePosition, believes asset tracking, fleet tracking and personal locator services will be the killer applications of the future. But today?

“There is no killer app in commercial services,” Angelides said. “Until there is a proven business case for any given service, your guess is as good as mine.”

It's too early to gauge how well AT&T Wireless' Find Friends will be perceived in the market. But Dahan's way of doing things may help other operators divine the fabled killer app that much quicker.

“We're in an industry that copies what you do,” Dahan said. “But that's okay. There's a lot to be gained by establishing a business model.”

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With additional reporting by Tim McElligott in Chicago.