Location Commerce & Privacy

L-commerce must give users the ability to control who knows their locations and how it's used.

As the wireless industry celebrates 100 million subscribers in the United States, the wireless landscape is undergoing considerable change. New services rapidly are emerging as innovative technologies, and upstart players are becoming part of the wireless supply chain. Within the broad category of mobile shopping, location commerce (l-commerce) clearly has appeared as both an opportunity and a challenge for providers.

Spurred by next year's Phase II of E-911, the growth of automobile telematics and the onslaught of location-aware WAP services, l-commerce is now a battle cry of providers in bringing new value to their subscribers.

The Location Paradox The inherent freedom afforded by numerous wireless services has been both a blessing and bane for the industry. The users' desire for focused information across markets is great, as demonstrated by the increasing popularity of directory assistance, weather, traffic and other voice-based proximity services. Although extensive coverage is expected, localized information also is craved. Users don't want their wireless phones to cast a wide net, but rather a laser that can pinpoint and deliver personalized content. The popularity of personalized Web offerings such as myaol.com and myyahoo.com indicate the demand for individual content. The next logical filter for this content is the context, or location, of the user.

However, in a country where privacy is so highly valued, it becomes difficult to be both anonymous and get personalized services. It's clear that the origin of the wireless call or transaction is fast-becoming an asset that providers want. Call origin or location offers a value to providers in determining subscriber use patterns, desires and other unique information.

Location can be a significant market-segmentation tool. It offers an ever-changing, almost voyeuristic view of the subscriber's lifestyle that is unobtainable through a static selection of personal preferences.

Location offers providers the potential to individualize a host of services for the end user. As these services proliferate, there is a fierce battle under way over who owns the location of the subscriber. Both the value and the sensitivity of the information cannot be overstated, and the battle line has been drawn between provider and subscriber ownership. For example, the E-911 bill in 1999 addressed the appropriate disclosure of location to other parties in the event of an emergency. CALEA includes specific references to location information and its release to law-enforcement officials. There also is considerable history in the appropriate management of customer-proprietary-network information by the service provider.

Many providers believe information on their subscribers' whereabouts is up for sale. With wireless penetration gaining, and our work and leisure becoming more mobile than ever, call-origination information can drive a variety of goals regarding service differentiation, personalization, and even churn reduction. Often, these attributes are called stickiness.

Another trend further complicating this ownership question is the introduction of complementary, and sometimes rival, brand affinities. Metro One Telecommunications and INFO-NXX are major directory-assistance providers, yet they are relatively unknown to the end user. The onset of Web browsers has driven branding beyond the service provider. This further complicates the ownership and control of location information as the wireless supply chain extends into other recognizable brands.

In searching for approaches to address location privacy, there are two appropriate analogies that can be drawn from the telephony and Internet worlds. Caller-ID services, offered by landline and wireless providers, and the cookies featured in Web browsers can offer some insight to how sensitive location information can be managed and controlled.

Because caller-ID functionality is turned on by default, and phone-number information is transported along with the call, a wide variety of user-controlled services can block calls from certain numbers totally or selectively. Most if not all of these services are available from a landline or mobile handset, and users may elect various levels of privacy on a service basis for all calls or on a per-call basis. The popularity of this service can be at least partially attributed to the extent of users' control or ownership of their phone numbers.

Cookies are used by Web services to identify individual client browsers uniquely. With this information, the Web site can track client-usage patterns; this data then is used for content personalization, customized storefronts and streamlining authentication processes. Similar to caller ID, the feature is enabled, and the Web server tags the client browser with unique information that can be leveraged on future visits. The similarities continue as cookies can be both enabled or disabled selectively by the end user.

Privacy-Friendly Solutions In an effort to balance the desires of wireless consumers and providers, there are several common recommended implementation baselines for l-commerce services.

The end user must have the ability to control the use of his location information selectively, regardless of technology employed. A solution where the location is determined and controlled within the device would provide subscribers the peace of mind and privacy they demand.

The end user must have the ability to opt-in for releasing location information on a broad basis or for a specific transaction. The flexibility of allowing location to be sent for certain emergency applications, while withholding it for convenience services or location-sensitive advertising, is a feature for which users may be willing to pay a premium.

L-commerce offers providers an opportunity to present a new generation of proximity-based services to the mobile subscriber. Balancing the public's desire for privacy with the value it will obtain for selectively allowing its location to be used will be tested extensively as these new services are deployed over the next year.

Given the revenue potential and growing interest in using subscriber location for service segmentation and revenue enhancement, this ownership issue has been a recent subject of debates, forums and articles as it quickly spills over into privacy dilemmas. Some recent examples of interest in location and privacy:

- In a recent report on location-based services by Driscoll-Wolfe Marketing and Research, privacy emerged as a major issue for focus groups and in a nationwide survey.

"They don't want Big Brother," according to Clem Driscoll, Driscoll-Wolfe partner. "But people tend to understand that you give up a little privacy to get these benefits."

- A recent Forrester Research survey showed that two-thirds of the respondents are concerned about Internet privacy.

- "Location tracking is one of the most fundamental privacy issues you can have," said Al Gidari, attorney and privacy expert from the Seattle area, who spoke at the first Location Commerce summit in May.

- Even John Zeglis, AT&T Wireless president, put privacy at center stage in his comments during Supercomm 2000.