|BUSINESSWEEK ONLINE : SEPTEMBER 25, 2000 ISSUE|
Big Brother Calling
Location technology in devices such as cell phones will make you easy to find
Imagine that you carried a miniature homing device in your wallet. As you dropped the kids off at school, drove to work, met with a friend for lunch, then visited the doctor's office, it would send out a signal identifying your exact location.
This transmitter would enable anybody to track you down at any time--or to figure out where you had been at a particular point in the past. It would also give marketing companies the ability to build a detailed profile of your travel patterns. That valuable data could then be sold to local restaurants, dry cleaners, clothing stores, collection agencies, or anybody else who wanted it.
Guess what? You may very well be carrying such a device--or its functional equivalent--one day soon. Thanks to the government's decision to open up the Global Positioning System (GPS) to the general public, as well as lightning-fast advances in wireless technology, it is now cheaper and easier than ever to figure out where somebody is. As a result, sophisticated location-tracking technology is rapidly finding its way into cell phones, personal digital assistants, cars, trucks, and boats. One Long Island (N.Y.) company, Digital Angel, even wants to put it into a tiny chip that can be implanted into people's bodies.
Already, many trucking companies use GPS to keep track of their fleets, estimate delivery times, locate stolen vehicles, and ensure drivers don't violate federal regulations governing how many hours they can be out on the road each day. One insurer, Progressive Corp. ( PGR), is running a pilot program in Texas in which customers are eligible for lower car insurance rates if they agree to have a GPS device in their car and let the company monitor their driving habits. In Britain, BT Cellnet's FINDme service can identify users within 300 feet and send information about banks, restaurants, and movie-theater listings. And, in a little-noticed regulation, the Federal Communications Commission is requiring cell-phone companies to be able to identify the exact location of most callers by 2002 so that 911 calls can be tracked down.
Will Big Brother one day monitor your every move? We are a long way from that point. But for the first time, it is starting to become technologically and economically feasible to track people down at all hours. That terrifies privacy advocates, who worry that sensitive location data could be abused by employers, insurers, creditors, even stalkers. It also troubles civil libertarians, who worry that another critical wall is falling between the individual and the probing eyes of the outside world. ''Part of human dignity is the ability to hide,'' says Harvard Law School constitutional expert Lawrence H. Tribe.
As a result, a new front is opening up in the privacy wars. Instead of focusing on protecting people's anonymity in cyberspace, though, this time the conflict will center around guarding people's privacy in real physical space. ''This technology is going to happen, and we've got to find ways to put people in control of how information about them is collected and used,'' says David L. Sobel, general counsel of the Electronic Privacy Information Center in Washington.
Of course, there's no question that location technology is going to be useful (table). Hit a few buttons on your cell phone, and it will be able to give you the local weather forecast, directions to the nearest Indian restaurant, and public-transit advice in unfamiliar cities. Assisted by GPS technology, your car's onboard computer will be able to warn you about traffic jams and send out an emergency beacon if you're in an accident that causes the airbags to deploy. These types of features are so valuable, many executives believe, that most consumers will be willing to sacrifice some privacy to get them. Location technology ''will be too convenient to stop using,'' says Dr. Ronjon Nag, CEO of Cellmania, a Mountain View (Calif.) company that builds wireless Web sites.
GAPING LOOPHOLES. What's more, it wouldn't be all that hard, in theory, to develop guidelines that would protect people's location privacy. Indeed, the Wireless Communications & Public Safety Act of 1999 already restricts the ability of telecommunications companies to use information about customers' whereabouts without their consent. Meanwhile, Progressive Corp. and General Motors Corp. ( GM), which provides some location services through its OnStar unit, both have privacy policies that prohibit them from sharing customer-tracking data with other companies. ''The whole purpose of our service is to be of value to consumers. We are certainly not going to do anything they don't want,'' says OnStar spokesman Todd Carstensen.
But privacy advocates warn that the 1999 law is full of gaping loopholes. And so, they claim, are most corporate privacy policies. Meanwhile, they fret that the rush to capitalize on tracking technology is only now gaining speed. According to Washington research firm Strategis Group, the overall market for providing location data and services will reach $4.9 billion by 2004.
In the telecommunications industry, for example, cell-phone companies such as AT&T Wireless and Sprint PCS are hoping to capture two potentially huge revenue streams. First, they'd like to charge customers who request location services, say $1 per call. Over time, however, the bigger prize may be in linking cell-phone users to the world of mobile commerce. Every time a cell-phone company steers a moviegoer to a particular theater, for instance, it could extract a small bounty.
As for the auto industry, OnStar's Carstensen believes that onboard computers equipped with GPS devices will soon be as common in cars ''as air conditioners.'' The GM subsidiary, which offers customers a variety of location services for a fee ranging from $16.95 to $34.95 per month, already has 375,000 subscribers. Now other auto makers, including Ford Motor ( F) and Honda Motor Co. ( HMC), are rolling out similar services. Over the long run, all of the manufacturers hope to transform GPS technology into a feature that will command a fat premium from drivers--and possibly be a source of lucrative subscription revenues.
SALIVATING. It is the advertising industry, though, that is really salivating over the potential for consumer-location data. Knowing where a potential customer is can be phenomenally valuable information. Consider a suburban mother pulling her sport-utility vehicle into the local mall. As she parks, her dashboard or cell phone could offer her coupons for kids' clothing. Already, prototype versions of this type of service are starting to appear. New York-based Vindigo Inc., which makes a mobile city guide for Palm Pilots, has a sponsorship deal with Finlandia Vodka. When Manhattanites use Vindigo to search for a nearby bar, a small ad for Finlandia may flash on their screen. The ad could include a drink recipe that the bar patron can show to a bartender. ''This is the holy grail of marketing,'' says Vindigo's Jason Devitt. ''Every time you use the service, you're in the street, looking for advice on how to spend your money.''
Well aware that privacy concerns could be a land mine, many of the companies aiming to capitalize on location services are trying to develop safeguards to protect their customers. ''The industry will bend over backwards to ensure [that] information will only be released if you want it to be,'' says Cellmania's Nag.
But that doesn't satisfy Harvard's Tribe. History shows, he says, that it has always been hard to protect people's privacy from intrusive new technologies. Why? ''It is so hard to detect abuse of the technology, because it is so hard to police, and because the injury is so ineffable.'' As a result, Tribe says, companies and government are inevitably tempted to press the boundaries of the rules.
In all likelihood, that pattern will continue in the future. The real question is whether a system can be developed that allows people to benefit from the technology while protecting them from constant surveillance by Big Brother.
By Mike France and Dennis K. Berman in New York
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