Privacy or profit: Which do you think will win? Telcos prepare for pervasive marketing

InfoWorld |  Business

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.

Last week's column 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 October. (See "FBI phone tapping and locating cell phones making 911 calls: Is it privacy or paranoia?" Jan. 15.)

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, Calif., 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.

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