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Cell phone industry wants your number

After last year's campaigns against spammers and telemarketers, lawmakers on Capitol Hill are poised to tackle the next privacy frontier: the nation's 150-million wireless phones.

As a group of carriers quietly works to create the first wireless white pages, legislation is in the works to protect consumers concerned about the privacy issues of those numbers going public. Privacy advocates say the proposed protections are not strong enough.

The Wireless 411 Consumer Privacy Act was introduced in the House and the Senate before the holiday recess. The bill would require existing customers who want to be listed in a national database of numbers to "opt in," or specifically say they want to be listed, while new wireless subscribers would have to "opt out," that is, choose not to be listed.

The proposed legislation also insists that consumers not be charged a fee for keeping their numbers private, a practice that generates $50-million in revenue for land-line companies each year.

"It is important for Congress to clearly articulate a pro-consumer privacy policy for wireless 411 information before the industry implements a 411 database," said Rep. Edward Markey, D-Mass., the ranking member of the House Subcommittee on Telecommunications and the Internet. "Otherwise, wireless consumers may be on the receiving end of an industry-designed service that results in privacy invasions, an increase in unwanted calls or new charges simply to retain the current level of privacy." Markey introduced the bill with Rep. Joe Pitts, R-Pa..

Industry insiders say that for years the wireless carriers did not think a directory would be useful or desirable. Since last year, though, with a decline in demand for traditional directory services, carriers have been discussing the idea of such a service.

The complexities are formidable, but the payoff could be great: Analysts say the mobile directory assistance business could yield $3-billion in revenue a year.

The creation of a master database of mobile phone numbers requires competing carriers to work together. An alliance of those carriers, working under the trade group Cellular Telecommunications Internet Association, has been meeting to determine the particulars of such a service.

A handful of independent businesses, such as Flatwire Inc. of Carrabassett, Maine, have been working to develop a directory assistance service for the mobile industry, too. Jeffrey Strunk, a former game developer who started the business in 1998, said there was "a huge opportunity for high volume" as long as privacy issues were addressed.

Travis Larson, a spokesman for the trade group, said he expected a directory _ it would not be printed, but available only to those who called for the service _ to be ready some time this year. "Each carrier will go forward on its own schedule," he said. "There's no official industrywide date or time. Consumers might discover this organically, if you will."

Ultimately, Larson said, the carriers will set their own prices and privacy policies for the services. He said that he saw no need for congressional regulation of the planned directory and that consumers were already protected by laws that ban telemarketing calls to wireless phones.

In addition, Larson said, wireless subscribers are eligible to protect their phone numbers further by listing them on the Federal Trade Commission's do-not-call registry.

"We don't see why the competitive wireless market needs to be regulated," Larson said. "It's as if computers existed unregulated for 20 years and someone invented laptops, and someone else said, "Stop! We have to hold hearings.' "

But some industry analysts say that if Congress had not started looking into privacy issues involving wireless, the carriers might have quietly started publishing wireless numbers.

"Almost everyone has signed a contract," said Kathleen Pierz, an analyst who has published a treatise on wireless privacy. "Right in the tiny print you give permission to include yourself in a database. People are so totally unaware of that. If you just simply put people in a wireless directory, you will not only have a mass revolt, you will have the federal government, the FCC, breathing down your neck, and for good reason."

But Pierz says that what the government has proposed may weaken the value of a wireless directory, because the bill's requirement for existing customers to opt in if they want to be listed could make the task of amassing a majority of numbers difficult.

"If you don't have 50 percent of all numbers in the database, it's not efficient," Pierz said, because callers to the service may become frustrated by inquiries that do not generate the information they are seeking. "I argue that opt-out is best _ opt-out with privacy protection. That's the key."

In a survey conducted last year by the Zelos Group, a research company in San Francisco, just 2 percent of consumers said they would agree to list their wireless numbers if there were no privacy protections. That jumped to 51 percent if privacy protections were guaranteed.

Privacy advocates also take issue with the government's plans, although for different reasons. The very existence of a wireless directory is going to shatter the existing "sanctuary" of the cell phone, said Chris Hoofnagle of the Electronic Privacy Information Center. He said of the proposed rules: "We would want it to be stronger, would want it to be opt-in across the board. Opt-out is generally not effective. It's only effective when there's widespread public knowledge of the facility to opt-out, as in the do-not-call registry."

All sides of the debate agree that as the migration to the wireless phone becomes more pronounced _ some 7.5-million people already rely solely on a wireless number, according to the cell phone trade group _ the need for a directory also will grow.

There are millions of numbers no one knows how to get access to, said Michael Dorian, director of wireless industry relations for NeuStar, the Sterling, Va., company that administers wireless numbers. "It's a really big thing to figure out. Obviously it's a big market opportunity. It's important to make wireless work."