WASHINGTON-The Federal Trade Commission, appearing to be staking out regulatory jurisdiction over the nascent mobile Internet industry, said it will examine a wide range of wireless consumer protection issues next month at a two-day workshop here.
“Mobile wireless Internet and data technologies raise many of the privacy and advertising issues previously considered by the commission. Accordingly, the goal of the workshop is to educate government officials and other interested parties about emerging wireless technologies, and to provide a forum for discussion of the privacy, security and consumer-protection issues raised by these new technologies,” the FTC said.
In that regard, the Cellular Telecommunications and Internet Association on Tuesday is expected to ask the Federal Communications Commission to write rules for location-based mobile commerce that would require prior consent by subscribers.
The arrival of m-commerce and the convergence of wireless and Internet technologies generally raise questions about how the FCC and FTC will deal with regulatory oversight of the wireless industry going forward.
While billed as a workshop, the Dec. 11-12 FTC meeting could be the beginning of something big-but not necessarily welcomed by the wireless industry.
The FTC took an early interest in online privacy, security and marketing issues, culminating in a determination by Chairman Robert Pitofsky this year that Internet self-regulation has failed.
As a result, industry coalitions have formed to limit privacy legislation promised by Republicans and Democrats next year in Congress.
“It appears to be the first indication of increased attention in wireless issues at the FTC, and may set the stage for activities at the FTC, FCC and on Capitol Hill in the next Congress,” said Daniel Phythyon, an attorney who used to be the top wireless regulator at the Federal Communications Commission.
In recent weeks, FTC staff has been meeting industry officials and consumer groups to gather information for the two-day workshop.
Even before Web phones and the FTC arrived on the scene, there have been signs of a growing consumer backlash in the United States.
Bills were introduced in Congress this year to outlaw unsolicited mobile-phone spam and to improve the quality of mobile-phone service. State attorneys general around the country are hearing from angry consumers on a variety of issues, such as dropped calls, poor customer service, billing complaints and contract disputes. Some of these issues have surfaced in state litigation.
The FCC in August ruled the Communications Act allows monetary damages to be awarded by state courts for violations of state laws prohibiting unfair and deceptive practices by wireless carriers.
The FCC also is pressing the cellular industry to ensure that consumers who make emergency 911 calls from their mobile phones are connected and located in the future. In addition, the FCC is considering whether to re-open a regulatory proceeding to foster the development of hearing-aid compatible mobile phones.
“It’s important to listen and identify areas where guidelines would be useful to the industry,” said Rob Hoggarth, senior vice president for government relations at the Personal Communications Industry Association.
“The last thing in the world we think is necessary are new regulations.”
Questions to be raised at the workshop about mobile technology and business models include the following: Where are wireless Internet and data today and where are they going? What devices are currently available for wireless Web access and data services? What sorts of devices and services are anticipated? How will mobile commerce develop? How do wireless Internet and data services function? What types of relationships will consumers have with wireless equipment makers, carriers, data service providers and others involved in the provision of these services? Will consumers’ wireless data services be supported by advertising, or will consumers pay for subscriptions (like cable television) or pay fees per service accessed?
Regarding privacy and security, questions to be asked will include: What privacy and security issues do wireless devices raise? How will location information be used and what are the privacy and security implications of the availability of location information? Is transmission of personal information secure in the wireless medium? As wireless devices converge so that cell phones, personal digital assistants and electronic wallets may become a single device, how are the risks of identity theft increased and what security measures are possible?
The FTC said the workshop also will address existing regulatory structures and existing or emerging self-regulatory initiatives, as well as technological methods of addressing privacy and security concerns.
On the subject of disclosure, the FTC wants answers to the following questions: How can companies make effective disclosures on small screens (both advertising and privacy disclosures)? Particularly as devices move to a combination of voice and text communications, how do traditional concepts like `clear and conspicuous’ and `equal prominence’ apply? Are there other aspects of this unique medium that will require modification of traditional consumer protection approaches?
The impact of the mobile Internet workshop was questioned last week at a wireless security conference in nearby Alexandria, Va.
“To me it is just one more example where a workshop will be held, more people will discuss it. But the real question is what we do to move toward a more constructive solution?” said John Sabo, director of security, privacy and trust initiative at Computer Associates International. Sabo is acting chairman of the policy and privacy working group of the PKI Forum.
Sabo made his comments to an audience of wireless security technical and marketing experts attending a two-day wireless security conference here last week.
Washington reporter Heather Forsgren Weaver contributed to this report.
