FCC Forum Looks at Need for Legislation or Regulation as LBS Proliferates

"I think we all recognize the services that can be offered with location enhancements and the value that consumers find in these,” said FCC Chief Technologist Douglas Sicker. “I don’t think there’s any doubt about that. But clearly there’s a lot of concerns.” Sicker said the government could take steps short of regulation, establishing “norms” it expects industry to follow so that “best practices can be designed around them."

FCC Wireless Bureau Chief Rick Kaplan noted that more than 6,000 location-based apps have been designed for the iPhone alone and the FCC recognizes that they are becoming critical for many businesses in their pursuit of customers. “The benefits are readily apparent,” he said. “Today’s focus, however, is on how consumers can be empowered to unlock the potential of location-based services while ensuring that their private data is protected from unauthorized access or abuse."

A major topic during an industry panel was whether Congress or federal regulators need to step in to protect consumers. “We've long asked for consumer privacy legislation to give people … baseline rights over all their information,” said Justin Brookman, representing the Center for Democracy and Technology. “We'd like to see location part of the comprehensive approach to consumer privacy, recognizing that it is a sensitive category of information.” Most mobile platforms do a good job of letting users decline to provide location information, he said.

The big concern is what applications like Yelp do with the data collected, Brookman said. Yelp uses the location information to find a nearby bar or restaurant, complete with user reviews. “I understand I'm giving it to Yelp for that reason,” he said. “But do they transfer it to a third party? Do they sell it to data brokers? That’s the part that’s utterly not transparent."

Hewlett Packard supports federal legislation that would create a national privacy standard, said Scott Taylor, chief privacy officer. “I believe that with baseline legislation, workable legislation, it creates an expectation and a standard that all organizations would follow,” Taylor said. The FTC has already helped though its series of workshops on LBS issues, he said. “Industry needs to come together on this issue.”

But Ted Morgan, CEO of Skyhook Wireless, which develops tracking technology, said the government doesn’t need to step in. “In this area, the best help right now is these kinds of forums to kind of air what’s been happening,” he said. “We've tried to be very, very careful about consumer privacy because we don’t want it to blow up in our face and we don’t want to ruin the growth in the industry.” Morgan argued that with LBS applications still evolving, it’s too early to even start to draft a bill. “I think at this stage for the government to lay something out would probably miss the mark,” he said. “It’s such an early market.”

The government can help by providing information to the small, often two-person shops, that develop many apps, Morgan said. “They're really not thinking about the broader implications,” he said. “They do need guidelines about this. They do need suggestions about the best way to retain their data.”

Wireless carriers have long agreed to LBS best practices, said Maureen Cooney, Sprint Nextel deputy chief privacy officer. “We need government to help us promote those really good best practices across the ecosystem, particularly now to application developers,” Cooney said. “That would be a tremendous help to carriers who cannot keep the consumer trust on their own.” Cooney agreed “it’s premature to say that best practices don’t work.”

Lorrie Cranor, associate professor at Carnegie Mellon University, said many developers don’t give that much consideration to privacy when apps are being designed. “We should be considering every piece of data that we're collecting and say, ‘Do we really need to keep it? How do we need to keep it? What are we doing with it,'” Cranor said. Most developers are “just trying to come up with the most expedient way to get their little app out. They're not thinking about this,” she said. “They gobble up all the data that they can possibly get because they might need it. It might make their app better. Who knows?"

"It’s an exciting time right now for location based services,” said Alan Davidson, director of public policy-Americas at Google. “We've been talking about them for years. … We've really reached a place where people are getting a lot of value and utility from these services.”

The FCC also heard from FourSquare and Facebook, two of the leading applications that make use of location data. Both said LBS is critical to social media. Facebook launched Places a year ago, which allows users to “check in” wherever they are, and share their current location with friends. “The insight that Facebook had is that life is better with your friends,” said Tim Sparapani, director of public policy. “Being able to take them wherever you go is part of making that life better.”