WASHINGTON-Federal regulators, lawmakers and consumer groups are ratcheting up pressure for stronger privacy protections for consumers in the Digital Age, a development with major implications for the wireless Internet sector.
On several fronts, digital privacy is showing signs of mushrooming into a major consumer issue that Congress and federal agencies may be forced to address with increasing frequency in coming years.
With forecasts that mobile phones and other wireless devices will be the primary points of access to the Internet in the future, any new law or regulation imposed on the Internet likely will be felt by a wireless industry that is transforming itself from a major provider of voice services to a potentially huge provider of data services.
One outgrowth of the convergence of wireless and Internet technologies is the development of location-based wireless services. Location services raise privacy issues and could be a marketing challenge, given that the law limits the location of wireless subscribers to emergency 911 situations.
In new findings leaked to the Wall Street Journal last week, a Federal Trade Commission survey found most Web sites fail to protect the privacy of Internet users. FTC staff reportedly will recommend that the agency seek congressional authority to regulate Internet privacy.
If FTC members embrace the recommendation and seek such oversight from Congress, it would represent a dramatic policy shift away from the FTC’s previous push for industry self-regulation.
However, given the fierce battle between Republicans and Democrats to champion the high-tech industry, such FTC privacy authority would be a hard sell on Capitol Hill.
At the same time, lawmakers can’t entirely dismiss an issue like consumer privacy that could resonate with voters in this fall’s elections.
Despite finding consumer privacy protection by online firms lacking, the new FTC research found online dot-com firms are making better efforts to post privacy policies on Web sites.
FTC spokesman Eric London declined to comment.
Elsewhere, controversy brewed over the delayed implementation of new privacy protections governing financial firms and their affiliates. In the future, wireless devices are expected to be major enablers of financial transactions.
“It is unbelievable to me that federal regulators would even consider delaying the implementation of very limited privacy protections at the request of the financial services industry,” said Sen. Richard Bryan (D-Nev.).
In another venture, a group of privacy advocates filed a brief with the U.S. Supreme Court in support of an appeal to reinstate federal regulations governing telecom carriers’ use of customer proprietary network information. A federal appeals court previously struck down CPNI rules of the Federal Communications Commission.
“Citizens have a legitimate expectation of privacy with respect to sensitive information such as who they call on a telephone, and a carrier’s right to communicate information about products and services does not include the right to build detailed profiles based on personal information obtained through private telephone calls,” stated the Electronic Privacy Information Center, 14 consumer organizations and 19 law professors.
High-tech executives, though, regard customer profiling as key to an Internet business model that stresses highly tailored advertising.
