The All-Seeing Eyes

No wireless internet offering has gotten more recent hype than one that allows your cell phone to pinpoint the nearest restaurant, police station, friend or relative. "Location awareness" has been labeled the next killer app by industry watchers, and it's here now. Japan pioneered the technology in the mid-1990s, European operators including Vodafone introduced it in 1999 and Americans followed in the last two years. No nation is farther along than South Korea, where SK Telecom uses the technology to call customers strolling by its Seoul airport lounge, inviting them inside. This beckoning from out of the blue evokes the intimate "awareness" of the wireless networks depicted in "The Matrix."

That future is almost upon us, or so we're told. The buzz over location awareness rose a few years ago as well, then died. It's back, due in part to new legislation in the United States, the European Union and South Korea, which will require operators to beef up the technology as a tool for emergency police and ambulance services. The EU rule took effect in September; the U.S. law will do so in 2005. Location-awareness services currently represent only a few million dollars of operator revenue in both Europe and the United States, and projections for 2008 range from $1 billion to more than $11 billion for both markets. The range is due to uncertainty over whether operators, or someone else, will profit most from the broad array of offerings, which could include buddy finders, mapping services, real-world hide-and-seek games, traffic navigators, hazardous-material trackers and targeted ads. The downside: while these services would allow you to find anyone with a cell phone almost instantly, the reverse is also true. Anyone could find you.

Like many promises (and threats) on the wireless Internet, this may take a while to realize fully. One challenge is accuracy. Japan's pioneering "personal handyphone" used the caller's position relative to the nearest network antenna to pinpoint locations, and NTT DoCoMo still uses a similar technology for its "i-area" service, which provides local weather reports and shopping tips. Systems of that type can have a margin of error of 300 meters or more--not good enough for a paramedic rushing to a heart-attack victim. Handsets equipped with Global Positioning System software are accurate to within 10 meters--but the software can cause battery drain and overheating.

The industry has been reluctant to throw money at these problems before the size of the market is clear. Legislation is pushing it to go ahead anyway. Seoul is requiring operators to install GPS chips in all new handsets by June 2004, and a spokesman for SK Telecom says this will make South Korea the first nation where all mobile phones have location awareness. Nextel, the U.S. leader in the field, introduced GPS only last year but now includes it on all new phones. So far its best customers are companies, which use the service to manage fleets of cars or trucks, or to direct field technicians and other remote staff to their next assignments. "This could put an end to the old problem of the cable company saying, 'We'll be there between 12 and 5'," says Nextel VP Ernie Cormier.

Balancing the upside against privacy threats will be no easy task. New European laws require that location data be used only with the consent of the consumer, except in the case of emergency and police services. America and Britain are looking for ways to use the technology to catch terrorists. In Britain, location information is part of the evidence in the Soham trials, involving the murders of two 10-year-old girls. Others are calling for tighter rules to prevent pedophiles from using these services to find victims. "Governments and operators need to be very careful about how they use the data that will be generated from location awareness," says James Harkin, a trend forecaster for the British think tank Demos. "If people get paranoid about it, the market simply won't take off." Making "The Matrix" a reality may depend on whether we really want giant companies to find us, anywhere at any time, not whether they can.