Wireless spam on its way to the U.S.

WASHINGTON -- Coming soon to a cell phone near you: text-based advertisements.

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Panelists on the second day of a three-day spam forum sponsored by the U.S. Federal Trade Commission agreed Thursday that text-based advertisements, already common in Japan and Europe, are coming to U.S. users of wireless devices, and that some of those messages, inevitably, will be spam.

While some panelists said current U.S. laws are inadequate for dealing with wireless spam, members of the cell phone industry said they're already taking steps to avoid the influx of spam that's saturated the "wired" Internet.

Unlike the free-for-all Internet, wireless carriers are treating their networks like private property and planning to kill off bulk text messages at gateways before they hit customer in-boxes.

Mobile marketing, as legitimate wireless advertising is called, "has not taken off yet, but it's scheduled to take off," said Jim Manis, chairman of the Mobile Marketing Association. Mobile marketing, Manis predicted, will eventually become an $8 billion industry.

Manis predicted U.S. users will soon be able to download discount coupons for coffee or other products to their cell phones by calling a number on a billboard.

Michael Altschul, senior vice president for policy and administration at the Cellular Telecommunications and Internet Association (CTIA), noted that major cell phone carriers have already put systems in place to block inbound text messages that contain the same string of words and are sent to multiple users.

The economics for spammers in the wireless world are different from those of the wired Internet: wireless carriers typically charge a fee per text message sent, making wireless spam less economical than e-mail spam.

"So it is possible to send spam to wireless users, but if the system works as intended, only one or two messages at a time will go through," Altschul said. "The process is so cumbersome that it does not become a problem for users."

Still, the popularity of text messaging on cellular devices is growing by leaps and bounds, from 14.4 million text messages sent to the subscribers of CTIA members in December 2000, to more than 1 billion text messages sent in the same month in 2002.

With the increase in text messaging will come increased interest from marketers in reaching those customers, including some who try to send unsolicited commercial text advertisements, panelists said.

Rodney Joffe, who started an Arizona lawsuit against a marketing company after receiving two unsolicited ads on his cell phone in 2001, said he doesn't want the "genie to get out of the bottle," like e-mail spam did while the industry debated what to do about it in the mid-1990s.

"I was determined not to allow it to become something that didn't kill the benefits of cell phones," said Joffe, explaining the reason for his lawsuit.

Three marketers on the panel, including Manis, said legitimate advertising should include an opt-in permission from the cell phone user before it is sent, and Manis said his organization is working on a code of conduct for wireless marketing that would allow customers to set limits on the number of ads they receive and to opt out when they've had enough.

"If there is something that'll kill us from developing and sustaining for a long time, it is spam," he said of his infant industry. "It is a threat."

Joffe, founder of Genuity, urged the marketers to keep opt-in as the gold standard, unlike many e-mail spammers. Few people would have problems with marketing based on opt-in permissions, he said, but many e-mail marketers don't give users that option.

The attitude from e-mail marketers, Joffe said, is that opting in isn't necessary, and the only time unwanted e-mail is spam is when it's from some other company.

JiroMurayama, manager of the Washington, D.C., office of Japanese wireless provider NTT DoCoMo, said his company has already experienced significant problems with unwanted wireless advertising. But the company has cut the number of text messages from 150 million a day to 90 million on its Internet enabled system, with more than 37 million subscribers, through a combination of lawsuits against spammers and legislation approved by the Japanese government.

"As traffic over wireless networks continues to grow, so will spam," Murayama said. "Spam to wireless is likely to become a social problem in the U.S. as well."

But the U.S. doesn't have current laws that anticipate all forms of wireless spam, panelists noted. While the 12-year-old Telephone Consumer Protection Act prohibits messages sent to telephone numbers attached to cellular devices, if those messages are prerecorded or use an autodialer, the U.S. Federal Communications Commission (FCC) has not determined if that law would apply to such messages sent to a wireless device through an e-mail address, said Margaret Egler, a member of the FCC's Consumer Information Bureau.

Albert Gidari, a partner with the Perkins Coie law firm, suggested the fine-point distinctions in the law no longer matter, and the U.S. Congress needs to end the uncertainty surrounding wireless marketing and spam in general.

"The very distinction between a wireless telephone and a computer has disappeared," he said. "These regulatory structures just don't apply. It's a real problem trying to stretch these statutes to try to meet the behavior."