The law is watching

By Mickey Alam Khan

March 3, 2008

Mickey Alam Khan is editor in chief of Mobile Marketer

When the Congress, Federal Communications Commission, Federal Trade Commission and Florida’s Attorney General come calling, you know mobile marketing is on notice. It’s time for those best practices to kick in.

It is but natural for regulatory agencies to poke around as new technologies and marketing practices take root. So it is not entirely fair to blame them for their interest in mobile marketing – a medium that is an ideal complement to almost all brand-based and direct marketing.

As was reported in our story today (“AT&T settles with Florida AG over mobile content ads”), state agencies are worried about the abuse that consumers might suffer from shady marketing. It’s also a vote-winner in an election year to proudly parade the captured kings in chain.

But make no mistake: there is little room for error with mobile marketing, given the fact that it is even more personal marketing than the Internet.

AT&T Mobility saw the wisdom of settling with Florida’s Attorney General. It got a rap on the wrist, paid $3 million in legal and education costs and agreed to refund customers.

The irony is, AT&T Mobility neither produced the offending ads nor did it use mobile advertising. Instead, it was penalized for third-party online ads that promised "free" content such as ringtones, wallpapers and horoscopes. Turns out, Florida customers of AT&T were unknowingly billed for such supposedly "free" content.

Having settled with AT&T Mobility, Florida Attorney General Bill McCollum’s CyberFraud Task Force has decided to launch investigations into Verizon Wireless, Sprint Nextel, Alltel and T-Mobile. He wants to ensure that Floridians are protected from such charges over “free” mobile content without their knowledge.

It’s not a coincidence that the House of Representatives is seeing the first stirrings of a bill on mobile consumer rights.

Representative Edward J. Markey (D-MA), chairman of the House Subcommittee on Telecommunications and the Internet, held a hearing Feb. 27 (see story) on developing regulations for the mobile industry. His bill is titled, “Wireless Consumer Protection and Community Broadband Empowerment Act of 2008.”

“Many consumers complain that some wireless service providers do not clearly or adequately disclose in plain language the products and services for which charges are imposed,” the bill says.

“Many consumers find it difficult to easily compare the costs and attributes of wireless service offered by different providers because of the lack of consistency in how contracts for wireless service are presented,” the document says.

Mr. Markey wants the FCC to play a role in holding wireless service companies to a higher standard.

So again, it’s no coincidence that the FTC has also thrown its hat in the ring.

The agency plans to hold a Town Hall-format meeting May 6-7 in Washington titled, “Beyond Voice: Mapping the Mobile Marketplace.” Free and open to the public, the event will focus on mobile marketing and commerce practices and how they relate to consumers.

All smart mobile marketers will either send representatives to that meeting or submit proposals for speaking and panel opportunities (see story). The government needs to know what’s under the hood. Cooperate, educate and self-regulate. That’s the best protection for consumers and mobile marketers.