Few would dispute that we are witnessing unprecedented deployment of new technologies, applications and devices in mobile communications. This development is accompanied by ever-increasing opportunities to commercialize information collected about individuals who use this technology – opportunities that are outpacing the efforts of regulators to strike an appropriate balance between preserving an environment that continues to foster innovation in services and products - including new business models for supporting those services and products - and protecting privacy and individual data.

Policy makers, and to some extent the courts, have been taking a close look at online privacy, particularly as the move to mobile computing through devices such as smart phones becomes more ubiquitous. This is a good time then to consider our collective notions about privacy in an increasingly virtual world -- including whether traditional beliefs about “ownership” of personal information must be reexamined. It is also a good time to consider whether virtually simultaneous proceedings by multiple authorities is the best approach to formulating an appropriate scheme for protecting privacy while preserving the benefits to individuals and business alike of collecting, sharing, and commercializing personal information.

At least three federal agencies and Congress are grappling with these issues. Many state legislatures, consumer protection agencies and Attorneys General have also acted to protect online privacy.

The FCC is looking at privacy in the mobile ecosystem and in connection with its development of a congressionally mandated national broadband plan. Part of this inquiry includes how to treat personal data collected various contexts. One example given by the FCC involves the collection by utilities and applications and device manufacturers of highly granular data about real time energy consumption and consumer habits. This information is highly commercially valuable to utilities, third parties and even law enforcement. The Federal Trade Commission and Department of Health and Human Services recently completed parallel proceedings to develop a framework for protecting sensitive health data maintained in on-site databases or in a “cloud” by health care providers or by private companies for access, analysis and transmission through mobile devices. Could this data be utilized to deliver targeted ads? Should it be used for such a purpose? More recently a federal court had an opportunity to consider privacy in connection with Google’s book digitization project sufficiently protects the privacy of individuals utilizing that service. Congress is also looking at privacy legislation this session.

Privacy and online advertising takes on an added dimension when mobile devices are added to the mix because of their location specific nature and because children and teenagers have integrated these devices into nearly every aspect of their social, familial and even educational lives. The FTC recently released its guidelines on behavioral advertising and more recently, its staff report on the mobile marketplace, focusing particularly on mobile advertising, including location based advertising and ad supported mobile content through commercialized text messaging. A federal court in California is considering the circumstances under which commercial text messaging violates the Telephone Consumer Protection Act. The FTC accelerated its review of the Children’s Online Privacy Protection Rule, given the unique challenges presented by the mobile web to children.

Of course, thousands of individuals surrender all sorts of personal information to their facebook profiles that could later come back to haunt them in legal proceedings in connection with document production requests during discovery.

In a cyber conversation I recently had with Andy he posed the following question: Why does everyone care about privacy when they give up so much information publicly in the first instance?

This is an interesting question whose answer is, in part, generationally based. Young people do not have the same expectation of privacy that their parents hold. They freely surrender highly personal information because they 1) understand that the cyber world they operate in is the functional equivalent of one “in plain view” theatre, 2) have been the target of advertising from birth and welcome the delivery of targeted ads to their mobile devices, and 3) are inoculated by their youth against any appreciation of how their behavior at 20 could interfere with their personal or professional goals after 30.

Another answer is that even though people, including the young, freely provide detailed personal information about themselves when visiting websites, they do so with the expectation that at least to some extent, they will know what is being done with that information and can control how that information is being used. This principle of transparency and choice forms the basis of the FTC’s behavioral advertising guidelines and mobile advertising principles. One possible new ingredient to this transparency-choice formulation could involve commercializing the data sharing transaction on the front end.

A recent study found low approval by consumers for the acquisition and dissemination of personal information collected by web sites to third parties for advertising. That number changed significantly when these individuals were offered something of value in exchange for the use of their information for commercial purposes. Commercializing the transaction at the front end, when added to transparency and choice, for example in the form of a rebate, coupon or points, provides something of value that, when combined with transparency and choice, significantly mitigates the aversion to sharing personal information.

Generational divides aside, there appears to be a general consensus that advertising supported online content is a good thing for business, consumers and innovation. There appears to be equal consensus that individuals should have the ability to know what information is being collected, who it is being shared with and for what purpose. This is the balance that policymakers are attempting to achieve. Industry could stave off undesirable regulation by coming up with innovative business models for supporting mobile content, particularly as the focus shifts to the mobile ecosystem and, more generally, developing, adhering to and enforcing meaningful industry best practices along the lines recently developed by some of the key industry trade associations.

Karen Neuman is a partner in St. Ledger-Roty Neuman & Olson LLP, a Washington, D.C. law firm focusing on communications law and the regulation of information technologies, privacy and data security and related transactional matters. She can be contacted at kneuman@slrno.com.