Prepaid Phones and Privacy, Too 

For privacy advocates who have spent years agitating for far-reaching data collection legislation, the last few months have resembled an ongoing bad dream.

A Republican lives in the White House, Democrats in Congress are in disarray, and business groups are emboldened. Even the Federal Trade Commission, which once recommended more privacy laws, will be headed by a conservative by the end of this year.

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But while public attention has focused on Washington, D.C., a quiet revolution has taken place in the marketplace. Spurred not by legislative fiat but by competitive pressures, companies have begun to offer anonymous services -- in part to lure customers who have poor credit or who are immigrants without any credit history.

On Tuesday, San Francisco startup Telespree said it will sell sub-$30 disposable cell phones later this year. The company says it believes the market for low-cost phones with prepaid service plans will be at least as large as today's market for disposable cameras.

Telespree spokeswoman Laura Borgstede says that anonymity "is just a side benefit" of the concept. She envisions wireless providers such as Sprint buying the snazzy red handsets and branding them with their own logos. "You could give one to your 5-year-old son, give another one to your parents, and keep an extra one in the car for emergencies," Borgstede said.

That's a remarkable change from the irksome obstacles customers once faced, back when cellular providers required hefty security deposits or intrusive credit checks in exchange for service.

Telespree isn't alone. AT&T offers prepaid wireless services, including digital features such as Caller ID, text messaging, and voicemail on Nokia and Motorola handsets. Customers can pay cash for the phones and prepaid service cards at AT&T retail stores.

"Self-help technologies are probably in the long run more effective at protecting privacy," said Jeffrey Rosen, an associate professor of law at George Washington University and the author of The Unwanted Gaze.

Last year, the U.S. Supreme Court said telephone companies could continue using information they record about customers, including phone-using habits, to market other services to them. But anonymous phone service prevents firms from linking names with calling profiles.

No less a figure than former President Clinton used the example of a miscreant credit card firm in a 1999 speech that called on Congress to approve more data regulations.

Said Clinton: "While some of your private financial information is protected under existing federal law, your bank or broker or insurance company could still share with affiliated firms information on what you buy with checks and credit cards -- or sell this information to the highest bidder."

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