1. Andrew Olsen
Wireless Advertising Messaging:
Legal Analysis & Public Policy Issues
By Ross D. Petty
A Review :
University of Maryland University College

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Abstract
Wireless marketing is fairly new, but it is expected to top $8 billion by 2005. A majority of wireless
marketing is done by SMS and there were roughly 1 billion text messages exchanged by U.S. consumers in
December. Wireless advertising messaging (WAM) is not a major problem in the U.S. now, but it grew to
epidemic proportion in Japan and Europe. The U.S. is trying to take the necessary steps to avoid the same
problem that plagued Japan and Europe. The FTC and FCC have been working to limit the affect of WAM,
but the laws and regulations are unclear. The states have been the most vigilant against fighting
spam/WAM issues despite jurisdictional and constitutional concerns. Federal legislation has also been
proposed that deals with spam and privacy issues, but now it also includes language that would deal with
WAM. No legislation has yet passed and it would most certain face a First Amendment suit, but passage of
this legislation appears to be promising. The Wireless Advertising Association (WAA) has established
guidelines and others are also following suit in order to deal with this WAM issue. In addition, the wireless
industry is taking necessary steps to prevent spam from affecting its customers. There are still a lot of
issues that need to dealt with, but it will probably have to include a combination of advertising association
guidelines, industry self-regulations, and federal oversight and/or regulations.
Introduction
The wireless market is not a new one and is one that will continue to grow. According to the
Cellular Telecommunications & Internet Association (CTIA) there are over 137 million wireless subscribers
in the United States (www.wow-com.com). What is new, however, is wireless marketing. The development
of wireless marketing is still at an experimental stage, but it is gaining ground. Wireless marketing is
expected to top $8 billion by 2005 (Swartz, 2003), but it is still only emerging in the U.S. At this point, the
majority of advertisements and alerts that are being sent is Short Message Service (SMS) text messaging.

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Text messaging has just recently begun to catch on widely in the United States over the past
couple of years, since wireless providers just recently agreed on an industry wide standard, but it is growing
dramatically in popularity. Roughly 1 billion text messages were exchanged by U.S. consumers in
December, which was up four times from the year before (Swartz, 2003). Wireless customers now pay
anywhere between $3 and $20 per month for the SMS text-messaging feature, but that is where the
problem surrounding wireless advertising develops.
WAM: The Problem
WAM or wireless spam is defined as push messaging related to the user’s location that is sent
without standard or confirmed opt-in and just like e-mail spam, it wastes time and resources, but it also
provokes the recipient even more because it could cost them valuable plan minutes. Since wireless
customers are paying to view wireless advertising messaging (WAM), they do not want to be spending their
money viewing junk advertising. Text messages can cost anywhere from 2 to 10 cents to receive, if it is not
included in the cost of the customer’s cellphone plan (Swartz, 2003). It could also cause enough
congestion to their wireless device that it could lead a network to crash. Privacy concerns are another
important issue because of WAM. Wireless consumers number one concern is privacy and most feel that
WAM poses a direct threat to their privacy. Many wireless customers are interested in services like voice
portals, SMS, and so forth, but it diminishes once advertisements are thrown into the mix (Luna, 2001).
WAM poses a major threat to the nascent wireless industry. Abuse of WAM could potentially
cause irreparable harm, expense to the customer, and undermine the value of an important communication
line between customers and advertisers. Spam whether wireless or email is something customers hate
and will not contribute to the growth of the industry.
However, WAM still has not become a major problem in the U.S. as it has been in Europe and
Japan because text messaging and other wireless features has been a popular feature of wireless devices

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for years there. According to NTT Docomo, Japan's largest wireless carrier, 17% of its 38 million iMode
subscribers receive up to five pieces of spam a day, which is down from 30% in 2001 (Blakeley, 2003).
Figures are similar in the EU, but thanks to new anti-spam laws, customer education and filtering efforts,
the number of wireless spam have been reduced significantly.
It is estimated that the total market for wireless advertising in the U.S. was about $23 million in
2000, but is expected to grow to roughly $4 billion by 2005 (Jarvis, 2001). As traffic over wireless networks
continues to grow, WAM will also grow. Currently it is difficult to separate WAM from the other forms of
spam when trying to determine how to fight this growing problem more so because the difference between
computers and wireless devices are disappearing. Since there have been very few laws that have
specifically dealt with WAM, it has been very difficult to determine if current laws would apply to
advertisement sent to wireless devices via an e-mail address. The fact is that WAM is going to become a
considerable problem unless the U.S. is able to get some control over this issue.
WAM Legal Analysis & Public Policy Issues Summary:
This article examines the complex issues involved in balancing privacy rights and the unfettered
flow of information as applied to the regulation of unwanted text messages (WAM) sent to wireless devices
such as newer types of cellular telephones, pagers and personal data assistants (PDAs). The advent of
the wireless Web and related technical advances has pushed spam and other privacy issues onto the
agendas of service providers and vendors, as well as regulators. It starts off by giving an extensive
background on WAM and what role it has played in Japan and Europe and what the U.S. should expect. In
Japan it has been estimated that between 900 million and 1 billion text messages are sent on an average
day, and an injunction was recently granted when a firm sent 900,000 unsolicited text messages in a single
hour. Because of significant cost advantages in communicating to consumers through spam and WAM the
US market is projected to grow exponentially, raising the stakes on these policy issues.

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There are various forms of regulations, federal, state, and self that are currently in place and this
article examines what effect they have when dealing with WAM. The determination is that the U.S. does
not have current laws that anticipate all forms of WAM, but some believe that current state and federal laws
and regulations may work when dealing with WAM. Federal law already prohibits junk faxes and prohibits
telemarketers from making unsolicited calls to cell phones in order to protect consumers from paying for
ads they probably have no interest in receiving. Some already feel that these laws already cover SMS
messaging, but the issue has not been tested enough in the courts to know for sure. This is where the
constitutionality of current and future laws and regulations becomes a contentious issue.
FTC/FCC & WAM:
In April of this year the Federal Trade Commission (FTC) had a three-day summit on spam and
according to FTC Commissioner Orson Swindle, "If you think spam is bad on your computer, wait until it
gets on your phone” (Swartz, 2003). The FTC has estimated that over 70% of spam is fraudulent,
misleading or deceptive (Pruitt, 2003) and so there have been several bills affecting privacy and spam have
been introduced in Congress. Congress is trying to give the FTC more power to catch and punish
spammers. So far, however, the FTC has rejected calls to fight email spam. They have cited limited time
and resources and decided to maintain their current level of enforcement, while working with the public to
explore solutions to the deluge of spam (Guerra, 2003). Out of these discussions, there has been a push
for the FTC to evaluate the legality and constitutionality of a consumer opt-out site for spam or a “do not
email” list, as it did with telemarketing. The FTC intends to have more workshops and hearings dealing
with spam and WAM.
Even the Federal Communications Commission (FCC) has stated that the legal status of cellphone
spam is murky. The Telephone Consumer Protection Act (TCPA) of 1991covers unsolicited cell-phone
traffic, but the FCC recommends that wireless customers ask their providers how they deal with text

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message spam under their plan (Holton, 2003). Ultimately, what the FCC is trying to determine is whether
wireless data, such as spam, is a telecommunications service, protected under the TCPA, or whether it is
an information service, which would not be regulated by the FCC. According to the FCC, spam would fall
under the TCPA only if it was sent to a wireless telephone number, not an e-mail or Internet address, but
what they have not reached is what happens when spam is sent to an Internet address (Weaver, 2003).
What they are still dealing with is this gray area and what to do with it.
State Regulations:
Even with commerce clause issues, state legislatures have continued to pass anti-spam legislation.
There are currently at least 30 states that have passed or are currently considering legislation that would
impose legal restrictions on spam. Several, including California, Colorado and Tennessee, would require
that senders of unsolicited commercial e-mail place "ADV" in the subject line of the e-mail. There are a few
states that allow lawsuits against spammers that violate posted state policies. Other states, including
Connecticut, Delaware, Hawaii, Idaho, Iowa, Illinois, Maryland, Nebraska, Nevada, North Carolina,
Oklahoma, Virginia, Washington and West Virginia, have passed or are currently considering similar
legislation (http://www.spamlaws.com/state/index.html). However, it is the validity of the state laws banning
or limiting unsolicited commercial e-mail is currently in question. More specifically, it is the constitutionality
and jurisdictional issue of these state laws that are questioned. In addition, the debate is there whether or
not current state laws and regulations cover WAM.
New York passed an amendment to its do-not-call law that includes email and it is the first state to
do so, and because email is sent via wireless and wireline networks, the law applies to wireless spam as
well, (Goldman, 2001). California has followed suit and has one of the strictest spam regulations in the
country. Current California legislation, SB12, would require an opt-in system for e-mail and it would
become a misdemeanor to transmit unsolicited commercial email advertisements within the state or to any

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California resident's email address (Norr, 2003). Many other states are also looking to continue to tighten
their spam regulations and laws, however; again the question is how far can the state go to regulate
spam/WAM?
Federal Regulations:
Even though WAM is in its infancy in the U.S., legislation has been introduced that may help deter
the problem of unwanted spam. Lawmakers have been working with the CTIA to include wireless in broad-
reaching anti-spam bills. Congress has been trying to pass anti-spam legislation since 1997, but it has
either been continually stalled or abandoned in committee (Sampath & Miller, 2003). Currently, there are a
number of privacy-related and anti-spam bills that have been introduced before Congress and several of
them are particularly relevant to wireless privacy and spam.
The most pertinent bill that would specifically deal with the WAM issue is H.R. 122, which is
currently pending in the Subcommittee on Telecommunications and the Internet. The Wireless Telephone
Spam Protection Act would make it unlawful for any person to use any covered mobile telephone
messaging system to transmit an unsolicited advertisement. It would also prohibit the FCC from exempting
from certain telephone regulatory requirements any call that violates such prohibition. This has been
introduced every year since 2001, previously as H.R. 113, but legislation against wireless spam appears to
be promising. The House Commerce Committee has taken up anti-spam legislation this year that would
include language to combat wireless spam.
A second bill that would deal with wireless spam is H.R. 2214, the Reduction in Distribution of
Spam Act of 2003, which had a hearing in the Subcommittee on Crime, Terrorism, and Homeland Security
this past July. This bill would go a long way to address the existing spam problem, while also trying to cut
off development of future spam problems, like wireless spam (Weaver, 2003).

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Several other pieces of legislation: H. R. 4678, H.R.71, H.R.1933, H. R. 2515, S. 877, S.1231,
and S.1293 have been proposed to either address privacy concerns, penalize fraudulent spam, or create a
system to secure mobile phone owners’ permission before a company could market services to them.
These pieces of legislation could be very important because they could address wireless users’ privacy and
spam concerns while also providing guidance to advertisers.
Any federal anti-spam law will have to survive a First Amendment challenge. The government
cannot regulate commercial speech unless it shows that the law is narrowly tailored to address a matter of
substantial government interest. There will be a lot of work in the various committees in Congress in order
to determine if lawmakers will be able to craft and enact an anti-spam law that will sustain a constitutional
challenge. In addition, a lot of spam comes from outside the U.S. and would not fall under the jurisdiction
of U.S. law.
Industry Regulations:
Members of the major advertising associations, such as the Mobile Marketing Association (MMA),
previously the Wireless Advertising Association (WAA), Wireless Advertising Industry Association (WAIA)
and the Interactive Advertising Bureau (IAB) all agree that spam posses a major problem to the industry.
However, how it should be dealt with vary among the members. Most prefer self-regulation to government
regulation, which is why the WAA established guidelines that dealt with difficult and critical issues of privacy
and spam and offered well-needed guidance. Furthermore, the WAIA and the IAB have launched efforts to
define standards and best practices for delivering ads to cellular phones and handheld devices. They feel
more comfortable letting the customers tell us what they want and do not want and responding with their
dollars (Goldman, 2001). However, that has yet to prove successful and there is no guarantee that
members will adhere to these guidelines let alone the many nonmembers.

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AOL, Microsoft, and Yahoo are already working together to fight spam. The wireless industry is
also fighting to protect their customers from unwanted advertising and are taking steps to avoid the influx of
WAM. They realize that subscribers will change operators if they do not address this problem. Most
wireless carriers also prefer self-regulation along with rigorous opt-in requirements, which has been
advocated by the CTIA. In addition, wireless carriers are treating their networks like private property and
plan to kill off bulk text messages at gateways before they hit customer in-boxes. (“News briefs,” 2003). If
wireless carriers can operate and maintain their networks as their own private entities, they can set a new
standard of integrity that makes the wireless Internet that much better than the wired (Wickham, 2003).
The wireless industry is continuing to work with legislatures and other groups so to best protect their
consumers from this growing problem.
Conclusions:
There is still no definitive answer about what to do when it comes to wireless spam. State
legislation along with effective federal legislation may have some effect. However, besides for
constitutionality and interstate commerce issues of such state and federal legislation, the law can only
regulate the means of transmission and not the content itself. In addition, some feel that legislation is
unnecessary because the industry already is heavily regulated and the market will take care of wireless
spam. Many in the wireless and advertising industry are very wary of government regulation and would
prefer self-regulations. National legislation would raise difficult issues about defining spam and they do not
want the government defining what or what not spam is. More so government regulations will affect those
that abide by laws and those are legitimate organizations, which are more apt to listen to and protect their
customers anyway.
No matter how hard the federal government tries, they will not be able to stop spam, but they could
make it more difficult. However, a solution could be a combination of comprehensive federal laws that

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include regulatory action, fines, and private lawsuits along with spam filtering. Basically, the combination
of advertising association guidelines, industry self-regulations, and proper federal oversight and/or
regulations, could prove to be the most effective tool in curbing spam and controlling WAM before it
becomes a problem. In addition, it could also help shift the costs of spam/WAM back to the marketers,
while allowing legitimate marketers to operate in their and the consumers’ best interests.

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