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It is now possible to trade stock or review a local restaurant directory by using a mobile device in the backseat of a taxi traveling 50 miles an hour. Wireless e-commerce offers the ability to communicate over the Internet without the use of cable or telephone wires, but instead with such mobile devices as a cellular telephone or a PalmPilot. E-commerce was previously defined as the ability to conduct a business transaction or obtain information using a desktop computer connected by telephone wires to the wired Internet. That model has already become obsolete. Wireless communications are rapidly increasing in popularity with users whose numbers are expected to range from more than 500 million by year-end 2001, to one billion by year-end 2004. The number of subscribers using mobile telephones appears to be growing even more rapidly than users subscribing to the Internet. With the growth of wireless e-commerce comes a host of legal and business issues that should be considered in license agreements between content providers and content packagers for the wireless format, and between content providers and packagers, and wireless service providers. However, in order to identify these issues, it is necessary first to have an understanding of: (1) how the wireless Internet is different from the “traditional,” wired Internet and (2) the various kinds of service providers, technology, languages, protocols, and devices which are specific to the wireless Internet. THE WIRELESS ENVIRONMENT The wireless Internet has characteristics distinct from the wired Internet. Wireless screens are much smaller than desktop screens, since they must fit on a handheld device. The bandwidth for transmitting information in a wireless format is smaller than that for wired formats, and the languages used for wireless applications must conform to this narrower bandwidth. Wireless devices are generally more limited and simple in their display, processing and storage capabilities and user interfaces. There are different types of service providers and companies from which to choose in a wireless environment. The main wireless service providers in the United States are Verizon Wireless, AT&T Wireless and Sprint PCS. Other types of service providers include crossover portals, content aggregators, wireless Internet service providers (ISPs) and device makers. Crossover portals consist of traditional Internet portals such as America Online and Yahoo which have entered into agreements with wireless carriers for space on a carrier’s wireless screen. The local parlance changes in the crossover from a wired to a wireless Internet, and former “Web sites and pages” become “decks and cards.” The initial screen that appears on a wireless device is called a “homedeck”, and these crossover portals appear as links on the homedecks. Content aggregators (such as Oracle’s MyOracleMobile) provide wireless users with the ability to create menus with book-marked links to Internet portals. Wireless ISPs (such as Go America and OmniSky) provide wireless services on mobile devices that are nontelephone devices (such as personal data assistants or PDAs) by purchasing airtime from carriers. In order for users to be able to communicate with each other over the wireless Internet, technology and protocols specific to the wireless environment are required. Presently, there is no national wireless technology standard. By contrast, European regulators and companies have adopted a uniform standard called the global system for mobile communications, or GSM. A protocol is a format by which data is transmitted between devices. The protocol establishes the methods for data compression and error checking, and the methods by which the devices signal that information or a message has been sent and received. The importance of protocols for the end user is that the computer or mobile device used must support the right protocols to enable communication with other end users using other computers or mobile devices. A developing wireless protocol or technology standard is the Wireless Application Protocol, or WAP. WAP is specifically designed for handheld wireless devices and small screens. This standard has been initiated by Ericsson, Motorola, Nokia and Unwired Planet to define industry-wide specifications for developing wireless applications and networks. WAP supports a number of different wireless network standards employed by the main wireless service providers. For instance, AT&T Wireless primarily uses time division multiple access or TDMA; Sprint PCS and Verizon Wireless use code division multiple access or CDMA; and Cingular Wireless within its wireless service uses different standards. This patchwork of telecommunications standards may make it difficult for wireless service providers to achieve economies of scale. These incompatible standards in the United States make it difficult for subscribers of different wireless carriers to use their cellular telephones in different markets, or even within a single geographic area when they want to change carriers. However, WAP is able to support CDMA, TDMA, GSM and many other standards and operating systems. WAP, therefore, provides an open standard protocol and architecture to facilitate Internet access that is not vendor or carrier-specific. In addition, WAP protocols allow different wireless devices to communicate over the Internet and over e-mail using compression technology to save bandwidth. BUSINESS, LICENSING CONSIDERATIONS There are a number of advantages to businesses and consumers in using wireless communications. Wireless e-commerce may provide a greater competitive advantage than “traditional” wired e-commerce by allowing businesses not only to operate where they have no physical presence, but also to access applications and information from anywhere without a wired connection to the Internet. One potential competitive advantage for a business using wireless communications is the ability to achieve a faster revenue stream by shortening the sales cycle in which sales people access competitive pricing and data while negotiating at customer sites. Wireless communications may allow for quicker access to the Internet for consumers who otherwise would have to wait several months for broadband Internet access, such as cable service, digital subscriber line technology, or DSL, and satellite delivery. Licensing agreements for wireless e-commerce include transactions with wireless service providers to purchase air space, and agreements between content packagers and content providers to license content specific to the wireless format. Some important deal terms to keep in mind include:
(1) ownership of user data; (2) content restrictions; (3) exclusivity; (4) anticipation of wireless delivery; (5) quality of content delivery; (6) retransmission rights; and (7) appropriate attribution with respect to the content owner’s copyrights and trademarks.

NEGOTIATING AGREEMENTS In negotiating agreements with wireless service providers, it is important to specify who owns user data. User data may include the identity of a user of a wireless site, with tracking mechanisms to identify the user’s path. This becomes valuable information that can be sold to marketers and provides additional sources of revenue for wireless service providers. A user’s mobile telephone number or mobile identification number (MIN) may be accessed by service providers. Also, by using a technology known as the global positioning system technology, or GPS, service providers are able to detect a user’s location with precision. In fact, the Wireless Communications and Public Safety Act of 1999 which is scheduled to take effect in October 2001, directs wireless service providers to precisely identify a user’s geographic location, within a 125-meter radius. Site operators, therefore, should ensure that their privacy policies are honored and that their user data is protected. There are various ways to incorporate these privacy concepts in an agreement with a wireless service provider. First, the site operator should spell out its ownership of the user data and should define user data to include any data generated by use of the site whether users provide such data directly or indirectly to site operators or to service providers. Second, a site operator should request a number of representations and warranties that the service provider will not, without first having received the user’s consent: (1) track user activity; (2) disclose user information to third parties; or (3) target users for advertisements or promotions. Another deal term that should be clarified includes restrictions on content displayed on a wireless screen. Wireless service providers will seek a representation that the operator’s site will not violate, among other things, any privacy rights, copyrights, or be obscene or defamatory. A site operator may agree to indemnify the service providers in the event that any such claims are filed against them arising from content on the operator’s site. EXCLUSIVE AGREEMENTS Content providers and wireless service providers may enter into exclusive agreements. Exclusivity in this context means that a content provider will use a single service provider exclusively, and that service provider is restricted from using content from competitors to appear on the service provider’s home page (or in wireless parlance, the homedeck). For example, if a service provider were to enter into an exclusive agreement with a company that facilitates investor trading, then the service provider would not be able to accept financial investing vehicles from competitors to feature on its homedeck. A content provider may negotiate better rates with the service provider because of the opportunity cost associated with limiting the potential audience by using a single carrier. Content providers should anticipate wireless delivery in their agreements. This issue is relevant for both wired service providers and content providers. If a content license agreement is for a wired platform, then both content and service providers should anticipate their ability t

(1) use or modify content on wireless platforms; (2) uncouple data, or the ability to take data apart to deliver on a wireless system; (3) provide for increased revenue streams; (4) define narrowly or broadly the platforms on which the content is going to be delivered; and (5) provide scalability, or the ability to handle large volumes of data.

The owner of content, or the content provider, will want to define the platforms, such as WML, as narrowly as possible, to retain greater control over what the licensee can use as the technology changes. In addition, there is the potential for greater sources of revenue in the event that the licensee wants to deliver on platforms other than those specified in the license. The licensee, on the other hand, would want wide-ranging, unfettered rights to existing and developing technology phrased as, for example, “all media, now existing or to be developed in the future.” This would keep the licensee’s costs constant as new technology emerges, and would give a licensee greater control over the use of the content. Another issue of concern for content providers is the quality of content delivery over a wireless medium. The content packager and service provider should create a version suitable for wireless capabilities so that the user has a positive experience, rather than simply distributing the same version as is delivered on the Internet by cable or wire. For example, a version that is loaded with graphics might not appear as quickly and clearly in a wireless format as it does by way of cable or wire delivery on the Internet. Whether a content provider should allow a content packager the right to retransmit or redistribute its content is another concern. This issue straddles both wired and wireless environments. Content providers should determine whether retransmission is permitted under their third-party licenses. Content providers should ensure that content packagers give appropriate attribution by ensuring that copyright and trademark notices and logos appear on each wireless page (or “card”) or, taking into consideration that the wireless screen is so small, by providing a “powered-by” link where there is a link to the copyright or trademark notice or logo. This issue may be addressed by a content provider requiring such notices or a “powered-by” link as a condition precedent to granting the licensee the right to use the content. CONCLUSION The use of mobile devices for delivery of information is just in its infancy. The current technical limits of these devices and the lack of national standards inhibit their wide acceptance. However, as these small devices become more powerful and useful, these markets will explode. The unprecedented growth of the Internet in the past decade may appear to be a small forerunner of this exciting new level of technology. Peter Brown and Richard Raysman are partners at Brown Raysman Millstein Felder & Steiner LLP in New York. Odette Wilkens, a law clerk at the firm, assisted with the preparation of this article.

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