Privacy implications of Microsoft's Windows Live Local

Mike Liebhold, my colleague at the Institute for the Future, is deep into the geohacking scene. He just took a look at Microsoft's new Virtual Earth incarnation, Windows Live Local and found some big privacy concerns. Below is the entirety of Mike's post to the Geowanking listserv:

The service includes a feature called "locate me" which launches a Placelab-like wifi base-station geolocation technique.called 'Location Finder" which listens for the MAC address and compares it to a client cache of locations of known base stations. Placelab, which was developed by Intel Labs, is available free for download on sourceforge, and as many people may know, was explicitly designed by Intel to be 'privacy observant'. Unlike most e-911 and mobile phone location systems which sureveil, and actively track a users location, Placelab was designed to present location coordinates privately to a user, without querying, or notifying the network. IMHO this is a noble design goal.
Microsoft's "Location Finder" program, on the other hand, includes the following disclaimer in the terms and conditions link which says "Your privacy is important to us. Click here to see our privacy policy:"

"Use of Location Information … Microsoft may use the information collected to provide you with more effective customer service, to improve Location Finder and any related Microsoft products or services,…

Microsoft may disclose location information if required to do so by law or in the good faith belief that such action is necessary to (a) conform to the edicts of the law or comply with legal process served on Microsoft; (b) protect and defend the rights or property of Microsoft and our family of Web sites; or (c) act in urgent circumstances to protect the personal safety of Microsoft employees or agents, users of Microsoft products or services, or members of the public.

Location information collected by Location Finder may be stored and processed in the United States or any other country in which Microsoft or its affiliates, subsidiaries or agents maintain facilities. "

So much for privacy of Microsoft's 'Location finder' program.

If this is unpalatable to you, you may be interested in trying as I did an alternate location techique. Instead of 'Location Finder' local.live.com also offers users a choice to select IP location lookup. As discussed here in the past, IP geolocation is an imperfect art, dependent of the accuracy of the data in the offical IANA database (Internet Assigned Numbers Authority.) In my case, my IP address has shown that am in San Diego, since that's where my IP connection is officially terminated at the downlink center for my satellite service provider. I'm actually connected to the Internet via a KuBand satellite in the remote wilds of Northern California, a long ways away. The location of my dish is simply not visible to the net. It looks, to the net, like I'm in San Diego, over 700 miles south.

So, you might understand that I was quite suprised and dismayed that Microsoft's IP lookup returned my actual location in the woods in Northern California !!! Just to be sure they didn't get my address from my satellite service provider, I called the Network Operations Center, who said the location of my dish is private, but looked up my record anyway, and confirmed "Our database, and the IANA database show your IP address is in San Diego." Clearly Microsoft's IP location database includes spooky datamined information about users' actual location that is not normally available by querying the publically accessible databases.

Be forewarned.