I think there will be some hiccups with new technology, but you can turn your phone off. It's not much different, in my opinion, from them using the radio or the television. You own the unit, and radios do travel around with you. The special chip thing, well, most smartphones are equipped with GPS anyway. My smartphone allows me to turn off the GPS when I'm not using it, although that's no guarantee that it's actually turned off. However, it's the same with a Garmin or a TomTom.
Furthermore, cell phones are a great way to get emergency message out. Almost everyone has them, and most people who have one check them often. With the popularity of smartphones, in fact, it's only a wonder that it took them this long. Could it be abused? Well, sure, but so can the emergency broadcast system in televisions and radios, in theory. This is, as far as I can tell, just a way of including cell phones in that system, and as long as it isn't abused, it's a positive thing.