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http://www.pcworld.com/news/article/0,aid,102743,00.asp

Telco Customer Data Goes Up for Grabs

FCC's contentious ruling gives 'affiliated' parties default access to
customer data, requires opt-in for others.

Stephen Chiger, Medill News Service
Wednesday, July 17, 2002

WASHINGTON -- Phone companies now can share a consumer's private
information with certain affiliates without first getting that
customer's consent, a new Federal Communications Commission ruling
says.

Details of who customers call, when they call, and how long they talk
may be shared with communications-related corporate affiliates, the
ruling says. Customers can choose to keep such information private,
but must initiate the request. The carrier does not have to ask
permission.

When it comes to sharing customer data with unaffiliated third
parties, the default is reversed under the FCC's new rule. Telecom
companies must get the consumers' express consent to "opt in," the
FCC says.

  
The decision, announced Tuesday by a somewhat divided FCC, has roiled
privacy advocates who say data could be used for consumer profiling
by companies with only weak links to the phone carriers.

Pros and Cons
"Everyone should understand that this decision is neither narrow or
pro-privacy," says FCC Commissioner Michael Copps, who dissented in
part with the decision over privacy concerns.

The unclear definition of "corporate affiliates" that can access
customer data invites abuse, Copps says. Consumers might find their
phone companies "selling to the highest bidder personal and detailed
information...as long as these companies use it for some
'communications-related' purpose and have some undefined murky
affiliation," he says.

Privacy advocates expressed similar concerns.

"Corporate families are pretty big. I don't know [that] customers
feel as familial about the relationship as corporations," says Mikal
Condon, staff counsel at the Electronic Privacy Information Center.

Condon also says the rule will confuse consumers, because it applies
different standards to the various third parties seeking customer
information.

Others see the ruling in a more positive light.

Consumers like sharing certain information, counters Mark Uncapher,
senior vice president and counsel for the trade group Information
Technology Association of America. Uncapher calls the decision a
positive step. He likens it to customers being willing for Amazon.com
to know which books they have purchased, and recommending others.

"The telecommunications industry has been under a fairly strict
privacy regime," Uncapher says. "This is an improvement."

Familiar Fight
This battle is an old one, with a series of changing decisions along
the way. The FCC originally required companies to obtain consumer's
consent before releasing private information to anyone. However, that
ruling was overturned in 1999 when a federal appeals court said the
commission did not have enough evidence to justify the rule's
infringement on corporate speech.

"We've argued pretty vehemently that the networks have misused
proprietary consumer information to win back customers," says
Jonathan Askin, general counsel for the Association for Local
Telecommunications Services.

The FCC was forced to carve a compromise that passed judicial
scrutiny and balanced corporate and consumer interests, commissioners
noted.

"Despite the laudable efforts of the parties to generate such an
empirical record, not to mention our own efforts, no more persuasive
evidence emerged that would satisfy the high constitutional bar set
by the court," says FCC Chairman Michael Powell. He adds that states
can set their own requirements.

However, Condon says the court ruling will likely be used as
precedent in the states, discouraging any change from the FCC's new
rule. States are "pretty much guaranteed litigation" if they require
consumer consent, she says.

Legislation introduced by Senator Paul Wellstone (D-Minnesota) would
require consumer consent in all cases. However, the measure, Senate
Bill 1928, but it does appear to have enough support to pass, Condon
says.

As a related matter, the FCC is currently seeking industry comment on
the use of information about customers whose telecommunications
carriers have gone out of business or have filed for bankruptcy
protection.

Thanks, 

John Ellingsworth
Project Leader
Virtual Curriculum


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