I would like to believe my story on September 21 on General Motors’ (News - Alert) OnStar communications service was the reason OnStar felt compelled to issue a clarification and even provide a link to a video on its new policy statement regarding the collection and sharing of the information it collects from its subscribers.  Hubris aside, in communications from OnStar it is clear that the revelation of the change (covered in numerous articles and blogs) touched a nerve.

As a result of the interest in this item, which goes to issues concerning the collection and sharing of private information that transcend the case at hand, it seems both fair and useful to provide OnStar’s clarification to the press in its entirety rather than selectively quote from it:

Dear media colleague, below you will find OnStar’s statement with regards to our new Terms & Conditions

OnStar Statement Re:

New Terms & Conditions

The following statement can be attributed to Joanne Finnorn, Vice President, Subscriber Services”

“OnStar has and always will give our customers the choice in how we use their data. We’ve also been very open with our customers about changes in services and privacy terms.

“Under our new Terms and Conditions, when a customer cancels service, we have informed customers that OnStar will maintain a two-way connection to their vehicle unless they ask us not to do so. In the future, this connection may provide us with the capability to alert vehicle occupants about severe weather conditions such as tornado warnings or mandatory evacuations. Another benefit for keeping this connection “open” could be to provide vehicle owners with any updated warranty data or recall issues.

“Of course, if the customer requests us to turn off the two-way connection, we will do as we have always done, and that is honor customers’ requests.

“Our guiding practices regarding sharing our subscribers’ personal information have not changed. We are always very specific about with whom we share customers’ personal information, and how they will use it. We have never sold any personally identifiable information to any third party.

“Keeping the two-way connection open will also allow OnStar to capture general vehicle information that could be used in future product development.

“We apologize for creating any confusion about our Terms and Conditions. We want to make sure we are as clear with our customers as possible, but it’s apparent that we have failed to do this. As always, we are listening to our subscribers’ feedback and we will continue to be open to their suggestions and concerns.”

As stated in my previous article, personally, I have no problem with OnStar providing what many find are valuable/invaluable services and peace of mind for subscribers. I also applaud their intent to use the service connection in vehicles for additional capabilities that drivers may find beneficial and that highway authorities can use to better manage traffic congestion. However, personally, and this is absolutely a personal opinion, despite all of OnStar’s assurances about their policy of only sharing anonymous information and only with my permission, I am skeptical that the breadth and depth of information being collected is somehow immune from the rash of hacking that is rampant worldwide.

At the end of the day, this boils down to a value proposition based on risk assessment and management on my part and theirs. Since it is unlikely that OnStar would assume liability if their databases were hacked and bad actors used that information to cause me harm in some manner, I would be willing to risk having their service for those instances where I need roadside assistance in the case of emergency. I would provide OnStar with only the minimum information they need to be alerted of my dire circumstances so they can provide help. I would be uncomfortable giving them anything more. Indeed, as I suggested, there seems to be an opportunity here for them to provide a basic and enhanced service.

I also am convinced that they need to revisit the terms and conditions that state, “Unless the Data Connection to your Vehicle is deactivated, data about your Vehicle will continue to be collected even if you do not have a Plan. It is important that you convey this to other drivers, occupants, or subsequent owners of your Vehicle.” My reading of this is that not only must I unsubscribe, but I also must inform OnStar to disconnect the service. This seems too complicated and fraught with customer service issues for OnStar that could easily be avoided by just deactivating everything if I choose not to subscribe.

It is clear that keeping the connection live despite subscription cancellation could be beneficial to highway authorities. The value of this information does seem problematic given OnStar’s penetration of the addressable market of all vehicles on the road, and the availability to such authorities of detailed traffic information from a variety of sources. The rest of the value that is created from keeping the connection live even after a subscription cancellation all seems to flow to OnStar. In other words, it is not driver friendly and obviously has no value-added in terms of my safety. 

Give OnStar credit for getting out in front of this challenge on two fronts. First, it is unusual that this much notice has been given ahead of such a change in policy. Second, they have been extremely proactive in their handling of the interest this has created. If only NetFlix understood how to act as forthrightly.

The issues regarding the collection, sharing and protection of personal information has been a huge issue ever since databases were created. In fact, the treatment of Customer Proprietary Network Information (CPNI) has been a challenge to the telecommunications industry for years. Let’s face it, there is extraordinary marketing value in those databases, especially if the veil of anonymity can be lifted. We are living in a world of policies and permissions. Historically, the default for service and information sharing has been that I am in unless I choose to Opt-Out. This is starting to change. It will be interesting to see going forward which services prosper most, Opt-In or Opt-Out.

Thank you OnStar for the clarifications.

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia, HP, Siemens, Nortel (News - Alert), France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.