FCC Shifts Onus of Customer Phone Privacy to Service Providers

By Spencer D. Chin

TMCnet Web Editor

 

In an apparent victory for privacy advocates but a potential nightmare for telco providers, the Federal Communications Commission has adopted new safeguards to prevent personal telephone records of consumers from unauthorized disclosure.

 

The regulations are intended to further protect against the likelihood of pretexting, whereby individuals or organizations obtain personal information without prior authorization. Such pretexting was used by Hewlett-Packard last year to investigate the source of board room media leaks.

 

The FCC (News - Alert) order hopes to prevent such reoccurrences. Carriers will be prohibited from releasing a customer’s phone records when customer calls the carrier, unless a password is used. Carriers will be required to provide mandatory password protection for online account access, and must notify customers immediately when changes are made to their accounts or if breaches of customer proprietary network information occur.

 

In addition, the FCC order would require carriers to obtain consent from customers before disclosing their information to any carrier joint venture partners or independent contractors for marketing communications-related services to them.

 

The order not only covers fixed and wireline providers but also the growing number of VoIP providers. All would have to file an annual certification with the FCC, informing the commission of any actions they have taken against data brokers and providing a summary of any consumer complaints related to releasing proprietary network information.

 

In a report on the CNET online site, USTelecom president Walter McCormick was concerned the new FCC rules could harm some businesses.

 

“We are deeply concerned that the FCC is taking an overly broad approach far beyond protecting the legitimate privacy interests of call detail information to preventing any marketing of new services, bundled offerings, and new applications—using joint venture partners or independent contractors—that can save consumers money,” McCormick was quoted as saying.

 

“This approach also will impede competition and will particularly impact the smaller rural service providers, who now will be unable to work with outside marketing partners, even though they have no connection to illegal pretexting,” McCormick added in the report.

 

On this matter, the FCC has chosen to side with consumers tired of dinner-time telemarketing pitches, by lifting the onus for protecting sensitive data from their shoulders onto service providers.

 

In a statement, FCC chairman Kevin Martin said, “While we work to create an environment in which market forces can thrive, the Commission must also act to protect consumers. The former “opt-out” approach to customer consent, whereby a carrier may disclose a customer’s phone records provided that a customer does not expressly withhold consent to such use, shifted too much of the burden to consumers, and has resulted in a much broader dissemination of consumer phone records.  The “opt-in” approach adopted in this order clearly is supported by the record, is consistent with applicable law, and directly advances our interest in protecting customer privacy.”