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C D T P O L I C Y P O S T
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A BRIEFING ON PUBLIC POLICY ISSUES
AFFECTING CIVIL LIBERTIES ONLINE
from
THE CENTER FOR DEMOCRACY AND TECHNOLOGY
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Volume 5, Number 20 August 26, 1999
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CONTENTS:
(1) Federal Appeals Court Vacates Rules Protecting Phone Customer
Privacy
(2) Background on Customer Proprietary Network Information
(3) Subscription Information
(4) About the Center for Democracy and Technology
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(1) FEDERAL APPEALS COURT VACATES RULES PROTECTING PHONE CUSTOMER
PRIVACY
In a 2-1 decision dated August 18, 1999, the U.S. Court of
Appeals for the
Tenth Circuit vacated privacy regulations issued by the Federal
Communications Commission limiting how telephone companies can
use for
marketing purposes personal information about their customers'
calling
patterns. The rules covered so-called customer proprietary
network
information -- information about to whom, where, and when a
customer places
a call, as well as the types of service offerings to which the
customer
subscribes and the extent the service is used.
The decision, in U.S. West v. FCC, can be found at
http://www.kscourts.org/ca10/cases/1999/08/98-9518.htm
U.S. West, joined
by other incumbent local exchange carriers, challenged the FCC's
rules. MCI
WorldCom, Sprint, the Competition Policy Institute and others
intervened in
the appeal in support of the FCC.
In vacating the FCC's regulations, the Court of Appeals embraced
the novel
theory that limits on the use of customer information violated
the First
Amendment rights of the telephone companies to engage in
"targeted
[commercial] speech."
While the issue before the appeals court was in some respects
very narrow,
the decision's rationale speaks more broadly to the ability of
Congress to
enact legislation that gives individuals the right to control
their
personal information. The appeals court questioned whether the
protection
of telephone users' privacy rises to the level of a substantial
governmental interest, stating, "In the context of a speech
restriction
imposed to protect privacy by keeping certain information
confidential, the
government must show that the dissemination of the information
desired to
be kept private would inflict specific and significant harm on
individuals,
such as undue embarrassment or ridicule, intimidation or
harassment, or
misappropriation of sensitive personal information for the
purposes of
assuming another's identity."
Judge Briscoe wrote a vigorous dissent, stating that "In my
view, Supreme
Court and circuit precedent clearly supports the conclusion that
both of
these interests [protection of privacy and promotion of
competition] are
'substantial' for First Amendment purposes." In conclusion,
Judge Briscoe
stated, "In the end, I reiterate my point that the opt-in
method selected
by the FCC is the only method of obtaining approval that serves
the
governmental interests at issue while simultaneously complying
with the
express requirement of the statute (i.e., obtaining informed
customer
consent)."
FCC Chairman William Kennard has indicated that the decision will
be appealed.
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(2) BACKGROUND ON CUSTOMER PROPRIETARY NETWORK INFORMATION RULES
The appeals court's decision vacated regulations implementing
Section 222
of the Telecommunications Act of 1996. 47 U.S.C. section 222. In
section
222, Congress required telephone companies to obtain the
"approval" of
customers before using information about customers' calling
patterns
(customer proprietary network information, or CPNI) to market new
services
to the customers. While the statute requires telephone
companies to obtain
"approval" before using customer's information,
Congress did not specify
how companies should obtain such approval. Responding to several
requests
from the telecommunications industry for guidance, the FCC issued
an order
interpreting the "approval" requirements in February of
1998.
http://www.fcc.gov/Bureaus/Common_Carrier/Orders/1998/fcc98027.txt
Under the FCC's rule, telephone companies must give customers
explicit
notice of their right to control the use of their CPNI and obtain
express
written, oral or electronic approval for its use.
The precise issue before the appeals court was whether the FCC's
regulation
interpreting the word "approval" was consistent with
the statute. The
appeals court suggested, but did not expressly rule, that the FCC
should
have adopted an "opt out" requirement that allowed the
telephone companies
to use the personal information unless the customers contacted
the
telephone companies to request that the information not be used.
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(3) SUBSCRIPTION INFORMATION
Be sure you are up to date on the latest public policy issues
affecting
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Policy Post news distribution list. CDT Policy Posts, the
regular news
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activists, and have become the leading source for information
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(4) ABOUT THE CENTER FOR DEMOCRACY AND TECHNOLOGY/CONTACTING US
The Center for Democracy and Technology is a non-profit public
interest
organization based in Washington, DC. The Center's mission is to
develop
and advocate public policies that advance democratic values and
constitutional civil liberties in new computer and communications
technologies.
Contacting us:
General information: info@cdt.org
World Wide Web: http://www.cdt.org/
Snail Mail: The Center for Democracy and Technology
1634 Eye Street NW * Suite 1100 * Washington, DC 20006
(v) +1.202.637.9800 * (f) +1.202.637.0968
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End Policy Post 5.20
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Ari Schwartz
Policy Analyst
Center for Democracy and Technology
1634 Eye Street NW, Suite 1100
Washington, DC 20006
202 637 9800
fax 202 637 0968
ari@cdt.org
http://www.cdt.org
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