WASHINGTON-Both the House and Senate said they plan to hold hearings on the ever-burgeoning privacy scandal regarding the disclosure and sale of customers’ telecommunications records.
The House Commerce Committee is expected to start the process with a hearing Wednesday afternoon. The Senate Commerce consumer-affairs subcommittee is scheduled to follow a week later.
Witnesses for the hearings have yet to be announced but Federal Trade Commission Chairman Deborah Platt Majoras said a representative of the FTC was expected to testify.
The cell-phone records scandal has been escalating since the CBS Evening News broadcast a Jan. 12 report critical of the wireless industry and the apparent theft and sale of customer-call records.
Majoras told reporters during a press conference last week that the practice of pretexting-impersonating a customer to obtain call records-is illegal.
“In no way is the practice of pretexting legal, and we are working with the Federal Communications Commission to close these avenues,” said Majoras. “We, together with the FCC, are working to stop these practices and we are talking to Congress about whether any additional protections are needed.”
The FTC believes pretexting is illegal because it is a deceptive act used to gain sensitive information, said Betsy Broder, assistant director in the FTC’s division of privacy and identity protection.
Broder acknowledged that the FTC does not have jurisdiction over communications carriers, but she said the agency has jurisdiction over the data brokers that are obtaining and selling this information. The FCC has jurisdiction over communications carriers. She called it “complementary jurisdiction.”
Majoras held a press briefing last week to announce a settlement with Choice Point Inc. regarding its data-theft problem first revealed last year. As part of the settlement, Choice Point will pay the FTC’s largest civil penalty ever, $10 million, and an additional $5 million into a customer-restitution fund.
One of the laws that Choice Point is alleged to have violated is the protection of customer data. It is similar data that is involved in the ongoing cell-phone record scandal that broke after an Internet blogger managed to buy the cell-phone records of retired Army General Wesley Clark. Clark appeared on Capitol Hill last week to urge passage of the legislation that would specifically protect communications records from pretexting.
The FCC has issued citations to two data brokers for not supplying it with requested information.
The House Commerce Committee began its investigation into the data brokering of cell-phone records by requesting that the FCC turn over information on how wireless carriers protect their call records.
Each year carriers must certify that they are protecting customer proprietary network information. However, the certifications are not filed with the FCC; instead each carrier must make it available upon request, said David Fiske, director of the FCC’s Office of Media Relations.
Therefore, the FCC will now have to get the certifications from the carriers in order to respond to the House committee’s request. This could turn out to be messy. RCR Wireless News has been attempting to get the CPNI certifications for Verizon Wireless and T-Mobile USA Inc. since Jan. 19 when Fiske first said they were available from the carriers. At press time, neither carrier-unlike Cingular Wireless L.L.C. and Sprint Nextel Corp.-had turned them over.
When Clark was on Capitol Hill he was specifically supporting the Consumer Telephone Records Protection Act of 2006 sponsored by Sen. Charles Schumer (D-N.Y.). While Schumer’s bill is the only one that has so far been introduced, other senators have expressed interest in solving this issue. Schumer’s bill, which has been referred to the Senate Judiciary Committee, is the toughest so far, he said, adding he would work with anyone who wants to solve the problem. Schumer said both the Judiciary and Commerce Committees have jurisdiction over the topic.
Rep. Joe Barton (R-Texas), chairman of the House Commerce Committee, said he will introduce legislation to make pretexting illegal when the House returns to work this week.
CTIA recently commented that it believes consumer-protection laws already on the books are sufficient.
On Friday, Sprint Nextel jumped on the lawsuit bandwagon, filing a lawsuit in Florida against First Source Information Specialists Inc., the parent company of locatecell.com, celltolls.com and datafind.org. Sprint Nextel joins Verizon Wireless, Cingular and T-Mobile USA in filing various lawsuits against First Source. In addition, the states of Illinois and Missouri have filed lawsuits against the company.
Bills also have been introduced in the Illinois General Assembly making it illegal for phone companies or data brokers to sell or release call records, or to impersonate a customer to obtain call records.
All the frantic action on the subject prompted one online data broker to stop selling call records, even though a spokesman for the company-which does marketing for private investigators-said it was much ado about nothing and that he believes that new laws will not solve the problem.
