WASHINGTON-The Federal Communications Commission last week said wireless carriers could indeed use customer information to market mobile handsets and so-called information services to customers who originally purchased these items from the carrier. The FCC left in place rules that restrict the use of customer information to try to win back customers who have switched to another carrier.
The FCC clarified rules governing the use of so-called customer proprietary network information, or CPNI, which is the information telecommunications carriers collect about their customers, including name, address, billing and when and where calls are placed. The rules implement Section 222 of the Telecommunications Act of 1996, which required the FCC to develop rules to protect the privacy of telecom customers in a competitive environment.
The clarification was in response to a petition filed in April by the Cellular Telecommunications Industry Association that asked the FCC to delay until November implementation of rules regarding how commercial mobile radio services carriers use information about their customers.
CTIA was not pleased with the ruling. “This is supposed to be a clarification … The FCC has only clarified that it is still thinking in a monopolistic fashion,” said Tim Ayers, CTIA’s vice president for communications.
One day before the release of the clarification, CTIA urged the FCC to not require CMRS carriers to live by the CPNI restrictions. In a forbearance petition, CTIA repeated many of the same arguments that it made in April.
Congress established procedures in the telecom act that allow entities to ask the FCC to “forebear” from enforcing rules that have become moot due to competition. The procedures require the FCC to rule on such requests within one year but gives the agency the option of a 90-day extension if necessary.
Notwithstanding the win on the handset rules, CTIA will continue to push its petition in an effort to use CPNI to win back customers, Ayers said, because “you have to concentrate on the big picture that [using CPNI in win-back promotions] are traditional marketing practices,” which the FCC is restricting.
CTIA claimed in its filing that the FCC went beyond the intent of Congress when it required CMRS carriers to live by the same rules as wireline carriers. CMRS carriers have never had restrictions on the use of CPNI while there have always been some restrictions, although not as stringent as the new rules, on wireline carriers’ use of CPNI. “This kind of `It works for monopoly [local exchange carriers] LECs, so let’s apply it to everybody’ regulatory philosophy stifles the very competition the FCC says it wants to promote,” commented CTIA President Tom Wheeler.
LECs have tried unsuccessfully to say that the use of CPNI is necessary in win-back promotions as that industry becomes more competitive, but CTIA believes CMRS is different because its market is competitive while the local telephone market is not.
CTIA further believes that Congress never intended for CMRS to be given the same CPNI restrictions as LECs. “We feel that applying CPNI to CMRS is not what Congress intended. When you are dealing with a monopoly situation, there is a rational [for regulation and restrictions]. This is not the wireless industry. If you go back one week to the competition report where [FCC Chairman William Kennard] said that the wireless industry was the poster boy of competition, this rule is inconsistent. [The CPNI rules] is traditional monopoly regulation,” Ayers said.
