[Federal Register Volume 63, Number 79 (Friday, April 24, 1998)]
[Rules and Regulations]
[Pages 20326-20339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10740]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 22 and 64
[CC Docket No. 96-115; FCC 98-27]
Telecommunications Carriers' Use of Customer Proprietary Network
Information and Other Customer Information
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Second Report and Order (Order) released February 26, 1998
promulgates regulations to implement the statutory obligations of
section 222 of the Telecommunications Act of 1996 relating to
telecommunications carriers' use of Customer Proprietary Network
Information (CPNI) and other customer information. The Order resolves
CPNI issues raised in other proceedings that have been deferred to this
proceeding, including obligations in connection with sections 272 and
274 of the 1996 Act.
EFFECTIVE DATE: May 26, 1998.
FOR FURTHER INFORMATION CONTACT: Lisa Choi, Attorney, Common Carrier
Bureau, Policy and Program Planning Division, (202) 418-1580. For
additional information concerning the information collections contained
in this Order, contact Judy Boley at (202) 418-0214, or via the
Internet at [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
adopted February 19, 1998, and released February 26, 1998. The full
text of this Order is available for inspection and copying during
normal business hours in the FCC Reference Center, 1919 M St., N.W.,
Room 239, Washington, D.C. The complete text also may be obtained
through the World Wide Web, at http://www.fcc.gov/Bureaus/Common
Carrier/Orders/fcc98-27.wp, or may be purchased from the Commission's
copy contractor, International Transcription Service, Inc., (202) 857-
3800, 1231 20th St., N.W., Washington, D.C. 20036. This Report and
Order contains new or modified information collections subject to the
Paperwork Reduction Act of 1995 (PRA). It has been submitted to the
Office of Management and Budget (OMB) for review under the PRA. OMB,
the general public, and other federal agencies are invited to comment
on the new or modified information collections contained in this
proceeding.
Regulatory Flexibility Certification
As required by the Regulatory Flexibility Act, the Order contains a
Final Regulatory Flexibility Analysis which is set forth in the Order.
A brief description of the analysis follows.
Pursuant to section 604 of the Regulatory Flexibility Act, the
Commission performed a comprehensive analysis of the Order with regard
to small entities. This analysis includes: (1) a succinct statement of
the need for, and objectives of, the Commission's decisions in the
Order; (2) a summary of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
summary of the Commission's assessment of these issues, and a statement
of any changes made in the Order as a result of the comments; (3) a
description of and an estimate of the number of small entities to which
the Order will apply; (4) a description of the projected reporting,
recordkeeping and other compliance requirements of the Order, including
an estimate of the classes of small entities which will be subject to
the requirement and the type of professional skills necessary for
compliance with the requirement; (5) a description of the steps the
Commission has taken to minimize the significant economic impact on
small entities consistent with the stated objectives of applicable
statutes, including a statement of the
[[Page 20327]]
factual, policy, and legal reasons for selecting the alternative
adopted in the Order and why each one of the other significant
alternatives to each of the Commission's decisions which affect small
entities was rejected.
Paperwork Reduction Act
This Report and Order contains either a new or modified information
collection. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collections
contained in this Order, as required by the Paperwork Reduction Act of
1995, Public Law 104-12. Written comments by the public on the
information collections are due 30 days after date of publication in
the Federal Register. OMB notification of action is due July 6, 1998.
Comments should address: (1) whether the new or modified collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information shall practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents including the use of automated
collection techniques or other forms of information technology.
OMB Control Number: 3060-0715.
Title: Implementation of the Telecommunications Act of 1996:
Telecommunications Carriers' Use of customer proprietary Network
Information and Other Customer Information.
Form No.: N/A.
Type of Review: Revised collection.
Respondents: Business or other for-profit.
Public reporting burden for the collection of information is
estimated as follows:
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Number of
Information collection respondents Annual hour burden per Total annual burden
(approximately) response
----------------------------------------------------------------------------------------------------------------
Customer Approval (47 CFR 64.2007).. 4,832 78 hours................... 376,896 hours.
Customer Approval Documentation and 4,832 30 minutes................. 2,416 hours.
Recordkeeping (47 CFR 64.2007(e)
and 64.2009).
Notification of CPNI Rights (47 CFR 4,832 78 hours................... 376,896 hours.
64.2007(f)).
Notification Recordkeeping (47 CFR 4,832 30 minutes................. 2,416 hours.
64.2007(e)).
Audit Mechanism (47 CFR 64.2009).... 4,832 30 minutes................. 2,416 hours.
Event Histories Recordkeeping (47 4,832 30 minutes................. 2,416 hours.
CFR 64.2009(d)).
Corporate Compliance Certification 4,832 1 hour..................... 4,832 hours.
(47 CFR 64.2009(e)).
Aggregate customer Information 1,400 1 hour..................... 1,400 hours.
Disclosure Requirements for LECs.
Subscriber List Information 1,400 4 hours.................... 5,600 hours.
Disclosure Requirement for
Providers of Telephone Exchange
Service*.
CPNI Disclosure to Third Parties*... 500 5 hours.................... 2,500 hours.
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*These requirements are imposed pursuant to statute. See 47 U.S.C. 222.
Total Annual Burden: 777,788 burden hours.
Estimated Costs Per Respondents: $47,500 (avg.); Total cost to
industry: $229,520,000.
Needs and Uses: The Second Report and Order implements the
statutory obligations of section 222 of the Telecommunications Act of
1996. Among other things, carriers are permitted to use CPNI, without
customer aproval, to market offerings that are related to, but limited
by, the customer's existing service relationship with their carrier.
Carriers must obtain express customer approval to use CPNI to market
service outside the customer's existing service relationship. Carriers
must provide a one-time notification of customers' CPNI rights prior to
any solicitation for approval. All of the collections would be used to
ensure that telecommunications carriers comply with the CPNI
requirements the Commission promulgates in the Order and to implement
section 222 of the statute.
Synopsis of Second Report and Order
I. Commission Authority
1. We conclude that we have authority to promulgate regulations
implementing section 222.
II. Carrier's Right to Use CPNI Without Customer Approval
A. Scope of a Carrier's Right Pursuant to Section 222(c)(1)(A): the
``Total Service Approach''
2. The statutory language makes clear that Congress did not intend
for the implied customer approval to use, disclose, or permit access to
CPNI under section 222(c)(1)(A) to extend to all of the categories of
telecommunications services offered by the carrier, as proposed by
advocates of the single category approach. First, Congress' repeated
use of the singular ``telecommunications service'' must be given
meaning. Section 222(c)(1) prohibits a carrier from using CPNI obtained
from the provision of ``a telecommunications service'' for any purpose
other than to provide ``the telecommunications service from which such
information is derived'' or services necessary to, or used in,
provision of ``such telecommunications service.'' We agree with many
commenters that this language plainly indicates that Congress both
contemplated the possible existence of more than one carrier service
and made a deliberate decision that section 222(c)(1)(A) not extend to
all. Indeed, Congress' reference to plural ``telecommunications
services'' in sections 222(a) and 222(d)(1) demonstrates a clear
distinction between the singular and plural forms of the term. Under
well-established principles of statutory construction, ``where Congress
has chosen different language in proximate subsections of the same
statute,'' we are ``obligated to give that choice effect.'' Consistent
with this, section 222(c)(1)'s explicit restriction of a carrier's
``use'' of CPNI ``in the provision of'' service further evidences
Congress' intent that carriers' own use of CPNI be limited to the
service provided to the particular customer, and not be expanded to all
the categories of telecommunications services available from the
carrier.
3. We therefore reject the single category approach as contrary to
the statutory language.
4. We likewise reject parties' suggestions that we interpret
section 222(c)(1)(A) based on prior Commission decisions, including the
McCaw orders, various Computer III orders, as well as the Common
Carrier Bureau's opinion in BankAmerica v. AT&T, which permitted the
sharing of customer information among affiliated companies based on the
existing business relationship and the perceived benefits
[[Page 20328]]
of integrated marketing. We similarly reject parties' reliance on other
statutes, particularly the Cable Television Consumer Protection and
Competition Act (1992 Cable Act) and the Telephone Consumer Protection
Act of 1991 (TCPA), as well as the Commission's implementation of those
Acts. Neither of these statutes contains the specific and unique
language of section 222 which expressly limits a carrier's ``use'' of
customer information. Again, to the extent other provisions are
probative, they indicate that Congress was clear when it intended to
exempt information sharing within the context of the existing business
relationship from general consumer protection provisions, but chose not
to in section 222.
5. We also conclude, contrary to the suggestion of its proponents,
that the discrete offering approach is not required by the language of
section 222(c)(1)(A).
Our rejection of the discrete category approach, and support for
the total service approach, is also informed by our understanding of
the relationship between sections 222(c)(1)(A) and (d)(1). Had Congress
intended to permit carriers to use CPNI only for ``rendering'' service,
as suggested under the discrete offering approach, and as explicitly
provided in section 222(d)(1), it would not have needed to create the
exception in section 222(c)(1)(A). In contrast, by interpreting section
222(c)(1)(A) as we do, to permit some use of CPNI for marketing
purposes, we give meaning to both statutory provisions. Indeed, in
contrast with the various parties' views concerning the scope of
section 222(c)(1)(A), commenters that addressed the meaning of section
222(d)(1) uniformly suggest that it does not extend to a carrier's use
of CPNI for marketing purposes.
6. The legislative history confirms our view that in section 222
Congress intended neither to allow carriers unlimited use of CPNI for
marketing purposes as they moved into new service avenues opened
through the 1996 Act, nor to restrict carrier use of CPNI for marketing
purposes altogether.
7. Finally, we also reject the various arguments advanced by GTE,
PacTel, USTA, and U S WEST that our adoption of an interpretation more
limited than the single or two category approaches raises
Constitutional concern.
8. We reject the Constitutional takings arguments because, to the
extent CPNI is property, we agree that it is better understood as
belonging to the customer, not the carrier.
9. We likewise reject parties' Equal Protection challenges based on
section 222's limitation to telecommunications carriers alone.
10. Non-Telecommunications Offerings. Several carriers argue that
certain non-telecommunications offerings, in addition to being covered
by section 222(c)(1)(B), also should be included within any service
distinctions we adopt pursuant to section 222(c)(1)(A), including
inside wiring, customer premises equipment (CPE), and certain
information services. Based on the statutory language, however, we
conclude that inside wiring, CPE, and information services do not fall
within the scope of section 222(c)(1)(A) because they are not
``telecommunications services.'' More specifically, section
222(c)(1)(A) refers expressly to carrier use of CPNI in the provision
of a ``telecommunications service.''
11. We conclude that carriers may not use CPNI derived from the
provision of a telecommunications service for the provision or
marketing of information services pursuant to section 222(c)(1)(A). We
likewise conclude that inside wiring and CPE do not fall within the
definition of ``telecommunications service,'' and thus do not fall
within the scope of section 222(c)(1)(A).
12. We also conclude that, to the extent that services formerly
described as adjunct-to-basic are offered by CMRS providers, these
should be considered either within the provision of CMRS under section
222(c)(1)(A), or as services necessary to, or used in, CMRS under
section 222(c)(1)(B). In addition, we agree with the result advocated
by WTR, and conclude that a reasonable interpretation of section
222(c)(1)(A) permits carriers to use, disclose, or permit access to
CPNI for the limited purpose of conducting research on the health
effects of their service.
13. Special Treatment for Certain Carriers. We conclude that
Congress did not intend to, and we should not at this time, distinguish
among carriers for the purpose of applying section 222(c)(1). Based on
the statutory language, it is clear that section 222 applies to all
carriers equally and, with few exceptions, does not distinguish among
classes of carriers.
14. We also decline to forbear from applying section 222(c)(1), or
any of our associated rules, to small or competitive carriers, as SBT
requests.
15. We also agree with a number of parties that there should be no
restriction on the sharing of CPNI among a carrier's various
telecommunications-related entities that provide different service
offerings to the same customer.
16. In addition to finding that the total service approach is most
consistent with the statutory language and legislative history, we are
persuaded that, as a policy matter, the total service approach also
best advances the principles of customer control and convenience
implicitly embodied in sections 222(c)(1) and (c)(2).
17. Customers do not expect that carriers will need their approval
to use CPNI for offerings within the existing total service to which
they subscribe. We believe it reasonable to conclude that, where a
customer subscribes to a diverse service offering--a mixture of local,
long distance, and CMRS--from the same carrier or its subsidiary or
affiliated companies, the customer views its telecommunications service
as the total service offering that it has purchased, and can be
presumed to have given implied consent to its carrier to use its CPNI
for all aspects of that service.
18. By contrast, neither the discrete offering approach nor the
three category approach serves the statutory principle of customer
convenience or reasonably reflects customers' expectations of what
constitutes their telecommunications service.
19. We also reject the discrete offering and three category
approaches because we share the concern expressed by many parties that
such restrictive interpretations may be difficult to implement as
service distinctions, and corresponding customer subscriptions, become
blurred with market and technological advances.
20. Customers do not expect that carriers will use CPNI to market
offerings outside the total service to which they subscribe.
21. Second, even if the Westin survey accurately shows that
customers desire ``one-stop shopping,'' and would permit carriers to
share information in order to offer improved service, our
interpretation of section 222(c)(1) does not foreclose carriers'
ability to offer integrated packages nor the beneficial marketing uses
to which CPNI can be made.
22. To be sure, under the total service approach carriers may not
use CPNI without prior customer approval to target customers they
believe would be receptive to new categories of service.
23. Finally, we reject the claim put forth by several proponents of
the single category approach that narrower interpretations of section
222(c)(1)(A) would result in significant administrative burdens for
carriers. On the contrary, we conclude that the total service approach
is the least onerous administratively.
[[Page 20329]]
B. Scope of Carrier's Right Pursuant to Section 222(c)(1)(B)
24. As a threshold matter, given the wide range of views on the
interpretation of section 222(c)(1)(B), we reject U S WEST's assertion
that we simply craft rules repeating, verbatim, the statutory language.
We clarify, however, that we do not attempt here to catalogue every
service included within the scope of section 222(c)(1)(B), but rather
address the specific offerings that have been proposed in the record as
falling within that section, in particular, CPE, certain information
services, and installation, maintenance, and repair services. We
likewise believe that section 222(c)(1)(B) most appropriately is
interpreted as recognizing that customers impliedly approve their
carrier's use of CPNI in connection with certain non-telecommunications
services. This implied approval, however, is expressly limited to those
services ``necessary to, or used in, the provision of such
telecommunications service.'' Through this limiting language, we
believe carriers' CPNI use is confined only to certain non-
telecommunications services (i.e. those ``services'' either ``necessary
to'' or ``used in''), as well as to those services that comprise the
customer's total service offering (i.e. ``such [section 222(c)(1)(A)]
telecommunications service'').
25. CPE and Certain Information Services. Based on the statutory
language we conclude that, contrary to the position advanced by several
parties, a carrier may not use, disclose, or permit access to CPNI,
without customer approval, for the provision of CPE and most
information services because, as other commenters assert, they are not
``services necessary to, or used in, the provision of such
telecommunications service'' under section 222(c)(1)(B).
26. Contrary to NYNEX's argument, we conclude that Congress'
designation of the publishing of directories as ``necessary to, or used
in'' the provision of a telecommunications service does not require a
broad reading of section 222(c)(1)(B) that encompasses all information
services. We are persuaded that section 222(c)(1)(B) covers services
like those formerly characterized as ``adjunct-to-basic,'' in contrast
to the information services such as call answering, voice mail or
messaging, voice storage and retrieval services, fax store and forward,
and Internet access services, that the parties identified in the
record.
27. Our interpretation is supported by Congress' example of the
publishing of directories. The publishing of directories, like those
services formerly described as adjunct-to-basic, can appropriately be
viewed as necessary to and used in the provision of complete and
adequate telecommunication service.
28. As a matter of statutory construction, we find that the
language of section 222(c)(1)(B) is clear and unambiguous, and does not
permit the interpretation that CPE and most information services are
``services necessary to, or used in, the provision of such
telecommunications service.'' But even if that language is ambiguous,
we are unpersuaded by parties' contrary arguments based on the
legislative history and policy considerations.
29. We also reject suggestions that restrictions on CPNI sharing in
the context of CPE and information services would be contrary to
customer expectations, as well as detrimental to the goals of customer
convenience and one-stop shopping. As ITAA notes, CPNI is not required
for one-stop shopping.
30. Finally, we reject parties' contentions that we should permit
carriers to use CPNI in connection with CPE and information services
because the Commission in the past permitted more information sharing.
31. Installation, Maintenance, and Repair Service. We conclude
that, pursuant to section 222(c)(1)(B), a carrier may use, disclose, or
permit access to CPNI, without customer approval, in its provision of
inside wiring installation, maintenance, and repair services.
32. Specifically, we are persuaded that installation, maintenance,
and repair of inside wiring is a service both ``necessary to'' and
``used in'' a carrier's provision of wireline telecommunications
service. As such, carriers may use, without customer approval, CPNI
derived from wireline service for the provision of inside wiring
installation, maintenance, and repair services.
33. We further believe that our conclusion is fully consistent with
customer expectation, and thereby furthers the statutory principles of
customer control and convenience embodied in section 222.
C. Scope of Carrier's Right Pursuant to Section 222(d)(1)
34. In the context of installation, maintenance, and repair of
inside wiring, we conclude that section 222(d)(1), as well as section
222(c)(1)(B), permit carrier use of CPNI without customer approval for
the provision of such services. We agree with virtually all commenters
that section 222(d)(1)'s permission for carriers to use CPNI ``to
initiate, render, bill, and collect for telecommunications services''
includes the actual installation, maintenance, and repair of inside
wiring.
35. Our conclusion is consistent with Equifax's concerns that we
not interpret sections 222(d)(1) as well as 222(d)(2) in a manner that
impedes carriers' access to information for the purpose of billing,
fraud prevention, and related services, as well as the carriers'
ability to provide the required information.
36. Contrary to the claims of AT&T and MCI, we further conclude,
however, that the term ``initiate'' in section 222(d)(1) does not
require that CPNI be disclosed by carriers when competing carriers have
``won'' the customer. We agree with GTE that section 222(d)(1) applies
only to carriers already possessing the CPNI, within the context of the
existing service relationship, and not to carriers seeking access to
CPNI.
37. Furthermore, a carrier's failure to disclose CPNI to a
competing carrier that seeks to initiate service to a customer that
wishes to subscribe to the competing carrier's service, may well,
depending upon the circumstances, constitute an unreasonable practice
in violation of section 201(b). We also do not believe, contrary to the
position suggested by AT&T, that section 222(d)(1) permits the former
(or soon-to-be former) carrier to use the CPNI of its former customer
(i.e., a customer that has placed an order for service from a competing
provider) for ``customer retention'' purposes.
III. ``Approval'' Under Section 222(c)(1)
A. Express Versus Notice and Opt-Out
38. We conclude, contrary to the position of a number of parties,
that an express approval mechanism is the best means to implement this
provision because it will minimize any unwanted or unknowing disclosure
of CPNI. In addition, such a mechanism will limit the potential for
untoward competitive advantages by incumbent carriers. In contrast,
under an opt-out approach, as even its proponents admit, because
customers may not read their CPNI notices, there is no assurance that
any implied consent would be truly informed.
39. We are not persuaded by the statutory argument raised by the
BOCs, AT&T, and GTE that Congress' requirement of an ``affirmative
written request'' in section 222(c)(2) means that Congress intended to
permit notice and opt-out when it required only ``approval'' in section
222(c)(1).
[[Page 20330]]
40. We likewise reject U S WEST's claim that the earliest versions
of what became H.R. 1555 requires that we interpret ``approval'' to
permit notice and opt-out.
41. We believe that, although the legislative history offers no
specific guidance on the meaning of ``approval'' in section 222(c)(1),
the language in the Conference Report, explaining that section 222
strives to ``balance both competitive and consumer privacy interests
with regard to CPNI,'' strongly supports our conclusion that express
approval is the better reading of the statutory language.
42. We also reject the arguments that Congress' express provision
for a notice and opt-out mechanism in section 551 of the Act somehow
compels that result here even though the language of section 222
contains no similar express reference to such a mechanism. To the
contrary, section 551 confirms that Congress knew how to draft a notice
and opt-out provision when it determined that such an approach was
appropriate. For all these reasons we reject commenters' arguments that
notice and opt-out is in some manner required by the language of
section 222, or other precedent.
43. We reject PacTel's and U S WEST's contention that customers do
not expect carriers to seek affirmative approval for the use of
information to market services to which they do not subscribe, and that
to do so would confuse them. To the contrary, based on the results of U
S WEST's affirmative approval market trial, as well as those of a
similar trial reported by Ameritech, we believe that, when customers
wish to do so, they have no problem understanding a carrier's
solicitation for approval and granting consent for the use of CPNI
outside the scope of their total service offering.
44. We reject the argument that imposing an express approval
requirement will ``effectively eliminate integrated marketing'' and
thwart the development of one stop shopping. While section 222
precludes carriers from jointly marketing certain services through the
use of CPNI, nothing in section 222 prevents carriers from jointly
marketing services without relying on CPNI, as CPI and Cox point out.
Moreover, while the use of CPNI may facilitate the marketing of
telecommunications services to which a customer does not subscribe,
such use is not necessary for carriers to engage in joint marketing. We
thus reject PacTel's contention that an express approval requirement
would vitiate section 601(d) of the 1996 Act, which allows carriers to
market CMRS services jointly with other telecommunications services,
and section 272(g) of the Act, which permits BOC joint marketing of
telephone exchange service and in-region interLATA service, under
certain conditions. To the contrary, carriers are free to market
jointly telecommunications services without using CPNI to the extent
such marketing is otherwise permissible under other provisions. In
addition, as TRA points out, a customer desiring an integrated
telecommunications service offering tailored to its needs simply may
give approval to allow its carrier to access CPNI for purposes outside
of sections 222(c)(1)(A) and (B).
45. We reject U S WEST's argument that an express approval
requirement under section 222(c)(1) would impermissibly infringe upon a
carrier's First Amendment rights. At the outset, we think there is a
substantial question as to whether CPNI restrictions even implicate
constitutionally protected ``speech.'' Carriers remain free to
communicate with present or potential customers about the full range of
services that they offer, and section 222 therefore does not prevent a
carrier from engaging in protected speech with customers regarding its
business or its products. What carriers cannot do is use confidential
CPNI in a manner that is not permitted by the statute. While section
222 may constrain carriers' ability to more easily ``target'' certain
customers for marketing by limiting in some circumstances their
internal use of confidential customer information, we question whether
that of itself constitutes a restriction on protected ``speech'' within
the purview of the First Amendment. Nevertheless, to the extent that it
were concluded that CPNI restrictions under section 222 did affect
carrier communications with their customers or unrelated third parties
in such a way as to implicate the First Amendment, at most commercial
speech would be at issue since any limitations under section 222 relate
solely to the economic interests of the speaker and its audience. But
any governmental restrictions on commercial speech will be upheld
where, as here, the government asserts a substantial interest in
support of the regulation, the regulation advances that interest, and
the regulation is narrowly drawn. As the Supreme Court has observed, it
has never deemed it an abridgement of freedom of speech to make a
course of conduct illegal merely because the conduct was initiated or
conducted in part through language; to the contrary, similar regulation
of business activity has been held not to violate the first Amendment.
46. We further conclude that an express approval requirement would
not violate the free speech rights of customers. To the extent a
customer wishes to receive information on offerings outside the scope
of its total service offering, it simply may grant approval under
section 222(c)(1). As we previously noted, to the extent customers are
engaged in communications with their carrier regarding the servicing of
their account, they are more likely to grant approval.
B. Written, Oral and/or Electronic Approval
47. We conclude that carriers should be permitted to obtain such
approval through written, oral, or electronic means, as several
commenters contend.
48. We disagree with parties arguing that section 222 mandates
written approval. We find nothing in the language or design of section
222 that limits carriers to obtaining only written approval, despite
arguments advanced by some of these commenters.
49. We also reject the contention that section 222(d)(3) of the Act
supports a written approval requirement. While section 222(d)(3)
contemplates oral approval in creating an exception for CPNI use during
an inbound call, section 222(d)(3) also may be interpreted simply to
permit a carrier to use CPNI to provide a customer with information for
the duration of an inbound call, based on oral approval, even if the
customer otherwise has restricted the carrier's use of its CPNI, as
Ameritech points out.
50. We conclude that a carrier relying on oral customer approval
should be required to notify customers of their CPNI rights, and should
bear the burden of demonstrating that a customer has granted approval
subsequent to such notification pursuant to the rules we adopt in this
order.
C. Duration, Frequency, and Scope of Approval
51. We conclude that approval obtained by a carrier for the use of
CPNI outside of section 222(c)(1), whether oral, written, or
electronic, should remain in effect until the customer revokes or
limits such approval, as some parties suggest. We do not require
carriers to renew customer approval periodically, for example, annually
or semi-annually, or to presume that customer approval is valid only
for the duration of the transaction, if the customer has not otherwise
specified the time period during which the approval remains valid.
[[Page 20331]]
52. We decline to establish at this time a restriction on the
number of times a carrier may contact a customer to obtain approval for
the use of CPNI outside of section 222(c)(1), despite arguments raised
by some parties.
53. We conclude that allowing a customer to grant partial use of
CPNI is consistent with one of the underlying principles of section 222
to ensure that customers maintain control over CPNI. A carrier could
obtain partial use by virtue of its ability to view customer records
for a limited duration, notwithstanding the customer's restriction of
CPNI use.
D. Verification of Approval
54. We conclude that a carrier relying on oral approval under
section 222(c)(1) should bear the burden of demonstrating that such
approval has been given in compliance with the rules we adopt in this
order, as a number of parties contend.
55. Because carriers must bear the burden of demonstrating that
they have obtained oral approval under section 222(c)(1), we find it
unnecessary to mandate specific verification mechanisms at this time.
In general, we agree with those commenters arguing that a carrier
relying on oral approval should be able to meet its burden by, for
example, audiotaping customer conversations, or by demonstrating that a
qualified independent third party operating in a location physically
separate from the carrier's telemarketing representative has obtained
customer approval under section 222(c)(1) subsequent to adequate
notification of its CPNI rights, and has confirmed the appropriate
verification data, e.g., the customer's date of birth or social
security number. In contrast, we would likely not consider the mere
absence of any CPNI restriction in the customer's database or other
account record sufficient to verify that a customer has given express
approval in accordance with section 222(c)(1), despite SBC's
suggestion. In addition, because carriers are required under our rules
to notify customers of their CPNI rights prior to soliciting approval,
we do not require them to send follow-up letters to customers
confirming approval, contrary to some parties' contentions.
56. Finally, we require that carriers maintain records of
notification and approval, whether written, oral, or electronic, and be
capable of producing them if the sufficiency of a customer's
notification and approval is challenged. Maintenance of such records
will facilitate the disposition of individual complaint proceedings. We
thus require that carriers maintain such records for a period of at
least one year in order to ensure a sufficient evidentiary record for
CPNI compliance and verification purposes.
E. Informed Approval Through Notification
57. We require carriers to provide their customers notification if
the carrier wishes to use, disclose or permit access to CPNI beyond the
purposes specified in sections 222(c)(1)(A) and (B); at this time,
however, we make no decision on whether notice is required for use of
CPNI within the scope of sections 222(c)(1)(A) and (B).
58. We agree with the majority of commenters that customers must be
made aware of their CPNI rights before they can be deemed to have
``waived'' those rights.
59. We reject BellSouth's contention that customers reasonably
expect businesses with whom they have a pre-existing relationship to
use CPNI to offer new services, and that therefore carrier use of CPNI
for the development and marketing of services should be deemed to be
permitted or invited, in the absence of specific notification to the
customer. Specific notification of the customer's CPNI rights, as a
component of informed ``approval'' under section 222(c)(1), is
warranted for uses of CPNI outside the customer's total service
offering.
F. Form and Content of Notification
60. Form of Notification. We conclude that a carrier should be
permitted to provide either written or oral notification, as a number
of parties contend. Such notification, for example, may take the form
of a bill insert, an individual letter, or an oral presentation that
advises the customer of his or her right to restrict carrier access to
CPNI.
61. We are not persuaded by parties' assertions that oral
notification is necessarily less verifiable than written, will result
in abuses, create greater disputes and confuse customers, is too
difficult to accomplish successfully, or could be used to dissuade
customers from releasing CPNI to a competitor. We therefore conclude
that a carrier providing verbal notification of a customer's CPNI
rights must carry the burden of showing that such notice has been
given, in compliance with the requirements we adopt in this order. We
further find that carriers may use any reasonable method for verifying
oral notification that adequately confirms that such notification has
been given, including, but not limited to, audiotaping customer
conversations or using an independent third party verification process.
62. We find no reason to impose different notification requirements
on large and small carriers, as some commenters suggest.
63. Content of Notification. At a minimum, customer notification,
whether oral or written, must provide sufficient information to enable
the customer to make an informed decision as to whether to permit a
carrier to use, disclose, or permit access to CPNI. If a carrier
intends to share CPNI with an affiliate (or non-affiliate) outside the
scope of section 222(c)(1), the notice must state that the customer has
a right, and the carrier a duty, under federal law, to protect the
confidentiality of CPNI. In addition, the notice must specify the types
of information that constitute CPNI and the specific entities that will
receive the CPNI, describe the purposes for which the CPNI will be
used, and inform the customer of his or her right to disapprove those
uses, and to deny or withdraw access to CPNI at any time. The
notification also must advise customers of the precise steps they must
take in order to grant or deny access to CPNI, and must clearly state
that a denial of approval will not affect the provision of any services
to which the customer subscribes. Any notification that does not
provide the customer the option of denying access, or implies that
approval is necessary to ensure the continuation of services to which
the customer subscribes, or the proper servicing of the customer's
account, would violate our notification requirements.
64. We also require that any notification provided by a carrier for
uses of CPNI outside of section 222(c)(1) be reasonably comprehensible
and non-misleading. In this regard, a notification that uses, for
example, legal or technical jargon could be deemed not to be
``reasonably comprehensible'' under our requirements. If written notice
is provided, the notice must be clearly legible, use sufficiently large
type, and be placed in an area so as to be readily apparent to a
customer. Finally, we require that, if any portion of a notification is
translated into another language, then all portions of the notification
must be translated into that language.
65. We agree with CWI that a carrier should not be prohibited from
stating in the notice that the customer's approval to use CPNI may
enhance the carrier's ability to offer products and services tailored
to the customer's needs. We also do not preclude a carrier from
addressing the rights of unaffiliated third parties to obtain access to
the customer's CPNI. Consequently, a carrier would not be prohibited
from,
[[Page 20332]]
for example, informing a customer that it may direct the carrier to
disclose CPNI to unaffiliated third parties upon submission to the
carrier of an affirmative written request, pursuant to section
222(c)(2) of the Act. However, a carrier would be prohibited from
including any statement attempting to encourage a customer to freeze
third party access to CPNI.
66. We also conclude that carriers must provide notification of a
customer's CPNI rights, whether oral or written, prior to any
solicitation for approval. A customer must be fully informed of its
right to restrict carrier access to sensitive information before it can
waive that right. Any notification that is provided subsequent to a
solicitation for customer approval under section 222(c)(1) is
inadequate to inform a customer of such right. The notification may be
in the same conversation or document as the solicitation for approval,
as long as the customer would hear or read the notification prior to
the solicitation for approval. Finally, we conclude that the
solicitation for approval to use CPNI, whether in the form of a
signature line, check-off box or other form, should be proximate to the
written or oral notification, rather than at the end of a long document
that the customer might sign for other purposes, or at the conclusion
of a lengthy conversation with the customer, for example. Similarly,
the solicitation for approval, if written, should not be on a document
separate from the notification, even if such document is included
within the same envelope or package. The notice should state that any
customer approval, or denial of approval, for the use of CPNI outside
of section 222(c)(1) is valid until the customer affirmatively revokes
or limits such approval or denial.
67. We conclude that carriers need only provide one-time
notification to customers of their CPNI rights, as suggested by some
parties.
IV. Aggregate Customer Information
68. We reject the claim that our interpretation of sections
222(c)(1) and 222(c)(3) would constitute an unlawful taking. Even
assuming carriers have a property interest in either CPNI or aggregate
customer information, our interpretation of sections 222(c)(1) and
222(c)(3) does not ``deny all economically beneficial'' use of
property, as it must, to establish a successful claim.
69. Although LECs face certain obligations when they use aggregate
customer information under section 222(c)(3), Congress did not require
that LECs give aggregate customer information to their competitors upon
request in all circumstances. Rather, when LECs use this aggregate
information only to tailor their service offering to better suit the
needs of their existing customers--that is, within the scope of
sections 222(c)(1)(A) and (B), LECs do not need to disclose the
aggregate information. Moreover, LECs are permitted to use the
aggregate information when targeting new service customers--that is,
for purposes beyond the scope of section 222(c)(1)(A) and (B). When
they do so, LECs simply must give that information to others upon
request.
70. We also reject parties' Equal Protection challenge. In order to
sustain an equal protection challenge, parties challenging the law must
prove that the law has no rational relation to any conceivable
legitimate legislative purpose. Making LEC aggregate customer
information available on nondiscriminatory terms, when used for
purposes beyond those in sections 222(c)(1)(A) and (B), is reasonably
related to the legitimate goal of promoting open competition in
telecommunications markets.
71. Finally, regarding the LECs' notice obligations, the
nondiscrimination requirement in section 222(c)(3) protects competitors
from anticompetitive behavior by requiring that LECs make aggregate
customer information available ``upon reasonable request.'' We
interpret these terms to permit a requirement that LECs honor standing
requests for disclosure of aggregate customer information at the same
time and same price as when disclosed to, or used on behalf of, their
affiliates.
V. Section 222 and Other Act Provisions
72. We recognize an apparent conflict between sections 222 and 272.
Because Congress did not make its intent clear, our resolution of the
apparent conflict must therefore be guided by the interpretation that,
in our judgment, best furthers the policies of these two provisions,
and thereby, best reflects the statutory design. On this policy basis,
we believe that interpreting section 272 to impose no additional
obligations on the BOCs when they share CPNI with their statutory
affiliates according to the requirements of section 222, as implemented
in this order, most reasonably reconciles the goals of these two
provisions.
73. We are persuaded here that we should interpret section 274 to
impose no additional CPNI requirements regarding the BOCs' use of CPNI
in connection with their provision of electronic publishing. Thus, as
in the case of section 272, where section 222 appropriately balances
the potentially competing interests in the specific context of
carriers' use and disclosure of CPNI, we conclude that we should not
upset the balance by ``superimposing'' nondiscrimination standards in
section 274.
VI. Commission's Existing CPNI Regulations
74. We conclude that retaining the Computer III CPNI requirements,
applicable solely to the BOCs, AT&T and GTE, would produce no
discernable competitive protection, and would be confusing to both
carriers and customers.
A. BOC Cellular CPNI Rule 22.903(f) and Computer II Rule 64.702(d)(3)
75. We conclude that we should eliminate both rules 22.903(f) and
64.702(d)(3).
B. Safeguards Under Section 222
76. We confirm our tentative conclusion that the Computer III
safeguards, as they currently operate, should not be applied to other
carriers. Insofar as the statutory scheme we implement in this order
fully supplants our Computer III CPNI framework, we are further
persuaded that we should likewise not retain the CPNI safeguards
designed to ensure compliance within the Computer III framework. The
record nevertheless supports the need to specify safeguards to prevent
unapproved use, disclosure, and access to customer CPNI by carrier
personnel and unaffiliated entities under the new scheme.
77. Although we believe different rules are not generally necessary
for small or rural carriers, we note that such carriers may seek a
waiver of our new CPNI rules if they can show that our rules would be
unduly burdensome, and propose alternative methods for safeguarding the
privacy of their customers, consistent with section 222.
78. Access Restrictions. We decline to require restrictions that
would prohibit carrier personnel from accessing CPNI of customers who
have either failed, or expressly declined, to give requisite approval
for carrier use of CPNI for marketing purposes.
79. Use Restrictions and Personnel Training. We specifically
require that carriers develop and implement software systems that
``flag'' customer service records in connection with CPNI. Carriers
have indicated that their systems could be modified relatively easily
to accommodate such CPNI ``flags.'' The flag must be conspicuously
displayed within a box or comment
[[Page 20333]]
field within the first few lines of the first computer screen. The flag
must indicate whether the customer has approved the marketing use of
his or her CPNI, and reference the existing service subscription. In
conjunction with such software systems, we require that all employees
with access to customer records be trained as to when they can and
cannot access the customer's CPNI. Carriers must also maintain internal
procedures to handle employees that misuse CPNI contrary to the
carriers' stated policy. These requirements represent minimum
guidelines that we believe most carriers can readily implement and that
are not overly burdensome.
80. Access Documentation. We require that carriers maintain an
electronic audit mechanism that tracks access to customer accounts. The
system must be capable of recording whenever customer records are
opened, by whom, and for what purpose. We believe awareness of this
``audit trail'' will discourage unauthorized, ``casual'' perusal of
customer accounts, as well as afford a means of documentation that
would either support or refute claimed deliberate carrier CPNI
violations. We further require that carriers maintain such contact
histories for a period of at least one year to ensure a sufficient
evidentiary record for CPNI compliance and verification purposes.
81. Supervisory Review for Outbound Marketing Campaigns. We require
carriers to establish a supervisory review process that ensures
compliance with CPNI restrictions when conducting outbound marketing.
Although supervisory review would neither be convenient nor practical
when customers initiate a service call (i.e., in the inbound marketing
context), we believe that such review is fully warranted in connection
with outbound marketing campaigns. There is both less likelihood that
customers will detect CPNI violations and greater incentive for sales
employees to misuse CPNI when the dialogue with the customer is
initiated by the carrier. Indeed, a major focus of outbound sales
representatives is on the acquisition of new customers rather than on
the retention of, and service to, current customers. Accordingly, we
require that sales personnel obtain supervisory review of any proposed
request to use CPNI for outbound marketing purposes. We require
carriers to maintain a record of the ``event histories'' (like contact
histories) for at least one year from the date of the marketing
campaign.
82. Corporate Certification. We require each carrier to submit a
certification signed by a current corporate officer, as an agent of the
corporation, attesting that he or she has personal knowledge that the
carrier is in compliance with our CPNI requirements on an annual basis.
This certification must be made publicly available, and be accompanied
by a statement explaining how the carrier is implementing our CPNI
rules and safeguards.
83. Additional requirements. The Commission will enforce all rules
announced in this order upon their effective date. Because carriers may
need time to conform their data systems and operations to comply with
the software flags and electronic audit mechanisms required under this
order, however, we will not seek enforcement of these specific
safeguard rules for a period of eight months from the date these rules
become effective. After that time, we authorize the Chief of the Common
Carrier Bureau to undertake enforcement actions when necessary and
appropriate, and, to the extent that carrier behavior justifies
requirements beyond those outlined herein, to establish additional
safeguards. This delegation to the Common Carrier Bureau will
facilitate the handling of CPNI compliance issues in an expedited
manner.
VII. Procedural Issues
A. Second Report and Order
1. Final Regulatory Flexibility Analysis
84. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C.
603, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated
in the Notice. The Commission sought written public comment on the
proposals in the Notice, including the IRFA. The Commission's Final
Regulatory Flexibility Analysis (FRFA) in this Second Report and Order
conforms to the RFA, as amended by the Contract With America
Advancement Act of 1996 (CWAAA), Public Law No. 104-121, 110 Stat. 847
(1996).
a. Need for and Objectives of the Proposed Rules
85. The Commission, in compliance with section 222 of the 1996 Act,
promulgates rules in this order to reflect Congress' directive to
balance the competitive and customer privacy interests associated with
the use and protection of customer proprietary network information
(CPNI), while fully considering the impact of these requirements on
small carriers. This order reflects the statutory principle that
customers must have the opportunity to protect the information they
view as sensitive and personal from use and disclosure by carriers. As
a general matter, we find that customer approval for carriers to use,
disclose, or permit access to CPNI is inferred from the existing
customer-carrier relationship; therefore, we conclude that such consent
should be limited to the ``total service offering'' to which the
customer subscribes from a carrier. To preserve the customer's control
over the dissemination of sensitive information, we require an express
approval requirement for the use of CPNI beyond the total service
offering to which the customer subscribes from a carrier. While these
rules permit customers to decide whether and to what extent their CPNI
is used, they also restrict carriers' anticompetitive use of CPNI.
b. Summary of Significant Issues Raised by the Public Comments in
Response to the IRFA
86. In the IRFA, the Commission generally stated that any rule
changes that might occur as a result of this proceeding could impact
small business entities. Specifically, in the IRFA, the Commission
indicated there were no reporting, recordkeeping, or other compliance
requirements. The IRFA solicited comment on alternatives to our
proposed rules that would minimize the impact on small entities
consistent with the objectives of this proceeding. In response we
received no comments specifically directed to the IRFA. As noted infra
Part X.A.1.e of this FRFA, in making the determinations reflected in
this order, we have given consideration to those comments of the
parties that addressed the impact of our proposed rules on small
entities.
c. Description and Estimate of the Number of Small Entities to Which
Rules Will Apply
87. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by our rules. The RFA generally defines the term ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small governmental jurisdiction.'' For
the purposes of this order, the RFA defines a ``small business'' to be
the same as a ``small business concern'' under the Small Business Act,
15 U.S.C. 632, unless the Commission has developed one or more
definitions that are appropriate to its activities. Under the Small
Business Act, a ``small business concern'' is one that: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) meets any additional criteria established by the
Small Business Administration (SBA). The SBA has defined a small
business for Standard
[[Page 20334]]
Industrial Classification (SIC) categories 4812 (Radiotelephone
Communications) and 4813 (Telephone Communications, Except
Radiotelephone) to be small entities when they have no more than 1,500
employees. We first discuss generally the total number of small
telephone companies falling within both of those SIC categories. Then,
we discuss the number of small businesses within the two subcategories,
and attempt to refine further those estimates to correspond with the
categories of telephone companies that are commonly used under our
rules.
88. Although affected incumbent local exchange carriers (ILECs) may
have no more than 1,500 employees, we do not believe that such entities
should be considered small entities within the meaning of the RFA
because they either are dominant in their field of operations or are
not independently owned and operated, and are therefore by definition
not ``small entities'' or ``small business concerns'' under the RFA.
Accordingly, our use of the terms ``small entities'' and ``small
businesses'' does not encompass small ILECs. Out of an abundance of
caution, however, for regulatory flexibility analysis purposes, we will
separately consider small ILECs within this analysis and use the term
``small ILECs'' to refer to any ILECs that arguably might be defined by
SBA as ``small business concerns.''
89. Total Number of Telephone Companies Affected. The United States
Bureau of the Census (the Census Bureau) reports that at the end of
1992, there were 3,497 firms engaged in providing telephone services,
as defined therein, for at least one year. This number contains a
variety of different categories of carriers, including local exchange
carriers, interexchange carriers, competitive access providers,
cellular carriers, mobile service carriers, operator service providers,
pay telephone operators, PCS providers, covered SMR providers, and
resellers. It seems certain that some of those 3,497 telephone service
firms may not qualify as small entities because they are not
``independently owned and operated.'' For example, a PCS provider that
is affiliated with an interexchange carrier having more than 1,500
employees would not meet the definition of a small business. It seems
reasonable to conclude, therefore, that fewer than 3,497 telephone
service firms are either small entities or small incumbent LECs that
may be affected by this order.
90. Wireline Carriers and Service Providers. The SBA has developed
a definition of small entities for telephone communications companies
other than radiotelephone (wireless) companies. The Census Bureau
reports there were 2,321 such telephone companies in operation for at
least one year at the end of 1992. According to the SBA's definition, a
small business telephone company other than a radiotelephone company is
one employing fewer than 1,500 persons. All but 26 of the 2,321 non-
radiotelephone companies listed by the Census Bureau were reported to
have fewer than 1,000 employees. Thus, even if all 26 of those
companies had more than 1,500 employees, there would still be 2,295
non-radiotelephone companies that might qualify as small entities or
small incumbent LECs. Although it seems certain that some of these
carriers are not independently owned and operated, we are unable at
this time to estimate with greater precision the number of wireline
carriers and service providers that would qualify as small business
concerns under the SBA's definition. Consequently, we estimate that
fewer than 2,295 small entity telephone communications companies other
than radiotelephone companies are small entities or small ILECs that
may be affected by this order.
91. Local Exchange Carriers. Neither the Commission nor the SBA has
developed a definition of small providers of local exchange services.
The closest applicable definition under the SBA's rules is for
telephone communications companies other than radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of LECs nationwide of which we are aware appears to be the data that we
collect annually in connection with the Telecommunications Relay
Service (TRS). According to our most recent data, 1,371 companies
reported that they were engaged in the provision of local exchange
services. Although it seems certain that some of these carriers are not
independently owned and operated, or have more than 1,500 employees, or
are dominant we are unable at this time to estimate with greater
precision the number of LECs that would qualify as small business
concerns under the SBA's definition. Consequently, we estimate that
fewer than 1,371 small providers of local exchange service are small
entities or small ILECs that may be affected by this order.
92. Interexchange Carriers. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under the SBA's rules is for telephone communications
companies other than radiotelephone (wireless) companies. The most
reliable source of information regarding the number of IXCs nationwide
of which we are aware appears to be the data that we collect annually
in connection with TRS. According to our most recent data, 143
companies reported that they were engaged in the provision of
interexchange services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of IXCs that would qualify as small business
concerns under the SBA's definition. Consequently, we estimate that
there are fewer than 143 small entity IXCs that may be affected by this
order.
93. Competitive Access Providers. Neither the Commission nor the
SBA has developed a definition of small entities specifically
applicable to providers of competitive access services (CAPs). The
closest applicable definition under the SBA's rules is for telephone
communications companies other than radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of CAPs nationwide of which we are aware appears to be the data that we
collect annually in connection with the TRS. According to our most
recent data, 109 companies reported that they were engaged in the
provision of competitive access services. Although it seems certain
that some of these carriers are not independently owned and operated,
or have more than 1,500 employees, we are unable at this time to
estimate with greater precision the number of CAPs that would qualify
as small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 109 small entity CAPs that may be
affected by this order.
94. Operator Service Providers. Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to
providers of operator services. The closest applicable definition under
the SBA's rules is for telephone communications companies other than
radiotelephone (wireless) companies. The most reliable source of
information regarding the number of operator service providers
nationwide of which we are aware appears to be the data that we collect
annually in connection with the TRS. According to our most recent data,
27 companies reported that they were engaged in the provision of
operator services. Although it seems certain that some of these
companies are not independently owned and operated, or
[[Page 20335]]
have more than 1,500 employees, we are unable at this time to estimate
with greater precision the number of operator service providers that
would qualify as small business concerns under the SBA's definition.
Consequently, we estimate that there are fewer than 27 small entity
operator service providers that may be affected by this order.
95. Pay Telephone Operators. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to pay
telephone operators. The closest applicable definition under the SBA's
rules is for telephone communications companies other than
radiotelephone (wireless) companies. The most reliable source of
information regarding the number of pay telephone operators nationwide
of which we are aware appears to be the data that we collect annually
in connection with the TRS. According to our most recent data, 441
companies reported that they were engaged in the provision of pay
telephone services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of pay telephone operators that would qualify as
small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 441 small entity pay telephone
operators that may be affected by this order.
96. Wireless Carriers. The SBA has developed a definition of small
entities for radiotelephone (wireless) companies. The Census Bureau
reports that there were 1,176 such companies in operation for at least
one year at the end of 1992. According to the SBA's definition, a small
business radiotelephone company is one employing no more than 1,500
persons. The Census Bureau also reported that 1,164 of those
radiotelephone companies had fewer than 1,000 employees. Thus, even if
all of the remaining 12 companies had more than 1,500 employees, there
would still be 1,164 radiotelephone companies that might qualify as
small entities if they are independently owned are operated. Although
it seems certain that some of these carriers are not independently
owned and operated, we are unable at this time to estimate with greater
precision the number of radiotelephone carriers and service providers
that would qualify as small business concerns under the SBA's
definition. Consequently, we estimate that there are fewer than 1,164
small entity radiotelephone companies that may be affected by this
order.
97. Cellular Service Carriers. Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to
providers of cellular services. The closest applicable definition under
the SBA's rules is for telephone communications companies other than
radiotelephone (wireless) companies. The most reliable source of
information regarding the number of cellular service carriers
nationwide of which we are aware appears to be the data that we collect
annually in connection with the TRS. According to our most recent data,
804 companies reported that they were engaged in the provision of
cellular services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of cellular service carriers that would qualify as
small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 804 small entity cellular service
carriers that may be affected by this order.
98. Mobile Service Carriers. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
mobile service carriers, such as paging companies. The closest
applicable definition under the SBA's rules is for telephone
communications companies other than radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of mobile service carriers nationwide of which we are aware appears to
be the data that we collect annually in connection with the TRS.
According to our most recent data, 172 companies reported that they
were engaged in the provision of mobile services. Although it seems
certain that some of these carriers are not independently owned and
operated, or have more than 1,500 employees, we are unable at this time
to estimate with greater precision the number of mobile service
carriers that would qualify under the SBA's definition. Consequently,
we estimate that there are fewer than 172 small entity mobile service
carriers that may be affected by this order.
99. Broadband PCS Licensees. The broadband PCS spectrum is divided
into six frequency blocks designated A through F, and the Commission
has held auctions for each block. The Commission has defined small
entity in the auctions for Blocks C and F as an entity that has average
gross revenues of less than $40 million in the three previous calendar
years. For Block F, an additional classification for ``very small
business'' was added and is defined as an entity that, together with
its affiliates, has average gross revenue of not more than $15 million
for the preceding three calendar years. These regulations defining
small entity in the context of broadband PCS auctions have been
approved by the SBA. No small business within the SBA-approved
definition bid successfully for licenses in Blocks A and B. There were
90 winning bidders that qualified as small entities in the Block C
auctions. A total of 93 small and very small businesses won
approximately 40 percent of the 1,479 licenses for Blocks D, E, and F.
However, licenses for Blocks C through F have not been awarded fully;
therefore, there are few, if any, small businesses currently providing
PCS services. Based on this information, we conclude that the number of
small broadband PCS licensees will include the 90 winning bidders and
the 93 qualifying bidders in the D, E, and F Blocks, for a total of 183
small PCS providers as defined by the SBA and the Commission's auction
rules.
100. Narrowband PCS Licensees. The Commission does not know how
many narrowband PCS licenses will be granted or auctioned, as it has
not yet determined the size or number of such licenses. Two auctions of
narrowband PCS licenses have been conducted for a total of 41 licenses,
out of which 11 were obtained by small businesses owned by members of
minority groups and/or women. Small businesses were defined as those
with average gross revenues for the prior three fiscal years of $40
million or less. For purposes of this FRFA, the Commission is utilizing
the SBA definition applicable to radiotelephone companies, i.e., an
entity employing no more than 1,500 persons. Not all of the narrowband
PCS licenses have yet been awarded. There is therefore no basis to
determine the number of licenses that will be awarded to small entities
in future auctions. Given the facts that nearly all radiotelephone
companies have fewer than 1,000 or fewer employees and that no reliable
estimate of the number of prospective narrowband PCS licensees can be
made, we assume, for purposes of the evaluations and conclusions in
this FRFA, that all the remaining narrowband PCS licenses will be
awarded to small entities.
101. SMR Licensees. Pursuant to 47 CFR 90.814(b)(1), the Commission
has defined ``small entity'' in auctions for geographic area 800 MHz
and 900 MHz SMR licenses as a firm that had average annual gross
revenues of less than $15 million in the three previous calendar years.
This definition of a ``small entity''
[[Page 20336]]
in the context of 800 MHz and 900 MHz SMR has been approved by the SBA.
The rules adopted in this order may apply to SMR providers in the 800
MHz and 900 MHz bands that either hold geographic area licenses or have
obtained extended implementation authorizations. We do not know how
many firms provide 800 MHz or 900 MHz geographic area SMR service
pursuant to extended implementation authorizations, nor how many of
these providers have annual revenues of less than $15 million. We
assume, for purposes of this FRFA, that all of the extended
implementation authorizations may be held by small entities, which may
be affected by this order.
102. The Commission recently held auctions for geographic area
licenses in the 900 MHz SMR band. There were 60 winning bidders who
qualified as small entities in the 900 MHz auction. Based on this
information, we conclude that the number of geographic area SMR
licensees affected by the rule adopted in this order includes these 60
small entities. No auctions have been held for 800 MHz geographic area
SMR licenses. Thus, no small entities currently hold these licenses. A
total of 525 licenses will be awarded for the upper 200 channels in the
800 MHz geographic area SMR auction. The Commission, however, has not
yet determined how many licenses will be awarded for the lower 230
channels in the 800 MHz geographic area SMR auction. Moreover, there is
no basis on which to estimate how many small entities will win these
licenses. Given that nearly all radiotelephone companies have fewer
than 1,000 employees and that no reliable estimate of the number of
prospective 800 MHz licensees can be made, we assume, for purposes of
this FRFA, that all of the licenses may be awarded to small entities
who, thus, may be affected by this order.
103. Resellers. Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to resellers. The
closest applicable definition under the SBA's rules is for all
telephone communications companies. The most reliable source of
information regarding the number of resellers nationwide of which we
are aware appears to be the data that we collect annually in connection
with the TRS. According to our most recent data, 339 companies reported
that they were engaged in the resale of telephone services. Although it
seems certain that some of these carriers are not independently owned
and operated, or have more than 1,500 employees, we are unable at this
time to estimate with greater precision the number of resellers that
would qualify as small business concerns under the SBA's definition.
Consequently, we estimate that there are fewer than 339 small entity
resellers that may be affected by this order.
d. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
104. In this Second Report and Order, if carriers choose to use
CPNI to market service offerings outside the customer's existing
service, we obligate these carriers to (1) obtain customer approval;
(2) provide their customers a one-time notification of their CPNI
rights prior to any solicitation for approval; and (3) maintain records
of customer notification and approval, whether oral, written, or
electronic.
105. We require carriers to develop and implement software systems
that ``flag'' customer service records in connection with CPNI. The
flag must be conspicuously displayed within a box or comment field
within the first few lines of the first computer screen, and the flag
must indicate whether the customer has approved the marketing use of
his or her CPNI, and reference the existing service subscription.
Also in connection with the software systems, carriers must
implement internal standards and procedures informing employees when
they are authorized to utilize CPNI. In addition, they must develop
standards and procedures to handle employees who misuse CPNI.
106. We further require that carriers maintain an electronic audit
mechanism that tracks access to customer accounts and is capable of
recording whenever customer records are opened, by whom, and for what
purpose. Carriers must maintain these ``contact histories'' for a
period of at least one year to ensure a sufficient evidentiary record
for CPNI compliance and verification purposes. Additionally, sales
personnel must obtain supervisory review of any proposed request to use
CPNI for outbound marketing purposes, to ensure compliance with CPNI
restrictions when conducting such campaigns.
107. Finally, carriers must submit on an annual basis a
certification signed by a current corporate officer, as an agent of the
corporation, attesting that he or she has personal knowledge that the
carrier has complied with the rules adopted in this order. The
certification must be made publicly available, and be accompanied by a
statement explaining how the carrier is implementing our CPNI rules and
safeguards.
e. Significant Alternatives and Steps Taken by Agency to Minimize
Significant Economic Impact on a Substantial Number of Small Entities
Consistent With Stated Objectives
108. After consideration of possible alternatives, we have
concluded that our rules should apply equally to all carriers. Several
parties in their comments address the impact of possible changes in our
CPNI rules on small entities. As a general matter, various small
entities express concern that, having never been required to comply
with CPNI regulations in the past, any regulation that extends to them
will impose immediate costs. Specifically, SBT argues that we should
forbear from applying section 222(c)(1) to small businesses, and
thereby permit their use of CPNI for all marketing purposes, because
small entities need more flexibility to use CPNI to be competitive in
the marketplace. SBT likewise opposes a three category approach,
claiming it gives large carriers flexibility to develop and meet
customers' needs, but may unnecessarily limit small business as
competition grows. SBT maintains that small carriers could be
competitively disadvantaged by any interpretation of section
222(c)(1)(A) other than the single category approach because a large
carrier can base the design of a new offering on statistical customer
data and market widely, while a small business can best meet
specialized subscriber needs if it offers local, interexchange, and
CMRS tailored to the specific subscriber. ALLTEL and SBC agree with
USTA that a multiple category definition of telecommunications service
would specifically burden small companies.
109. As we discussed in this order, we decline to forbear from
applying section 222(c)(1) to small carriers because we are unpersuaded
that customers of small businesses have less meaningful privacy
interests in their CPNI. We believe that the total service approach
furthers the balance of privacy and competitive considerations for all
carriers and provides all carriers with flexibility in marketing their
telecommunications products and services. Indeed, if SBT is accurate in
its claim that small businesses typically have closer personal
relationships with their customers, then small businesses likely would
have less difficulty in obtaining customer approval to market services
outside of a customer's existing service. Under the total service
approach, carriers are able to use the customer's entire customer
record in the course of providing the customer service, and no
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business is prohibited from meeting customer needs by offering tailored
packages of local, interexchange, and CMRS with customer approval.
Moreover, to the extent carriers do not choose to use CPNI for
marketing purposes, or do not want to market new service categories,
they do not need to comply with our approval or notice requirements.
Finally, given our decisions to permit oral, written, or electronic
approval under section 222(c)(1), and impose use rather than access
restrictions, the total service approach addresses any concern that
CPNI restrictions will disrupt the customer-carrier dialogue or the
carriers' ability to provide full customer service.
110. Some commenters urge the Commission to adopt notification
rules which would require dominant carriers to give their customers
written notification of their CPNI rights, while smaller carriers or
carriers in competitive markets would be permitted to give oral
notification to its customers. We find no reason to impose a written
notification requirement only on incumbent carriers. While competitive
concerns may justify different regulatory treatment for certain
carriers, we believe all customers, despite the size or identity of
their carrier, have similar and important privacy concerns.
111. We also reject the suggestion by Arch, LDDS WorldCom, MCI,
Sprint, and TCG that our rules in connection with CPNI safeguards be
limited to large or incumbent carriers, as they had been previously.
Rather, we maintain that Congress intended for all carriers to
safeguard customer information, and that the safeguards we adopt today
do not impose a greater administrative burden on small carriers. We
remain unconvinced that the burdens of section 222 are so great on
small carriers that they cannot comply with reasonable restrictions.
Indeed, the mechanisms we require expressly factor commercial
feasibility and practice into an appropriate regulatory framework, and
represent minimum general requirements. We also find that the use of an
electronic audit mechanism to track access to customer accounts is not
overly burdensome because many carriers already maintain such
capabilities for a variety of business purposes unrelated to CPNI.
Carriers have indicated that such capabilities are important, for
example, to track employee use of company resources, including
computers and databases, as well as for personnel disciplinary
purposes. The contact histories that we require carriers to maintain
for a period of at least one year also should not be burdensome to
carriers because carriers routinely evaluate these contact histories to
determine the success of marketing campaigns. As we discuss in this
order, we believe the safeguards we adopt in this order will afford
carriers the flexibility in conforming their systems, operations, and
procedures to assure compliance with our rules. Furthermore, in an
effort to reduce, for all carriers, the administrative burden of
compliance with our rules, we specifically decline to impose a password
access restriction on carrier use of CPNI. We also conclude that use
restrictions are less burdensome to all carriers, including medium and
small sized carriers. We decline at this time to impose a requirement
of separate marketing personnel on the basis that such a rule may
produce inefficiencies particularly for small carriers, and thereby may
dampen competition by increasing the costs of entry into
telecommunications markets.
2. Paperwork Reduction Act Analysis
112. This Second Report and Order contains several new information
collections. We describe our collections as follows:
113. In this order, if carriers choose to use CPNI to market
service offerings outside the customer's existing service, we obligate
these carriers to obtain customer approval and document such approval
through software ``flags'' on customer service records indicating
whether the customer has approved or declined the marketing use of his
or her CPNI when solicited. These requirements constitute new
``collections of information'' within the meaning of the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501-3520. Implementation of this
requirement is subject to approval by the Office of Management and
Budget as prescribed by the Paperwork Reduction Act.
114. Additionally, we require all telecommunications carriers that
choose to solicit customer approval to provide their customers a one-
time notification of their CPNI rights prior to any such solicitation.
Pursuant to this one-time notification requirement, these carriers must
maintain a record of such notifications. This requirement constitutes a
new ``collection of information'' within the meaning of the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501-3520. Implementation of this
requirement is subject to approval by the Office of Management and
Budget as prescribed by the Paperwork Reduction Act.
115. All carriers must record whenever customer records are opened,
by whom, and for what purpose, and maintain these contact histories for
a period of at least one year. These requirements constitute new
``collections of information'' within the meaning of the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501-3520. Implementation of this
requirement is subject to approval by the Office of Management and
Budget as prescribed by the Paperwork Reduction Act.
116. Finally, we have adopted rules in this order requiring all
telecommunications carriers to submit on an annual basis a
certification signed by a current corporate officer attesting that he
or she has personal knowledge that the carrier is in compliance with
the rules we promulgated in this order, and to create an accompanying
statement explaining how the carriers are implementing our rules and
safeguards. Pursuant to this recordkeeping requirement, all
telecommunications carriers must maintain in a publicly available file
the compliance certificates and accompanying statements. This
requirement constitutes a new ``collection of information'' within the
meaning of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
Implementation of all of these recordkeeping requirements are subject
to approval by the Office of Management and Budget as prescribed by the
Paperwork Reduction Act.
VIII. Ordering Clauses
117. Accordingly, It Is Ordered that pursuant to sections 1, 4(i),
222 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
151, 154(i), 222 and 303(r), a Report and Order is hereby Adopted.
118. It is further ordered that, pursuant to our own motion,
paragraph 222 of In the Matter of Implementation of the Non-Accounting
Safeguards of Section 271 and 272 of the Communications Act of 1934, as
amended, CC Docket No. 96-149, First Report and Order and Further
Notice of Proposed Rulemaking, 11 FCC Rcd 21905 (1996), is hereby
Overruled.
119. It Is Further Ordered that the Commission's Office of Public
Affairs, Reference Operations Division, Shall Send a copy of this
Second Report and Order, including the associated Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration, in accordance with paragraph 605(b) of the
Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (1981).
120. It Is Further Ordered that part 22 of the Commission's rules,
47 CFR 22.903 and part 64 of the Commission's
[[Page 20338]]
rules, 47 CFR 64.702(d)(3) are Removed as set forth in the Rule
Changes.
121. It Is Further Ordered that part 64 of the Commission's rules,
47 CFR part 64 is Amended as set forth in Rule Changes, effective 30
days after publication of the text thereof in the Federal Register.
List of Subjects
47 CFR Part 22
Communications common carriers, Reporting and recordkeeping
requirements.
47 CFR Part 64
Communications common carriers, Reporting and recordkeeping
requirements, Telephone.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
For the reasons set out in the preamble, 47 CFR parts 22 and 64 are
amended as follows:
PART 22--PUBLIC MOBILE SERVICES
1. The authority citation for part 22 is revised to read as
follows:
Authority: 47 U.S.C. 154, 222, 303, 309 and 332.
Sec. 22.903 [Removed].
2. Remove Sec. 22.903.
PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
3. The authority citation for part 64 is revised to read as
follows:
Authority: 47 U.S.C. 154, 222, 254(k).
Sec. 64.702 [Amended]
4. In Sec. 64.702 remove and reserve paragraph (d)(3).
5. Subpart U is added to part 64 to read as follows:
Subpart U--Customer Proprietary Network Information
Sec.
64.2001 Basis and purpose.
64.2003 Definitions.
64.2005 Use of customer proprietary network information without
customer approval.
64.2007 Notice and approval required for use of customer
proprietary network information.
64.2009 Safeguards required for use of customer proprietary network
information.
Subpart U--Customer Proprietary Network Information
Sec. 64.2001 Basis and purpose.
(a) Basis. The rules in this subpart are issued pursuant to the
Communications Act of 1934, as amended.
(b) Purpose. The purpose of the rules in this subpart is to
implement section 222 of the Communications Act of 1934, as amended, 47
U.S.C. 222.
Sec. 64.2003 Definitions.
Terms used in this subpart have the following meanings:
(a) Affiliate. An affiliate is an entity that directly or
indirectly owns or controls, is owned or controlled by, or is under
common ownership or control with, another entity.
(b) Customer. A customer of a telecommunications carrier is a
person or entity to which the telecommunications carrier is currently
providing service.
(c) Customer proprietary network information (CPNI).
(1) Customer proprietary network information (CPNI) is:
(i) Information that relates to the quantity, technical
configuration, type, destination, and amount of use of a
telecommunications service subscribed to by any customer of a
telecommunications carrier, and that is made available to the carrier
by the customer solely by virtue of the customer-carrier relationship;
and
(ii) Information contained in the bills pertaining to telephone
exchange service or telephone toll service received by a customer of a
carrier.
(2) Customer proprietary network information does not include
subscriber list information.
(d) Customer premises equipment (CPE). Customer premises equipment
(CPE) is equipment employed on the premises of a person (other than a
carrier) to originate, route, or terminate telecommunications.
(e) Information service. Information service is the offering of a
capability for generating, acquiring, storing, transforming,
processing, retrieving, utilizing, or making available information via
telecommunications, and includes electronic publishing, but does not
include any use of any such capability for the management, control, or
operation of a telecommunications system or the management of a
telecommunications service.
(f) Local exchange carrier (LEC). A local exchange carrier (LEC) is
any person that is engaged in the provision of telephone exchange
service or exchange access. For purposes of this subpart, such term
does not include a person insofar as such person is engaged in the
provision of commercial mobile service under 47 U.S.C. 332(c).
(g) Subscriber list information (SLI). Subscriber list information
(SLI) is any information:
(1) Identifying the listed names of subscribers of a carrier and
such subscribers' telephone numbers, addresses, or primary advertising
classifications (as such classifications are assigned at the time of
the establishment of such service), or any combination of such listed
names, numbers, addresses, or classifications; and
(2) That the carrier or an affiliate has published, caused to be
published, or accepted for publication in any directory format.
(h) Telecommunications carrier. A telecommunications carrier is any
provider of telecommunications services, except that such term does not
include aggregators of telecommunications services (as defined in 47
U.S.C. 226(a)(2)).
Sec. 64.2005 Use of customer proprietary network information without
customer approval.
(a) Any telecommunications carrier may use, disclose, or permit
access to CPNI for the purpose of providing or marketing service
offerings among the categories of service (i.e., local, interexchange,
and CMRS) already subscribed to by the customer from the same carrier,
without customer approval.
(1) If a telecommunications carrier provides different categories
of service, and a customer subscribes to more than one category of
service offered by the carrier, the carrier is permitted to share CPNI
among the carrier's affiliated entities that provide a service offering
to the customer.
(2) If a telecommunications carrier provides different categories
of service, but a customer does not subscribe to more than one offering
by the carrier, the carrier is not permitted to share CPNI among the
carrier's affiliated entities.
(b) A telecommunications carrier may not use, disclose, or permit
access to CPNI to market to a customer service offerings that are
within a category of service to which the customer does not already
subscribe to from that carrier, unless the carrier has customer
approval to do so, except as described in paragraph (c) of this
section.
(1) A telecommunications carrier may not use, disclose, or permit
access to CPNI derived from its provision of local service,
interexchange service, or CMRS, without customer approval, for the
[[Page 20339]]
provision of CPE and information services, including call answering,
voice mail or messaging, voice storage and retrieval services, fax
store and forward, and Internet access services. For example, a carrier
may not use its local exchange service CPNI to identify customers for
the purpose of marketing to those customers related CPE or voice mail
service.
(2) A telecommunications carrier may not use, disclose or permit
access to CPNI to identify or track customers that call competing
service providers. For example, a local exchange carrier may not use
local service CPNI to track all customers that call local service
competitors.
(3) A telecommunications carrier may not use, disclose or permit
access to a former customer's CPNI to regain the business of the
customer who has switched to another service provider.
(c) A telecommunications carrier may use, disclose, or permit
access to CPNI, without customer approval, as described in this
paragraph (c).
(1) A telecommunications carrier may use, disclose, or permit
access to CPNI, without customer approval, in its provision of inside
wiring installation, maintenance, and repair services.
(2) CMRS providers may use, disclose, or permit access to CPNI for
the purpose of conducting research on the health effects of CMRS.
(3) LECs and CMRS providers may use CPNI, without customer
approval, to market services formerly known as adjunct-to-basic
services, such as, but not limited to, speed dialing, computer-provided
directory assistance, call monitoring, call tracing, call blocking,
call return, repeat dialing, call tracking, call waiting, caller I.D.,
call forwarding, and certain centrex features.
Sec. 64.2007 Notice and approval required for use of customer
proprietary network information.
(a) A telecommunications carrier must obtain customer approval to
use, disclose, or permit access to CPNI to market to a customer service
to which the customer does not already subscribe to from that carrier.
(b) A telecommunications carrier may obtain approval through
written, oral or electronic methods.
(c) A telecommunications carrier relying on oral approval must bear
the burden of demonstrating that such approval has been given in
compliance with the Commission's rules in this part.
(d) Approval obtained by a telecommunications carrier for the use
of CPNI outside of the customer's total service relationship with the
carrier must remain in effect until the customer revokes or limits such
approval.
(e) A telecommunications carrier must maintain records of
notification and approval, whether oral, written or electronic, for at
least one year.
(f) Prior to any solicitation for customer approval, a
telecommunications carrier must provide a one-time notification to the
customer of the customer's right to restrict use of, disclosure of, and
access to that customer's CPNI.
(1) A telecommunications carrier may provide notification through
oral or written methods.
(2) Customer notification must provide sufficient information to
enable the customer to make an informed decision as to whether to
permit a carrier to use, disclose or permit access to, the customer's
CPNI.
(i) The notification must state that the customer has a right, and
the carrier a duty, under federal law, to protect the confidentiality
of CPNI.
(ii) The notification must specify the types of information that
constitute CPNI and the specific entities that will receive the CPNI,
describe the purposes for which CPNI will be used, and inform the
customer of his or her right to disapprove those uses, and deny or
withdraw access to CPNI at any time.
(iii) The notification must advise the customer of the precise
steps the customer must take in order to grant or deny access to CPNI,
and must clearly state that a denial of approval will not affect the
provision of any services to which the customer subscribes.
(iv) The notification must be comprehensible and not be misleading.
(v) If written notification is provided, the notice must be clearly
legible, use sufficiently large type, and be placed in an area so as to
be readily apparent to a customer.
(vi) If any portion of a notification is translated into another
language, then all portions of the notification must be translated into
that language.
(vii) A carrier may state in the notification that the customer's
approval to use CPNI may enhance the carrier's ability to offer
products and services tailored to the customer's needs. A carrier also
may state in the notification that it may be compelled to disclose CPNI
to any person upon affirmative written request by the customer.
(viii) A carrier may not include in the notification any statement
attempting to encourage a customer to freeze third party access to
CPNI.
(ix) The notification must state that any approval, or denial of
approval for the use of CPNI outside of the service to which the
customer already subscribes to from that carrier is valid until the
customer affirmatively revokes or limits such approval or denial.
(3) A telecommunications carrier's solicitation for approval must
be proximate to the notification of a customer's CPNI rights.
(4) A telecommunications carrier's solicitation for approval, if
written, must not be on a document separate from the notification, even
if such document is included within the same envelope or package.
Sec. 64.2009 Safeguards required for use of customer proprietary
network information.
(a) Telecommunications carriers must develop and implement software
that indicates within the first few lines of the first screen of a
customer's service record the CPNI approval status and reference the
customer's existing service subscription.
(b) Telecommunications carriers must train their personnel as to
when they are and are not authorized to use CPNI, and carriers must
have an express disciplinary process in place.
(c) Telecommunications carriers must maintain an electronic audit
mechanism that tracks access to customer accounts, including when a
customer's record is opened, by whom, and for what purpose. Carriers
must maintain these contact histories for a minimum period of one year.
(d) Telecommunications carriers must establish a supervisory review
process regarding carrier compliance with the rules in this subpart for
outbound marketing situations and maintain records of carrier
compliance for a minimum period of one year. Specifically, sales
personnel must obtain supervisory approval of any proposed outbound
marketing request.
(e) A telecommunications carrier must have a corporate officer, as
an agent of the carrier, sign a compliance certificate on an annual
basis that the officer has personal knowledge that the carrier is in
compliance with the rules in this subpart. A statement explaining how
the carrier is in compliance with the rules in this subpart must
accompany the certificate.
[FR Doc. 98-10740 Filed 4-23-98; 8:45 am]
BILLING CODE 6712-01-P