PRIVACY ADVOCATES CLAIM CPNI PROPOSAL WILL GUT LAW

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WASHINGTON-A large contingent of telecommunications industry representatives was expected to
meet with government officials Friday to present a proposal to change the rules governing how telecom carriers must
treat customer privacy information. The expected proposal, however, is being panned by privacy advocates.

The
proposal guts the privacy provisions of the Telecommunications Act of 1996, these advocates claim.

The Federal
Communications Commission has been refining the use of customer proprietary network information, or CPNI, since it
first adopted the much derided rules in 1997. CPNI is the information telecom carriers collect about their customers,
including name, address, billing, and when and where calls are placed. The rules implement Section 222 of the telecom
act, which required the FCC to develop rules to protect the privacy of telecom customers in a competitive
environment.

Wireless carriers have complained they should be exempt from CPNI rules because they are already in
a competitive environment unlike their landline colleagues. Prior to adopting the FCC’s rules, commercial mobile radio
services carriers never had restrictions on the use of CPNI. Wireline carriers always have been restricted in how they
can use the information, although the new rules are more stringent.

The Personal Communications Industry
Association has been leading the telecom industry effort to find an alternative to the CPNI electronic flagging and
auditing requirements. A proposal developed by some of the Baby Bells has been modified to reflect the views of long-
distance, smaller wireline and wireless carriers. The proposal is expected to be endorsed by more than 25 telecom
entities, said PCIA Government Relations Manager Todd Lantor.

The PCIA proposal was meant to “lessen
the burden [on carriers]substantially and protect privacy interests,” Lantor said. Protecting consumer privacy
appears to be in the eye of the beholder since privacy advocates do not seem fond of the proposal.

The alternative
tackles three specific regulations. The first change would allow smaller carriers without electronic databases to keep
paper copies of CPNI information and alert marketing employees in written material the rules about CPNI usage.
Lantor expects big carriers still would electronically alert marketing personnel that approval must be granted before
CPNI information is used, but the telecom industry initiative would give flexibility, he said.

Another change would
delete the word “corporate” from the regulations because some of the carriers are not corporations, Lantor
said.

A third modification would change the focus of the electronic auditing requirement from the consumer to the
marketing campaign. This change is necessary, Lantor said, because it is “very difficult to track who [a carrier]is
actually targeting with a mass-marketing campaign.”

Privacy advocacy groups such as the Electronic Privacy
Information Center may not be too keen on the proposal. Indeed, EPIC General Counsel David Sobel said he has
serious concerns with the electronic auditing change. “That is a huge change from the perspective of the
individual subscriber,” Sobel said.

Sobel said he expressed similar concerns when the Baby Bell proposal was
presented at a CPNI meeting last month at the FCC. The changes advocated by PCIA and the rest of the telecom
industry do nothing to alleviate his concerns, he said.

FCC Chairman William Kennard has stated he plans to
“remain vigilant in protecting customer privacy.”

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