WASHINGTON-Federal Communications Commission member Susan Ness said last week’s ruling on the marketing of customer information by paging, cellular and telephone companies will benefit Baby Bells and their subsidiaries more than others.
The agency’s ruling restricts carriers from using customer data from one telecom service to market other telecom services to that customer.
For example, if a customer uses the same carrier for local landline and wireless service, that company could use the customer’s billing records to market caller ID or call waiting for each of those services. But the company could not use that customer’s local landline or mobile phone usage data to market long-distance service.
“Despite the care Congress took to fashion a narrow exception to the general principles of structural separation, the majority’s decision today irretrievably blurs the lines between the two entities,” said Ness in a 3-page statement in which she dissented in part to the FCC’s decision.
“The total-services approach creates an unprecedented opportunity for companies to offer a wide range of services by using sophisticated marketing technology to solidify the loyalty of a customer,” said Blair Levin of Knowledge Based Marketing in Chapel Hill, N.C.
However, Levin, former chief of staff to ex-FCC chairman Reed Hundt, emphasized that it is important that telecom companies fully explain to customers the benefits of being able to use billing data to offer new products.
For reasons different than those of Ness, BellSouth Corp. blasted the FCC ruling.
“This FCC rule effectively undermines one of the most cherished customer-convenience goals of the Telecom Act-one-stop-shopping for telecommunications service,” said Randy New, BellSouth’s vice president of legislative implementation.
“Instead,” said New, “the FCC order means more regulation, confusion and inconvenience for customers, just the opposite of what Congress intended.”
AT&T Corp. reportedly lobbied the FCC for a so-called “negative-option approach.” Under such a scheme, telecom carriers would have been able to use and market customer information as they wanted unless a consumer objected.
AT&T believed its approach would be cost-effective. But such an approach would have put the burden on the consumer, and it was rejected by the commission.
