WASHINGTON-The Federal Communications Commission fined LocateCell.com $97,500 for repeatedly failing to respond to subpoenas to provide information in connection with the commission’s investigation of data brokers that deceptively gain access to consumers’ phone records from cellular carriers.
It is the FCC’s first fine against a data broker and the stiffest allowable under the law, though LocateCell.com can challenge the FCC action. The commission is investigating other data brokers, and also attempting to ascertain whether cellular carriers are liable for violating federal telecom consumer privacy regulations.
The practice of “pre-texting”-impersonating a wireless subscriber to gain access to that customer’s personal information-in the data broker industry has ignited federal legislation and a flood of lawsuits in the states.
“As I testified to Congress earlier this year, the commission is taking numerous steps to protect the privacy of consumers’ personal phone records. One of these steps is our current investigation into whether telecommunications carriers are complying with their customer privacy obligations under the Communications Act. Examining how data brokers are able to access consumer call records from these carriers is an integral part of this investigation,” said FCC Chairman Kevin Martin.
Martin said the FCC needs more enforcement clout to deter data brokers from violating the privacy of the nation’s 215 million cell-phone subscribers and other telecom consumers.
“Responding to commission subpoenas is not optional,” Martin said. “We expect that subpoenas, as well as all of our requests for information, will be responded to completely and promptly. Although we propose the maximum forfeiture against LocateCell for its failure to adequately respond, I fear that the amount we propose … is merely a cost of doing business. As I have said previously, it is my hope that, in the future, our statutory maximum will be increased. If companies such as LocateCell have no incentive to comply with our requests for information, our enforcement processes will be severely compromised.”
But Michael Copps and Jonathan Adelstein, the two Democrats on the five-member GOP-led FCC, suggested Martin himself and telecom carriers are part of the problem because the agency has not made consumer privacy a priority in recent years and telecom carriers may not be doing enough to protect their subscribers’ privacy.
“Even though today’s decision is a step in the right direction, let’s be sure we don’t lose sight of the bigger picture here. Data brokers continue to flout the law, invade our privacy, and put each of us at risk,” Copps stated. “As the Electronic Privacy Information Center demonstrated so forcefully in its petition for rulemaking last summer, data brokers are capable of obtaining a history of calls made to and from a particular phone number, the customer name associated with that number, and perhaps even the geographic location of a mobile-phone user. This is an unsettling and entirely intolerable state of affairs. The commission simply cannot stop until the root problem has been solved. This company’s failure to respond to our subpoena about how it came to possess private data underscores just how badly further action is needed.”
Copps added: “In order to provide consumers with the level of protection they expect and deserve, I hope we will move on from here to issue rules in the customer proprietary network information docket that we opened last February. For too long the commission treated privacy as a `back-burner’ issue. It has been four years since the Arizona Corporation Commission initiated a petition regarding dissemination of [customer proprietary network information] to unaffiliated third parties. Last year we reclassified wireline broadband Internet access services but left for another day the chilling question of whether privacy protections even apply to this regulatory remix. It is time to stop putting Americans’ digital privacy unnecessarily at risk.”
Adelstein said the FCC needs to shine a light on telecom carriers as well as data brokers.
“We have a lot more work to do to ensure that consumers private call records are adequately safeguarded. It is essential that we move ahead with our pending rulemaking on our consumer privacy rules for telephone companies,” said Adelstein. “The mere fact that these records have been so readily available, even though telephone companies are required to have firewalls in place to protect consumers’ private information, has raised serious questions about the mechanisms that are in place to safeguard the confidentiality of their consumers’ information…Every provider should be on notice that we are watching closely and will take the action necessary to protect consumers’ privacy, and we expect them to do the same.”
