FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT:

August 16, 1999 Emily Hoffnar 202/418-0253

Report No. CC 99-36

COMMON CARRIER ACTION

**FCC CLARIFIES RULES FOR USE OF CUSTOMER PROPRIETARY NETWORK
INFORMATION**

(CC Docket Nos. 96-115, 96-149)

The FCC today adopted an Order that simplifies the rules for telephone
company use of customer proprietary network information (CPNI) while
retaining privacy protections for telephone customers. CPNI is the
information a telephone company has obtained about a customer that
relates to the quantity, technical configuration, type, destination, and
amount of use of a telecommunications service subscribed to by that
customer.

Section 222 of the Communications Act established CPNI privacy
requirements and set restrictions on how telephone companies may use or
disclose a customer's CPNI. To implement section 222 of the Act, the FCC
adopted regulations in the CPNI Second Report and Order on February 26,
1998. Some telephone companies argued that these regulations were
burdensome and requested that the FCC reconsider, clarify, and/or
forbear from parts of those regulations. Today's Order addressed those
petitions.

In the decision adopted today, the FCC lessened the regulatory burden of
various CPNI safeguards while continuing to require that carriers
protect customer privacy. Specifically, the FCC reduced the restrictions
on telephone companies' use of CPNI to market services and equipment to
their own customers. For example, telephone companies will be able to
use CPNI to market to their customers equipment that is necessary to, or
used in, the provision of their telephone service, such as telephones
and caller ID units, without first obtaining customer permission. The
FCC allowed wireline telephone carriers to use CPNI without customer
approval to market related information services. Wireless carriers were
awarded broader discretion to use CPNI without customer approval to
market all information services that are necessary to, or used in, the
provision of their telecommunications services. The FCC also allowed all
telephone companies to use CPNI in their efforts to "win back" customers
lost to competitors, reasoning that "winback" campaigns are good for
competition and consistent with the Act.

The Commission also modified its requirement that carriers develop and
implement software that indicates a customer's CPNI approval status
within the first few lines of the first screen of a customer's service
record. Now, carriers must clearly establish the status of a customer\'s
CPNI approval prior to the use of CPNI, but the specific details of
compliance are left to the carriers. In so doing, the FCC allowed the
carriers the flexibility to adapt their record keeping systems in a
manner most conducive to their individual size, capital resources,
culture and technological capabilities. The FCC also eliminated the
requirement that carriers maintain an electronic audit mechanism that
tracks access to customer accounts. Instead, the FCC required carriers
to maintain a record of their sales and marketing campaigns that use
CPNI.

The FCC addressed various issues concerning a customer\'s approval to
use CPNI consistent with section 222, including authorizations obtained
by carriers from customers prior to the release of the FCC's CPNI rules.
The FCC also eliminated that section of its rules that required a
carrier\'s solicitation for approval, if written, to be on the same
document as the carrier\'s notification. Further, the FCC affirmed its
decision to exercise its preemption authority on a case-by-case basis
for state rules that conflict with the FCC's rules.

Although all of the forbearance petitions were rendered moot or denied,
the FCC granted most of the relief requested in those petitions while
addressing the petitions for reconsideration.

Action by the Commission August 16, 1999, by Order on Reconsideration
and Petitions for Forbearance (FCC 99-223). Chairman Kennard,
Commissioners Ness and Powell with Commissioner Furchtgott-Roth
approving in part and concurring in part, and Commissioner Tristani
approving in part and dissenting in part, and Commissioners
Furchtgott-Roth and Tristani issuing separate statements.

-FCC-

News Media contact: Emily Hoffnar at (202)418-0253.

Common Carrier Bureau contacts: Margaret Egler, Eric Einhorn, or Anthony
Mastando at (202)418-1580.

# August 16, 1999

# 

# Separate Statement of

# Commissioner Gloria Tristani, 

# Dissenting in Part

# *Re: Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Information; Implementation of the Non-Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, As Amended. CC Docket Nos. 96-45 and 96-149.* 

## I am forced to write separately, because I disagree with the majority in one major respect. I believe that the majority's reading of section 222(c)(1)(B) of the Act is contrary to the plain language of what the Commission previously found to be a "clear and unambiguous" provision.[^1] Accordingly, I believe that the Commission should have denied the petitions for reconsideration of our conclusion that carriers may not use customer proprietary network information (CPNI) to market customer premises equipment (CPE) and most information services without first obtaining customer approval.[^2] 

## 

## Section 222(c)(1)(B) sets forth an exception to the general prohibition against the use of CPNI without customer approval for information related to "services necessary to, or used in, the provision of . . . telecommunications service, including the publishing of directories."[^3] In the *CPNI Order*, the Commission concluded that CPE and most information services do not fall under section 222(c)(1)(B), because they are not "services necessary to, or used in, the provision of . . . telecommunications service."[^4] I believe that this reading is compelled by the terms of the statute. Therefore, I must dissent from the majority's reading of section 222(c)(1)(B) to now include "*products and* services provisioned by the carrier *with* the underlying telecommunications service."[^5] The majority rests its interpretation on the grounds that such products and services are "related" to and "facilitate" the provision of an underlying telecommunications service and customers "expect" them to be jointly provisioned, a basis divorced from the language of section 222(c)(1)(B) itself.[^6]

By reading the term "services" to include both products and services,
the majority impermissibly expands the scope of the section 222(c)(1)(B)
exception. I believe that had Congress intended the section 222(c)(1)(B)
exception to extend to equipment, it would have said so explicitly,
creating an exception for both services and equipment necessary to, or
used in, the provision of telecommunications services. Instead, as the
Commission held in the *CPNI Order*, the exception set forth in section
222(c)(1)(B), by its terms, is limited to "services." CPE is by
definition equipment, not a service.[^7] I am puzzled by the majority's
assertion that "its previous interpretation construed the term
'services' in isolation from the phrase 'necessary to, or used in.'"[^8]
Basic principles of statutory construction require that effect be given
to every word of the statute, so that no word will be rendered
meaningless.[^9] Because petitioners have not presented any new
arguments, facts, or evidence that persuades me that we incorrectly
interpreted the text of this section, I continue to believe that the
statutory language precludes the inclusion of equipment within section
222(c)(1)(B), even if the equipment is "necessary to, or used in, the
provision of . . . telecommunications service."[^10]

I am not persuaded by the majority's reliance on the only example that
Congress included in section 222(c)(1)(B), "the publishing of
directories," as justification for its reading of "services" to include
"products and services."[^11] The Commission previously expressly
rejected the argument on which it now relies \-- that the directory
publishing example justifies a broader reading of section 222(c)(1)(B)
\-- in the *CPNI Order.* In that order, we stated that the publishing of
directories is appropriately viewed as necessary to and used in the
provision of complete and adequate telecommunications service.[^12] I am
baffled by the majority's new reading of the directory publishing
example to sweep products, and equipment in particular, into the
language of section 222(c)(1)(B).

In adopting the argument of several petitioners that information
services are "services necessary to, or used in, the provision of . . .
telecommunications service" for purposes section 222(c)(1)(B), the
majority has read "necessary to, or used in, the provision of . . .
telecommunications services"[^13] to mean "provisioned by the carrier
*with* the underlying telecommunications service."[^14] We concluded in
the *CPNI Order* that while information services, such as fax store and
forward and Internet access services, constitute non-telecommunications
"services," most such services are not "necessary to, or used in" the
carrier's provision of telecommunications service. Rather, we reasoned
that although telecommunications service is "necessary to, or used in,
the provision of" any information services, information services
generally are not "necessary to, or used in, the provision of" any
telecommunications service.[^15] While I acknowledge that information
services can be an important component of the services that a customer
receives from a telecommunications carrier, this fact alone does not
change the conclusion that is compelled by the terms of the statute.

As the Commission has concluded previously, "the meaning of the term
'necessary' depends on the purposes of the statutory provision in which
it is found."[^16] The focus and placement of section 222 within the Act
indicate Congress's intent that the Commission augment consumer privacy
protections. Section 222 reflects Congress's view that with increased
competition comes a risk that consumer privacy interests will not be
protected by the marketplace. As a result, I continue to believe that
control over the use of CPNI properly belongs in the hands of the
customer. A narrow construction of the phrase "necessary to, or used in"
best accomplishes the goals of the statute.[^17]

In today's decision, the majority also relies on what it concludes are
customer expectations regarding how services will be provisioned as the
touchstone of whether an offering falls within the section 222(c)(1)(B)
exception, an approach that I believe cannot be squared with the
language of that provision. For example, the majority's reliance on the
lack of record evidence showing that allowing wireline carriers to
market CPE to their customers violates customer expectations is
misplaced.[^18] Ultimately, regardless of what customers expect, the
language of the provision itself governs. Similarly, the "principle of
customer convenience"[^19] cannot be exalted above congressional intent
in enacting the provision.

Accordingly, unlike the majority, I would decline to grant petitioners'
requests that, because of the integrated nature of certain information
services with telecommunications service, we should distinguish among
information services for purposes of section 222(c)(1)(B).[^20] In my
view, none of the parties has presented a statutory basis for treating
messaging services differently from other information services under
section 222. As I note above, information services may well constitute
an important component of the services a telecommunications carrier
offers its customers. Nevertheless, these information services are not
necessary to, or used in, the provision of the underlying
telecommunications service.

In construing the phrase "services necessary to, or used in,"[^21] the
Commission must be guided by the statute's focus on the protection of
customer privacy and hence narrowly construe the statute in order to
optimize consumer protections. A carrier need only obtain permission to
use CPNI in order to market CPE or information services to its
customers, a minimal burden when weighed against the purposes of section
222. I believe this approach best effectuates Congress's intent by
balancing competitive interests with the consumers' interests in privacy
and control over CPNI.

[^1]: 47 U.S.C. § 222(c)(1)(B). *Implementation of the
    Telecommunications Act of 1996: Telecommunications Carriers' Use of
    Customer Proprietary Network Information and Other Customer
    Information and Implementation of the Non-Accounting Safeguards of
    Sections 271 and 272 of the Communications Act of 1934, as amended*,
    CC Docket Nos. 96-115 and 96-149, Second Report and Order and
    Further Notice of Proposed Rulemaking, 13 FCC Rcd 8061, 8120, ¶ 75
    (1998) (*CPNI Order)*.

[^2]: ^?^ I do not dissent from the majority's clarification that, like
    the provision of installation, repair, and maintenance of inside
    wiring in the wireline context, the tuning and retuning of CMRS
    units and repair and maintenance of such units is a service
    necessary to or used in the provision of CMRS service under section
    222(c)(1)(B).

[^3]: 47 U.S.C. § 222(c)(1)(B).

[^4]: ^?^ *CPNI Order*, 13 FCC Rcd at 8116, ¶ 71.

[^5]: *Implementation of the Telecommunications Act of 1996:
    Telecommunications Carriers' Use of Customer Proprietary Network
    Information and Other Customer Information and Implementation of the
    Non-Accounting Safeguards of Sections 271 and 272 of the
    Communications Act of 1934, as amended*, CC Docket Nos. 96-115 and
    96-149, Order on Reconsideration and Petitions for Forbearance, \_\_
    FCC Rcd \_\_, \_\_, ¶ 40 (1999) (*CPNI Recon)* (emphasis added).

[^6]: ^?^ *Id.* at \_\_, ¶ 41. An administrative agency may deviate from
    the text of a statute in very limited circumstances, such as to
    harmonize conflicts between statutes. *See, e.g., Citizens to Save
    Spencer County et al. v. E.P.A.*, 600 F.2d 844 (D.C. Cir. 1979).
    Here, the majority seeks to extend the permissible use of CPNI
    beyond the plain meaning of section 222, yet does not demonstrate
    statutory conflict, evidence of congressional intent contrary to the
    conclusion we reached in the *CPNI Order*, or other extraordinary
    circumstances that would provide legitimate grounds on which to
    reconsider the Commission's previous action.

[^7]: ^?^ *CPNI Order*, 13 FCC Rcd at 8116, ¶ 71 (stating that "CPE is
    by definition customer premises *equipment*, and as such
    historically has been categorized and referred to as equipment").

[^8]: *CPNI Recon*, \_\_ FCC Rcd at \_\_, ¶ 41.

[^9]: ^?^ *See, e.g., Carcamo-Flores v. INS*, 805 F.2d 60, 66 (2d Cir.
    1986) (stating that "\[t\]here is a presumption against construing a
    statute as containing superfluous or meaningless words") (quoting
    *United States v. Blasius*, 397 F.2d 203, 207 n. 9 (2d Cir. 1968)).

[^10]: ^?^ *See* 47 U.S.C. § 222(c)(1)(B). Nor do I find merit in
    petitioners' argument that inside wiring installation, maintenance,
    and repair services are tantamount to CPE under section
    222(c)(1)(B). Comcast Petition at 13-14; CommNet Cellular Petition
    at 2-3; CTIA Petition at 25-29; Omnipoint Petition at 6-7; USTA
    Petition at 2-6; AT&T Comments at 9. While inside wiring is no more
    a service than CPE, it is not the inside wiring equipment itself
    that constitutes a service under section 222(c)(1)(B), but rather
    the installation, maintenance, and repair of the inside wire. *CPNI
    Order*, 13 FCC Rcd at 8124, ¶ 80.

[^11]: 47 U.S.C. § 222(c)(1)(B). *CPNI Recon*, \_\_ FCC Rcd at \_\_, ¶
    41. *See also* Comcast Petition at 13-14; Omnipoint Petition at 5
    (arguing that the inclusion in the statute of this example requires
    a broader reading than the Commission adopted in the *CPNI Order*);
    PrimeCo Petition at 6-7 (asserting that for many CMRS customers
    voicemail is a more useful and more important feature than the
    availability of published directories).

[^12]: ^?^ I am not persuaded by SBC's argument that the Commission
    failed to articulate a reasoned basis for its conclusion that
    services formerly characterized as "adjunct-to-basic," in contrast
    to information services, are covered under section 222(c)(1)(B). See
    *CPNI Order*, 13 FCC Rcd at 8118, ¶ 73 (stating that "\[e\]xamples
    of adjunct-to-basic services include speed dialing, call forwarding,
    computer-provided directory assistance, call monitoring, caller ID,
    call tracing, call blocking, call return, repeat dialing, call
    tracking, and certain centrex features") (citation omitted); SBC
    Petition at 7. *See also* NTCA Petition at 6-7. In drawing this
    distinction, the *CPNI Order* relied in part on Commission
    precedent. The Commission noted that it previously determined that
    the computer processing functions of adjunct-to-basic services are
    "used in conjunction with 'voice' service" and "help telephone
    companies provide or manage basic telephone services," as opposed to
    the information conveyed through enhanced services. *CPNI Order*, 13
    FCC Rcd at 8118, ¶ 73 (emphasis in original) (citing *North American
    Telecommunications Association Petition for Declaratory Ruling under
    Section 64.702 of the Commission\'s Rules Regarding the Integration
    of Centrex, Enhanced Services, and Customer Premises Equipment*, ENF
    No. 84-2, Memorandum Opinion and Order, 101 FCC 2d 349, 358, ¶ 23-24
    (1985), recon., 3 FCC Rcd 4385 (1988)). Thus, the Commission
    interpreted the language of section 222(c)(1)(B) to reach these
    adjunct-to-basic services, which are "used in" the carrier's
    provision of its telecommunications service, to the exclusion of
    information services. I note that the Commission recently recognized
    adjunct-to-basic services as being telecommunications services, and
    our treatment of these services in the *CPNI Order* is consistent
    with that determination. *Implementation of the Non-Accounting
    Safeguards of Sections 271 and 272 of the Communications Act, as
    amended*, First Report and Order and Further Notice of Proposed
    Rulemaking, 11 FCC Rcd 21905, 21958, ¶ 107 (1996).

[^13]: 47 U.S.C. § 222(c)(1)(B).

[^14]: *CPNI Recon*, \_\_ FCC Rcd at \_\_, ¶ 40 (emphasis added).

[^15]: ^?^ 47 U.S.C. § 222(c)(1)(B); *CPNI Order*, 13 FCC Rcd at 8116, ¶
    72.

[^16]: ^?^ *See, e.g., In the Matter of Federal-State Joint Board on
    Universal* Service, CC Docket No. 96-45, Report and Order, 12 FCC
    Rcd 8776, 9100, ¶ 618 (1997) (finding that the phrase "necessary for
    the provision of health care services . . . including instruction
    relating to such services" of section 254(h) means reasonably
    related to the provision of health care services, because a broad
    reading of the phrase is consistent with the purpose of that
    section). *See also Chapman v. Houston Welfare Rights Organization*,
    441 U.S. 600, 608 (1979) (stating that a statute should be
    interpreted in light of the purposes that Congress sought to serve
    by its enactment).

[^17]: ^?^ For similar reasons, I do not agree with SBC and GTE that the
    term "necessary to" in section 222(c)(1)(B) should not be
    interpreted restrictively because in other proceedings the
    Commission has used the term "necessary" not to mean "indispensable"
    but rather "used" or "useful." *See* GTE Petition at 8; SBC Petition
    at 7.

[^18]: *CPNI Recon*, \_\_ FCC Rcd at \_\_, ¶ 44.

[^19]: *Id.* at \_\_, ¶ 42.

[^20]: ^?^ *See* Bell Atlantic Petition at 7-9; GTE Petition at 21-26;
    NTCA Petition at 6-7; SBC Petition at 7; TDS Petition at 6. *See
    also* PrimeCo Petition at 6-7 (asserting that voice mail enables
    CMRS customers to receive communications when the handset is
    temporarily out of service); Cable & Wireless Comments at 10 (urging
    the Commission to allow use of CPNI only when the information
    service is an integral part of or otherwise related to the
    underlying telecommunications service).

[^21]: 47 U.S.C. § 222(c)(1)(B).