Opinion ID: 206188
Heading Depth: 1
Heading Rank: 1

Heading: Disclosure of Individualized Contracts

Text: The Act requires incumbents to offer for resale at wholesale rates any telecommunications service that the carrier provides at retail to subscribers who are not telecommunications carriers. 47 U.S.C. § 251(c)(4)(A). AT & T acknowledges that its resale duty extends to individualized contracts, but the parties disagree on what constitutes an offer for purposes of the Act. CMC's primary argument on appeal is that AT & T is not truly offering its individualized contracts for resale because AT & T will not disclose any information about the contracts unless a competitor first obtains customer consent. Because an offer can exist only if the offeree has enough information to understand what is being offered, AT & T must disclose sufficient terms of its individualized contracts such that competitors can discern the nature of those contracts and offer them to new customers. AT & T maintains, and the district court agreed, that unconsented disclosure of individualized contracts would constitute a violation of another of AT & T's duties under the Act: the duty to protect customer proprietary network information (CPNI). Section 222(c)(1) of the Act provides that: [e]xcept as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of (A) the telecommunications service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories. The Act defines CPNI as: information that relates to the quantity, technical configuration, type, destination, location, 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 carrier-customer relationship. 47 U.S.C. § 222(h)(1)(A). Because multiple customer-specific factors are considered in designing individualized contracts, AT & T contends that disclosing the terms of these contracts would amount to disclosing CPNI in violation of § 222. The factors AT & T uses in writing individualized contracts include services ordered, customer location, and quantity. [1] Although this information (at least when identified by customer name) clearly constitutes CPNI, AT & T's claim that it would be violating § 222 by disclosing details of these contracts is without merit, because the Act allows for disclosure as required by law. 47 U.S.C. § 222(c)(1). Section 251 requires incumbents to offer all of their retail services for resale, and thereby constitutes a legal requirement that the terms of individualized contracts be sufficiently disclosed so as to be understood. Because § 251's resale duty constitutes a legal disclosure requirement, § 222 does not prevent AT & T from disclosing terms of its individualized contracts to competitors. AT & T argues that the exceptions to § 222(a)'s disclosure prohibition are limited to those listed in § 222(d). [2] This argument is inconsistent with case law and the Federal Communication Commission's own interpretation of the Act. In ICG Communications Inc. v. Allegiance Telecom, 211 F.R.D. 610, 614 (N.D.Cal.2002), the court identified the Federal Rules of Civil Procedure as law within the meaning of § 222, and held that a party could therefore be compelled to provide information in discovery that would otherwise be protected CPNI. More recently, the FCC considered the reach of § 222's except as required by law language in making a declaratory ruling on the potential conflict between § 222 and 42 U.S.C. § 13032. In the Matter of Implementation of the Telecomms. Act of 1996: Telecomms. Carriers' Use of Customer Proprietary Network Info. and Other Customer Info., 21 FCC Rcd. 9990 (2006). Section 13032, since repealed, [3] required providers of an `electronic communication service or remote computing service' to report apparent violations of certain federal statutes involving child pornography. The information reported by service providers pursuant to this statute, such as e-mail and ISP addresses, constitutes individually identifiable CPNI, but the FCC has found that reporting is permissible because § 222(c)(1)'s except as required by law exception applies. 21 FCC Rcd. at 9991-92. Given that the FCC, the body ultimately responsible for implementing the Act, has itself found that § 222(a)'s exceptions extend beyond those listed in § 222(d) of the Act, AT & T's argument to the contrary is unavailing. See 47 U.S.C. § 151 (creating FCC to execute and enforce the provisions of the Act). Aside from the statutory arguments, AT & T's brief reveals that its concerns about disclosing CPNI are largely driven by its desire to avoid sharing its customers' names with competitors. [4] AT & T may be able to avoid this disclosure by providing CMC with redacted versions of the individualized contracts, so long as those contracts contain enough information to constitute an offer. That is, AT & T may be able to anonymize the contracts so that CMC can learn the terms on which AT & T provides individual offers without learning the identities of AT & T's customers. With redacted contracts, it is possible that § 222 would not even be called into question, as that section only prohibits disclosure of individually identifiable CPNI. However, as AT & T argued below and CMC conceded at oral argument, there may be customers for which even a redacted contract would contain sufficiently distinctive customer-linked data so that competitors could easily recognize the underlying customer. Nonetheless, AT & T is required by law to offer all of its retail services for resale, and this disclosure duty applies even when redaction cannot fully mask customer identity. Therefore, the commission erred in permitting AT & T to withhold completely the terms of its individualized contracts from competitors.