Privacy Posturing

Jean B. Keffeler

Your name. Your address and telephone number. Detailed information about the amount you spend, what services you use, the numbers you call, and how long you talk. Up until now this kind of information has been considered confidential, data that can't be used for anything other than putting together customers' phone bills. But faced with competition on the local front and a planned foray into the long-distance market, US West now wants to use the data to market new services to its clients and to give its affiliates a competitive edge. And the company is arguing that it has a First Amendment right to do so.

Privacy advocates, federal officials, and even other phone companies, disagree. Customers now assume that the phone company can't expose their calling habits; indeed, if courts or law-enforcement officials want the data, they need a subpoena. Letting the behemoth have its way would make it harder for other phone companies to compete, which is what a deregulated phone market was supposed to accomplish.

The Federal Communications Commission (FCC), which will ultimately have to decide who's right, wants to require phone companies to obtain a customer's approval before using such information or before sharing it with anyone else. US West wants it to be the customer's responsibility to speak up if they want this information kept private.

In 1996, Congress largely deregulated the phone industry, setting up provisions for companies to compete in markets they had previously been barred from. The law allowed the so-called Baby Bells, regional operating companies like US West, to provide not just local phone service, but to begin providing services such as long-distance and Internet accounts. One strategy for dealing with competition under discussion by some local phone companies is to become a "one-stop" phone-service shopping center, something that's obviously easier if the company can use all of its information on each customer.

In the months following the passage of the phone-deregulation law, a number of companies requested clarification about the section pertaining to customer privacy, explains John Nakahata of the FCC. US West's discussions with the FCC led the company to believe that the feds were interpreting "approval" to mean that something had to be done by the phone customer in order for the company to use the information. "US West serves between 10 and 11 million customers, securing the approval of all would probably be impossible," says US West attorney Kathryn Krause. "The company wants to use the information to be able to communicate intelligently with customers about the services they might use. We also use the information to target our speech so we are speaking with the person most likely to be receptive."

Last July, Krause sent the commission a legal opinion written by Harvard Professor Laurence H. Tribe, arguing that an opt-in policy, under which phone companies need customer approval, is tantamount to prohibiting the use of any of the data. "Response rates for opt-in requests are notoriously low, and an opt-in rule would be, in effect, a prohibition of the use and transmission of [the information.]" Tribe and US West instead advocate an opt-out policy, in which the phone company can use the data unless a customer asks that the information not be used. "It is reasonable to conclude that customers ordinarily desire (or, at a minimum, do not object to) communications from businesses with which they already have a relationship and from their affiliates," writes Tribe.

Consumer advocates argue that in reality, opt-out programs just don't work. Rich Neumeister, a Minneapolis privacy advocate, says an opt-out policy is advantageous to US West because it's harder for customers to say no. "The company can place the announcement where it likes," he explains. "Say they place it on the third page of a four-page article. It could be placed in such a way that people may not notice it." One example of a failed opt-out policy is the privacy policy for Minnesota Drivers License information, he adds. Anyone can obtain the information on someone's driver's license. What most people don't know, however, is that you can opt to keep this information private. And most people miss their opportunity, Neumeister says, because the opt-out box on license applications is almost unnoticeable.

Neumeister also points out that the U.S. Supreme Court has recognized two different kinds of free speech: Commercial free speech, the kind US West and other corporations are protected under, is not political free speech, he says. Limits have been placed on commercial free speech, such as when cigarette companies wanted to advertise on TV.

Meanwhile Mark Anfinson, a Twin Cities media and First Amendment attorney, says that this may not be a constitutional argument at all, but rather a matter of contract law. "It would normally be a good strong First Amendment argument [that] if I have legally gone out, researched, and obtained information on somebody, I can use it," he says. "As long as it was lawfully gathered and used the government cannot restrict its use; their hands are tied. The US West issue is a contract issue, it's information obtained from the customer when the customer entered into a contract with US West for phone service."

However, it's tough to say how the courts will see it, Anfinson adds. "This is an emerging area of law without many clear precedents," he says, "Eventually, the law usually tracks with people's gut reactions and will end up deciding the whole future of the information age. With the new data-collection technologies soon they'll know something about us all. The question then becomes what rights do we have to restrict private use."

MCI Attorney Bruce J. Ennis Jr. is among those who don't see this debate as an issue of free speech. It's about money, he says. "Local Bell operating companies such as US West currently enjoy a virtual monopoly, " he writes. "There is no question that this data--including details about customers' calling patterns and the amounts they spend on telephone service--would be invaluable marketing tools to a [Baby Bell] marketing its new long-distance service."

The final irony in this debate is that if US West wins the right to use previously protected data to sell its new products, it says it won't share the information with or sell it to other companies. Krause argues that people expect contact from a phone company with which they already have a relationship, but don't expect the company to share that information with anyone else.

It's this inconsistency that may ultimately undo US West's argument, some debate-watchers predict. "If it's a First Amendment priority, why is there protection on it in the first place," asks Neumeister. "If it's a First Amendment right, they would be able to do with it as they want--share it with the police or anyone at any time. If it's already protected, I don't think the First Amendment argument is there."

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