Verizon Cautions FCC to Back Away from CPNI Rule Change
It makes no sense and raises constitutional questions for FCC to ban carriers sharing customer proprietary network information (CPNI) with vendors who handle their marketing unless a customer “opts in,” Verizon said. The carrier hinted it will challenge the order in federal court unless it’s changed. The CPNI rule, with opt-in language, is on the 8th floor and is expected to be approved within days. Sources said Comrs. are likely to get questions on it from members of the Senate Commerce Committee during their testimony Thurs.
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The opt-in requirement is not “aimed with precision at the problem of pretexting,” the spur to FCC’s alteration of CPNI rules, Verizon said in a 28 page paper filed at the FCC. “Forcing carriers to reconfigure marketing relationships to avoid the use of independent contractors by bringing the operations in-house or converting independent contractors to agents is neither viable nor constitutional,” Verizon said: “Attempting to reconstruct inhouse the marketing expertise and dissemination capability available from the myriad independent contractors on the market today would be a substantial new undertaking for Verizon as a telecommunications carrier.”
Chmn. Martin said after the Jan. FCC meeting CPNI rules he has circulated would limit sharing of data among carriers and partners in joint ventures or with independent contractors (CD Jan 18 p4). Carriers have been lobbying the Commission to change course (CD Jan 25 p1).
“Converting an independent contractor to an agent is much more than a semantic exercise; it could involve Verizon in the direct management of marketing activities and deprive it of the specialized expertise that is the core value provided by marketing contractors,” Verizon said. The carrier said marketers it uses need access to some data CPNI rules cover. “The use of CPNI to engage in target marketing increases the amount of information available to consumers of telecommunications services, resulting in more informed choices and lower prices,” Verizon said: “Indeed, many of Verizon’s target marketing campaigns are aimed at reducing a customer’s overall bill by offering new, less expensive services or service plans.”
The paper includes a blueprint for a federal case against the order. Verizon cautioned the FCC that past Supreme Court decisions have made clear that a “commercial speaker” is entitled to “select its audience, the content of its message, and its preferred means of dissemination in order to maximize the impact and effectiveness of its commercial speech.” The high court also has held that any infringement on commercial speech must “directly advance” solution of a problem and be tailored narrowly. “An opt-in mandate for sharing of all CPNI with outside contractors cannot pass this test -- there is no evidence in the record that pretexters are targeting marketing vendors or have obtained CPNI from marketing vendors, and there is no evidence that the Commission’s present system for controlling marketing vendor handling of CPNI has failed,” Verizon said.