[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
 AN EXAMINATION OF WIRELESS DIRECTORY ASSISTANCE POLICIES AND PROGRAMS
=======================================================================

                                HEARING

                               before the

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 29, 2004

                               __________

                           Serial No. 108-122

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/







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                                 house

                               __________


                    ------------------------------  

                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
RALPH M. HALL, Texas                   Ranking Member
MICHAEL BILIRAKIS, Florida           HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
CHRISTOPHER COX, California          SHERROD BROWN, Ohio
NATHAN DEAL, Georgia                 BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi, Vice Chairman           TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania        TOM ALLEN, Maine
MARY BONO, California                JIM DAVIS, Florida
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                  HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho
JOHN SULLIVAN, Oklahoma

                      Bud Albright, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

          Subcommittee on Telecommunications and the Internet

                     FRED UPTON, Michigan, Chairman

MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida                 Ranking Member
  Vice Chairman                      ALBERT R. WYNN, Maryland
PAUL E. GILLMOR, Ohio                KAREN McCARTHY, Missouri
CHRISTOPHER COX, California          MICHAEL F. DOYLE, Pennsylvania
NATHAN DEAL, Georgia                 JIM DAVIS, Florida
ED WHITFIELD, Kentucky               CHARLES A. GONZALEZ, Texas
BARBARA CUBIN, Wyoming               RICK BOUCHER, Virginia
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
HEATHER WILSON, New Mexico           BART GORDON, Tennessee
CHARLES W. ``CHIP'' PICKERING,       PETER DEUTSCH, Florida
Mississippi                          BOBBY L. RUSH, Illinois
VITO FOSSELLA, New York              ANNA G. ESHOO, California
STEVE BUYER, Indiana                 BART STUPAK, Michigan
CHARLES F. BASS, New Hampshire       ELIOT L. ENGEL, New York
MARY BONO, California                JOHN D. DINGELL, Michigan,
GREG WALDEN, Oregon                    (Ex Officio)
LEE TERRY, Nebraska
JOE BARTON, Texas,
  (Ex Officio)

                                  (ii)



                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Ahn, Sunny K., Chief Executive Officer, Context Connect, Inc.    48
    Boxer, Hon. Barbara, a U.S. Senator from the State of 
      California.................................................    28
    Cox, Patrick M., Chief Executive Officer, Qsent, Inc.........    43
    Hammond, W. Lee, Vice President and Member, AARP Board of 
      Directors..................................................    40
    Largent, Hon. Steve, President and CEO, Cellular 
      Telecommunications and Internet Association................    36
Material submitted for the record by:
    Ahn, Sunny K., Chief Executive Officer, Context Connect, Inc. 
      letter dated October 6, 2004, to Hon. Joseph R. Pitts......    81
    Montezemolo, Susanna, Legislative Representative, Consumers 
      Union, prepared statement of...............................    75
    Strigl, Dennis F., President and CEO, Verizon Wireless, 
      prepared statement of......................................    83

                                 (iii)




 AN EXAMINATION OF WIRELESS DIRECTORY ASSISTANCE POLICIES AND PROGRAMS

                              ----------                              


                     WEDNESDAY, SEPTEMBER 29, 2004

              House of Representatives,    
              Committee on Energy and Commerce,    
                     Subcommittee on Telecommunications    
                                           and the Internet
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:06 a.m., in 
room 2322, Rayburn House Office Building, Representative 
Charles F. Bass, presiding.
    Members present: Representatives Stearns, Gillmor, Shimkus, 
Pickering, Bass, Walden, Terry, Markey, Wynn, Stupak, and 
Barton (ex officio).
    Also Present: Representative Pitts.
    Staff present: Neil Fried, majority counsel; Jaylyn Jensen, 
majority professional staff; Will Carty, majority legislative 
clerk; Howard Waltzman, majority counsel; Will Nordwind, 
majority counsel; David Vogel, minority staff assistant; and 
Peter Filon, minority counsel.
    Mr. Bass. This meeting is called to order. I waive 
explanation. I just want to mention that Chairman Upton is 
currently in a DOD Authorization Conference Committee Report. 
His Decency Bill has been added to that bill so Commerce 
Committee members are now involved in the DOD conference. He 
regrets not being here today. I am pleased to stand in his 
stead.
    Without objection I would like to have my opening statement 
made part of the record and I will at this time read into the 
record Chairman Upton's opening statement.
    Good morning. Today's hearing is entitled, ``An Examination 
of Wireless Directory Assistance Policies and Programs.'' Like 
many Americans I often carry a cell phone. I also have 
landlines at home and at work so I have not cut the cord 
completely.
    However, unlike my landline phone which I leave behind the 
second I walk out of the house, my cell phone is oftentime 
attached to my hip. Wherever I go whether it is in the car to 
drop the kids at school, to the grocery store, to Lake Michigan 
Beach, or out to dinner with my wife. And unless I tell people 
to call me or there is an emergency, I don't want people 
calling my cell phone because of the simple fact I closely 
guard my cell phone number and it is not listed in any 
directory.
    That is the way I want to keep it for the foreseeable 
future. I suspect that is the way many Americans want to keep 
it, too. To folks like me this is a matter of simple privacy so 
when we hear about a proposed industry Wireless Directory 
Assistance Project I, like many Americans, get justifiably 
concerned.
    However, I am also mindful that many Americans, 
particularly small business people like plumbers, real estate 
agents, delivery people, and electricians have cut the cord and 
may very well be interested in having their numbers listed in a 
directory. As a consumer the proposed industry Wireless 
Directory Assistance Project raises a number of critically 
important fundamental questions which need to be answered and 
answered correctly by the industry before I would be 
comfortable with such a directory.
    For instance, would the directory be opt-in for the 
consumer based on clear and conspicuous mechanism? It better 
be. Two, will consumers be charged to keep their numbers out 
such a directory? They better not be. Three, regardless of any 
legalese in their existing service contracts will consumers be 
able to keep their numbers out of such a director? They better 
be able to.
    Four, if consumers choose to be listed will their numbers 
be published or exposed or sold to third-party telemarketers 
without the consumer's consent? They better not be. Fifthly and 
last, will consumers be able to change their minds later and 
get out of the directory at no charge? Chairman Upton things 
they ought to be able to.
    Recently, I, Chairman Upton, joined Chairman Barton and 
Senator McCain in asking for the six major wireless carriers to 
respond on the record in writing to get answers to these types 
of questions. We have received written responses from all those 
carriers and the replies are encouraging. I will enter those 
responses into today's record.
    Today we will also hear from the CTIA who will run the 
Wireless Directory Assistance Project to see how its answers 
jibe with those of the carriers. I would also note that Verizon 
Wireless has announced its intention to not participate in the 
proposed Wireless Directory Assistance Project. This is a 
significant factor in this debate because if other companies 
participate and do not respect consumer wishes and privacy, 
then I suspect consumers will have the opportunity to ``vote 
with their feet'' and flock to Verizon wireless.
    Above all, the wireless industry has been a model of 
competitiveness in large part due to Government restraining 
itself from over-regulating it. Two able members of this 
committee, Mr. Pitts and Mr. Markey, have introduced 
legislation to regulate the Wireless Directory Assistance.
    In particular, I believe Mr. Pitts and Mr. Markey's 
legislation has forced the wireless industry to soberly reflect 
upon the Wireless Directory Assistance Project and how it seeks 
to construct and run it. I congratulate those members for their 
foresight, persistence, and commitment to consumer privacy. It 
truly has made a difference.
    At the moment I am inclined to think that on-the-record 
commitments to us from the industry combined with competitive 
forces and continued oversight from this subcommittee preclude 
the need for legislation action at the present time. However, 
given the seriousness of this issue for consumers and their 
privacy, it will not take much convincing to move such 
legislation if any of those commitments come up short in the 
future. We will all be watching the industry like a hawk.
    Opening statements. Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman. I will be brief. 
Thanks for holding the hearing and I want to thank our 
witnesses for appearing today, especially Senator Boucher.
    I am glad to hear that the wireless industry is revamping 
its original plan to create a 411 cell phone directory. Cell 
phones are different from landlines. Cell phone users are 
charged for incoming and outgoing calls. Those users should not 
have to pay for any unwanted incoming calls.
    With cell phones privacy has always been a given unlike 
regular landline phones and their phone directories which 
require a customer to opt-out to keep their numbers unlisted. I 
look forward to hearing today, Mr. Chairman, about whether this 
legislation is really needed to ensure that consumer cell phone 
privacy is protected. It is an interesting debate and I look 
forward to hearing from our witnesses. I would yield back the 
balance of my time.
    Mr. Bass. Thank you, Mr. Stupak.
    Mr. Walden.
    Mr. Walden. Thank you very much, Mr. Chairman. I want to 
associate myself with the comments that you made in your 
opening statement. I also want to welcome Mr. Patrick Cox from 
Oregon who will be testifying later in this hearing. I think we 
all are concerned about privacy and people's access to our cell 
phone numbers and some of the things that go along with that. I 
think the wireless industry has come a long way and I look 
forward to the testimony of all of our witnesses today, and 
especially want to extend a warm welcome to Patrick Cox.
    Mr. Bass. The gentleman yields back.
    Mr. Wynn.
    Mr. Wynn. Thank you, Mr. Chairman. I, too, appreciate you 
calling this hearing on this very interesting issue. 
Approximately 5 million people already pay to list their 
wireless numbers in traditional wireline directories. Many of 
these individuals have at-home businesses or small businesses 
with a need for mobility. Businesses that have a need for this 
service include realtors, plumbers, any at-home business, and 
also obviously electricians.
    For these individuals the option to list their wireless 
phone numbers is not a luxury, but a necessity to ensure the 
viability of their business. In response to this need the 
wireless industry, headed by CTIA, began development of a 
national wireless phone directory.
    The industry is almost finished creating an all opt-in 
directory where each participating carrier will ask new and 
existing customers if they want to be included. Importantly, 
CTIA and the participating carriers have affirmed that they 
will not sell this directory to a third party and that there 
will not be a published version of this directory.
    Aside from commercial customers, more than 8 million 
Americans have cut the cord and only use wireless phones in 
their home. Since a wireless number is their primary phone 
number, these individuals should be given the opportunity to 
list their numbers in a directory. The industry has been a 
great model to show how light regulation of an emerging 
industry fosters competition and leads to a better product for 
its consumers.
    I believe we should allow the wireless industry to proceed 
with its plans to complete development and implementation of a 
national wireless directory. I am very interested in the 
testimony today, but I want to mention one thing. The industry 
has made representation that this will be an opt-in system and 
I think that is fundamental to our discussions here today that 
consumers will have control over whether or not they are 
included.
    That being the case, we have an initial guarantee of 
privacy that is fundamental to this process. I am looking 
forward to the testimony and hope that we can envision a system 
or create a system in which we don't have to over-regulate a 
problem that does not yet exist. Rather, we can watch and see 
if the option approach and the existing level of competition is 
sufficient to protect consumers' interest.
    Thank you for the time.
    Mr. Bass. The gentleman yields back.
    Gentleman from Illinois, Mr. Shimkus.
    Mr. Shimkus. This is one of these areas where the evolution 
of technology is just amazing and great. We have now an issue 
where people want to be able to get phone numbers but they 
don't want their phone numbers to be the one to get. I don't 
know how we get involved with this and how we dispute this but 
it is a good hearing. I look forward to learning from both 
sides and I yield back the time.
    Mr. Bass. The gentleman yields back.
    The gentleman from Nebraska, Mr. Terry, do you have an 
opening statement?
    Mr. Terry. I will waive.
    Mr. Bass. The gentleman waives.
    Mr. Pitts is not a member of the subcommittee but I would 
ask unanimous consent since he is a sponsor of the bill to 
allow him to participate in the hearing. If there is no 
objection, I recognize Mr. Pitts for an opening statement.
    Mr. Pitts. Thank you, Mr. Chairman. Thanks so much for 
allowing me to join your subcommittee today. I am pleased that 
this subcommittee is taking a look at the Wireless Directory 
Assistance Data base. Mr. Markey has been a great partner in 
drawing attention to this issue. He should be commended for his 
clear and consistent voice for consumer privacy.
    As you may know, I have some serious privacy concerns about 
this and I will share them today, Mr. Chairman. It was 18 
months ago when I first heard about the wireless director. It 
was a very small story in some trade publications. I was 
shocked that something so important to consumer privacy was not 
more public.
    We have several studies that show a majority of consumers 
opposed to such a violation of their personal privacy. The 
Pierz study and the AARP study both show that a majority of 
Americans are opposed to being in the directory. I would like 
to submit both studies for the record.
    Mr. Bass. Without objection.
    [The material follows:]
    [GRAPHIC] [TIFF OMITTED] T6102.001
    
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    [The Pirez study can be obtained from the Pierz Group 
itself and they can be contacted through their website at 
http://www.pierxgroup.com/]
    Mr. Pitts. When I first heard of this public listing, my 
first instinct was to put an end to the whole thing. I don't 
want just anyone to have the number of my cell phone. But as I 
read more about it, I came to realize that certain customers, 
particularly some small businesses and those who have cut the 
cord, could benefit from it.
    I am sure we will hear more about that from Mr. Largent. I 
agree with him that this could be a good service. And that is 
why Mr. Markey and I crafted our legislation to allow this 
directory to move forward under a few common sense conditions.
    Eighteen months ago the full committee chairman joined Mr. 
Markey, Ms. Eshoo, Mr. Burr, and I in sending a letter to CTIA 
asking more questions about this directory. The response we 
received in meetings was revealing. We were told that we were 
interfering with business. We were told that making this 
directory all opt-in was unworkable.
    We were told that the companies own the cell phone numbers, 
not individuals. We were also told that they would not make any 
money if we told them they couldn't charge to be unlisted. We 
were told basically that the companies reserved the right to do 
anything they wanted.
    I am pleased to learn that today the industry supports the 
opt-in provision in the bill, that they agree to not charge 
users to be unlisted, and that they essentially support the 
components of the bill. That is great news, and we have 
definitely come a long way on this from 18 months ago when we 
first talked about it.
    But, Mr. Chairman, a number of concerns remain and these 
are the current contracts for all five of the major carriers. 
Deep in each contract, that all users have signed, is language 
that permits companies to list numbers in a Directory 
Assistance Data base and even charge to be unlisted. Mr. 
Chairman, I would like unanimous consent to insert these 
contracts in the record.
    Mr. Bass. Without objection.
    [The material follows:]
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    Mr. Pitts. Thank you, Mr. Chairman.
    The carriers call this ``boiler plate language'' that has 
always been there. They point to the fact that numbers have not 
been listed for 20 years as evidence that they won't do it now. 
This is a dangerous line of reasoning. The bottom line is this 
legislation is necessary because all we have are promises from 
the carriers.
    Promises that they will make this opt-in. That is only from 
5 of the 180 small companies. And promises they won't charge 
users. While those promises are greatly appreciated, we need a 
law. These contracts give them a way out of those promises.
    Besides, the decision to break a promise won't be made on 
the basis of a letter to a few politicians. It will be made 
according to a business plan. As a conservative former business 
owner myself, I am sympathetic to that position. My gut is to 
oppose more regulation. But there are certain values worth 
protecting for consumers and privacy is one of them.
    There are a number of issues I could raise. I won't raise 
them all but I know that CTIA is not wanting to do anything 
harmful but the issues that we will raise today in the hearing 
must not be overlooked. While on its face a directory for cell 
phones may sound like a good idea, we need to explore further 
the ramifications of such a directory and what an invasion of 
privacy this will be.
    Some of the questions I hope the panel will address are 
what are the legal status of existing service agreements that 
contain legal authorization to list numbers in a public 
directory? What happens when you change your mind? Will 
documentation be provided that prove the industry will continue 
to pursue an opt-in for the directory? How will users be 
offered the opportunity to opt-in? Will all users, new and 
existing, receive a chance to opt-in? Will carriers who choose 
not to participate at the current time be subject to the 
promise that you make today if they decide to participate in 
the future?
    Again, Mr. Chairman, thank you so much for holding this 
hearing and I look forward to hearing our witnesses and look 
forward to working with you further on this issue.
    Mr. Bass. The gentleman's time has expired.
    The gentleman from Florida, Mr. Stearns.
    Mr. Stearns. Good morning and thank you, Mr. Chairman. As 
many of you know, consumer privacy continues to be a major 
focus involved with other subcommittees, one which I chair, the 
Subcommittee on Commerce, Trade, and Consumer Protection.
    Including yesterday's hearing we have had eight hearings on 
this matter and I think we have developed a number of specific 
actions that I believe a data collection organization should 
take when compiling any personal identifiable information from 
a consumer and that includes his or her cell phone number.
    First, the organization must provide the consumer with a 
clear and conspicuous notice describing the manner in 
collecting and purpose for using that person's information. 
Second, Mr. Chairman, the consumer should be allowed to 
preclude the disclosure of that information. These principles 
were originally developed as I looked into how businesses 
collect information to market services to consumers. However, I 
think that they provide appropriate guidelines regarding the 
topic that is before us today, namely the proposed 411 wireless 
directory.
    Most people value the privacy that wireless phones can 
provide. AARP's testimony notes that is the case based upon the 
survey they conducted and that privacy should be protected. 
However, I also firmly believe in market forces and consumer 
choice. Should a wireless consumer want to disclose his or her 
cell number as a part of a wireless 411 directory, they have 
every right to request that service and wireless companies have 
the right to provide it.
    Having said that, prudent safeguards must be in place 
before such a service is implemented. The consumer must be 
given a choice as to whether or not he wants to allow his cell 
phone number to be disclosed in a directory. That choice should 
be offered in the form of a clear and conspicuous notice with 
the opportunity to opt-in or out of that service.
    Furthermore, in no way should the consumer be charged for 
not wanting his number published. It is my understanding that 
this is the direction that these wireless companies are taking 
in developing this service and that is a positive note. 
However, there remains a number of issues of concern for 
members and the public as to how this directory will work and 
what back doors, if any, could be used to exploit this new 
service for other motives.
    I look forward to the testimony. I also look forward to our 
formal member, Steve Largent, his testimony, and welcome him 
this morning, too.
    Mr. Bass. The gentleman yields back.
    The gentleman from Massachusetts, Mr. Markey.
    Mr. Markey. Thank you, Mr. Chairman, very much. It is like 
all-star weekend here. We have Steve Largent and Barbara Boxer 
back here to visit us in the House of Representatives. We 
welcome you both and everyone else who is here today.
    Our bill now has 50 co-sponsors. That is the bill that Joe 
Pitts and I have introduced. Senator Boxer and Senator Specter 
have introduced an identical bill in the U.S. Senate. It is 
progressing quite well. This is one of those self-evident 
truths that when the American people hear about it want to 
ensure that they are able to gain the attention of.
    Chairman Barton of this committee and I co-founded the 
Privacy Caucus about 5 or 6 years ago proving that the far left 
and the far right can agree on issues that protect the 
individual. Now, it does isolate the pragmatic middle, 
unfortunately, as the far left and right agree on the privacy 
issues of people but, nonetheless, at the end of the day this 
is something that all Americans do want to see as part of their 
lives.
    At the core of this privacy is routed in freedom and the 
freedom to not have your personal life intruded upon without 
your permission. What we have today in the wireless revolution 
is the coupling of the freedom to move with a wireless phone 
that can allow you to stay in communication and, at the same 
time, the freedom not to be bothered by people who you don't 
want to be communicating with you, that you have the right to 
be left alone.
    Now, when Mr. Pitts and I first introduced our bill, the 
wireless industry originally told us that asking consumers' 
permission before listing them in a 411 data base would be too 
onerous. They said that the provision in our bill that 
prohibited wireless companies from charging new fees to 
consumers who wanted to remain unreachable or unlisted was 
unfair.
    Last year after we asked the wireless industry for 
information on their plans, the industry wrote to Mr. Pitts and 
to myself, to Chairman Barton and to several other members 
about their directory plans telling us at the time that, 
``Wireless Directory Assistance offers consumers great 
benefits. These consumers will want to have their wireless 
number included in the Wireless Directory Assistance Data base 
and we are asking for this service.'' I ask unanimous consent 
that the letter from the industry to the committee be included 
in the record.
    Mr. Bass. Without objection.
    [The letter follows:]
    [GRAPHIC] [TIFF OMITTED] T6102.018
    
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    Mr. Markey. Now, notwithstanding the industry's contention 
last year that consumers were evidently asking for this 
service, how did the industry advise consumers of the good news 
that the industry was planning on implementing a 411 data base? 
Well, the way consumers often find out about such good news is 
in the fine print of their contracts that they were asked to 
signed as part of having a wireless service.
    The industry also told us in their letter to us last year 
that, ``No customer will be denied the opportunity to provide 
consent before they are listed in the Wireless Directory 
Assistance Data base. Yet, in the fine print of many of these 
wireless contracts the companies disclosed that in order to 
sign up for service, customers had to sign away their privacy 
rights. That is just plain wrong. Those contracts went on for 
months and months.
    Recently, many of the carriers have had second thoughts. 
Several of the carriers appear to have changed their minds. The 
industry is now saying that they will give consumers the chance 
to opt-into the service and carriers are now saying they won't 
charge extra fees. But given the track record of the industry 
over the last 18 months, one can imagine our reaction when the 
industry now argues that we shouldn't pass a law even before 
the service is launched.
    A couple of years ago the subcommittee worked on a 
bipartisan bill that Mr. Shimkus and Mrs. Eshoo had developed 
to establish a 911 as a national emergency number. As part of 
that bill I successfully offered an amendment to include strong 
privacy protections for use of wireless location information. 
We did this before the industry began fully implementing such 
technology and that bill is now law with the support of the 
wireless industry.
    This is a very good bill. It is in line with the consistent 
privacy laws which our committee has placed on the books. No 
one by law can know what phone numbers you have dialed. They 
can't find out. People can't look that up. No one can find out 
what cable shows you watch. That is also against the law, laws 
that we passed here in this committee. This similarly is 
something that the American people want and deserve to have as 
a privacy protection in the modern communications era.
    I thank you, Mr. Chairman, very much and it is my great 
honor to have Senator Boxer here with us today.
    Mr. Bass. The Chair thanks the gentleman from 
Massachusetts. There being no further opening statements, the 
Chair will move to our first panel and welcome Senator Barbara 
Boxer from California.
    As you know, Senator Boxer, we have a tradition of limiting 
witness' testimony to 5 minutes. I know you are only going to 
be able to stay until 10:30 so that probably won't be a big 
issue for you. Without any further ado, I recognize you for 5 
minutes.

 STATEMENT OF HON. BARBARA BOXER, A U.S. SENATOR FROM THE STATE 
                         OF CALIFORNIA

    Senator Boxer. Since I have been here for 30 minutes I will 
stay here for the full 5. Maybe even 5\1/2\.
    Mr. Chairman, thank you so much for the opportunity to 
testify. As you know, Congressman Markey, Congressman Pitts 
have teamed up to take the lead on this cell phone privacy 
bill. In the Senate I have had the honor to work with Senator 
Specter and a bipartisan group of Senators on companion 
legislation.
    I am very pleased to report to you today that the Senate 
Commerce Committee voted to approve the Wireless 411 Privacy 
bill last week. I particularly want to thank the Consumers 
Union and the AARP for their work in favor of this legislation.
    Speaking of the AARP, Mr. Chairman, they did a very 
thorough poll on this whole idea and I think it is rather 
stunning what they came up with. I would disagree with my 
dearest friend and colleague, Mr. Markey, when he says this is 
the left and the right. This is everyone. Here is what it says.
    ``The idea of a wireless phone directory is troubling to 
all consumers but especially older consumers. Only 5 percent of 
cell phone users aged 65 and older said they want their number 
to be listed in a wireless phone directory. Among all cell 
phone users nine out of 10 said they value phone number privacy 
and view the lack of a directory as a good things.'' I think 
that is rather remarkable. It is very rare that we see the 
American people gather around the notion of privacy as they 
have here in this particular area.
    Now, all we say in our bill, Mr. Chairman, is that if there 
is a wireless directory, then every cell phone user has to 
approve being listed in that directory and there should be no 
charge for exercising that right. Pretty straight forward.
    Mr. Chairman, as has been pointed out, a cell phone is far 
different from a home phone. It is far more intrusive because 
we take our cell phones with us wherever we go. We give our 
children cell phones in case of an emergency. We give our 
colleagues at work our cell phone numbers to reach us wherever 
we are whenever they need us. We pay whenever we use it even 
for incoming calls.
    A communication tool as personal and portable as a cell 
phone must meet a high standard of respect for privacy rights, 
perhaps the highest. The Wireless 411 Privacy Bill is our 
effort to establish that standard. It is totally fair. It is 
very fair to the industry. It just sets out guidelines.
    In the Senate Commerce Committee hearing we held last week, 
we learned that the cell phone companies have hired a firm to 
create a wireless directory. It is going to be ready to go so 
we have to act now. We believe our bill is necessary for a 
number of reasons and I want to give you one. I know every 
member here. I don't know if you are all parents or uncles. Let 
me just say this. Imagine your 13-year-old daughter's phone 
number in a directory. Any stranger, any stalker could call 
her.
    For those kids whose parents give them cell phones for 
emergencies, imagine someone calling that child and saying, 
``Your parents want you to go to the nearest corner and wait 
for them.'' We have to think about these things, folks, because 
these things happen. I wrote the Driver Privacy Protection Law 
that was upheld by the Supreme Court.
    It used to be somebody was stalking a young woman, drive 
next to her in a car, write down her license number, call the 
DMV, and get her home address. We stopped that here in a 
bipartisan way and the Supreme Court upheld us. Privacy is 
important. It is a safety issue. It is a safety issue.
    Now, I know the cell phone companies will tell you this 
bill is a solution in search of a problem. It is a solution in 
search of a problem. But nothing could be further from the 
truth. An unregulated directory of wireless phone numbers is a 
problem and if we don't act, then an unregulated cell phone 
directory is what we will get. It is much easier for the 
industry and I think it is safer for our people to establish 
the protections now instead of having to fix the chaos once 
Pandora's Box has been opened.
    I want to make a point that Mr. Pitts made very clearly. A 
lot of people who have had cell phones for a while have signed 
agreements that say the following. This is in the small print 
in a big contract. ``You consent to our use and disclosure of 
your name, address, and identifier, e.g., mobile phone number, 
including area code, for any lawful purpose.''
    It says if you don't want this to happen, you have to write 
them. It is a very complicated deal. So then people say, ``Oh, 
let competition win the day.'' People will leave these 
companies and go to Verizon because Verizon is very much 
against this and I commend them for being smart business 
people. It is going to cost a couple of hundred bucks, $100, 
$150, $200 to switch and that is not fair to people who want 
simply to have their privacy. Privacy should be afforded to 
everyone.
    As Mr. Largent will tell you today, you have nothing to 
worry about. Cell phone people are going to be great and they 
may well be but what is to stop them from changing? We need a 
uniform standard of privacy for our people.
    To sum it up, and I would ask unanimous consent that my 
entire statement be placed in the record.
    Mr. Bass. Without objection.
    Senator Boxer. I hate to use this very direct term but this 
is kind of a no-brainer. You have a situation where everyone, 
except maybe 5 or 10 percent of the people, want their privacy 
protected. You have the cell phone company saying, ``Fine. We 
have got no problem with that.'' Let us pass this law so we 
know we have done something to protect the people. Let us not 
wait for the first stalker to send some kid to a corner and 
then we will all be back here saying why didn't we do this.
    It is really simple. I want to have a directory, I agree 
with Mr. Wynn, for the people who want to get in it. But I 
don't want people in it who really want to protect their 
privacy. We can do this. I think you have great leadership on 
this committee from Mr. Markey and Mr. Pitts. You have strong 
support from this legislation. I think the only one against it 
are the cell phone folks. Why would they be against it?
    I hope you will press Mr. Largent on that point just 
because we don't want to be regulated. The fact of the matter 
is a directory that simply says if you want to be in it you 
have to opt-in is not a big deal. I think it will set good 
guidelines and it will make everybody happy.
    I thank you very much for this opportunity. I look forward 
to working with all of you on this.
    [The prepared statement of Hon. Barbara Boxer follows:]
Prepared Statement of Hon. Barbara Boxer, a United States Senator from 
                        the State of California
    Mr. Chairman, thank you for the opportunity to testify here today 
on the Wireless 411 Privacy bill.
    As you know, Congressman Pitts has taken the lead on the issue with 
Congressman Markey in the House.
    In the Senate, I have had the honor of working with Senator Specter 
and a bipartisan group of Senators on companion legislation.
    I am happy to report that the Senate Commerce Committee voted to 
approve the Wireless 411 Privacy bill last week. I also want to thank 
Consumers Union and the AARP for their work in favor of the 
legislation.
    Mr. Chairman, the Wireless 411 privacy bill is very 
straightforward.
    We say that if there is a wireless directory, then every cellphone 
user has to approve being listed in that directory and there should be 
no charge for exercising that right.
    Mr. Chairman, a cell phone is far different from home phone. It is 
far more intrusive because people take a cell phone with them wherever 
they go. We give our children cell phones in case of emergency. We give 
our colleagues at work our cell phone numbers to reach us wherever we 
are, whenever they need us. And, we pay whenever we use it B even for 
incoming calls.
    A communication tool as personal and portable as a cell phone must 
meet a high standard of respect for privacy rights. The Wireless 411 
Privacy bill is our effort to establish that standard.
    In the Senate Commerce Committee hearing we held last week, we 
learned that the cell phone companies have hired a firm to create a 
wireless directory. It will be ready to go within months. As a result, 
we have to act now.
    We believe our bill is necessary for a number of reasons. One of 
the most important reasons is for the protection of our children.
    I am very concerned by the prospect of any child's number being 
listed.
    Imagine your 13 year old daughter's phone number in a directory. 
Any stranger, any stalker could call her.
    For those kids whose parents give them cellphones for emergencies, 
imagine someone calling them and telling them that their parents want 
them to go to the nearest corner and wait for them.
    I want to make sure that parents can control which numbers are 
listed in any directory. And, if they choose not to have their 
children's numbers listed, they should not be charged for that choice.
    We have worked hard to draft legislation with which the industry 
can comply and that will protect consumers.
    The AARP and Consumers Union support this legislation. And, every 
survey that has been conducted says that people want their privacy 
protected in a cell phone directory.
    I know that cell phone companies will tell you this bill is a 
solution in search of a problem. But nothing could be further from the 
truth. An unregulated directory of wireless phone numbers is a problem 
and, if we do not act, then an unregulated cell phone directory is what 
we will get. It is much safer and easier to establish the protections 
in law now than having to fix the chaos once Pandora's box has been 
opened.
    The industry also says it has changed its contracts to allow for 
consumer privacy. But we know that they could just as easily switch 
right back.
    In addition, many of these old contracts cannot be easily 
abrogated. For example, here is one contract (hold up AT&T contract). 
For millions of consumers this contract and others like it still apply.
    When companies say that if you don't like the directory, just move 
to another company with a better privacy policy, what they are not 
telling you is that it will cost you a hundred dollars or more to break 
your contract.
    We can act to protect consumers from an unregulated directory. They 
want that protection and we should make sure they have it.
    Mr. Chairman, thank you again for allowing me to testify. Let's 
protect our constituents. Let's stand up for privacy.

    Mr. Bass. Thank you, Senator Boxer.
    Does any member of the subcommittee wish to question 
Senator Boxer?
    Mr. Stupak.
    Mr. Stupak. Just quickly. Under the 411 proposal nothing is 
published, no address or no phone number, but like my landline 
that is published. Whenever I get a hard line they publish my 
phone number, they published my address. Don't you have more 
privacy with the 411 proposal than you do with a landline?
    Senator Boxer. In your home phone you can opt-out.
    Mr. Stupak. And they charge me, right?
    Senator Boxer. You have to pay to be unlisted. What we are 
pointing out this is a different circumstance here. This cries 
out for more privacy protection.
    Mr. Stupak. Why----
    Senator Boxer. I will explain that if you give me a chance.
    Mr. Stupak. Sure.
    Senator Boxer. When I call you at your home phone I pay. 
When I call you on your cell phone you pay. That is one reason 
right there. You could be having tons of phone calls come in. 
Yeah, it is true you have a certain number of free minutes but 
eventually you start paying. That is one difference.
    Mr. Stupak. Sure.
    Senator Boxer. Second, with your cell phone you have it 
with you all the day and, therefore, it is a constant nuisance 
because it could be ringing all day with people wanting to find 
you who you don't particularly want to find you. I think this 
is a different circumstance. It is more ubiquitous. It is with 
you all the time. You have to pay for the calls that you don't 
want to have.
    If you question people, which the AARP has done, people 
view their cell phone in a very different way. Sometimes they 
give it to their kids just for emergencies. It is a very 
different situation. By the way, we also did set up a no call 
list, if you will remember, and the same issue was raised 
because people were going crazy so we did protect them from 
those.
    Mr. Stupak. If we are really concerned about privacy then 
why don't we take and pass a law then that says landlines, 
can't publish my number, can't publish my home address?
    Senator Boxer. I just said I feel differently about 
landlines but if you feel that way, go ahead and do it. I am 
not going to do it. I think this is a way different situation 
and you are putting the chairman to sleep.
    Mr. Stupak. I don't think the chairman is sleeping.
    Mr. Bass. The gentleman yields back. Any other members of 
the subcommittee? Congressman Markey.
    Mr. Markey. It would only be to make this point. If our 
cell phones were listed, as we left this hearing unfortunately 
there would be about 40 people in this audience that would then 
try to start calling us, the members of the committee on our 
cell phone because it would be listed. People would just be 
bothering you as you are walking down the street and walking 
around.
    We use it in America, this phone, as something that we give 
a number to our family members and to other people and they can 
call us. That is the point of it. It is on us. If it was 
listed, then everyone here who is interested in lobbying us on 
the bills would just call us. They would look up our number and 
call us on the phone all day long instead of calling us in our 
office or calling us at home which is where we have become used 
to getting called at home.
    It goes right to voice mail anyway at home when we are not 
there all day long anyway so it is just a different set of 
expectations. But since it is on us and it is on, we would be 
bothered all day long by people who we had not given 
permission. It is just not something that is available to 
everyone. I think Senator Boxer is making the point that over 
100 years, for better or worse, is a precedent that has these 
numbers listed.
    I think in California, Barbara, I think half the people in 
California pay each month to have their number unlisted. I 
think half of all phone numbers in California are unlisted and 
people have to pay. The question here is should the phone 
industry make us now pay to have a number unlisted that is 
already unlisted and we don't pay to have it unlisted?
    They see it as a business that they can make $3, $4, $5 
million a years making all Americans pay to get something that 
they already have. What is happening is in most states, I think 
the minimum number in most states is 20 to 30 percent of all 
people pay each month to the phone company not to put their 
name in the book.
    So now in this system no one's name is in the book but yet 
they want us to pay from now on to do so. That just doesn't 
make any sense at all. They are trying to create a business 
where no business is needed at all. Thank you, Barbara.
    Mr. Bass. The gentleman yields back.
    Mr. Wynn.
    Mr. Wynn. Thank you, Mr. Chairman. Good to see you, 
Senator. Just a couple of questions. The industry has made 
certain representations, obviously, to all of us. I think it is 
predicated based on those representations. Is there any example 
that industry has, in fact, sold wireless numbers or list the 
wireless numbers?
    Senator Boxer. They are just about to get their directory, 
Mr. Wynn, as you will find out. They have just hired a company 
to put it together. They don't have the directory as yet. They 
are just about to have it.
    Mr. Wynn. But based on the information you gave us in the 
fine print, they actually do have all of those numbers and if 
it were lawful to sell those numbers, and I presume it would 
be, is there any evidence that they have sold the existing 
numbers that they have pursuant to----
    Senator Boxer. Well, you would have to ask them that.
    Mr. Wynn. Okay. All right.
    Senator Boxer. Obviously, you wouldn't put something in a 
contract if you didn't have an intention to do it. It says 
clearly you consent.
    Mr. Wynn. No, I got that part. I was just concerned if 
there was any anecdotal evidence because I am a big proponent 
of privacy.
    Senator Boxer. Good. Good.
    Mr. Wynn. I strongly pushed for the Do Not Call list. I 
just wanted to find out if there was any egregious anecdotes. 
Also, I have a 10-year-old daughter so I am very sensitive to 
the point that you made. If, in fact, this is an opt-in system, 
as has been represented, would that address your concerns? 
Because as the parent of a young daughter, my preference would 
be to not opt-in. If I had that option without any cost, do you 
believe that would solve the potential stalking problem?
    Senator Boxer. That is the point of the legislation. This 
is what they will tell you. They will tell you what you want to 
hear today. They have changed on this constantly which is 
wonderful they are changing. The point is we are here to 
legislate for the long run and now you have certain people who 
obviously hear us and they are listening and they are saying 
they are going to do it all this way. But if you don't put it 
into legislation, it could be all fine.
    Yes, I agree. That is why we say opt-in, protect your kids 
and all that is fine. That is what we are doing. We are not 
stopping the directory. We are just saying this is the way it 
ought to be. They say they are going to do exactly what we want 
but yet they oppose the legislation on philosophical grounds 
that they don't want to be ``regulated.'' But they say they are 
going to do exactly what we have asked today.
    A few months ago that wasn't what they said. What are they 
going to want to do a year from now? I think we need to get 
ahead of this. I think what we are doing again is very clear. 
If the industry supports what we are doing, why not just put it 
into law so in the future you may have an unscrupulous company 
come forward and do something and start charging people. This 
idea of all you have to do is switch to another carrier isn't 
as easy as it sounds. Have you ever tried to switch carriers? 
It isn't as easy as it sounds. It cost money. It takes time.
    Mr. Wynn. Thank you.
    Mr. Bass. The gentleman yields back.
    Mr. Stearns.
    Mr. Stearns. Thank you. Senator Boxer, let me also welcome 
you here.
    Senator Boxer. Thank you.
    Mr. Stearns. I served with you when you were in the House. 
You mentioned your 13-year-old daughter.
    Senator Boxer. No, no, no, no, no. I don't have a 13-year-
old daughter.
    Mr. Stearns. You mentioned a 13-year-old.
    Senator Boxer. I said imagine your 13-year-old. It was kind 
of a rhetorical put yourself in the position.
    Mr. Stearns. Right. I have a 13-year-old daughter.
    Senator Boxer. I actually have a 9-year-old grandson.
    Mr. Stearns. But isn't it true that no one can sign these 
consent contracts unless you are 18 and over.
    Senator Boxer. Exactly right. But they print it anyway.
    Mr. Stearns. The people that have been mentioned here they 
really can't sign these contracts.
    Senator Boxer. Well, the parent signs it for them.
    Mr. Stearns. So the parent's name would be on the contract 
and not the 13-year-old or the 9-year-old. But just from the 
standpoint of industry, couldn't they take this----
    Senator Boxer. Sir, let me just explain. If you are a 
stalker you know that there is a kid and who the parents are so 
if you see a number of phone lines listed in the parent's name, 
all you have to do is call those and you will get the kid at 
one point.
    Mr. Stearns. Okay. Is it possible that this consent 
agreement, that the wireless companies could just change it 
itself without--I am just talking now. Instead of big Federal 
legislation couldn't they just change this consent agreement 
and do some kind of opt-in, opt-out procedures and all do it 
there? Is that something----
    Senator Boxer. That is the whole point. They can do 
anything they want. They can do anything they want right now.
    Mr. Stearns. So wouldn't you also suggest that--let us say 
this bill does not pass in this Congress. I know it has passed 
the Senate but----
    Senator Boxer. No, it has not. It has passed the Commerce 
Committee.
    Mr. Stearns. Okay.
    Senator Boxer. In a bipartisan vote.
    Mr. Stearns. Well, let us say it doesn't pass. Wouldn't 
your recommendation be also that maybe these companies should 
actually just change the agreement and that would solve the 
whole problem?
    Senator Boxer. Of course I want them to change the 
agreement. Of course. That is the point of the legislation. 
There should be a national standard. Verizon doesn't want 
anything to do with the directory whatsoever. That is their 
opinion.
    Mr. Stearns. Each company would be different and you want--
--
    Senator Boxer. Each company would be different. I think you 
should have a standard so that everyone knows that they are 
protected. Just simple. Instead of Verizon says, ``We won't 
even allow anyone to be in the directory.'' Now, some people 
might flock to Verizon for that reason but others may not know. 
This just seems like such a simple thing.
    Mr. Stearns. Wouldn't that force all the companies to have 
a national standard because they wouldn't want to lose business 
so they----
    Senator Boxer. I don't think so. There is no national 
standard today.
    Mr. Stearns. Okay.
    Senator Boxer. No. There are all kinds of different 
standards and Verizon was really chastising the other 
companies, ``Stay away from this. It is really a bad idea.'' 
The rest of them--most of them are going forward with this.
    Mr. Stearns. Thank you.
    Senator Boxer. It is a mess out there, folks. That is the 
truth.
    Mr. Bass. Thank you, Mr. Stearns.
    Further questions? Seeing none, I would like to thank you, 
Senator Boxer for your testimony.
    Senator Boxer. I thank you and it is nice to be here with 
my--I don't want to say old colleagues and friends but my 
former colleagues and current friends. Thank you very much.
    Mr. Bass. You are very welcome.
    The Chair will now introduce the second panel. The Chair 
will hear from the Honorable Steve Largent who is the President 
Chief Executive Officer of the Cellular Telecommunications and 
Internet Association; Mr. W. Lee Hammond, Vice President and 
Member of AARP; Mr. Patrick M. Cox, Chief Executive Officer of 
Qsent, Inc.; Mr. Sunny K. Ahn, Chief Executive Officer of 
Context Connect, Inc.
    The Chair will recognize Congressman Largent for an opening 
statement.

 STATEMENTS OF HON. STEVE LARGENT, PRESIDENT AND CEO, CELLULAR 
 TELECOMMUNICATIONS AND INTERNET ASSOCIATION; W. LEE HAMMOND, 
VICE PRESIDENT AND MEMBER, AARP BOARD OF DIRECTORS; PATRICK M. 
 COX, CHIEF EXECUTIVE OFFICER, QSENT, INC.; AND SUNNY K. AHN, 
         CHIEF EXECUTIVE OFFICER, CONTEXT CONNECT, INC.

    Mr. Largent. When I left Congress in 2002 the question I 
got asked often was, ``Do you miss being in Congress?'' And my 
answer was typically, ``Not at all but I do miss being around 
my friends.'' So it is great to have the opportunity to see a 
lot of old friends and colleagues once again.
    I have always been told that a picture is worth 1,000 words 
so I brought a picture to hopefully help explain in the most 
simple terms exactly what we are trying to propose and the 
problems that we have with the direction that Congress seems to 
be taking.
    We have basically devised two different scenarios, what the 
world looks like today and what we are trying to propose the 
world look like tomorrow.
    Let me just say, first of all, that we know according to 
surveys about 90 percent of the people want to be like Mark 
over here who is on this island. Mark wants his number unlisted 
and you don't have to do a thing in today's world to keep your 
number unlisted if you are a cell phone customer.
    Congressman Pitts mentioned he doesn't want his phone 
number listed. I don't want my number listed. You don't have to 
do anything in today's world and you are really not threatened. 
I mean, I would assume that most people don't feel threatened 
as the world is today and that is a good thing.
    However, John's Plumbing Company, he wants to list his 
wireless number. He doesn't want to have a landline number 
anymore. He can't afford to pay an assistant. He carries a cell 
phone on his hip. It is a one-man operation, or two people 
perhaps, and he wants to save some money. In fact, in today's 
world you can actually port your old landline number to your 
wireless device so that you don't even have to change your 
current listing in the yellow pages. But John wants to be able 
to be found and wants his wireless number to be able to be 
found on a Directory Assistance, a 411 number.
    He goes to his wireless company and in today's world 
wireless companies can't list their numbers which is why we are 
trying to introduce this service. He goes to his wireless 
company and no, he can't list it. He goes to his wireline 
company.
    He happened to be smart enough to then try instead of going 
to his wireless company to go to his wireland company and in 
some instances in some places in this country today you can 
actually list your wireless number with the wireline company. 
We know there are approximately 5 million current wireless 
customers who list their number.
    I mentioned before we knew that 90 percent of the people 
according to surveys that we have done say, ``We don't want our 
number listed.'' That means that 10 percent do. Ten percent of 
our customers have said, ``We would like to have our number 
listed.'' Well, in today's world, you know, in the political 
world you operate with 51 percent, right? But not in the 
competitive wireless industry.
    Ten percent of our customers is 17 million people so 17 
million people, primarily small business people, what to have 
their number listed. We listen to those customers so in today's 
world there are 5 million of those people currently that are 
paying a monthly fee to list their number with a 411 service.
    If you happen to be in an area of the country where your 
wireline company won't list your number, that is a no. Perhaps 
you can list it on the Internet directory but that doesn't 
necessarily connect with a 411 directory so you really don't 
accomplish a lot.
    Well, this is the world as it exist today. What are we 
trying to do that is creating so much controversy? All we are 
trying to do is add this line right here giving a wireless 
company the opportunity to say yes to 10 percent of their 
customers, 17 million people like John's Plumbing Company, that 
are asking to list their number.
    This doesn't have anything to do with people like many of 
us who don't want your number listed. You are still over here 
on this proposed world. You are still over here on this island. 
You don't have to do a thing to keep your privacy protected in 
the world that we are proposing. You can stay over there as 
Mark is on the island.
    But now John's Plumbing Company goes to this wireless 
company and says, ``Can I list my number?'' Well, even in this 
competitive world in the proposed world there are some wireless 
companies who say, ``No, you can't list your number with our 
service.'' Some customers will say, ``Thank goodness. I want to 
be with you because I can't list my number. I can't choose to 
list my number with your company. That is a good thing. I am 
going to join you.''
    But we want to create a world where they can go to their 
wireless company and some wireless companies can say, ``Yes, if 
you join our company you can list your number with a 411 
service,'' which you can't do today. And then you go into--then 
their number, which they have opted-in, they want to have this 
service. Now it can be listed.
    And a couple of things. John's Plumbing Company has to 
proactively opt-in. We don't charge him to opt-in. In fact, 
Mark, who is opting-out in this scenario, we don't charge him 
for opting-out. That is also a free service. This is the 
proposal that we have.
    What I would like to do in just the 2 or 3 minutes I have 
left is respond to some really specific questions. No. 1, will 
carriers charge to opt-in or opt-out? The answer is no. This 
committee asked for letters from all of our companies that are 
participating. You got letters from the CEOs of these companies 
and said absolutely not, not to opt-in and not to opt-out.
    Will there be a printed directory of wireless numbers? The 
answer is no. There is no printed directory unlike landline 
directories. What about carrier contracts that say they can 
list? It was mentioned most carriers had boiler plate language 
that gave them permission over the last 10 or 15 years to 
create this directory and list those numbers and you had to 
sign that contract if you wanted to get their service.
    The question was raised what is going to prevent companies 
from changing their mind in the future? Let me just tell you, 
all you can look at is the history. The carriers had 
contractual language that allowed them to do this for the last 
15 years and they have not done it.
    Why? Because they are more concerned about their customer's 
privacy then Congress is. They know if they start listing 
numbers their customers are going to flee to somebody else's 
company that doesn't do it. That is the pressure that these 
companies face that is a greater pressure than legislation, and 
that is the competitive industry that creates winners and 
losers.
    Mr. Bass. Steve, I hate to cut you off.
    Mr. Largent. Let me just finish really quickly. Why now are 
we doing this? Because of local number portability. You can 
take your landline and carry it to a wireless service.
    Children at risk. I would just, again, remind you you can't 
sign a contract until you are 18 years old. I would mention the 
fact that there are 200,000 calls to 911 over wireless phones 
today. Wireless saves lives. It doesn't put children at risk. 
It makes children safer. I look forward to responding to your 
questions.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Steve Largent follows:]
 Prepared Statement of Hon. Steve Largent, President and CEO, Cellular 
                           Telecommunications
    Chairman Upton, Ranking Member Markey and members of the 
Subcommittee, thank you for your invitation to testify this morning 
regarding, ``An Examination of Wireless Directory Assistance Policies 
and Programs.'' I welcome the chance to provide CTIA's views on this 
issue, and specifically, the development of a wireless 411 service.
    Let me preface my remarks by acknowledging the legislation that 
Congressmen Pitts and Markey have put forward, H.R. 3558, and their 
well-intentioned efforts. However, I sincerely believe that this bill 
is not needed and does have unintended consequences. The wireless 
industry has a proven track record of protecting our customers' 
privacy, and we have made a concerted effort while developing this 
directory assistance service to safeguard our subscribers' personal 
information. Moreover, the service is still in the planning stages. It 
is extremely premature for Congress to issue a government mandate on a 
service that has yet to be made available to our customers. If there 
are wireless customers who have serious reservations about this service 
or who just do not want to be bothered with the choice of opting-in, 
they have the option to switch to a carrier that is not participating 
in the wireless 411 service.
    The wireless industry has a great story to tell and I feel 
fortunate to be here today to tell it. Currently, there are more than 
168 million wireless customers in this country as compared to roughly 
33 million when the 1996 Telecommunications Act was signed. This 
represents a phenomenal growth rate of 425 percent. And why has our 
industry enjoyed such a dramatic growth rate? Because of intense 
competition among service providers, a growing number of service 
options, technological advancements, and prudent, forward-looking 
government policies that allowed the market to determine the fate of 
the industry rather than government mandates.
    However, with success, be it athletic, political, or business, 
comes greater scrutiny. It has become apparent to me over the past 11 
months that the wireless industry is not being viewed as the hyper-
competitive industry that we are. To set the record straight there are 
currently more than 180 wireless service providers who compete in the 
U.S. An impressive 93 percent of Americans live in markets served by 
four or more operators, and a nearly ubiquitous 98 percent of Americans 
live in a market served by three or more operators. Whether urban or 
rural, American wireless consumers have choice and the power to 
exercise it. Clearly, wireless customers have a multitude of service 
providers to choose from in the wireless market, and as a result, 
receive more value for their wireless dollars. Last year, consumers 
increased their individual usage of voice minutes by 22 percent while 
paying 13 percent less per minute according to data released last week 
by the FCC's latest report on competition in the wireless industry. And 
wireless customers are now using their phones for a multitude of new 
purposes--to take pictures, play games and music, and to exchange more 
than two billion text messages each month.
    Customers not only have carrier choice, but also choice among 
service features. Accordingly, another potential choice we want to 
offer our customers is a wireless 411 service, but only for those 
customers who want their number listed. Many wireless customers, 
particularly those in small businesses who spend most of their workday 
away from an office and a landline phone, rely upon their wireless 
phone as their primary business line. We believe these customers would 
welcome the option of having their wireless numbers be made available 
in a 411 service. A survey conducted by the Small Business 
Administration in March of this year entitled ``A Survey of Small 
Businesses' Telecommunications Use and Spending'' confirms that 
wireless services are now used by 73% of small businesses, and 25% of 
all small businesses spend more for wireless services than they do for 
local and long distance telephone services combined. Unfortunately, 
those small businessmen and women who use their wireless phones as 
their primary business line currently have no other choice but to pay 
to have their number listed in the wireline phone directory if they 
have that option at all, which many do not.
    Seeing this void in the marketplace, in February 2002, the wireless 
industry first contemplated the concept of providing its customers with 
a wireless directory assistance service. During the past two and a half 
years, CTIA serving in the role of a coordinator and six of the seven 
largest carriers: AT&T Wireless, Cingular, Sprint PCS, Nextel, T-
Mobile, and Alltel have proceeded with a thoughtful approach to provide 
a service that our customers want and currently cannot receive.
    Over 8 million Americans have ``cut the cord'' and use their 
wireless phone exclusively; many have no way to have their numbers 
listed and those that do must incur a cost. Unlike the traditional 
landline directory, which lists all customers by default, the wireless 
411 service being developed will only include consumers who 
affirmatively choose to participate. Participating wireless carriers 
will ask their customers if they want their number included. If they 
do, these numbers can be added to the existing directory assistance 
database and be made available by the 411 operator to customers who 
specifically ask for it.
    If a customer chooses not to be included, they will not have to do 
anything--the wireless 411 database will only include numbers that 
customers affirmatively add to the list--all other numbers are 
automatically excluded. The only way a number will be listed is if the 
customer specifically asks that it be made available. In addition, 
unlike the current wireline directory system, all of the national 
wireless carriers have indicated they will not charge customers who 
elect to remain unlisted.
    A mutual concern of both the sponsors of H.R. 3558 and the wireless 
industry is the issue of a published directory. Let me put to rest any 
misperception that there will be a published directory associated with 
this service. Wireless numbers from this database will not be published 
in a directory. Additionally, the aggregated database of wireless 
numbers will not be sold to any third-party, nor will it be available 
anywhere on the Internet.
    The wireless industry has historically advocated for strong privacy 
measures for its customers such as prohibiting the use of automated 
systems to dial wireless phone numbers and encouraging its subscribers 
to register their wireless number on the Federal Trade Commission's 
``Do Not Call'' list. Likewise, privacy concerns are paramount in this 
initiative. We have attempted to make every assurance that there is no 
invasion to a customer's privacy as a result of their inclusion in this 
database. Moreover, consumers who choose to be listed will have an 
added protection against telemarketers because of the current 
restrictions on the use of automated dialers calling wireless numbers.
    It is envisioned that the wireless 411 system will operate by 
having participating carriers contact their customers and offering them 
the choice of participating in the service. If they choose to opt-in, 
their wireless contact information will be confirmed by the carrier and 
sent to the database aggregator, Qsent, at which point Qsent will 
integrate that information with the opt-in listings provided by 
wireless customers of all of the carriers who support this service. By 
providing a single aggregated database for opted-in wireless listings, 
operators can make a single query to the Qsent database when a customer 
calls 411 (from either a wireline or wireless phone) to request a 
wireless listing. While in Congress, I was privileged to serve on this 
Committee and worked on several privacy-related bills dealing with 
spamming, slamming, cramming, Do-Not-Call, and the privacy title of the 
Gramm/Leach/Bliley Act. All of those bills were introduced as a result 
of bad corporate behavior. With the legislation we are discussing 
today, there has been no bad behavior; in fact, the behavior has been 
exemplary, as the wireless industry has sought to fashion the service 
in a manner most protective of customer privacy. Moreover, as I keep 
making the point, the wireless industry is such a hyper-competitive 
business that if any carriers that choose to participate in a wireless 
411 system betray the confidence of their customers, as sure as I am 
sitting here, those customers will vote with their feet and switch to 
another service provider.
    We believe the wireless 411 service is yet another example of the 
efforts of wireless companies to provide their customers with choice. 
It will be opt-in only and participating carriers indicate there will 
be no charge for opting out. There will be no published directory, no 
Internet access to the numbers, nor will there be any third-party sale 
of the numbers.
    The multitude of service and feature options and calling plans, 
better service for lower prices, free voicemail, caller ID, and 3-way 
calling are all competitive responses undertaken to satisfy consumer 
demand. Wireless 411 is one more attempt to provide a service to a 
growing number of wireless customers. We know the service may not be 
for everyone, but many have asked for it and we urge you to allow these 
ultra-competitive companies to offer the wireless 411 service as they 
propose. Customers truly are the ultimate regulators in a competitive 
market and they are capable and willing to decide for themselves 
whether a service is viable.
    In closing, as someone who used to sit on the other side of this 
dais, I know the importance that your constituents place on protecting 
their privacy. I also know that the wireless industry has a proven 
track record of supporting legislation to protect its customers' 
privacy. My concern with H.R. 3558 is that it offers no more privacy 
protection than the wireless industry's own proposed 411 service, but 
if enacted, the legislation may deter future innovation and industry 
initiatives for fear government mandates will step in even before new 
services get off the ground.
    I welcome any questions you may have.

    Mr. Bass. Thank you, Congressman Largent.
    Mr. Hammond.

                   STATEMENT OF W. LEE HAMMOND

    Mr. Hammond. Chairman Barton and members of the committee, 
my name is Lee Hammond and I am a member of AARP's Board of 
Directors. On behalf of AARP and its 35 million members, thank 
you for inviting us here this morning to testify on H.R. 3558, 
the ``Wireless 411 Privacy Act,`` introduced by Representatives 
Pitts and Markey.
    AARP supports this legislation because it will maintain 
consumer privacy by giving cell phone owners a choice as to 
whether their cell phone number is included in a wireless 
directory, and will protect consumer pocketbooks by shielding 
them against charges for keeping it private.
    The number of cellular or wireless telephone subscribers in 
the U.S. has grown substantially over the past decade, 
increasing from roughly 16 million in 1994 to 97 million in 
2000, and to more than 160 million today. Many of these 
subscribers are older Americans. In fact, consumers age 50 to 
64 are almost as likely as those age 18 to 49 to have cell 
phones. While consumers age 65 and older are somewhat less 
likely to have cell phones, cell phones are of growing 
importance to this age group as well.
    In fact, cell phone users age 65 and older are most likely 
to say that security in case of an emergency is the main reason 
they have a cell phone. In contrast, younger cell phone users 
are most likely to list convenience as the chief reason they 
have a cell phone.
    Privacy protection is a critical issue for cell phone users 
of all ages. While many subscribers to more traditional 
landline telephone service also want to keep their home numbers 
private, cell phone subscribers have additional incentives to 
do so. First, the privacy of wireless subscribers has always 
been safeguarded.
    Therefore, many cell phone users now expect to receive 
calls only from those individuals to whom they have personally 
given their number.
    Second, wireless service providers, unlike their landline 
counterparts, charge for incoming as well as outgoing calls. As 
a result, wireless users have to pay for any unwanted, incoming 
calls.
    A recent study by the AARP Public Policy Institute, which 
surveyed wireless telephone users age 18 and older, confirms 
that cell phone owners place a high value on the privacy of 
their cell phone numbers.
    As part of this survey, we asked cell phone subscribers 
whether they thought it was good or bad that there is currently 
no way for another individual to get their wireless phone 
number unless the respondent chooses to give it to them. Nine 
out of ten wireless phone owners of all ages said they thought 
this was a good thing. The consensus on this point is 
unequivocal.
    We asked cell phone owners whether they would want to have 
their wireless phone number included in a Directory Assistance 
Data base so that others could locate their number. Only one in 
ten wireless phone owners age 18-49 indicated that they would 
want to be included in such a data base.
    Far fewer of those age 50-64--6 percent--indicated that 
they would want to be included in a wireless directory, and 
among those age 65 and older, just 1 in 20--5 percent--said 
that they would want to be included in a Directory Assistance 
Data base. The consensus on this point is also clear and 
unambiguous.
    Finally, we asked wireless phone owners to assume that a 
cell phone directory would in fact be compiled and then 
requested that they choose one of two options as the best 
method for creating a directory, opt-in and opt-out.
    Respondents of all age groups overwhelmingly chose opt-in. 
They indicated that a wireless directory should only include 
the cell phone numbers of those wireless users who elect to 
participate. In fact, only about 6 percent of all cell phone 
owners selected the opt-out method as described in option #1. 
On this point as well, the consensus is clear cut and 
unmistakable.
    This survey underscores the need for the bipartisan 
legislation, H.R. 3558 and S. 1963, introduced by 
Representatives Joseph Pitts (R-PA) and Edward Markey (D-MA) in 
the House and Senators Arlen Specter (R-PA) and Barbara Boxer 
(D-CA) in the U.S. Senate. AARP supports these bills and 
believes that consumers deserve the right to maintain the 
maximum amount of control over the disclosure of their wireless 
phone numbers.
    In this regard, we are not convinced that wireless 
Directory Assistance can be managed in a manner that 
effectively safeguards customer privacy unless Congress creates 
legally enforceable rights to ensure that this occurs.
    Some critics of H.R. 3558 and S. 1963 contend that these 
bills are unnecessary in a competitive wireless industry and 
make the point that most Americans live in a market served by 
three or more wireless providers. They argue that with 
competition in the marketplace will enable dissatisfied 
customers to simply take their business elsewhere.
    One problem with this line of reasoning, however, is that 
many cell phone subscribers would have to pay a severe penalty 
to take advantage of other choices in their service area. In 
effect, they are trapped by long-term contracts. They include 
very high fees, $150, $175 or more for early termination.
    The development of a wireless directory without sensible 
and effective privacy safeguards is not a risk worth taking. 
Congress should enact industry-wide privacy protections for 
cell phone subscribers now. Thank you.
    [The prepared statement of W. Lee Hammond follows:]
 Prepared Statement of W. Lee Hammond, Member, AARP Board of Directors
    Chairman Barton and Members of the Committee: My name is W. Lee 
Hammond and I am a member of AARP's Board of Directors. On behalf of 
AARP and its 35 million members, thank you for inviting us here this 
morning to testify on H.R. 3558, the ``Wireless 411 Privacy Act,'' 
introduced by Representatives Pitts and Markey. AARP supports this 
legislation because it will maintain consumer privacy by giving cell 
phone owners a choice as to whether their cell phone number is included 
in a wireless directory, and will protect consumer pocketbooks by 
shielding them against charges for keeping it private.
    The number of cellular or wireless telephone subscribers in the 
U.S. has grown substantially over the past decade, increasing from 
roughly 16 million in 1994 to 97 million in 2000, and to more than 160 
million today. Many of these subscribers are older Americans. In fact, 
consumers age 50 to 64 are almost as likely as those age 18 to 49 to 
have cell phones. While consumers age 65 and older are somewhat less 
likely to have cell phones, cell phones are of growing importance to 
this age group as well. In fact, cell phone users age 65 and older are 
most likely to say that security in case of an emergency is the main 
reason they have a cell phone. In contrast, younger cell phone users 
are most likely to list convenience as the chief reason they have a 
cell phone.
    Privacy protection is a critical issue for cell phone users of all 
ages. While many subscribers to more traditional landline telephone 
service also want to keep their home numbers private, cell phone 
subscribers have additional incentives to do so. First, the privacy of 
wireless subscribers has always been safeguarded. Therefore, many cell 
phone users now expect to receive calls only from those individuals to 
whom they have personally given their number. Second, wireless service 
providers, unlike their landline counterparts, charge for incoming as 
well as outgoing calls. As a result, wireless users have to pay for any 
unwanted, incoming calls.
    A recent study by the AARP Public Policy Institute, which surveyed 
wireless telephone users age 18 and older, confirms that cell phone 
owners place a high value on the privacy of their cell phone numbers.
    As part of this survey, we asked cell phone subscribers whether 
they thought it was good or bad that there is currently no way for 
another individual to get their wireless phone number unless the 
respondent chooses to give it to them. Nine out of ten wireless phone 
owners of all ages said they thought this was a good thing. The 
consensus on this point is unequivocal.
    We asked cell phone owners whether they would want to have their 
wireless phone number included in a directory assistance database so 
that others could locate their number. Only one in ten wireless phone 
owners age 18-49 indicated that they would want to be included in such 
a database. Far fewer of those age 50-64 (six percent) indicated that 
they would want to be included in a wireless directory, and among those 
age 65 and older, just one in twenty (five percent) said that they 
would want to be included in a directory assistance database. The 
consensus on this point is also clear and unambiguous.
    Finally, we asked wireless phone owners to assume that a cell phone 
directory would in fact be compiled and then requested that they choose 
one of two options as the best method for creating a directory. Option 
#1 was to have the wireless providers add every cell phone number to 
their directory and then give cell phone owners the ability to have 
their number removed upon request. Option #2 was to add only those 
phone numbers of wireless users who give their permission to do so. 
Respondents of all age groups overwhelmingly indicated that a wireless 
directory should only include the cell phone numbers of those wireless 
users who elect to participate. In fact, only about 6 percent of all 
cell phone owners selected the opt-out method as described in option 
#1. On this point as well, the consensus is clear cut and unmistakable.
    This survey underscores the need for the bipartisan legislation--
H.R. 3558/S. 1963--introduced by Representatives Joseph Pitts (R-PA) 
and Edward Markey (D-MA) in the House and Senators Arlen Specter (R-PA) 
and Barbara Boxer (D-CA) in the U.S. Senate. AARP supports these bills 
and believes that consumers deserve the right to maintain the maximum 
amount of control over the disclosure of their wireless phone numbers.
    In this regard, we are not convinced that wireless directory 
assistance can be managed in a manner that effectively safeguards 
customer privacy unless Congress creates legally enforceable rights to 
ensure that this occurs. Some critics of H.R. 3558 and S. 1963 contend 
that these bills are unnecessary in a competitive wireless industry and 
make the point that most Americans live in a market served by three or 
more wireless providers. They argue that with competition in the 
marketplace, customers will simply take their business to a wireless 
provider who is willing to meet their needs.
    Nevertheless, the existence of numerous competitors in the wireless 
telephone market does not necessarily ensure that consumers can choose 
among these competitors or freely switch providers. In fact, among all 
wireless subscribers who responded to a 2003 AARP survey, just 33 
percent have ever switched companies to get a cheaper rate. Even fewer 
older respondents report that they have changed their wireless service 
provider.
    The rate of consumer switching in the wireless industry contrasts 
dramatically with that of the long-distance telephone industry. 
According to another AARP survey released in 2000, 62 percent of 
consumers who made long-distance telephone calls said they had changed 
their long-distance company to get a cheaper rate. One explanation for 
the lack of customer turnover in the wireless industry is the fact that 
most wireless telephone companies require their customers to sign long-
term contracts that include penalties of $175 or more for early 
termination.
    Some in the wireless industry contend that the low turnover or 
``churn'' rates are the result of overall customer satisfaction. 
However, AARP research suggests that the more consumers use their cell 
phones, the less satisfied they are with their service. More 
specifically, the heaviest cell phone users, who are generally in the 
best position to assess the overall quality of their service, are less 
likely to report being very satisfied with their service. When these 
cell phone users were asked why they remain with their current provider 
despite a low level of satisfaction, the most often-cited reason was 
that they wanted to avoid paying an early termination fee.
    The development of a wireless directory without sensible and 
effective privacy safeguards is not a risk worth taking. The consensus 
on this point is unequivocal. Congressional action is necessary. In 
this regard, we appreciate the work of the sponsors of H.R. 3558 and 
this Subcommittee for their leadership in crafting legislation that 
ensures consumers have a choice as to whether their cell phone number 
is included in a wireless directory and protection against charges for 
keeping it private. We urge you to enact industry-wide privacy 
protections for cell phone subscribers now. The industry is poised to 
implement a wireless directory assistance service; Congressional action 
could not be timelier.

    Mr. Bass. Thank you, Mr. Hammond.
    Mr. Cox.

                   STATEMENT OF PATRICK M. COX

    Mr. Cox. Thank you, Mr. Chairman. Good afternoon. I am Pat 
Cox. I am the CEO of Qsent. I would like to comment today on 
the wireless 411 service being proposed and talk about some of 
its affects on privacy and how the service will work as well.
    Qsent has been selected by six of the largest wireless 
carriers to aggregate and provide a secure dynamically 
controlled privacy protected data base solution for voice-based 
411 services today. The service will be designed to provide 
privacy control and consumer choice or opt-in. Clearly all the 
concerns I have heard today really are being absolutely 
addressed by the industry.
    We believe it is important that the offering be nationwide. 
We believe it is important to make the offering not a mobile 
directory per se but be put as part of the basic 411 service 
infrastructure that exist today so when any user calls 411 they 
can get access to wireless subscriber information when and only 
when and if that wireless subscriber has decided they want to 
include their information.
    Those 10 percent, and some studies have indicated as high 
as maybe 60, but those 10 percent of the current subscribers 
today that want to be in this data base, want to be in the 
solution, it is highly important for them. I happen to be one 
of those folks could really take advantage of being included in 
the directory. I understand most of you out there don't see the 
value personally. I get it. I fully get it.
    And because of that it would be a complete train wreck for 
the industry to start a service offering with all of you in the 
data base. Could you imagine the backlash? It is just not going 
to happen. All these fears that are being talked about just 
aren't realistic. They aren't realistic in terms of the 
business and legal liability associated, let alone customer 
goodwill and satisfaction.
    We fundamentally believe there are four pieces here that 
need to be met with clearly. That is, the right to choose, opt-
in. This will be an opt-in service. The second, the right to 
change. Something I haven't heard mentioned here but this is a 
major part to think about. If a consumer decides they are no 
longer desiring to be in the data base, they can make a phone 
call, go to the web, go to a store, and say, ``Take me out.'' 
That night they are out.
    Show me another industry that has that kind of real-time 
access to privacy control. This is an 80-year tradition in the 
telephone industry to be able to provide real-time access and 
control of your privacy. Not only that, with directories such 
as this you can say, ``Don't include my address,'' or ``Don't 
include my first name.'' A lot of folks put their husband's 
name in but not their name if they are widowers or whatever it 
might be.
    There is a lot of control over how information is 
displayed. Specifically, Qsent's job in this project is to make 
sure that no lists are created so that the lists don't get in 
the hands of telemarketers, lists don't go in the wrong place. 
And also to label numbers as wireless because there are a lot 
of great protections.
    There are at least four laws that have been enacted by you 
that protect the consumer's right to not be bothered by 
telemarketers and be spammed to, but they have got to be marked 
wireless.
    The current directory today does not mark phones as 
wireless. This proposed service does. It allows greater 
protections than is being afforded currently.
    The last piece, the right to security and the right to do 
it without cost. Really important that there will no fees to be 
in, no fees to be out. This is an industry standard 
proposition.
    I would say on the chart that the CTIA put up here is a 
very important point. Wireline companies can and do take money, 
$3 or $4 a month, from wireless subscribers today to be in a 
directory. Such large landline companies as Verizon provide 
this as an opportunity but companies like Sprint or T-Mobile 
who don't have large landline operations can't do these types 
of things.
    Hopefully that can shed some light possibly on why it makes 
sense for some carriers to play in an environment where they 
can charge $3 or $4 a month to be listed in a directory and 
other carriers don't want to because they don't have the 
landline opportunity. They don't print phone books and don't 
provide that.
    I think it is really clear there is a lot of value, an 
extreme amount of value in the 411 directory. Eighty percent of 
landline participants opt-in to the directory. They are 
included. Clear consumer need. It solves a big problem.
    The specific problem I have in the last 30 seconds I want 
to cover is clearly this is not a philosophical argument as to 
why we don't want legislation. It is because simply we agree 
upon privacy but it starts getting down to the fine print, just 
like the contracts that were pointed out earlier, such as this 
is a call-forwarding service only and defining how that works, 
or blocking numbers. Those types of technological decisions and 
technology choices will put companies like this gentleman's out 
of business. It is going to have unintended consequences. It 
restricts the ability for investment by the investment 
community in value-added services, new products, new features, 
and new benefits. I believe today it is very, very clear that 
the services will be handled in an appropriate manner.
    [The prepared statement of Patrick M. Cox follows:]
Prepared Statement of Patrick Cox, Chief Executive Officer, Qsent, Inc.
    Good afternoon, Mr. Chairman and Members of the Committee. Thank 
you for inviting me to testify on Senate Bill S. 1963, the ``Wireless 
411 Privacy Act''. My name is Patrick Cox and I am CEO of Qsent, Inc. 
Prior to founding Qsent, I was the founding CEO of MetroOne 
Telecommunications, Inc., the first independent operator services 
company to provide 411 services to wireless phone users.
    I am here today because Qsent was selected by 6 of the nation's 
leading wireless carriers to facilitate the delivery of wireless 
directory assistance information through the existing 411 providers, 
the Operator Services Companies (OSCs). Simply stated, Qsent was 
selected because these large, diverse, fiercely competitive companies 
trust us with one of their most important assets: customer listing 
information. In our current business, we've demonstrated our commitment 
to consumer choice and privacy as well as our ability in managing 
highly secure services. My company's background and expertise makes us 
uniquely qualified to work with the wireless carriers and their 
associated OSCs in making the Wireless 411 Service a success from the 
consumer's perspective.
    Mr. Chairman, you and the other members of this Committee have been 
leaders in adapting our laws to meet the changing needs of the 
information age. You recognize the importance of creating an 
environment where new technologies can be adapted to provide consumers 
with more and better services without compromising their rights and 
privacy. I am concerned that by adopting this legislation, you may 
stall technology growth and limit new consumer and business services 
that provide real value. I applaud your commitment to privacy, and at 
the same time I believe this legislation, and the bill before Governor 
Schwarzenegger in California, are based on fundamental misconceptions 
about the Wireless 411 Service. The legislation outlines ``fixes'' to 
problems that do not and will not exist, and in doing so, will restrict 
consumer choice in unintended ways.
                        the wireless 411 service
    The Wireless 411 Service is designed to be the consumer-choice and 
privacy-protected inclusion of wireless listings in the national 411 
infrastructure, making wireless numbers available in the existing 411 
service. In fact, it will not be a directory like standard 411, but 
based upon a dynamic privacy-protected database accessible only in 
real-time for each 411 inquiry by the operator. The service is not yet 
available, but the following describes the fundamental design 
principles.
    Subscribers will be able to pre-authorize (opt-in) through their 
carrier, the availability of their wireless phone number information 
for 411 purposes. It is expected that individuals will be able to 
choose to participate in the Wireless 411 Service at any time.
    If the individual chooses to opt into the Wireless 411 Service, 
their carrier will make their listing information available for the 
privacy-protected database. When a wireless number inquiry is made, the 
data aggregator (Qsent) will provide the carrier's Operator Services 
Company (OSC) access to the data. The OSC will neither temporarily 
store nor permanently retain the subscriber information.
    If an individual chooses not to opt into the Wireless 411 Service, 
their listing will not be made available in the privacy-protected 
database. If no decision is made by the consumer to opt-in, the 
individual is automatically opted out. It is critically important to 
the success of this service that it begins with no participants and 
grows only as individuals explicitly opt-in. There is far too much 
business risk to the carriers and privacy risk to individuals for it to 
work any other way.
    Individual carriers will be responsible for outlining services and 
options to subscribers, managing the opt-in process and providing Qsent 
with the approved wireless phone number information. With their 
greatest asset on the line--customer trust--there are huge incentives 
to follow this course.
    Qsent will collect opt-in wireless listing data from participating 
carrier data sources and provide the information through each carrier's 
selected OSCs--the same OSCs that provide landline 411 today. The 
information will be placed into Qsent's dynamic privacy-protected 
database and will only be accessible by an OSC in response to a real-
time customer query for an opted-in wireless number.
    Qsent will not create or allow to be created a wireless phone 
number directory, either printed, electronic or online, in whole or in 
part. Measures are in place, such as employee training and technical 
controls to ensure that no printed, electronic, or online directory is 
created.
                                privacy
    Protecting Privacy is a fundamental requirement for Qsent's 
business and for the Wireless 411 Service. We not only focus on privacy 
because it is the right thing to do, but also because it is good 
business practice. Wireless carriers have a crucial valuable asset, the 
trusted relationships they build with their customers. The Wireless 411 
Service will strongly support this relationship. In services such as 
Wireless 411, consumer participation is an important factor for 
success. Building trust through strong privacy principles substantially 
increases the likelihood that individuals will participate. We 
understand how privacy is personal to each of us, to our family, to 
your constituents, and to our customers. We've designed all Qsent 
services, including the Wireless 411 Service, with a foundation of 
privacy protection. The Wireless 411 Service provides the wireless 
carriers with the ability to assure consumer trust. Qsent believes the 
following principles are critical to a successful Wireless 411 Service 
and are designed into the foundation of the solution.
The right to choose.
 A Wireless 411 Service privacy policy will be made available to 
        customers in plain-English--not legalese.
 Customers must opt-in to have their phone number included in the 
        service.
The right to change your mind.
 Customers may choose to have their number removed from the service at 
        any time. When they do this, no residual uniquely identifiable 
        information will remain (as a result of having been part of the 
        service) anywhere within or outside of the service.
The right to security.
 Customer data residing in the Wireless 411 Service privacy-protected 
        database will be disclosed only for the purpose of providing 
        voice-accessed 411 services, and will not be disclosed in 
        either printed or electronic form.
 A method will be provided for customers to have their numbers removed 
        from the service or to register complaints about the service.
 Opt-in requires authorization of an account owner who is 18 years of 
        age or older.
The right to exercise these fundamental choices at no charge.
 Qsent does not charge carriers for storage of listings, additions, or 
        deletions. Additionally, we understand that each participating 
        carrier will not charge for such services.
    These four fundamental principles are built into all Qsent 
practices, into the Wireless 411 Service and into the provision of 
Wireless 411 Services at the OSCs. Qsent will make consumers' listing 
information available only as part of a real-time, individual query 
initiated by the delivery of 411 service. There will never be a bulk 
distribution of uniquely identifiable information. The OSCs will not 
store or retain the data. These efforts enable individuals and 
enterprises to control how personally identifiable information is 
disclosed to third parties in a clear and simple way.
                           consumer benefits
    Today, about 80% of consumers choose to have their landline phone 
numbers listed in a directory, and there are many who now voluntarily 
list their cell phones as well. Clearly, there is a strong value to 
them in doing so, whether that value is business or personal. Further, 
in an increasingly electronic economy, directories are what enable 
networks like the Internet and email to operate efficiently, and for 
consumers and businesses to gain the most value from them. Most 
importantly, directories play a key role in helping people stay 
connected. The Wireless 411 Service is an example of how traditional 
directories will evolve to deliver these same benefits in a way that 
protects privacy and preserves consumer choice.
    According to the FCC, of the 165 million cell phone users in the 
U.S. today, 20% consider their wireless phone to be their primary 
communications device, with 5 million reporting that their mobile phone 
was their only phone. And even more astounding, half of all telephone 
subscriptions in the U.S. this year will be mobile phones. Given the 
growth and dependency on wireless devices, a Wireless 411 Service will 
meet the growing demands of those subscribers who want such a service 
and specifically choose to participate.
    For business people, particularly small business owners who are 
mobile such as real estate professionals, contractors and consultants, 
the benefit is clear. For personal safety, consumers may also choose to 
participate in order to be contacted in an emergency situation wherever 
or whenever it occurs. This could be a teenager searching for a 
parent's forgotten cell number after a roadside accident or a frantic 
parent in a emergency trying to contact a child who is with a friend's 
family.
    Finally, for the large and growing number of individuals, 
particularly young people for whom their cell phone is their only 
phone, participating in the Wireless 411 Service will be their means 
for people to find them--their means to be both mobile and available, 
if they so choose.
    So why don't more wireless subscribers choose to be listed in 
traditional 411? The answer; it's difficult, costs money and opens them 
up to unwanted calls because it isn't privacy protected. In fact, a 
telemarketer who gets a directory today has no way of knowing which 
listings are cell phones if they want to specifically avoid calling 
them. With the Wireless 411 Service, the consumer benefits are realized 
while the negative consequences have been designed out.
                              legislation
    Let me share with you my thoughts on the proposed legislation 
specific to what I expect to be the practical affect on consumers and 
businesses.
    The Wireless 411 Service is a natural evolution of an increasingly 
pervasive technology. The idea of adding the capability for a cell 
phone user to call 411 for service assistance in reaching another 
subscriber who has chosen to be listed seems a natural course in the 
innovation of wireless technology. The design of the Wireless 411 
Service was developed with consideration for the existing consumer 
privacy laws already in place.
    Today, there are a number of consumer privacy laws designed for 
landline phones that cross-over to protect wireless consumers. These 
include: the National Do Not Call Registry, CAN SPAN Act of 2003 and 
the Telephone Consumer Protection Act of 1991 (TCPA). As of June 2004, 
62 million numbers were on the Do Not Call list. This has proven to be 
an effective means to screen out telemarketing calls. The TCPA 
prohibits all autodialed calls to wireless phones, whether it is a 
marketing call or not. The CAN SPAM Act and the rules recently 
promulgated by the FCC prohibit unsolicited commercial messages to 
wireless phones and pagers, providing yet another layer of protection 
for the consumer. The Wireless 411 Service is compatible with, and in 
fact can help with the compliance of these laws.
    Section (C) CALL FORWARDING of the Wireless 411 Privacy Act appears 
to be an attempt to ensure that callers only receive desired calls, but 
the method mandated in this legislation will not allow that to occur. 
First, accepting or rejecting the notification of an unwanted call is 
no less invasive than receiving the call but not taking it. Second, 
there is no method or technology available to effectively authenticate 
the identity of the caller; therefore, it would be relatively easy for 
someone to claim a false identity in order to get through. The 
inability to authenticate the true identity of a caller to a cell phone 
stems from the fact that there is no technology that displays the 
Caller ID name for an incoming call to a cell phone. The name can only 
be displayed if the name already exists in the personal address book in 
the cell phone. Therefore, there is no way to notify the user of the 
caller's identity before the call goes through. Third, certain state 
PUC regulations may require detailed call billing. If the goal of call 
forwarding is to obscure the number, that couldn't be accomplished 
because the wireless number would appear on the call detail reports.
    Eventually, many technology companies will develop competing 
products that will allow you to only receive calls from certain people 
or allow the true integration of caller ID for cell phones. Consumers 
have the right to choose these service offerings. Consumer choice 
should not be constrained by Congressional legislation.
    The Wireless 411 Service will have a dynamic privacy protected 
database from which no printed or electronic directory will be created. 
However, the pending legislation calls for the prohibition against any 
future published directory. I do not believe this service should be 
strictly prohibited through legislation simply because subscribers 
themselves may find that they want to put their wireless phone number 
in the white or yellow pages, as millions of businesses do today.
                               conclusion
    We've designed the Wireless 411 Service to ensure that consumers 
know their information will be secure and private. Most importantly, 
the greatest protection a consumer can have is personal choice. The 
Wireless 411 Service will provide this. The legislation before us today 
will stifle innovation and limit consumer choice while not adding any 
real privacy protection.
    Thank you.

    Mr. Bass. Thank you, Mr. Cox.
    Mr. Ahn.

                    STATEMENT OR SUNNY K. AHN

    Mr. Ahn. Thank you, Mr. Chairman, members of this 
committee. I appreciate the opportunity to testify before you 
today on the topic of Wireless Directory Assistance. My name is 
Sunny Ahn and I am the CEO of Context Connect.
    Over the past 4 years Context Connect has developed, 
patented, and continues to improve upon an innovative set of 
technologies that together provide a privacy-based platform for 
DA services. Our technologies give consumers a portfolio of 
choices in providing them not only with privacy, but with 
control of their DA services as well.
    We have worked with telecommunications carriers, 
enterprises, and other service providers in the U.S., Europe, 
and the Asia Pacific regions. As such, I would like to share 
with you some of our thoughts and experiences to date.
    Let me start by addressing the core issue of privacy and 
how it relates to Directory Assistance directories. One of the 
problems that I continue to see in our industry today is how we 
use the word ``privacy'' without making the distinction between 
privacy and control, which are two very different things and 
are both important.
    Privacy, in the context of Directory Assistance, 
constitutes protecting consumers' personal information, in 
particular not revealing one's phone number or name and address 
information without their permission. Control, on the other 
hand, is the means by which we manage our connectivity: that 
is, determining how, when and who can contact us via a 
directory service, whether one's personal information is kept 
private or not.
    There is technology today that addresses both the privacy 
and the control aspects of Directory Assistance. For example, 
subscribers can create directory listings that protect their 
personal information.
    Masking technology on the consumer's phone number is 
available on two levels.
    One, at the time of a Directory Assistance inquiry where 
the call center agent does not reveal the phone number and the 
second on a monthly billing record.
    On the latter point, masking technologies that protect 
consumer numbers from becoming public information are currently 
in use and commonly accepted. For example, technology that 
protects consumers' credit card or bank account numbers mask 
all but 4 of the 16 digits on paper receipts, websites or other 
places where the information might be captured. One caveat is 
that there are regulatory, financial and integration challenges 
that will certainly have an impact on whether this aspect of 
masking can be reasonably accomplished and these should not be 
overlooked.
    Subscribers can also protect or mask their name and 
physical address. This ``name and address'' information can be 
protected by use of a domain-name service for mobile devices. 
This concept is similar to the way individuals create e-mail 
addresses or URLs for websites. Subscribers can choose how they 
want to be listed, whether it is professional, personal or 
private in nature, based on their relationships with people, 
rather than having to use their names and physical addresses.
    Technology allows individuals to create single or multiple 
directory listings according to their own parameters about how 
they want to be located.
    For example, my business colleagues could dial 411 and 
contact me using the listing ``Sunny at Context Connect.'' Or, 
my friends could call me at ``Sunny at the Newburyport Tennis 
Club.'' In both cases, the caller does not have access to 
either my phone number or my ``name and address'' information 
unless I decide to reveal it.
    Technology also gives consumers control over how they want 
to be connected. For example, consumers can choose how they 
receive their Directory Assistance calls, either through a 
directly connected voice call, a text message, or a call 
completed through a third-party partner. We can also allow 
individuals to accept, decline, or redirect calls to another 
device such as a land-line phone, voice mail or even e-mail.
    Some of these services can be provided where the subscriber 
does not have to use their own minutes to receive a Wireless 
Directory Assistance call. We can also provide choices as to 
when people choose to be contacted via Directory Assistance, 
say only before 5 p.m. on weekdays.
    And last, we can not only provide consumers with choices 
regarding who can reach them via a directory service, but we 
can even allow them to revoke that capability at some point in 
the future without their privacy ever being compromised. My 
point here is to establish that technology is already available 
that can ensure consumers privacy over their personal 
information while providing them with options to control how 
they want to be contacted if they elect to be included in a 
Wireless Directory Assistance Service directory.
    In addition, these technologies continue to evolve rapidly; 
many of these were not even available when this legislation was 
first proposed last November. In our experience working on 
Directory Assistance services in the U.S. and around the globe, 
there is no question that consumers are strongly demanding more 
efficient ways to connect.
    I would like to reference the latest study by the Pierz 
Group that was conducted in August 2004. According to that 
study, if wireless services were currently constructed with 
consumer protections similar to the traditional Directory 
Assistance fixed line services, only 11 percent of wireless 
subscribers would participate by listing themselves in that 
directory.
    However, if a Wireless Directory Assistance Service 
included even a basic level of privacy and control features, 
participation would increase to over 50 percent. And, if 
consumers were offered comprehensive privacy protections, 
estimated participation would increase even further to over 60 
percent.
    These survey findings are very consistent with our own 
experience in the U.K. and New Zealand where the majority of 
mobile subscribers would participate with appropriate privacy 
tools. Interestingly, in the UK, where 40 percent of fixed line 
customers have chosen to not be included in the Directory 
Assistance directory, nearly 50 percent of them would actually 
come back into the directory if basic privacy and control tools 
were given.
    The key here is if marketed as a mobile directory service a 
high penetration of subscribers would be needed in the 
director. However, other niche directory services could exist 
and succeed if marketed appropriately as we have seen in the UK 
in other European countries.
    Another proof point of the receptivity of the market to 
offering a suite of privacy control options has to do with the 
experiences of one of our customers who has successfully 
implemented a DA service including wireless phone numbers. That 
customer is focused on providing directory services to a large 
vertical market most of who use mobile phones.
    Mr. Bass. Mr. Ahn, can you wrap it up?
    Mr. Ahn. Sure. Well, in conclusion, it is clear from the 
market research conducted to date that there is a strong market 
need and demand for Wireless Directory Assistance Services. 
Annually, billions of calls are already placed in the U.S. 
through existing directories. However there is no single 
Directory Assistance service that is appropriate for everyone. 
The key, therefore, is to construct these services in a way 
that gives control to the consumer and that provides a viable 
directory for all concerned. Thank you.
    [The prepared statement of Sunny K. Ahn follows:]
        Prepared Statement of Sunny K. Ahn, CEO, Context Connect
    Thank you Mr. Chairman and Members of this Committee. I appreciate 
the opportunity to testify before you today on the topic of Wireless 
Directory Assistance. My name is Sunny Ahn and I am the CEO of Context 
Connect, Inc.
    Over the past four years Context Connect has developed, patented 
and continues to improve upon an innovative set of technologies that 
together provide a privacy-based platform for Directory Assistance 
Services. Our technologies give consumers a portfolio of choices in 
providing them not only with privacy, but with control of their 
directory services as well. We have worked with telecommunications 
carriers, enterprises, and other service providers in the United 
States, Europe, and the Asia Pacific regions. As such, I would like to 
share with you some of our thoughts and experiences to date.
                          privacy vs. control
    Let me start by addressing the core issue of privacy and how it 
relates to Directory Assistance directories. One of the problems that I 
continue to see in our industry today is how we use the word 
``privacy'' without making the distinction between privacy and control, 
which are two very different things and are both important. Privacy, in 
the context of directory assistance, constitutes protecting consumers' 
personal information, in particular not revealing one's phone number or 
``name and address'' information without their permission. Control, on 
the other hand, is the means by which we manage our connectivity: that 
is, determining how, when and who can contact us via a directory 
service, whether one's personal information is kept private or not.
               available privacy and control technologies
    There is technology today that addresses both the privacy and the 
control aspects of Directory Assistance. For example, subscribers can 
create directory listings that protect their personal information. Such 
technology enables a call to be placed through a Wireless Directory 
Assistance Service without requiring or revealing the call recipient's 
phone number.
    Masking technology on the phone number is available on two levels: 
one at the time of a Directory Assistance inquiry where the call center 
agent does not reveal the phone number and the second on a monthly 
billing record. On the latter point, masking technologies that protect 
consumer numbers from becoming public information are currently in use 
and commonly accepted. For example, technology that protects consumers' 
credit card or bank account numbers mask all but four of the sixteen 
digits on paper receipts, websites or other places where the 
information might be captured. One caveat is that there are regulatory, 
financial and integration challenges that will certainly have an impact 
on whether this aspect of masking can be reasonably accomplished and 
these should not be overlooked.
    Subscribers can also protect or mask their name and physical 
address. This ``name and address'' information can be protected by use 
of a domain-name service for mobile devices. This concept is similar to 
the way individuals create email addresses or URLs for websites. 
Subscribers can choose how they want to be listed, whether it is 
professional, personal or private in nature, based on their 
relationships with people, rather than having to use their names and 
physical addresses. Technology allows individuals to create single or 
multiple directory listings according to their own parameters about how 
they want to be located. For example, my business colleagues could dial 
411 and contact me using the listing ``Sunny at Context Connect.'' Or, 
my friends could call me at ``Sunny at the Newburyport Tennis Club.'' 
In both cases, the caller does not have access to either my phone 
number or my ``name and address'' information unless I decide to reveal 
it.
    Technology also gives consumers control over how they want to be 
connected. For example, consumers can choose how they receive their 
Directory Assistance calls, either through a directly connected voice 
call, a text message, or a call completed through a third-party 
partner. We can also allow individuals to accept, decline, or redirect 
calls to another device such as a land-line phone, voicemail or even 
email. Some of these services can be provided where the subscriber does 
not have to use their own minutes to receive a Wireless Directory 
Assistance call. We can also provide choices as to when people choose 
to be contacted via Directory Assistance, say only before 5pm on 
weekdays. And lastly, we can not only provide consumers with choices 
regarding who can reach them via a directory service, but we can even 
allow them to revoke that capability at some point in the future 
without their privacy ever being compromised.
    My point here is to establish that technology is already available 
that can ensure consumers privacy over their personal information while 
providing them with options to control how they want to be contacted if 
they elect to be included in a Wireless Directory Assistance Service 
directory. In addition, these technologies continue to evolve rapidly; 
many of these were not even available when this legislation was first 
proposed last November.
    In our experience working on Directory Assistance services in the 
U.S. and around the globe, there is no question that consumers are 
strongly demanding more efficient ways to connect. I would like to 
reference the latest study by the Pierz Group that was conducted in 
August 2004.
    According to that study, if wireless services were currently 
constructed with consumer protections similar to the traditional 
Directory Assistance fixed line services, only 11% of wireless 
subscribers would participate by listing themselves in that directory. 
However, if a Wireless Directory Assistance Service included even a 
basic level of privacy and control features, participation would 
increase to over 50%. And, if consumers were offered comprehensive 
privacy protections, estimated participation would increase even 
further to over 60%.
    These survey findings are very consistent with our own experience 
in the U.K. and New Zealand where the majority of mobile subscribers 
would participate with appropriate privacy tools. Interestingly, in the 
UK, where 40% of fixed line customers have chosen to not be included in 
the Directory Assistance directory, nearly 50% of them would actually 
come back into the directory if basic privacy and control tools were 
given.
    Another proof point of the receptivity of the market to offering a 
suite of privacy and control options has to do with the experience of 
one of our customers who has already successfully implemented a 
Directory Assistance service that includes wireless phone numbers. That 
customer is focused on providing directory services to a large vertical 
market segment, most of which use mobile phones. Because they were able 
to mask the phone numbers and provide additional privacy and control 
features, nearly 75% of all their prospects that have heard of the 
service have opted to be included in the directory. While this service 
provider is not restricted with regulatory and industry coordination 
challenges, this further demonstrates that when marketed appropriately, 
privacy and control tools can increase the participation within a 
directory and ultimately improve the usefulness of that directory to 
consumers.
                               conclusion
    In conclusion, it is clear from the market research conducted to 
date that there is a strong market need and demand for Wireless 
Directory Assistance Services. Annually, billions of calls are already 
placed in the U.S. through existing directories. However there is no 
single Directory Assistance service that is appropriate for everyone. 
The key, therefore, is to construct these services in a way that gives 
control to the consumer and that provides a viable directory for all 
concerned.
    Subscribers have very legitimate and important privacy concerns. 
Most of us sitting here in this room use a wireless phone. We recognize 
that the continued confidentiality of personal information and control 
on when, where and how each of us want to be connected to is a very 
personal concern. Subscribers should and can have the ultimate decision 
on what personal information goes into a directory, if any. Context 
Connect and other companies have technologies that can address these 
concerns thoughtfully, carefully and with flexibility. As the market 
and these technologies continue to evolve, we need to allow flexibility 
for industry participants to move quickly to meet and exceed the 
demands of consumers who are increasingly knowledgeable and 
sophisticated in their technology purchases.
    Context Connect supports providing the most comprehensive privacy 
and control features available, and also highly encourages innovation 
and progress within our industry to ensure maximum customer 
satisfaction.

    Mr. Bass. Thank you.
    The Chair recognizes himself for a round of questions. 
Steve, what is wrong with just legislating your proposed scheme 
there that you have?
    Mr. Largent. Well, if you just look at the legislation that 
came out of the Senate Commerce Committee, what has been 
portrayed as a simple solution, a no-brainer, is really much 
more complex than that. The fact is, Mr. Chairman, that this 
industry is highly competitive. It is highly innovative. It 
continues to offer new and better services.
    One of the comments that was made is that it is hard to get 
out of contracts. The fact is that there are many companies 
that are offering prepaid phones where you don't have to have a 
contract. They are offering service with no contractual 
obligation.
    It was also mentioned that this is a service that you have 
to pay for incoming calls. Not true. Most companies are 
offering plans where you don't have to pay for incoming calls. 
That is also a non-issue. But it highlights the point that the 
industry continues to evolve and offer new and better services.
    What legislation like this does, it basically puts a 
regulatory straightjacket on an innovative industry. It has the 
potential of killing a company like Sunny Ahn, that you just 
heard from on this very panel, to offer new and innovative 
services through 411 service. And so that is part of it.
    Another thing, again, going back to the Senate bill, I 
mean, you talk about this should be a simple solution. It is 
not. They put masking provisions in there so that you can't put 
down the phone numbers that are now mandated on phone bills of 
who you called or who called you. You want to say that you want 
all those numbers masked that you are now mandated to put on 
there if they happen to be customers who want to opt-out of 411 
service.
    Now you have really got to put together a data base of all 
customers whether they opt-in or opt-out so you can figure out 
who is in and who is out so that you can mask those numbers on 
the phone bill of those people that are out. It becomes very 
complex.
    Mr. Bass. I guess I'll repeat it. Is there any problem 
besides--your response was you need flexibility to provide 
innovation. Is there any problem with legislating what you have 
suggested as your current policy? What ways would you change 
that would make it better?
    Mr. Largent. There would be no problem--I would tell you 
there is no problem whatsoever legislating what we are 
proposing today. But I can't tell you what this might look like 
without legislation as it continues to grow and move forward 
and become robust and a richer experience for our consumers.
    But I can tell you that if you legislate our proposal 
today, you freeze us in place and you lock out technology 
companies like Sunny's. We have seen that time and time again. 
It has an incredible chilling affect on our ability to offer 
new and more innovative services in this industry which we have 
proven time and time again to do.
    Mr. Bass. Mr. Ahn, would legislating Mr. Largent's proposal 
there put you out of business?
    Mr. Ahn. Well, there are obviously a number of service 
providers that are out there. In fact, I would characterize 
them as certainly a main focus of our business, the carriers, 
but there are service providers that are out there. They are 
just dying to get into the directory space because of 
legislation, you know, whether it is available or not. But I 
think we do have opportunities throughout but certainly 
carriers are one of our key constituents in terms of focus.
    Mr. Bass. Would enactment of legislation along the lines of 
Mr. Largent's proposed scheme put you out of business?
    Mr. Ahn. I think for the carriers with an industry-based 
solution that would be a difficult thing for us to follow, 
correct.
    Mr. Bass. Mr. Largent, you said that contracts are 
different. That is true. Is it not true, though, that most 
wireless subscribers lock themselves into a fixed term because 
they don't want to pay as much cash for the handset or whatever 
other benefit is offered. Under your proposal there how would--
if you have a 2-year contract and you are paying a low price 
for the handset or whatever other benefit, free calling and so 
forth, how could you get out of a contract without significant 
expense and bother if you found out that the wireless company 
was going to list your name in a directory?
    Mr. Largent. Well, the voluntary consumer code that all of 
our major companies have participated in actually allow for 
customers to get out of their contract if the carrier changes 
the terms of those contracts.
    Mr. Bass. But the terms currently say you can list their 
names without their consent, many of these contracts. Is that 
not correct?
    Mr. Largent. That is correct.
    Mr. Bass. They would have their name listed. What 
percentage of the wireless contracts do you think have that 
phraseology in it?
    Mr. Largent. You know, I'm not sure what the percentage 
would be, Mr. Chairman. But, again, we're talking about the 
world that we are proposing and the world as we know it today. 
The fact is that the proposed world that we are debating today 
is about a total opt-in service.
    Mr. Bass. One question is how easy would it be for 
customers to opt-out under your proposal? Would it take time if 
they wanted to?
    Mr. Largent. The gentleman that handles the technology side 
of that, it would be almost instantaneous.
    Mr. Bass. Okay.
    Mr. Largent. Can I say one other thing, Mr. Chairman? You 
asked what is the problem. Our proposal actually goes further 
than the bill that is under consideration meaning that the bill 
language today says if you are a new customer, you have to opt-
in. If you are an existing customer, you have to opt-out. We 
are saying it is total opt-in.
    If you are a new customer or if you are an existing 
customer, we are going to ask you to opt-in into this service 
or else you are automatically opted-out. Just the opposite of 
the current landline situation where you are automatically in 
unless you proactively opt-out and have to pay for it.
    Mr. Bass. What is your observation about the possibility 
that companies might change this contract language involving 
the use of their name for directory if no law is passed? If we 
past no legislation, what is your best bet as to whether or not 
the wireless companies would be willing to take that language 
out?
    Mr. Largent. That is an excellent question. In fact, that 
was one that was posed by Chairman Barton and Chairman Upton, 
as well as Chairman McCain in the Senate. They polled our CEOs 
and asked that very question, ``What is your intent on this 
language and on the opt-in provision that you are proposing?'' 
They got responses from the participating carriers. Again, 
Verizon is not participating. But of the participating carriers 
the other six major carriers in the country both responded to 
the letter and they all said that they would impose opt-in.
    Now, you can say there are 170 different carriers. That is 
true but the carriers that we are talking about represent more 
than 90 percent of all the cellular customers in the country 
today.
    Mr. Bass. I have here responses from the companies that 
without objection I would like to include them in the record. I 
have no further questions.
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    Mr. Bass. Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman. Along that same line, 
Mr. Largent, is the industry changing the language in these 
contracts?
    Mr. Largent. Some companies have already done that so all 
of the new contracts that are out there are already changed. I 
think every company is in the process of changing those 
contracts as we speak.
    Mr. Stupak. How long will the industry be committed to the 
opt-in approach for these cell users?
    Mr. Largent. As long as our customers tell us that is the 
way it needs to be. Obviously you have heard all the numbers 
today. The overwhelming majority of our customers insist upon 
having an opt-in provision in this 411 service.
    Mr. Stupak. You said that this legislation would probably 
stifle technology and innovation. Could you just elaborate on 
that a little bit more? Being a representative of the industry 
how do you see it stifling technology and innovation? I 
understand the competition part.
    Mr. Largent. Sure. Well, the one thing we haven't spoken 
about is the fact that not only is this legislation being 
proposed at the Federal level but there are several states, in 
fact, California being one of them, that has already passed 
legislation regulating 411 service in the State of California 
that is even more burdensome than the bill that is under 
consideration here.
    In fact, a number of our carriers are questioning whether 
they want to continue down this path even though they feel the 
demand from their customers, even 10 percent of their 
customers, to do this the regulatory burden becomes so great 
that they are saying it may not be worth it to go down this 
path. If that is, in fact, the case, then you not only put out 
a company--you harm a company like Sunny's but also Pat's.
    Mr. Stupak. The 411 proposal that your industry has, would 
every wireless company be required to be part of it? I realize 
Verizon is not in support of it but, I mean, you can't say to 
your members, ``If we do 411, you are required to come into 
this directory?''
    Mr. Largent. No. In fact, again, the competitive industry 
not all the companies are participating. Verizon is not. Six of 
the other seven largest carriers who, again, if you add Verizon 
who you would say is opting-out, they represent about 93 
percent of the wireless customers in the country today. There 
are a lot of tier two and tier three carriers. Maybe they will 
be a part of this and maybe they won't. I can't say.
    Mr. Stupak. I have no other questions, Mr. Chairman. Thank 
you.
    Mr. Bass. The gentleman yields back. The Chair would like 
to welcome the distinguished chairman of the committee, Mr. 
Barton, and recognize him for 10 minutes for questions.
    Chairman Barton. Mr. Chairman, I have no questions. I 
apologize for being a little bit late and missing Senator 
Boxer. I did want to come and at least welcome these fine 
fellows to our committee, especially former Congressman Steve 
Largent. We are glad to have you here.
    Mr. Largent. Thank you.
    Mr. Bass. The gentleman yields back.
    Mr. Walden.
    Mr. Walden. Thank you very much, Mr. Chairman. I just want 
to make sure I have this straight. If I am a cell phone users, 
which I am, and under the proposed system the only way my 
number could be made available in a directory service is if I 
say it can be made available. Is that accurate under your 
proposal, Mr. Largent?
    Mr. Largent. Yes, sir.
    Mr. Walden. And so everybody out there with cell phones 
today would have the ability under your proposal to not be 
listed if they didn't want to be?
    Mr. Largent. That is right.
    Mr. Walden. Now, what happens if I--one of the issues I 
have, of course, speaking of cell phones, is the way they ring 
in the middle of committee meetings, but it is okay in this 
case. The issue is when people call me, I get billed. Don't it?
    Mr. Largent. Not necessarily.
    Mr. Walden. Could you elaborate more on that?
    Mr. Largent. Sure. Again, because this is such a 
competitive robust industry, carriers are responding to their 
customers' concerns. In fact, the average cost, the monthly 
bill of a wireless customer has gone down the last 10 years, 
not up. We offer more services and we offer them for free in 
many cases like this service, free service. You don't pay to 
opt-in and you don't pay to opt-out. You don't pay for caller 
ID. You don't pay for a number of things that are offered over 
your wireless service. What was your question again?
    Mr. Walden. I don't want to be charged----
    Mr. Largent. Oh, yeah. So a lot of carriers have plans--
have devised plans where you don't have to pay for incoming 
calls so it is not a given that you pay for incoming calls.
    Mr. Walden. What percent of your carriers have those sorts 
of plans? Do you know?
    Mr. Largent. My guess is the majority, the overwhelming 
majority of our major carriers who, again, represent 93 percent 
of all customers in the country have a plan, or even multiple 
plans, that do not charge for incoming calls.
    Mr. Walden. All right. Or at least in the first minute or 
so.
    Mr. Cox, do you want to elaborate on that?
    Mr. Cox. Yeah. I believe most carriers don't charge for the 
first minute of incoming calls in case it is a wrong number or 
a misdial.
    Mr. Walden. Okay. All right. So what are the privacy issues 
then if this is how you are proposing this? Mr. Hammond, do you 
want to tell me? Some of the issues you raised in your 
testimony seem to be addressed by this proposal. Don't they?
    Mr. Hammond. Some of them are.
    Mr. Walden. What remains?
    Mr. Hammond. Mr. Walden, I think it is more of a concern of 
making sure that they continue to be addressed.
    Mr. Walden. All right.
    Mr. Hammond. We have heard the number of changes that have 
taken place over the past several months and there is nothing 
to indicate that those changes couldn't continue to take place 
in the future. Certainly there will be technological advances 
but I think it is appropriate to set a level if privacy 
expectation by allowing a consumer to determine whether they 
want to be in or out of the Director Assistance Program.
    Mr. Walden. Mr. Largent, do you want to comment on that? I 
mean, what would be wrong with us saying at a minimum every 
consumer should have the right to opt-in if that is what you 
are proposing to do?
    Mr. Largent. Again, let me offer a personal view and that 
is that it seems to me that Congress has a lot more important 
things to do in instances where there has been demonstrated 
consumer harm. This is a service that is still on the 
chalkboard. Again, I think this is an industry that continues 
to change.
    Mr. Walden. So is it your view that this legislation is 
chasing a problem that doesn't exist and probably won't exist?
    Mr. Largent. Well, the problem not only doesn't exist. The 
service doesn't exist yet. Again, it is a very dynamic industry 
that continues to change. In fact, I would mention talk about a 
dynamic industry that continuously evolves and changes. I mean, 
it is exciting to me to be able to say or learn that the AARP 
is going to get into the wireless business offering services to 
their own members. I think that is a wonderful thing. Again, it 
just shows you how diverse the industry is.
    Mr. Walden. And, Mr. Cox, could you elaborate a little bit 
more on the issue, I guess, in this case is it plumbing? Is it 
John's Plumbing Company, Mr. Largent? In my case it was a 
contractor. John Plumbing. That is a good one. In my case it 
was a contractor whose whole business was on his cell phone. 
Now, what happens today and what would happen under this 
system?
    Mr. Cox. One of the clear advantages to not having 
legislation, the only no-brainer here is to not make a law 
here. It is not so much whether people should opt-in or opt-
out. It is clear, everybody, agrees it is an opt-in. The data 
base starts at zero. That is clear and agreed to by everybody.
    The question comes in how do you do it. For example, 
California says it requires a wet ink signature on a piece of 
tree paper. That would be like asking Amazon.com to have a wet 
signature on a tree piece of paper before they could ship a 
book. It breaks the business model. For phones today the AARP 
won't be setting up retail locations to have their consumers 
leave their home and drive down to sign forms. They want to 
conduct business over the phone, over the web.
    The devil is always in the details. It is the structure of 
how these things, these protections, would be created that kill 
the innovation, that kill the prospect of service and end up 
not servicing the customer. It makes it harder for people to be 
able to get the control and access they deserve. It is a huge 
problem. That being said, one of the proposed pieces also is 
that it becomes now illegal for John's Plumbing to be listed in 
the phone book when John needs very much----
    Mr. Walden. Under the legislation.
    Mr. Cox. Under the proposed legislation in Section D it 
would now become illegal where it is now legal if John chooses. 
He has to pay for it but it becomes illegal for him to be in 
the phone book. That phone book listing for him is key to his 
success.
    Not only that, it allows him to pay literally thousands of 
dollars into the telephone company in the form of advertising 
which subsidizes and creates lower consumer rates on basic 
telephone service. Businesses pay more for advertising . 
Businesses pay more for phone bills. If you take away a 
business' opportunity to advertise and be represented in a 
directory, it kills the rate structure we have today.
    Mr. Walden. Thank you. Thank you, Mr. Chairman, for letting 
the witness complete his answer.
    Mr. Bass. The gentleman's time has expired. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. This is an 
interesting hearing and I am glad I spent time and stayed 
around. Usually we address problems after they are happening. 
Here we are making an assumption that there is going to be a 
problem. I think the debate is really because, Steve, there are 
groups that don't trust your industry and they think they are 
going to rip off the public and sell information.
    That is obviously a very political challenging hurdle to 
overcome because it has mass appeal. Really the question is is 
there an opt-out--I mean an opt-in? Are people going to be 
forced to pay in? I think if those things get addressed, then 
it is not that difficult. I would encourage this to--I grabbed 
it from your staff, a smaller portion of your little diagram. I 
think it is very helpful in synthesizing this whole debate.
    As you know, I worked with--I helped draft and pass E911 as 
a national cellular number. Now we are doing Enhanced 911. My 
question is also the cellular industry is keeping data bases. 
They have to keep data bases for the system to operate.
    I was on the floor last night talking about the 911 
Commission Report and talking about the opportunity to call 
forward based upon a terrorist attack, weaponized anthrax, 
dirty bomb. The ability through your industry and the industry 
of the cellular phone companies to be able to say there is a 
plume and you know the wind direction to be able to identify 
and call forward on the cell phones to identify people to 
disperse and actually which way to go because you don't want to 
go down--you want to disperse but you don't want to keep going 
downwind if there is a terrorist attack. There is a data base 
but right now there is no ability based on current law to call 
those numbers. Is that correct?
    Mr. Largent. If I understand your question, there is no 
central data base. Every carrier obviously has their customers' 
information that is highly protected for obvious competitive 
reasons.
    Mr. Shimkus. So as far as the 911 Commission--I'm sorry to 
go off topic but that is pretty relevant with our bill coming 
up on the floor next week--how do we get there? The cellular 
industry has been lifesaving and when we can pass Enhanced 911 
we are going to hope to offer that to an amendment on the 911 
Commission bill and hopefully get the support of my colleagues 
and put that as part of the bill.
    How do we get to that point where our first-line responders 
or TTIC or all these other whoever, how do they get access? We 
need to talk through how a cellular phone can be used in the 
event of a catastrophic terrorist attack to inform folks. If 
you folks here, you tech folks, and even the consumer advocates 
because it will address issues of consumer privacy. I mean, you 
have to call to warn people to get out of the way. There is a 
data base that has numbers but have you gotten permission to 
call that number.
    Mr. Largent. If I could respond to that, two things. One, 
you began your question by talking about there are some that 
don't trust the industry. I would say that we are talking and 
debating today about an issue that has not been created. There 
has been no demonstrated harm. We are also talking about an 
industry that has at least a 15-year track record of protecting 
consumer privacy. I just wanted to make that statement.
    Mr. Shimkus. If I may jump in, even with our Enhanced 911 
bill you all supported the legislation that would keep us from 
identifying locations so when you are driving down the 
interstate you don't get a call saying, ``Pull off at exit 45 
for your nearest McDonald's.'' That was part of that 
legislation that we passed through the House. Through this 
committee and on the floor of the House.
    Mr. Largent. Not only that, this is an industry that also 
worked assiduously with the Congress to make sure that wireless 
numbers were not made available to telemarketers. It is a 
Federal offense. Because of legislation that we helped promote 
it is a Federal offense for telemarketers to call wireless 
numbers. We have guarded our customers' privacy doggedly.
    Mr. Shimkus. When you go back and do staffing, and really 
the turnaround time is pretty quick. Like I said, we are going 
to be addressing the 911 Commission Report next week. We are 
going to offer the E911 as an amendment to the bill.
    We are probably not going to be able to structure 
legislation to address the national data base and how do you 
use that to call. We need to start the tech folks and the 
associations really need to address that because my experience 
with the cellular industry it has been a lifesaving association 
and time saves lives and the cellular industry has done that. I 
appreciate that work.
    Mr. Chairman, that ends my time and I yield back.
    Mr. Bass. Mr. Gillmor. Mr. Gillmor waives.
    Mr. Pitts.
    Mr. Pitts. Thank you, Mr. Chairman.
    Steve, the recent promises to make this directory 
completely opt-in is from, did you say, 5 or 6 of the major 
carriers? Is that correct?
    Mr. Largent. All of the participating carriers.
    Mr. Pitts. How many is that?
    Mr. Largent. We have six of the seven largest carriers.
    Mr. Pitts. Okay. What does that mean then for the remaining 
180, tier two, tier three carriers that do not and are not 
represented?
    Mr. Largent. It means that they are not participating in 
the Limited Liability Corporation that CTIA helped formulate of 
the carriers who are participating, which means that if a 
carrier is not participating in the LLC, then, again, their 
customers are just like Verizon who have made--I mean, they are 
the one large carrier that have made the decision not to offer 
this service to their customer.
    Mr. Pitts. I know Verizon has said that. Does that mean the 
folks with those other carriers could be concerned that their 
numbers and personal information including address could be in 
a data base without them knowing it?
    Mr. Largent. If a customer is with a carrier who is not 
participating in this Limited Liability Corporation that has 
been structured by the industry, then they aren't at any 
greater risk after the service is introduced then they are 
before because their personal data is held only by their 
carrier of choice.
    Mr. Pitts. What is the legal status of the existing service 
agreements that contain legal authorization to list numbers in 
a public directory?
    Mr. Largent. Again, let's talk about the universe of 
carriers who have elected to participate in offering this 
service. Every one of the CEOs of those companies is in process 
or has already restructured those contracts, and has sent a 
letter to Congress stating that in those instances where they 
have existing customers who have contracts that contain the 
language that permit the carriers to do this without seeking 
anymore permission, that those carriers will go back to those 
existing customers and say, ``We are going to offer this new 
service. Would you like to participate? Yes or no?''
    Mr. Pitts. And how did they change the contracts?
    Mr. Largent. Well, they have changed the contracts on a 
going forward basis. In other words, any new customer who comes 
in to their service, the contract now looks differently. It 
does not contain that language and for the foreseeable future 
that will be the case.
    Mr. Pitts. But with existing contracts they are with a 
letter saying they are not going to hold them to that privacy 
section where they signed away their privacy rights. Is that 
right?
    Mr. Largent. They are saying, Congressman Pitts, if you 
have a contract with Carrier X and Carrier X is participating 
in this service and the contract that you have with Carrier X 
says, ``Mr. Pitts, we can list your number if we want to,'' and 
you sign that contract, if your contract looks like that, 
Carrier X has said in a letter to Congress that for customers 
like yourself they will proactively go to you and say, ``Mr. 
Pitts, would you like to have your number listed in this 
service?'' If your answer is no, then the world that you live 
in today looks no different tomorrow after this has been 
implemented.
    Mr. Pitts. Now, can you tell me if a letter to a bunch of 
politicians is going to hold up in a court of law? Are they 
legally binding?
    Mr. Largent. No, they are not. Clearly they are not.
    Mr. Pitts. So what happens if they change their mind in a 
couple of years?
    Mr. Largent. Two things can happen. One is that customer 
can go to another carrier who does not offer the service. The 
second thing that could happen, and I hope this, in fact, is 
the case, that Congressman Pitts will still be in Congress and 
then you can actually come before Congress and say, ``We have 
many instances, or an instance, of consumer harm and we need to 
do this right now.'' You can pass legislation and you can do it 
post haste.
    Mr. Pitts. Is there any other way besides that that we can 
ensure that the contracts won't change again in another 6 
months? I mean, is the market place really free when consumers 
are locked into 2-year contracts?
    Mr. Largent. I would say there has never been a freer 
market or more competitive market than there is in the wireless 
industry. That is across telecommunications or any other 
industry you want to look at. The answer to your question is 
no. I cannot stand here and tell you today that there is no way 
that the industry is ever going to move off of where we are 
today because the one thing that you can say has been 
consistent about the wireless industry is that it continues to 
evolve. The evolvement of this industry has been better for 
consumers, not worse. It has protected their interest better, 
not worse. My expectation is that trend will continue.
    Mr. Pitts. Now, will documentation be provided that proves 
the industry will continue to pursue and opt-in for the 
directory?
    Mr. Largent. I guess I would ask what kind of documentation 
would be satisfactory to you?
    Mr. Pitts. Anything in writing.
    Mr. Largent. Well, you have that in writing before you as 
part of the record right now.
    Mr. Pitts. You're talking about the letter. Is that 
correct?
    Mr. Largent. Yes, sir.
    Mr. Pitts. Will carriers who choose not to participate at 
the current time be subject to the promise that you have made 
today if they decide to participate in the future?
    Mr. Largent. Yes.
    Mr. Bass. Let me interrupt you for a second, Mr. Pitts. 
Your time has expired. However, Mr. Gillmor does not wish to be 
recognized. Do you have further questions?
    Mr. Pitts. I'll yield back.
    Mr. Bass. Mr. Pitts yields back. Does anybody else wish to 
ask any further questions of this panel? Seeing none, we thank 
the panel for being here today and with that we will adjourn 
this subcommittee hearing.
    [Whereupon, at 11:40 a.m. the subcommittee hearing was 
adjourned.]
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