[Federal Register Volume 63, Number 79 (Friday, April 24, 1998)]
[Proposed Rules]
[Pages 20364-20367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10741]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 22 and 64

[CC Docket No. 96-115, FCC 98-27]


Telecommunications Carriers' Use of Customer Proprietary Network 
Information and Other Customer Information

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission is issuing this Notice of Proposed Rulemaking 
(NPRM) seeking comment on three issues involving carrier duties and 
obligations relating to the use of Customer Proprietary Network 
Information (CPNI) and other customer information established under 
sections 222(a) and (b) of the Telecommunications Act of 1996. We are 
doing this based on various responses from parties in the proceeding.

DATES: Comments are due on or before March 30, 1998 and Reply Comments 
are due on or before April 14, 1998.1 Written comments by 
the public on the proposed information collections are due March 30, 
1998. Written comments must be submitted by the Office of Management 
and Budget (OMB) on the proposed information collections on or before 
July 6, 1998.

    \1\ Editorial Note: This document was received at the Office of 
the Federal Register on April 17, 1998.
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ADDRESSES: Comments and reply comments should be sent to Office of the 
Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 
222, Washington, D.C. 20554, with a copy to Janice Myles of the Common 
Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C. 20554. 
Parties should also file one copy of any documents filed in this docket 
with the Commission's copy contractor, International Transcription 
Services, Inc., 1231 20th St., N.W., Washington, D.C. 20036. In 
addition to filing comments with the Secretary, a copy of any comments 
on the information collections contained herein should be submitted to 
Judy Boley, Federal Communications Commission, Room 234, 1919 M Street, 
N.W., Washington, D.C. 20554, or via the Internet to [email protected], 
and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, 
N.W., Washington, D.C. 20503 or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Lisa Choi, Attorney, Common Carrier 
Bureau, Policy and Program Planning Division, (202) 418-1580. For 
additional information concerning the information collections contained 
in this NPRM contact Judy Boley at (202) 418-0214, or via the Internet 
at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM) adopted February 19, 1998 
and released February 26, 1998 (FCC 98-27). This FNPRM contains 
proposed information collections subject to the Paperwork Reduction Act 
of 1995 (PRA). It has been submitted to the OMB for review under the 
PRA. The OMB, the general public, and other Federal agencies are 
invited to comment on the proposed information collections contained in 
this proceeding. The full text of this Further Notice of Proposed 
Rulemaking is available for inspection and copying during normal 
business hours in the FCC Reference Center, 1919 M St., N.W., Room 239, 
Washington, D.C. The complete text also may be obtained through the 
World Wide Web, at http://www.fcc.gov/Bureaus/Common Carrier/Orders/
fcc9827.wp, or may be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., (202) 857-3800, 1231 20th 
St., N.W., Washington, D.C. 20036.

Paperwork Reduction Act

    This NPRM contains a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collections contained in 
this NPRM, as required by the Paperwork Reduction Act of 1995, Pub. L. 
104-13. Public and agency comments are due at the same time as other 
comments on this NPRM; OMB notification of action is due 70 days from 
date of publication of this NPRM in the Federal Register. Comments 
should address: (a) whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    OMB Approval Number: 3060-0715.
    Title: Implementation of the Telecommunications Act of 1996: 
Telecommunications Carriers' Use of

[[Page 20365]]

Customer Proprietary Network Information and Other Customer 
Information.
    Form No.: N/A.
    Type of Review: Proposed Collections.
    Respondents: Businesses or other for profit.

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                                            Number of                                             Total annual  
                 Title                      responses        Estimated time per  response        burden (hours) 
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Proposed Foreign Storage of CPNI.......              10  78.5 hours..........................                785
Proposed Foreign Maintenance of CPNI of           4,832  30 minutes..........................              2,416
 all U.S.-Based Customers' Records.                                                                             
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Synopsis of Further Notice of Proposed Rulemaking

I. Further Notice of Proposed Rulemaking

    1. Implementation of sections 222(a) and (b). The Commission in the 
Notice of Proposed Rulemaking (NPRM) focused on issues relating to the 
implementation of sections 222(c)-(f). Based on various responses from 
parties, we now seek further comment on three general issues that 
principally involve carrier duties and obligations established under 
sections 222(a) and (b) of the Act. Specifically, section 222(a) 
requires telecommunications carriers ``to protect the confidentiality 
of proprietary information of, and relating to, other telecommunication 
carriers, equipment manufacturers, and customers, including 
telecommunication carriers reselling telecommunications services 
provided by a telecommunications carrier.'' Section 222(b) provides 
that ``a telecommunications carrier that receives or obtains 
proprietary information from another carrier for purposes of providing 
any telecommunications service shall use such information only for such 
purpose, and shall not use such information for its own marketing 
efforts.''

A. Customer Right to Restrict Carrier Use of CPNI for Marketing 
Purposes

    2. Section 222(c)(1) prohibits carriers from using, disclosing, or 
permitting access to CPNI without customer approval for purposes other 
than those expressly provided in sections 222(c)(1) (A) and (B), and 
those in connection with the exceptions established in sections 
222(d)(1)-(3). Section 222, however, is silent on whether a customer 
has the right to restrict a telecommunications carrier from using, 
disclosing, or permitting access to CPNI within the circumstances 
defined by subsections 222(c)(1) (A) and (B). While the Notice referred 
to customers' ``rights to restrict access to their CPNI,'' it did so in 
the context of when carriers must seek approval for CPNI use for 
purposes outside the scope of the exceptions in sections 222(c)(1)(A) 
and (B).
    3. One view is that customers should be able to restrict carrier 
use of CPNI for all marketing purposes, even within the customer's 
total service offering. This position may be supported by the privacy 
protection in section 222(a), which imposes on every telecommunications 
carrier ``a duty to protect the confidentiality of proprietary 
information of, and relating to * * * customers * * *,'' as well as by 
the principle of customer control implicitly embodied in section 
222(c). In addition, interpreting section 222 to permit customers to 
restrict all marketing use of CPNI could be viewed as furthering the 
privacy-competition balance struck in section 222, insofar as such a 
right would allow customers to prevent carrier marketing practices that 
they found objectionable as their service relationship with the carrier 
grew. Under this view, the only limitations on the customer's right to 
restrict uses of CPNI within sections 222(c)(1)(A) and (B) arguably 
would be those ``required by law'' in accordance with section 
222(c)(1), as well as those set forth in section 222(d). We seek 
comment on this issue of whether customers have a right to restrict all 
marketing uses of CPNI. Parties supporting a particular interpretation 
should state the statutory as well as policy basis for their conclusion 
and should demonstrate why other conclusions are not justified.

B. Protections for Carrier Information and Enforcement Mechanisms

    4. We seek comment on what, if any, safeguards are needed to 
protect the confidentiality of carrier information, including that of 
resellers and information service providers, that are in addition to 
those adopted in this accompanying order. We note that Congress 
expressly protected carrier information in section 222(a), as well as 
in the specific limitations on the use of that information in section 
222(b). We believe that Congress' goals of promoting competition and 
preserving customer privacy will be furthered by protecting the 
competitively-sensitive information of other carriers, including 
resellers and information service providers, from network providers 
that gain access to such information through their provision of 
wholesale services. Therefore, we seek comment on what, if any, 
additional regulations or safeguards are necessary to further this 
goal. These safeguards, for example, may include personnel and 
mechanical access restrictions. Parties identifying specific safeguards 
should comment explicitly on the costs and benefits of imposing such 
regulation.
    5. We also seek comment on what, if any, further enforcement 
mechanisms we should adopt to ensure carrier compliance with our rules, 
or that may be necessary to encourage appropriate carrier discharge of 
their duty under section 222(a) to protect the confidentiality of 
customer information. We note, for example, that the Commission in 
other proceedings has sought to compensate carriers who have become 
victims of anticompetitive behavior, as well as to streamline and 
update the formal complaint process in order to promote the policies of 
the 1996 Act. Parties identifying specific enforcement mechanisms 
should comment explicitly on the costs and benefits of imposing such 
regulation.

C. Foreign Storage of, and Access to, Domestic CPNI

    6. The Federal Bureau of Investigation (FBI) asks the Commission to 
regulate the foreign storage of, and foreign-based access to, CPNI of 
U.S. customers who subscribe to domestic telecommunications services 
(domestic CPNI). The FBI contends that vital law enforcement, public 
safety, national security, business, and personal privacy reasons 
justify a prohibition under section 222 on carriers storing domestic 
CPNI in foreign countries, for any purpose, including billing and 
collection. The FBI further maintains that permitting direct foreign 
access or foreign-storage of CPNI would seriously undermine important 
U.S. governmental, business, and privacy-based protections afforded to 
CPNI under other international and bilateral treaties. According to the 
FBI, the Commission has the authority to prohibit such foreign storage 
or access based upon our jurisdiction conferred in section 222. We seek 
comment on the FBI's proposal. In particular, we seek

[[Page 20366]]

comment on whether the duty in section 222(a) upon all 
telecommunications carriers to protect the confidentiality of 
customers' CPNI, or any other provision, permits and/or requires us to 
prohibit the foreign storage or access to domestic CPNI.
    7. As an exception to this administrative prohibition, the FBI 
suggests that foreign storage or access to domestic CPNI may be 
permitted upon informed written customer approval. When a U.S. domestic 
customer consents to having his or her CPNI stored or accessed from a 
foreign country, the FBI further proposes, however, that we require 
carriers to keep a copy of that customer's CPNI record within the U.S. 
for public safety, law enforcement, and national security reasons, so 
that such information is available promptly to law enforcement. We seek 
comment on whether requiring written customer consent to store or 
access CPNI from a foreign country and maintaining duplicate CPNI 
records in the U.S are necessary to protect customer confidentiality 
under section 222(a) or any other provision.
    8. Finally, the FBI also requests that we require carriers to 
maintain copies of the CPNI of all U.S.-based customers, regardless of 
whether they are U.S. domestic customers, because of the need for 
prompt, secure, and confidential law enforcement, public safety, or 
national security access to such information, pursuant to lawful 
authority. The FBI cites the need of such information for 
investigations and as trial evidence. We seek comment on this proposal.

II. Procedural Issues

B. Further Notice of Proposed Rulemaking

1. Ex Parte Presentations
    9. This matter shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. 47 CFR 
1.1200 et seq. Persons making oral ex parte presentations are reminded 
that memoranda summarizing the presentations must contain summaries of 
the substance of the presentations and not merely a listing of the 
subjects discussed. More than a one or two sentence description of the 
views and arguments presented is generally required. See 47 CFR 
1.1206(b)(2), as revised. Other rules pertaining to oral and written 
presentations are set forth in section 1.1206(b) as well.
2. Initial Paperwork Reduction Act Analysis
    10. This Further Notice contains a proposed information collection. 
As part of its continuing effort to reduce paperwork burdens, we invite 
the general public and the Office of Management and Budget (OMB) to 
take this opportunity to comment on the information collections 
contained in this Further Notice, as required by the Paperwork 
Reduction Act of 1995, Pub. L. 104-13. Public and agency comments are 
due at the same time as other comments on this Further Notice; OMB 
comments are due July 6, 1998. Comments should address: (a) whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the Commission, including whether the 
information shall have practical utility; (b) the accuracy of the 
Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology.
3. Initial Regulatory Flexibility Act Analysis
    11. As required by the Regulatory Flexibility Act (RFA), as 
amended, the Commission has prepared this present Initial Regulatory 
Flexibility Analysis (IRFA) of the expected significant economic impact 
on small entities by the policies and rules proposed in this Further 
Notice of Proposed Rulemaking (Further Notice). Written public comments 
are requested on this IRFA. Comments must be identified as responses to 
the IRFA and must be filed by the deadlines for comments on the Further 
Notice. The Commission will send a copy of the Further Notice, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration. See 5 U.S.C. 603(a). In addition, the Further 
Notice and IRFA (or summaries thereof) will be published in the Federal 
Register. See id.
a. Need for, and Objectives of, the Proposed Rules
    12. The Commission is issuing the Further Notice to seek comment on 
whether customers may restrict a carrier's use of CPNI for all 
marketing purposes, even within sections 222(c)(1)(A) and (B). The 
Commission also seeks comment on what, if any, additional further 
safeguards may be needed to protect the confidentiality of carrier 
information, including that of resellers and information service 
providers, and on what further enforcement mechanisms, if any, should 
be adopted to ensure carrier compliance with the rules adopted pursuant 
to the Second Report and Order. The Commission seeks comment on whether 
the duty in section 222(a) upon all telecommunications carriers to 
protect the confidentiality of customers' CPNI, or any other provision, 
permits or requires the Commission to prohibit the foreign storage of, 
or access to domestic CPNI, as requested by the FBI based on their 
national security concerns.
b. Legal Basis
    13. The Further Notice is adopted pursuant to sections 1, 4(i), 
222, and 303(r) of the Communications Act of 1934, as amended, 47 
U.S.C. 151, 154(i), 222, and 303(r).
c. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    14. Consistent with our conclusions in the present Second Report 
and Order, our rules apply to all telecommunications carriers; 
therefore, any new rules or changes in our rules adopted as a result of 
the Further Notice might impact small entities, as described in the 
Final Regulatory Flexibility Analysis supra. For a list of the small 
entities to which the proposed rules would apply, see the Second Report 
and Order Final Regulatory Flexibility Analysis supra Part X.A.1.c 
(Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules will Apply). We hereby incorporate that description and 
estimate into this IRFA. These entities include telephone companies, 
wireline carriers and service providers, local exchange carriers, 
interexchange carriers, competitive access providers, operator service 
providers, pay telephone operators, wireless carriers, cellular service 
carriers, mobile service carriers, broadband PCS licensees, narrowband 
PCS licensees, SMR licensees, and resellers. We discussed supra the 
number of small businesses falling within both of the SIC categories, 
and attempted to refine further those estimates to correspond with the 
categories of telephone companies that are commonly used under our 
rules.
d. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    15. Because we have not made any tentative conclusions or suggested 
proposed rules, we are unable at this time to describe any projected 
reporting, recordkeeping, or other compliance requirements. We have 
discussed generally in the Further Notice, supra Part IX, however, the 
possibility that such proposals, if adopted, might entail additional 
obligations for carriers.

[[Page 20367]]

e. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    16. As noted supra, we seek comment on whether customers may 
restrict a carrier's use of CPNI for all marketing purpose, and on 
what, if any, additional safeguards may be needed to protect the 
confidentiality of carrier information, as well as what further 
enforcement mechanisms, if any, should be adopted to ensure carrier 
compliance with our rules. In addition, we seek comment on whether the 
duty in section 222(a) upon all telecommunications carriers to protect 
the confidentiality of customers' CPNI, or any other provision, permits 
or requires the Commission to prohibit the foreign storage of, or 
access to domestic CPNI. Consistent with our rules in the Second Report 
and Order, our intent is to further the statutory principle that 
customers must have the opportunity to protect the information they 
view as sensitive and personal from use and disclosure by carriers. 
Because we have not proposed any rules, at this juncture, we are unable 
to forecast the economic impact on small entities.
f. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    17. None.
4. Comment Filing Procedures
    18. Pursuant to applicable procedures set forth in sections 1.415 
and 1.419 of the Commission's rules, interested parties may file 
comments on or before March 30, 1998, and reply comments on or before 
April 14, 1998. To file formally in this proceeding, you must file an 
original and six copies of all comments, reply comments, and supporting 
comments. If you want each Commissioner to receive a personal copy of 
your comments, you must file an original and eleven copies. Comments 
and reply comments should be sent to Office of the Secretary, Federal 
Communications Commission, 1919 M Street, N.W., Room 222, Washington, 
D.C. 20554, with a copy to Janice Myles of the Common Carrier Bureau, 
1919 M Street, N.W., Room 544, Washington, D.C. 20554. Parties should 
also file one copy of any documents filed in this docket with the 
Commission's copy contractor, International Transcription Services, 
Inc., 1231 20th Street, N.W., Washington, D.C. 20036. Comments and 
reply comments will be available for public inspection during regular 
business hours in the FCC Reference Center, 1919 M Street, N.W., Room 
239, Washington, D.C. 20554.
    19. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with section 1.49 and all other 
applicable sections of the Commission's Rules. We also direct all 
interested parties to include the name of the filing party and the date 
of the filing on each page of their comments and reply comments. All 
parties are encouraged to utilize a table of contents, regardless of 
the length of their submission.
    20. Parties are also asked to submit comments and reply comments on 
diskette. Such diskette submissions would be in addition to and not a 
substitute for the formal filing requirements. Parties submitting 
diskettes should submit them to Janice Myles of the Common Carrier 
Bureau, 1919 M Street, N.W., Room 544, Washington, D.C. 20554. Such a 
submission should be on a 3.5-inch diskette formatted in an IBM 
compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The 
diskette should be submitted in ``read only'' mode. The diskette should 
be clearly labeled with the party's name, proceeding, type of pleading 
(comment or reply comments) and date of submission. The diskette should 
be accompanied by a cover letter.
    21. You may also file informal comments or an exact copy of your 
formal comments electronically via the Internet at <http://
dettifoss.fcc.gov:8080/cgi-bin/ws.exe/beta/ecfs/upload.hts>. For 
information on filing comments via the Internet, please see 
<[email protected]>. Only one copy of electronically-filed comments must be 
submitted. You must put the docket number of this proceeding in the 
body of the text if you are filing by Internet. You must note whether 
an electronic submission is an exact copy of formal comments on the 
subject line. You also must include your full name and Postal Service 
mailing address in your submission.

III. Ordering Clauses

    22. Accordingly, It is ordered that pursuant to sections 1, 4(i), 
222 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 154(i), 222 and 303(r), a Further Notice of Proposed Rulemaking is 
hereby Adopted.
    23. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Further Notice of Proposed Rulemaking, including the associated Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration, in accordance with paragraph 605(b) 
of the Regulatory Flexibility Act, 5 U.S.C. Section 601 et seq. (1981).

List of Subjects

47 CFR Part 22

    Communications common carriers, Reporting and recordkeeping 
requirements.

47 CFR Part 64

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-10741 Filed 4-23-98; 8:45 am]
BILLING CODE 6712-01-P