[Federal Register Volume 63, Number 119 (Monday, June 22, 1998)]
[Proposed Rules]
[Pages 33890-33892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16511]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 22 and 64

[CC Docket No. 96-115; DA 98-971]


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

AGENCY: Federal Communications Commission.

ACTION: Clarification; proposed rule.

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

SUMMARY: The Order released May 21, 1998 clarifies various issues 
pertaining to the Second Report and Order and Further Notice of 
Proposed Rulemaking released February 26, 1998.

FOR FURTHER INFORMATION CONTACT: Brent Olson, Attorney, Common Carrier 
Bureau, Policy and Program Planning Division, (202) 418-1580.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
adopted and released May 21, 1998. The full text of this Order is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, 1919 M St., NW., Room 239, Washington, DC. 
The complete text also may be obtained through the World Wide Web, at 
http://www.fcc.gov/Bureaus/Common Carrier/Orders/da98971.wp, or may be 
purchased from the Commission's copy contractor, International 
Transcription Service, Inc., (202) 857-3800, 1231 20th St., NW., 
Washington, DC. 20036.

Synopsis of Order on Reconsideration

I. Introduction

    1. On February 26, 1998, the Commission released a Second Report 
and Order and Further Notice of Proposed Rulemaking, 63 FR 20326, April 
24, 1998 (Second Report and Order), interpreting and implementing, 
among other things, the portions of section 222 of the Communications 
Act of 1934, as amended, that govern the use and disclosure of, and 
access to, customer proprietary network information (CPNI) by 
telecommunications carriers. Since the release of the Second Report and 
Order, a number of parties have requested that the Commission clarify 
various issues pertaining to that order. In response to these requests, 
the Common Carrier Bureau issues this order clarifying the Second 
Report and Order as follows:
    (a) Independently-derived information regarding customer premises 
equipment (CPE) and information services is not CPNI and may be used to 
market CPE and information services to customers in conjunction with 
bundled offerings.
    (b) A customer's name, address, and telephone number are not CPNI.
    (c) A carrier has met the requirements for notice and approval 
under section 222 and the Commission's rules where it has both provided 
annual notification to, and obtained prior written authorization from, 
customers with more than 20 access lines in accordance with the 
Commission's former CPNI rules.
    (d) Although a carrier must ensure that its certification of 
corporate compliance with the Commission's CPNI rules is made publicly 
available, it is not required to file this certification with the 
Commission.

II. Clarification of Marketing Uses of Customer Information Related 
to CPE or Information Services

    2. Section 222(c)(1) establishes the limited circumstances in which 
carriers can use, disclose, or permit access to CPNI without first 
obtaining customer approval. In interpreting section 222(c)(1) in the 
Second Report and Order, the Commission adopted an approach that allows 
carriers to use CPNI, without first obtaining customer approval, to 
market improvements or enhancements to the package of 
telecommunications services the carrier already provides to a 
particular customer, which it referred to as the ``total service 
approach.''
    3. The Commission's discussion, however, did not specifically 
address a carrier's ability to use CPNI when its customers obtain their 
telecommunications service as part of a bundled package that includes 
non-telecommunications service offerings, such as CPE or certain 
information services.
    4. We make clear that, when a customer purchases CPE or information 
services from a carrier that are bundled with a telecommunications 
service, the carrier subsequently may use any customer information 
independently derived from the carrier's prior sale of CPE to the 
customer or the customer's subscription to a particular information 
service offered by the carrier in its

[[Page 33891]]

marketing of new CPE or a similar information service that is bundled 
with a telecommunications service. Neither CPE nor information services 
constitute ``telecommunications services'' as defined in the Act. 
Therefore, any customer information derived from the carrier's sale of 
CPE or from the customer's subscription to the carrier's information 
service would not be ``CPNI'' because section 222(f) defines CPNI in 
terms of information related to a ``telecommunications service.'' As a 
result, in situations where the bundling of a telecommunications 
service with CPE, information services, or other non-telecommunications 
services is permissible, a carrier may use CPNI to target particular 
customers in a manner consistent with the Second Report and Order, and 
it also may use the customer information independently derived from the 
prior sale of the CPE, the customer's subscription to a particular 
information service, or the carrier's provision of other non-
telecommunications offerings to market its bundled offering.
    5. In an effort to further explain a carrier's obligation in the 
context of bundled offerings, we provide an example of how the 
Commission's rules would apply in the CMRS context. A CMRS provider 
could use CMRS-derived CPNI to target its high usage analog wireless 
customers to offer them new digital wireless service plans. If such an 
analog customer also had purchased previously a CMRS handset, or an 
information service such as voice mail, as part of a bundled offering 
from the carrier, the carrier also would have access to information 
concerning the customer's purchase of the carrier's CPE and information 
service that is independent from the CPNI derived from the provision of 
the CMRS service. Consistent with the total service approach, the 
carrier could use such customer information to market new digitally-
compatible CPE and new voice mail service in conjunction with the 
offering of new digital wireless service in a single contact with the 
customer, without first obtaining the customer's approval.
    6. In contrast, where a particular customer has not purchased CPE 
or information services from the carrier that is providing its 
telecommunications services, the carrier would be subsequently 
prohibited from using CPNI, without first obtaining customer approval, 
to market a bundled offering of CPE or information services with 
telecommunications services to such a customer. In this situation, 
absent customer approval, the carrier would be using CPNI in violation 
of section 222(c)(1) to market CPE or information services to a 
customer with whom they had no existing relationship derived from the 
carrier's sale of CPE or the customer's subscription to the carrier's 
information service. Similarly, the general knowledge that all wireline 
customers have a telephone would not permit carriers to use CPNI 
derived from wireline service to select those individuals to whom to 
market the carrier's CPE offerings.
    7. We also clarify that, only where CPE or an information service 
is part of a bundled offering, including a telecommunications service, 
and the carrier is the existing CPE or information service provider, 
could the carrier use CPNI to market a new bundled offering that 
includes new CPE or similar information services. For example, carriers 
cannot use CPNI to select certain high usage customers to whom they 
also sold telephones, and then market only new CPE that is not part of 
a new bundled plan. Section 222(c)(1)(A) permits the use of CPNI, 
without first obtaining customer approval, only ``in the provision of 
the telecommunications service from which such information is 
derived.'' Therefore, when a carrier has identified a customer through 
the use of CPNI, but is not offering a telecommunications service in 
conjunction with its marketing of CPE or information services, that 
carrier would be using CPNI outside the provision of the service from 
which it is derived, in violation of section 222 and the Commission's 
rules.

III. Customer's Name, Address, and Telephone Number

    8. We clarify that a customer's name, address, and telephone number 
do not fall within the definition of CPNI, set forth in section 
222(f)(1).
    9. We consider this information to be part of a carrier's business 
record or customer list that identifies the customer and indicates how 
that customer can be contacted by the carrier. Although such 
information generally appears on a customer's billing statement, it 
does not pertain to the ``telephone exchange service or toll service'' 
received by the customer, as specified by the statutory definition in 
section 222(f)(1)(B). If the definition of CPNI included a customer's 
name, address, and telephone number, a carrier would be prohibited from 
using its business records to contact any of its customers to market 
any new service that falls outside the scope of its existing service 
relationship with those customers. In fact, under such an 
interpretation, a carrier would not even be able to contact a single 
customer in an effort to obtain permission to use their CPNI for 
marketing purposes because the carrier's mere use of its customer list 
to initiate contact with its customers would constitute a violation of 
section 222. This anomalous result was clearly not intended by section 
222. Therefore, we clarify that a carrier's use of its customers' name, 
address, and telephone number for marketing purposes would not be 
subject to the CPNI restrictions in section 222(c)(1) because such 
information is not CPNI. Thus, under section 222 and the Commission's 
rules, a carrier could contact all of its customers or all of its 
former customers, for marketing purposes, by using a customer list that 
contains each customer's name, address, and telephone number, so long 
as it does not use CPNI to select a subset of customers from that list.

IV. Notice and Written Approval Under the Computer III CPNI 
Framework

    10. Prior to the adoption of the Telecommunications Act of 1996, 
the framework established under the Commission's Computer III regime 
governed the use of CPNI by the BOCs, AT&T, and GTE to market CPE and 
enhanced services. Two important components of this Computer III 
framework were: (1) a carrier's obligation to provide an annual 
notification of CPNI rights to multi-line customers regarding enhanced 
services, as well as a similar notification requirement regarding CPE 
that applied only to the BOCs, and (2) a carrier's obligation to obtain 
prior written authorization from business customers with more than 20 
access lines to use CPNI to market enhanced services. We clarify that 
in circumstances where a carrier has provided annual notification and 
received prior written authorization from customers with more than 
twenty access lines, the requirements for notice and approval under 
section 222, and the associated Commission rules, are satisfied for 
those customers.
    11. We find that carriers that have complied with the Computer III 
notification and prior written approval requirement in order to market 
enhanced services to business customers with more than 20 access lines 
are also in compliance with section 222 and the Commission's rules. 
Such carriers may rely on their previous compliance with the Computer 
III notification and approval requirements to market enhanced services 
to business customers with more than 20 access lines without taking any 
additional steps to notify such customers of their CPNI rights or to 
obtain customer approval to use CPNI to market enhanced services to 
such customers.

[[Page 33892]]

V. Safeguards

    12. As one of several CPNI safeguards, the Commission required in 
the Second Report and Order each carrier to certify that it is in 
compliance with the Commission's CPNI rules. In describing a carrier's 
duty, the Commission stated that each carrier must ``submit a 
certification'' and that the certification ``must be made publicly 
available.'' We clarify that the Commission's use of the word 
``submit'' in the order was not intended to require carriers to file 
such certifications with the Commission. Rather, the order directs 
carriers to ensure only that these corporate certifications be made 
publicly available.

VI. Ordering Clauses

    13. 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), and authority delegated thereunder pursuant to 
sections 0.91 and 0.291 of the Commission's rules, 47 CFR 0.91, 0.291, 
this Order is hereby adopted.

Federal Communications Commission.
Richard K. Welch,
Acting Deputy Chief, Common Carrier Bureau.
[FR Doc. 98-16511 Filed 6-19-98; 8:45 am]
BILLING CODE 6712-01-P