Telecom Companies Fight Bill Targeting ‘Pretexting’

Posted March 12, 2007 at 1:02pm

A bipartisan effort to improve enforcement of a ban on pretexting — the practice of fraudulently obtaining customer phone records — is facing strong resistance from the telecommunications industry, which asserts that the bill may impede their ability to market services to their customers.

Last year Congress enacted the Telephone Records and Privacy Protection Act (PL 109-395) establishing criminal penalties for pretexting, but it did not contain language requiring telephone companies to ensure the security of some consumer information, nor did it give the Federal Communications Commission broad enforcement authority.

Now, lawmakers are offering the Prevention of Fraudulent Access to Phone Records Act (H.R. 936). The measure would restate the terms of last’s year law, but give the FCC enforcement authority and make it easier for consumers to bar telecommunications from sharing their personal data.

“This is not a faceless crime,” said House Energy and Commerce Chairman John Dingell (D-Mich.), who sponsored the bill. “This is a problem that faces every American who has a phone.”

While telecom companies don’t quarrel with some aspects of the bill, they are most concerned about language — known as “opt-in” — that would require carriers to secure customer consent before they sharing telephone records with a third party, including joint venture partners or independent contractors. Such third parties typically use that information for marketing purposes.

Steve Largent, a former Republican House member from Oklahoma, testified Friday before the House Energy and Commerce panel that the language of the provision was ambiguous.

Largent, who now serves as president and CEO of CTIA–The Wireless Association, the trade group for the wireless communications industry, said that the act’s implementation would be “unduly burdensome” and would not prevent fraudulent access to phone records.

Current law requires customers to “opt out” by notifying their telephone service providers that they do not want their information shared with a third-party, rather than requiring carriers to obtain consent beforehand.

Rep. Jay Inslee (D-Wash.) said he’d prefer keeping the “opt-in” provision in the bill, but cautioned against impeding the business of telephone companies.

Walter McCormick, president and CEO of the U.S. Telecom Association, said that an “opt-in” provision would prevent companies from using legitimate marketing practices.

The bill has the support of the Federal Trade Commission, which would enforce the pretexting prohibition. It also directs the FCC to pursue more stringent security standards for customer proprietary network information (CPNI) that would detect and prevent confidentiality violations. The FCC would be allowed to impose penalties for such security violations.

Thomas J. Navin, chief of the FCC’s Wireline Competition Bureau, said that the bill would make it easier to bring enforcement actions against non-common carriers, such as data brokers.