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How Much Did the U.S. Wireless Carriers “Earn” From “Location Information Aggregators”?

The FCC lawfully fined U.S. facilities-based wireless carriers nearly $200 million for selling highly intrusive location data about subscribers without their “opt-in” consent.

In Section 222 of the Communications Act, Congress comprehensively specified how the carriers bore an affirmative duty of care not to disclose clearly defined Customer Proprietary Information (“CPNI”). The Act explicitly required the FCC, and no other agency, to protect telecommunications consumers.

The language in this section is quite unambiguous. Congress surely answered the “major question” whether and how the FCC has jurisdiction to protect telecommunications service subscribers from the unconsented commercial exploitation of data about their immediate location.

There is no basis for the carriers, or certain dissenting FCC Commissioners, to state that the Federal Trade Commission has exclusive jurisdiction over any and all consumer privacy issues. (See https://docs.fcc.gov/public/attachments/FCC-24-43A3.txt) Wireless carriers need subscriber location information to route calls to consumers and to provide access to their networks. Privacy surely can be invaded by unlawful disclosure, but the reason wireless carriers generate and process this information is a fundamental technological element in how they provide service to subscribers.

There is no doubt that all the facilities-based carriers “monetized” this information, but we will never know how many millions they received, because the carriers would scream bloody murder that such information is “business confidential” and “proprietary.” I’ll bet the carriers received far more than the $200 million they have to forfeit.

If you follow the logic for exonerating the wireless carriers, it is okay for the carriers to provide nearly instantaneous location information for compensation, because such disclosure does not constitute anything proprietary within the meaning of Section 222 of the Communications Act. The exonerators dug themselves an even deeper jurisprudential hole when they claim the FTC has exclusive jurisdiction to decide whether and how to sanction CPNI disclosures.

Once upon a time, both Democratic and Republican FCC Commissioners acted in a nonpartisan, unanimous manner to protect consumers. So did Congress when it enacted Section 222 and amended it on several occasions.

Now we have apologists for truly egregious behavior by carriers who surely knew they were creating a lucrative, but illegal, new profit center. It does not help that they mended their ways a few years ago.

By Rob Frieden, Pioneers Chair and Professor of Telecommunications and Law

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