QWEST DROPS INFORMATION SHARING UNTIL FCC SETS PRIVACY RULES
Qwest abandoned all plans to share sensitive local exchange customer information with affiliates until after FCC issued new national rules on privacy of customer proprietary network information (CPNI) later this year. Qwest CEO Joseph Nacchio said any future decisions on information sharing within its family of companies would depend on what FCC said. “When many of our customers tell us that they're concerned or don’t understand what we're doing, it’s time to stop the process and make a change,” he said. Nacchio said 5% of Qwest’s 12 million local customers called with questions and concerns about notices it had sent with Dec. phone bills explaining its information-sharing plans and giving instructions for blocking information sharing. He said Qwest had invested billions of dollars to improve service and customer perceptions about value of its services: “We will not allow misunderstandings to unravel all the good we've done or minimize our best service results in more than 7 years.” Nacchio also announced that David Heller, Qwest’s risk management vp, would be given additional duties as chief privacy officer, overseeing implementation, enforcement and review of company’s privacy policies.
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Furor had its roots in 1999 ruling by 10th U.S. Appeals Court, Denver, that struck down FCC CPNI privacy rules that called for “opt-in” approach where information couldn’t be shared without customer’s prior consent. Appeals court remanded rules to FCC with instructions to develop “opt-out” approach where information would be shared unless customer explicitly blocked sharing. Supreme Court last year refused to review that decision so appeals court’s remand order became effective. FCC began remand proceeding last fall.
Based on court rulings, Qwest sent notices to customers in their Dec. phone bills advising that it planned to share sensitive information with other members of Qwest’s “family” of companies and giving subscribers instructions for opting out of sharing. But notice also contained language many read as implying that Qwest would be sharing sensitive account information with anyone willing to pay for it, which Nacchio termed “communications problem.” Wording and format of notices drew sharp questions in at least 4 Qwest states from regulators and consumer advocates who were concerned that Qwest was disregarding customer privacy for sake of revenues from marketing lists.
Nacchio stressed that Qwest’s standing privacy policy prohibited providing private customer account information to any party not related to Qwest by affiliation or marketing agreements except for collection of money owed to Qwest, investigators probing unlawful service use or sell-off of that portion of the business. Sensitive information, he said, includes characteristics of customer’s specific service, usage patterns, credit/billing history.
Move makes Qwest first major telecom carrier to announce it won’t share sensitive customer information with anybody until FCC has issued new rules on sharing of CPNI. It will send notices to all its customers explaining that it has withdrawn all information-sharing plans. Qwest wasn’t only telecom carrier to run into problems with privacy notices. SBC/Ameritech also sent notices with Jan. bills that raised questions in Mich., Ind. and elsewhere in Midwest that haven’t been resolved.