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Appeals Court Denies NCTA on Privacy Rule

2/14/2009 2:00 AM Eastern

A federal appeals court last week denied a petition by the National Cable & Telecommunications Association to review a Federal Communications Commission rule that bars phone companies from providing a subscriber's personal information to a marketing partner without consent.

The U.S. Court of Appeals for the District of Columbia Circuit turned down the NCTA's request to review an FCC order adopted in 2007 that requires telecommunications providers to obtain a customer's “opt-in” approval before sharing his or her information with a business partner for marketing purposes.

“It is widely accepted that privacy deals with determining for oneself when, how and to whom personal information will be disclosed to others,” the court said in denying the petition for review.

The NCTA had argued the commission's rule violated the First Amendment of the U.S. Constitution, the Administrative Procedure Act or both. Verizon Communications and Qwest Communications International joined the appeal as intervenors.

“We are disappointed with the ruling,” NCTA vice president of communications Brian Dietz said. He declined to comment further.

Acting FCC chairman Michael Copps issued a statement supporting the appeals court's decision.

“Telephone carriers today handle vast amounts of their customers' personal information, and in light of documented abuses of consumers' privacy, the commission appropriately required carriers to institute additional safeguards to protect customers' personal information,” he said. “Today's court decision upholding those safeguards should be a welcome development for all consumers, and the commission will continue to be vigilant to ensure that their privacy is protected.”

In its 2007 order, the FCC asserted that personal information when shared with third-party marketers is “placed at greater risk of unauthorized disclosure.” The NCTA, Verizon and Qwest countered that the record does not show that joint-venture partners or independent contractors have improperly disclosed customer information.

The appeals court said a carrier's sharing of customer information with a third party without the customer's consent is itself an invasion of the customer's privacy. “In addition, common sense supports the commission's determination that the risk of unauthorized disclosure of customer information increases with the number of entities possessing it,” the court said. The opinion was filed for the court by Judge A. Raymond Randolph.

In a separate case earlier last week that went cable's way, the D.C. appeals court upheld an FCC order requiring Verizon to stop “retention marketing” initiatives targeted at customers who had switched their phone service to cable.

According to the Telecommunications Act of 1996, “customer proprietary-network information” comprises information relating to the “quantity, technical configuration, type, destination, location and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier.”

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