Cable and Telecommunications News from Mendoza Law Office, LLC

Federal law provides that a "telecommunications carrier that receives or obtains proprietary information from another carrier for purposes of providing any telecommunications service shall use such information only for such purpose, and shall not use such information for its own marketing efforts." Moreover, "a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of the telecommunications service from which such information is derived."

FCC rules govern the extent to which carriers may use or access data provided by a customer or a competing carrier to regain the business of a customer who has or who is in the process of switching to a competing carrier. These rules allow carriers to use CPNI without a customer's prior consent if (a) the data is derived in the course of providing services to the customer; and (b) the data is used solely for marketing services to which the customer already subscribes, a rule known as the "Total Service Approach."

Under the Total Service Approach, the FCC distinguishes between proprietary data used for "win-back" marketing aimed at customers who have already switched to a new provider, and "retention marketing" aimed at "soon-to-be-former" customers. All carriers may use CPNI to engage in winback marketing. The FCC concluded such use is consistent with its Total Service Approach. In its rulemaking order, the FCC reasoned that consumers are aware of and expect their former carrier has information about the services to which they formerly subscribed. Further, the FCC reasoned that placing such a restriction on winback marketing might deprive those consumers of the benefits of competition. The use of such CPNI, the FCC stated, "Does not impact customer privacy in any substantial respect because the former customer-carrier relationship previously enabled the carrier to use this same telecommunications usage information."

However, FCC rules also provide that carriers may not use CPNI in their marketing efforts to retain a customer that has not yet switched service providers "where the carrier gained notice of a customer's imminent cancellation of service through the provision of carrier-to-carrier service." The FCC rulemaking order concluded that competition is harmed if any carrier uses carrier-to-carrier information, such as switch or PIC orders, to trigger retention-marketing campaigns. Carrier change information is considered carrier proprietary data under federal law. The FCC noted that Congress explicitly protected carrier information under statute by creating a duty to protect the confidentiality of such data, as well as a prohibition against the use of customer data obtained from another carrier for the use of the carrier's own marketing efforts. However, the FCC also concluded that telecommunications carriers might use CPNI data in retention marketing efforts triggered by information independently obtained from their own retail operations. In other words, if the carrier learns that a customer is intending to switch providers from its own retail operations, and not as a result of a PIC, switch, or number porting order submitted by the competing carrier, then the carrier is free to engage in retention marketing efforts with the customer.