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from: Capital Weekly

AT&T's new privacy policy is sticking point in cable-access legislation

By Shane Goldmacher

(published June 26th, 2006)
On Tuesday, the Senate utilities committee will consider legislation to drastically expand telephone companies' access to California's lucrative video- and Internet-services market.

But AT&T, the state's leading phone company, recently overhauled its privacy policy--a move that may cast a long shadow over the hearing. Consumer advocates say AT&T's new privacy rules open the door for the company to share personal data--such as the Web sites that customers visit and the TV shows they watch--with government officials.

The pending bill, AB 2987 by Assembly Speaker Fabian Núñez, D-Los Angeles, would create a state-issued franchise for phone companies wishing to enter the video-services market, the very service that AT&T announced privacy-policy amendments for last week.

Under the new policy, AT&T declared that a customer's viewing information is the property of AT&T--not the customer.

"While your Account Information may be personal to you, these records constitute business records that are owned by AT&T," reads the policy. "As such, AT&T may disclose such records to protect its legitimate business interests, safeguard others, or respond to legal process."
Consumers and civil-liberties groups have blasted the new policy, arguing that it gives the company carte blanche to share private consumer data.

"The declaration that this is their property is really unprecedented," says Lenny Goldberg, a consumer advocate and lobbyist for The Utility Reform Network, who is pressing for amendments to Núñez's legislation.

Examples of the "usage information" that AT&T says it now owns--and can share--includes "the Web page from which you entered our site, pages you view, how much time you spend on each page, the links you click and other actions taken." It also includes "information about viewing, game, recording and other navigation choices that you and those in your household make."

Representatives for AT&T have described the changes to the privacy policy as "nothing new," saying it is a clarification of policy after the company merged with SBC last year.

"[It] was simply to consolidate existing privacy policies of the two companies into one," wrote AT&T spokesman Gordon Diamond in an e-mail.

Some, both in and out of the Legislature, already are calling for provisions in the cable bill to force AT&T to keep California customers' viewing habits private. A statute banning the distribution of consumer data is already in place for incumbent cable providers, but because AT&T would be providing broadband video services over phone lines, rather than cable lines, they are exempt.

"We believe that whether you call it Internet protocol or anything else, as far we are concerned, it is under the law," said Dennis Mangers, president of the California Cable Telecommunications Association, which is at-odds with the phone companies over the measure. "Anything else is definitional arbitrage."

The Senate committee analysis, released Monday, suggested that the bill makes both cable and phone companies play under the same rules.

"At a minimum, to establish a level playing field, as well as to protect video customer privacy rights, the authors and committee may wish to consider making any holder of a state video franchise subject to existing cable television privacy laws," reads the analysis.

The analysis also adds that there may be "additional privacy issues" and the challenge of balancing of state law with "more stringent federal law dealing with the collection of data applies to cable companies but not telephone companies providing video service."

A spokesman for Núñez said the Assembly leader will accept some type of proposed privacy amendment at Tuesday's hearing.

Verizon, the state's second largest phone company and a major backer of AB 2987, says in its privacy policy that it already operates under the federal guidelines for cable companies.

Sen. Jackie Speier, D-Hillsborough, who authored a major financial privacy law in 2003, said the Senate should require AT&T to protect consumer viewing choice privacy.

"The question becomes, 'Is this as sensitive as financial information?'" said Speier. "I would argue that it is. … It should not get out of this house without privacy protections imposed upon it."

The flap over AT&T's new privacy policy comes on the heels of newspaper revelations that AT&T and other telecom companies turned over the calling records of millions of Americans to the National Security Agency (NSA) to track potential terrorists. The San Francisco-based Electronic Frontier Foundation is suing AT&T for what they call warrantless spying on U.S. citizens.

The privacy debate is playing out not only in the California statehouse, but the U.S. Senate, where a nationally issued cable franchise bill is currently under consideration. In testimony last week, news agencies reported that the chairman and chief executive of AT&T, Ed Whitacre, dodged tough questions about his company's alleged leaking of data to the NSA.

He also was queried on the company's new privacy policy. "We simply tried to make the privacy policy more understandable to our customers," Whitacre said.
The Senate Energy, Utilities and Communication Committee must act on AB 2987 by Friday, but with the committee only scheduled once, Tuesday has become the de facto deadline.

Jamie Court of the Foundation for Taxpayer and Consumer Rights says the hearing is the last best chance for the Legislature to roll back AT&T's new privacy policy.

"There is no one with more leverage over AT&T right than either Núñez or the Senate utilities committee," said Court. "They should use it to get AT&T to get their hands off our privacy."
Shane Goldmacher is a Capitol Weekly staff reporter and author of The California Observer.