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`Fx#5\  P6Q{P#QՊ( Before the  QFederal Communications Commission  X2Washington, D.C. 20554 ă In the Matter of) )  Y/2Implementation of the)ppXCC Docket No. 96115 Telecommunications Act of 1996:) ) Telecommunications Carriers' Use) of Customer Proprietary Network) Information and Other) Customer Information) ) )  Y 2Implementation of the NonAccounting)ppXCC Docket No. 96149 Safeguards of Sections 271 and 272 of the) Communications Act of 1934, as Amended) )  X"2G  SECOND REPORT AND ORDER AND  X2 FURTHER NOTICE OF PROPOSED RULEMAKING x  Y2X` hp x (#%'0*,.8135@8:"(#p 1  Y"2XxII.BACKGROUND p>"(#p 6  YE$2XxIII.COMMISSION AUTHORITY p"(#k 11  Y"%2XX` ` A.` ` Background ` p"(#k 11  Y%2XX` ` B.` ` Discussion ` p"(#k 14 "',))<<'"  Y2XxIV.CARRIER'S RIGHT TO USE CPNI WITHOUT CUSTOMER APPROVAL p"(#k 21  Y2XX` ` A.` ` Overview ` p"(#k 21  X-XxX` ` xB.` ` Scope of a Carrier's Right Pursuant to Section222(c)(1)(A): the "Total Service Approach" ` p"(#I 27  Xt-XxX` ` X ` ` 1. Background p"(#I 27  XQ-XxX` ` X ` ` 2. Discussion p"(#I 31  X.-XxX` ` X X a.Statutory Language, History, and Structure p"(#I 32  X -XxX` ` X X b.Statutory Principles of Customer Control and Convenience p"(#I 53  X-XxX` ` xC.` ` Scope of Carrier's Right Pursuant to Section222(c)(1)(B) ` p"(#I 68  X-XxX` ` X ` ` 1. Background p"(#I 68  X -XxX` ` X ` ` 2. Discussion p"(#I 70  X\ -XxX` ` xD.` ` Scope of Carrier's Right Pursuant to Section222(d)(1) ` p"(#I 81  X9 -XxX` ` X ` ` 1. Background p"(#I 81  X -XxX` ` X ` ` 2. Discussion p"(#I 82  X -XxPV.x"APPROVAL" UNDER SECTION 222(c)(1) p"(#I 86  X-XxX` ` xA.` ` Overview ` p"(#I 86  X-XxX` ` xB.` ` Express Versus Notice and OptOut ` p"(#I 88  Xg-XxX` ` X ` ` 1. Background p"(#I 88  XD-XxX` ` X ` ` 2. Discussion p"(#I 91  X!-XxX` ` xC.` ` Written, Oral and/or Electronic Approval ` p!(#C 108  X-XxX` ` X ` ` 1. Background p!(#C 108  X-XxX` ` X ` ` 2. Discussion p!(#C 109  X-XxX` ` xD.` ` Duration, Frequency, and Scope of Approval ` p!(#C 115  X-XxX` ` X ` ` 1. Background p!(#C 115  Xr-XxX` ` X ` ` 2. Discussion p!(#C 116  XO-XxX` ` xE.` ` Verification of Approval ` p!(#C 119  X,-XxX` ` X ` ` 1. Background p!(#C 119  X -XxX` ` X ` ` 2. Discussion p!(#C 120  X-XxX` ` xF.` ` Informed Approval Through Notification ` p!(#C 124  X-XxX` ` X ` ` 1. Background p!(#C 124  X-XxX` ` X ` ` 2. Discussion p!(#C 127  X}-XxX` ` xG.` ` Form and Content of Notification ` p!(#C 130  XZ-XxX` ` X ` ` 1. Background p!(#C 130  X7-XxX` ` X ` ` 2. Discussion p!(#C 132  X-XxPVI.xAGGREGATE CUSTOMER INFORMATION p!(#F143  X -XxX` ` xA. ` ` Overview ` p!(#F143  X!-XxX` ` xB. ` ` Background ` p!(#F145  X"-XxX` ` xC.` ` Discussion ` p!(#F149  XB$-XxPVII.xSECTION 222 AND OTHER ACT PROVISIONS p!(#F154  X%-XxX` ` xA.` ` Overview ` p!(#F154  X%-XxX` ` xB. ` ` Section222 and Section272 ` p!(#F155  X&-XxX` ` X ` ` 1. Background p!(#F155"&,K(K(<<'"Ԍ X-XxX` ` X ` ` 2. Discussion p!(#F158  X-XxX` ` xC. ` ` Section222 and Section274 ` p!(#F170  X-XxX` ` X ` ` 1. Background p!(#F170  X-XxX` ` X ` ` 2. Discussion p!(#F173  XQ-XxPVIII.xCOMMISSION'S EXISTING CPNI REGULATIONS p!(#F174  X.-XxX` ` xA. ` ` Overview ` p!(#F174  X -XxX` ` xB.` ` Computer III CPNI Framework ` p!(#F176  X-XxX` ` X ` ` 1. Background p!(#F176  X-XxX` ` X ` ` 2.  Discussion p!(#F180  X-XxX` ` xC. ` ` BOC Cellular CPNI Rule 22.903(f) and Computer II Rule 64.702(d)(3) ` p!(#F185  X -XxX` ` X ` ` 1. Background p!(#F185  X` -XxX` ` X ` ` 2. Discussion p!(#F188  X= -XxX` ` xD.` ` Safeguards Under Section 222 ` p!(#F190  X -XxX` ` x` ` 1. Background ` p!(#F190  X -XxX` ` X ` ` 2. Discussion p!(#F193  X-XxPIX.xFURTHER NOTICE OF PROPOSED RULEMAKING p!(#F203  X-XxX` ` xA.` ` Customer Right to Restrict Carrier Use of CPNI for Marketing Purposes ` p!(#F204  Xk-XxX` ` xB.` ` Protections for Carrier Information and Enforcement Mechanisms ` p!(#F206  XH-XxX` ` xC.` ` Foreign Storage of, and Access to, Domestic CPNI ` p!(#F208  X-XxPX.xPROCEDURAL ISSUES p!(#F211  X-XxX` ` xA.` ` Second Report and Order ` p!(#F211  X-XxX` ` X ` ` 1. Final Regulatory Flexibility Analysis p!(#F211  X-XxX` ` X ` ` 2. Paperwork Reduction Act Analysis p!(#F239  Xv-XxX` ` xB.` ` Further Notice of Proposed Rulemaking ` p!(#F244  XS-XxX` ` X ` ` 1. Ex Parte Presentations p!(#F244  X0-XxX` ` x` ` 2. Initial Paperwork Reduction Act Analysis ` p!(#F245  X -XxX` ` x` ` 3. Initial Regulatory Flexibility Act Analysis ` p!(#F246  X-XxX` ` x` ` 4. Comment Filing Procedures ` p!(#F253  X-XxPXI.xORDERING CLAUSES p!(#F257  X;-APPENDIX A LIST OF PARTIES  X-APPENDIX B FINAL RULES",K(K(<<"  X- X #X\  P6G;2P#X01Í ÍX01Í Í 1. 1. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#Xj\  P6G;cXP# [ I.xINTRODUCTION AND EXECUTIVE SUMMARY   X-x1.` ` In passing the Telecommunications Act of 1996 (1996 Act),""< yO3-ԍxTelecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996 Act) (codified at 47 U.S.C.  {O-  151 et seq.). Hereinafter, all citations to the 1996 Act will be to the 1996 Act as it is codified in the United States Code. The 1996 Act amended the Communications Act of 1934. We will refer to the Communications Act of 1934, as amended, as "the Communications Act" or "the Act." Congress sought  X-to establish a new "procompetitive, deregulatory national policy framework""< yO-ԍ JOINT  JOINT xJoint Statement of Managers, S. Conf. Rep. No. 104230, 104th Cong., 2d Sess., 1 (1996) (Joint Explanatory Statement). that would [ replace the statutory and regulatory limitations on competition within and between markets. Congress recognized, however, that the new competitive market forces and technology ushered in by the 1996Act had the potential to threaten consumer privacy interests. Congress, therefore, enacted section 222 to prevent consumer privacy protections from being  X-inadvertently swept away along with the prior limits on competition. "< yO-ԍxRepresentative Markey, the original sponsor of the "Telephone Consumer Privacy Protection Act of 1993," which was the first iteration of what ultimately evolved into section 222, explained: "As recent events have made clear, we are undoubtedly in a fullfledged technological revolution. This revolution promises exciting new services and products that will change the way we live, work, and play . . . . If adequate safeguards are not in place to protect consumers, however, the same technology that serves to empower individuals can also imperil them by fostering and abetting invasions of personal privacy. The legislation I am introducing today will ensure that the fundamental privacy rights of each American will be protected even as this new era of communications becomes ever more sophisticated and ubiquitously deployed." Extension of Remarks of Edward J. Markey, 139 Cong. Rec. E274501. Section 222 establishes a new statutory framework governing carrier use and disclosure of customer proprietary network information (CPNI) and other customer information obtained by carriers in their provision of telecommunications services.  X9 -x2.` ` Section 222 sets forth three categories of customer information to which different privacy protections and carrier obligations apply individually identifiable CPNI,  X -aggregate customer information, and subscriber list information.Z "< yO~-ԍxSections 222(a) and (b) also establish obligations and restrictions in connection with carrier proprietary information. The nature of these obligations are not addressed in this order, but rather are the subject of the  {O-accompanying Further Notice of Proposed Rulemaking. See discussion infra Part IX.  CPNI includes information that is extremely personal to customers as well as commercially valuable to carriers, such as to whom, where and when a customer places a call, as well as the types of service offerings  X-to which the customer subscribes and the extent the service is used.$X""< yO7#-ԍxSection 222(f)(1) defines CPNI as: "(A) information that relates to the quantity, technical configuration, type, destination, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier, and that is made available to the carrier by the customer solely by virtue of the"$0*%%$" carriercustomer relationship; and (B) information contained in the bills pertaining to telephone exchange service or telephone toll service received by a customer of a carrier; except that such term does not include subscriber  {O -list information." 47 U.S.C.  222(f)(1). See infra generally Part IV, for discussion of carriers' use of CPNI for marketing purposes.$ Aggregate customer and"0*%%<<J" subscriber list information, unlike individually identifiable CPNI, involve customer information that is not private or sensitive, but like CPNI, is nevertheless valuable to competitors. Aggregate customer information is expressly defined as "collective data that  X-relates to a group or category of services or customers, from which individual customer  Xv-identities and characteristics have been removed."Zv"< {O -ԍx47 U.S.C.  222(f)(2)(emphasis added). See infra generally Part VI, for discussion of carriers' use of aggregate information for marketing purposes, including, for example, in developing new service offerings for its existing customers as well as for creating customer profiles that can be useful in targeting new customers.  Subscriber list information, although  XU-consisting of individually identifiable information, is defined in terms of public, not private,  X4-information, including the "listed names, numbers, addresses, or classifications . . . that the  X-carrier or an affiliate has published, caused to be published, or accepted for publication in  X-any directory format.""< yOw-ԍx47 U.S.C.  222(f)(3)(emphasis added). Subscriber list information is critically important to the development of specialized and competitive directory publications.  X-x3.` ` In contrast to other provisions of the 1996 Act that seek primarily to "[open]  X -all telecommunications markets to competition," , "< yOf-#X\  P6G;2P#эxJoint Explanatory Statement at 1. and mandate competitive access to facilities and services, the CPNI regulations in section 222 are largely consumer protection provisions that establish restrictions on carrier use and disclosure of personal customer information. With section 222, Congress expressly directs a balance of "both competitive and consumer  X -privacy interests with respect to CPNI."o "< {Oj-#X\  P6G;2P#эxId. at 205.o Congress' new balance, and privacy concern, are  X -evidenced by the comprehensive statutory design, which expressly recognizes the duty of all  X-carriers to protect customer information, N "< yO-ԍx47 U.S.C.  222(a)(establishes general duty, titled "Privacy of Customer Information"). and embodies the principle that customers must be able to control information they view as sensitive and personal from use, disclosure, and  Xs-access by carriers. s"< {O!-ԍxSee discussion infra Part IV.B.2.b (section 222(c)(1), titled "Confidentiality of Customer Proprietary Network Information," embodies principle of customer control). Where information is not sensitive, s8"< {O\#-ԍxSee, e.g., section 222(c)(3)(involving aggregate customer information, defined as nonpersonal  yO&$-information); section 222(e)(involving subscriber list information, defined as published information). or where the customer so directs, "s"< {O-ԍxSee discussion infra Part V.B.2. Under section 222(c)(1) carriers can use, disclose or permit access to CPNI upon the "approval" of the customer. 47 U.S.C.  222(c)(1). Under section 222(c)(2) carriers "shall disclose [CPNI], upon affirmative written request by the customer, to any person designated by the customer." 47 U.S.C.  222(c)(2)."s 0*%%<<I" the statute permits the free flow or dissemination of information beyond the existing customercarrier relationship. Indeed, in the provisions governing use of aggregate customer and subscriber list information, sections 222(c)(3) and 222(e) respectively, where privacy of  X-sensitive information is by definition not at stake, Congress expressly required carriers to  Xv-provide such information to third parties on nondiscriminatory terms and conditions.+Lv"< yO -ԍxSection 222(c)(3) provides in pertinent part: "A local exchange carrier may use, disclose or permit  {O -access to aggregate customer information other than for purposes described in paragraph (1) only if it provides  {Ok -such aggregate information to other carriers or persons on reasonable and nondiscriminatory terms and  {O5 -conditions upon reasonable request therefor." 47 U.S.C.  222(c)(3)(emphasis added). Section 222(e) provides that "notwithstanding subsections (b), (c), and (d), a telecommunications carrier that provides telephone exchange  {O -service shall provide subscriber list information gathered in its capacity as a provider of such service on a timely  {O-and unbundled basis, under nondiscriminatory and reasonable rates, terms and conditions, to any person upon  {O[-request for the purpose of publishing directories in any format." 47 U.S.C.  222(e)(emphasis added). + Thus, although privacy and competitive concerns can be at odds, the balance struck by Congress aligns these interests for the benefit of the consumer. This is so because, where customer information is not sensitive, the customer's interest rests more in choosing service with respect to a variety of competitors, thus necessitating competitive access to the information, than in prohibiting the sharing of information.  X -x4.` ` In this Second Report and Order, we promulgate regulations to implement the statutory obligations of section 222. We also review our existing regulatory framework  X= -governing CPNI, and resolve CPNI issues raised in other proceedings that have been deferred to this proceeding, including obligations in connection with sections 272 and 274 of the 1996  X -Act. More specifically, for the reasons discussed herein, we modify our rules and procedures regarding CPNI and implement section 222 as follows:  X-x` ` (a) We permit carriers to use CPNI, without customer approval, to market offerings that are related to, but limited by, the customer's existing service relationship with  XH-their carrier.\H "< {O-ԍxSee discussion infra Part IV.B.\ x` ` (b) Before carriers may use CPNI to market service outside the customer's  X-existing service relationship, we require that carriers obtain express customer approval.[X "< {O"-ԍxSee discussion infra Part V.B.[ "0*%%<<s"  X-Such express approval may be written, oral, or electronic.["< {Oy-ԍxSee discussion infra Part V.C.[ In order to ensure that customers are informed of their statutory rights before granting approval,  X-we further require carriers to provide a onetime notification of customers' CPNI rights prior  X-to any solicitation for approval.dZ"< {O-ԍxSee discussion infra Parts V.F and V.G.d  Xt-x  XQ-x` ` (c)  We eliminate the Computer III CPNI framework, as well as sections 22.903(f) and 64.702(d)(3) of our rules, in light of the comprehensive regulatory scheme  X -Congress established in section 222.\ "< {O -ԍxSee discussion infra Part VIII.\ x` ` (d) We reconcile section 222 with sections 272 and 274, and interpret the latter two provisions to impose no additional CPNI requirements on the Bell Operating  X -Companies (BOCs).[ ~"< {O-ԍxSee discussion infra Part VII.[  X; -x5.` ` Finally, in a Further Notice of Proposed Rulemaking (Further Notice) we seek additional comment on three issues involving carrier duties and obligations established under  X -sections222(a) and (b) of the 1996 Act.x "< yO-ԍxSection 222(a) states that: "[E]very telecommunications carrier has a duty to protect the confidentiality of proprietary information of, and relating to, other telecommunication carriers, equipment manufacturers, and customers, including telecommunication carriers reselling telecommunications services provided by a telecommunications carrier." 47 U.S.C.  222(a). Section 222(b) states 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." 47 U.S.C.  222(b).  In particular, we seek further comment on (a) the  X -customer's right to restrict carrier use of CPNI for all marketing purposes;\ P "< {O-ԍxSee discussion infra Part IX.A.\ (b) the appropriate protections for carrier information and additional enforcement mechanisms we  X-may apply;\"< {O! -ԍxSee discussion infra Part IX.B.\ and (c) the foreign storage of, and access to, domestic CPNI.\t"< {O!-ԍxSee discussion infra Part IX.C.\ "k0*%%<<"Ԍ X- II.xBACKGROUND  X-x6. FURCH  ` ` In response to various informal requests for guidance from the  X-telecommunications industry regarding the obligation of carriers under new section 222, "< {O-ԍFGR LETTER xSee, e.g., Letter from Mary McDermott, United States Telephone Association (USTA) to Regina Keeney, Chief of the Common Carrier Bureau, FCC, on behalf of USTA, the National Rural Telephone Association (NRTA), the National Telephone Cooperative Association (NTCA), and the Organization for the Promotion & Advancement of Small Telecommunications Companies (OPASTCO), dated February 14, 1996  {O2-(Association Letter). See also Petition of the NYNEX Telephone Companies for a Declaratory Ruling as to the Interpretation of Section 222 of the Communications Act (filed Mar. 5, 1996) (NYNEX Petition); Letter from Lawrence E. Sargeant, Vice President Federal Regulatory, U S WEST, to Regina M. Keeney, Chief, Common Carrier Bureau, FCC, filed March 27, 1996 (disagreeing with NYNEX's interpretation of CPNI provisions). The NYNEX Petition sought a declaratory ruling with regard to the meaning of the term "telecommunications service" as used in section 222(c)(1). NYNEX specifically argued that intraLATA service should be distinguished from interLATA service for the purpose of applying section 222. U S WEST, in a letter response to the NYNEX petition, expressed disagreement with NYNEX's interpretation of the CPNI provisions of the statute and argued that section 222 supported the broad use of CPNI in a carrier's provision of telecommunications services. the  Xt-Commission released a Notice of Proposed Rulemakingv^t "< {O-ԍxIn the Matter of Implementation of the Telecommunications Act of 1996: Telecommunications Carriers'  {Os-Use of Customer Proprietary Network Information and Other Customer Information, Notice of Proposed  {O=-Rulemaking, CC Docket No. 96115, 11 FCC Rcd 12513 (1996) (Notice).v on May 17, 1996. The Notice, among other things, sought comment on: (1) the scope of the phrase "telecommunications service," as it is used in section 222(c)(1), which permits carriers to use, disclose, or permit  X -access to individually identifiable CPNI without obtaining customer approval;[ "< {Oh-ԍxNotice at 1252326,   2026.[ (2) the  X-requirements for customer approval;[<"< {O-ԍxNotice at 1252628,   2733.[ and (3) whether the Commission's existing CPNI  X-requirements should be amended in light of section 222.["< {OF-ԍxNotice at 1252931,   3842.[  X -x7.` ` Prior to the 1996 Act, the Commission had established CPNI requirements  X^ -applicable to the enhanced servicesz^ `"< yOo - ENH-SERV ׍x#X\  P6G;2P#"Enhanced services" generally include such services as voice mail, electronic mail, electronic storeand forward, fax storeandforward, data processing, and gateways to on-line databases. Prior to the 1996 Act, enhanced services were defined as services "offered over common carrier transmission facilities used in interstate communications, which employ computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information; provide the subscriber additional, different, or  {OW$-restructured information; or involve subscriber interaction with stored information." 47 C.F.R.  64.702(a); see also North American Telecommunications Association Petition for Declaratory Ruling Under Section 64.702 of"!%0*%%j%" the Commission's Rules Regarding the Integration of Centrex, Enhanced Services and Customer Premises  {OX-Equipment, 101 FCC 2d 349 (1985), recon., 3 FCC Rcd 4385 (1988).  operations of AT&T, the BOCs, and GTE, and the CPE"^ "0*%%<<" "  X-operations of AT&T and the BOCs, in the Computer II,(""< {O-ԍRCAC2x#X\  P6G;2P#In the Matter of Amendment of Section 64.702 of the Commission's Rules and Regulations (Computer  {O-II), Docket No. 20828, 77 FCC 2d 384 (1980) (Final Order), recon., 84 FCC 2d 50 (1980) (Reconsideration  {Og-Order), further recon., 88 FCC 2d 512 (1981) (Further Reconsideration Order), aff'd sub nom. Computer and  {O1-Communications Industry Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983). Computer III, $"< {O-ԍ BSAFE  CIII  BOC SAFE  BOC CPE  PHASE II CPE BOC SAFE  BOC SAFE FOOTNOTE 30FOOTNOTE 30 RREMY xIn the Matter of Amendment of Section 64.702 of the Commission's Rules and Regulations (Computer  {O -III), CC Docket No. 85229, Phase I, 104 FCC 2d 958 (1986) (Phase I Order), recon., 2 FCC Rcd 3035 (1987)  {OW -(Phase I Recon. Order), further recon., 3 FCC Rcd 1135 (1988) (Phase I Further Recon. Order), second further  {O! -recon., 4 FCC Rcd 5927 (1989) (Phase I Second Further Recon. Order); Phase I Order and Phase I Recon.  {O -Order vacated sub nom. California v. FCC, 905 F.2d 1217 (9th Cir. 1990) (California I); CC Docket No. 85 {O -229, Phase II, 2 FCC Rcd 3072 (1987) (Computer III Phase II Order), recon., 3 FCC Rcd 1150 (1988) (Phase II  {O -Recon. Order), further recon., 4 FCC Rcd 5927 (1989) (Phase II Further Recon. Order); Phase II Order  {OI-vacated, California I, 905 F.2d 1217 (9th Cir. 1990); Computer III Remand Proceeding, CC Docket No. 90368,  {O-5 FCC Rcd 7719 (1990) (ONA Remand Order), recon., 7 FCC Rcd 909 (1992), pets. for review denied sub nom.  {O-California v. FCC, 4 F.3d 1505 (9th Cir. 1993) (California II); Computer III Remand Proceedings: Bell  {O-Operating Company Safeguards and Tier 1 Local Exchange Company Safeguards, CC Docket No. 90623, 6  {Oq-FCC Rcd 7571 (1991) (BOC Safeguards Order), BOC Safeguards Order vacated in part and remanded sub nom.  {O;-California v. FCC, 39 F.3d 919 (9th Cir. 1994) (California III), cert. denied, 115 S. Ct. 1427 (1995) (referred to  {O-collectively as the Computer III proceeding); Computer III Further Remand Proceedings:Bell Operating  {O-Company Provision of Enhanced Services, CC Docket 9520, Notice of Proposed Rulemaking, 10 FCC Rcd 8360  {O-(1995) (Computer III Further Remand Notice), Further Notice of Proposed Rulemaking, FCC 988 (rel. Jan. 29,  {Oc-1998) (Computer III Further Remand Further Notice).#X\  P6G;2P# See also Filing and Review of Open Network  {O--Architecture Plans, CC Docket 88-2, Phase I, 4 FCC Rcd 1, 20910,   39899 (1988) (BOC ONA Order); In the Matter of Furnishing of Customer Premises Equipment and Enhanced Services by American Telephone &  {O-Telegraph Co., CC Docket No. 8526, Memorandum Opinion and Order, 102 FCC 2d 655 (1985) (AT&T  {O-Structural Relief Order), recon., Furnishing of Customer Premises Equipment and Enhanced Services by  {OS-American Telephone & Telegraph Co., CC Docket No. 8526, Memorandum Opinion and Order on  {O-Reconsideration, 104 FCC 2d 739, 768 (1986) (AT&T Structural Relief Reconsideration Order). GTE ONA,\!("< {O-ԍGTEx#X\  P6G;2P#In the Matter of Application of Open Network Architecture and Nondiscrimination Safeguards to GTE  {Oy-Corp., CC Docket No. 92256, Report and Order, 9 FCC Rcd 4922, 494445,  45 (1994) (GTE Safeguards  {OC-Order); Application of Open Network Architecture and Nondiscrimination Safeguards to GTE Corp., CC Docket  {O -No. 92256, Memorandum Opinion and Order, 11 FCC Rcd 1388, 141925,   7386 (1995) (GTE ONA Order).\ and  X-BOC CPE Relief"^"< {O~ -ԍ BOC CPE #X\  P6G;2P#FOOTNOTE 33CPE BCPE  READ xIn the Matter of Furnishing of Customer Premises Equipment by Bell Operating Telephone Companies  {OH!-and the Independent Telephone Companies, CC Docket No. 8679, Report and Order, 2 FCC Rcd 143 (1987)  {O"-(BOC CPE Relief Order), recon. on other grounds, 3 FCC Rcd 22 (1987); aff'd, 883 F.2d 104 (D.C. Cir. 1989). proceedings. The Commission recognized in the Notice that it had adopted these CPNI requirements, together with other nonstructural safeguards, to protect independent enhanced services providers and CPE suppliers from discrimination by AT&T, the BOCs, and" !"0*%%<<"  X-GTE.U#"< {Oy-ԍxNotice at 12516,  4.U The Notice stated that the Commission's existing CPNI requirements were intended  X-to prohibit AT&T, the BOCs, and GTE from using CPNI obtained from their provision of regulated services to gain a competitive advantage in the unregulated CPE and enhanced  X-services markets.e$Z"< {O-ԍxNotice at 12516, 12530,   4, 40.e The Notice further stated that the existing CPNI requirements also were intended to protect legitimate customer expectations of confidentiality regarding individually  XU-identifiable information.O%U"< {O -ԍxNotice at 12516,  4.O The Commission concluded in the Notice that existing CPNI requirements would remain in effect, pending the outcome of this rulemaking, to the extent  X-that they do not conflict with section 222.b&~"< {O@ -ԍxNotice at 1251516, 12529,   3, 38.b On November 13, 1996, the Common Carrier Bureau (Bureau) waived the annual CPNI notification requirement for multi-line business customers that had been imposed on AT&T, the BOCs, and GTE under our preexisting CPNI  X-framework, pending our action in this proceeding. '&"< {Oi-ԍxPetition for Exemption from Customer Proprietary Network Information Notification Requirements,  yO3-Order, CCB Pol 9620, DA 961878, 12 FCC Rcd 15134. On December 16, 1997, the Policy and Program  {O-Planning Division waived this requirement for 1997. In the Matter of Waiver from Customer Proprietary  {O-Network Information Notification Requirements, CCB Pol 97-13, DA 972599 (rel. Dec. 16, 1997).   Xb -x8. ` ` On August 7, 1996, the Commission released the First Report and Order in the  XA -CPNI proceeding.e(\A "< {O-ԍxIn the Matter of the Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer Proprietary Network Information; Use of Data Regarding Alarm Monitoring Service  {O-Providers, CC Docket No. 96115, Report and Order, 11 FCC Rcd 9553 (1996).e In the First Report and Order, the Commission affirmed its tentative conclusion that, even if a carrier has received customer approval to use CPNI pursuant to section 222(c)(1), such approval does not extend to the carrier's use of CPNI involving the  X -occurrence of calls received by alarm monitoring service providers,*)X ""< yO-ԍxFor example, LEC personnel may not use information regarding the occurrence or content of calls received by alarm monitoring service providers, even with customer approval under section 222(c)(1), for purposes of marketing alarm monitoring services.* pursuant to the ban on  X-such use in section 275(d).L*B"< yO!-ԍx11 FCC Rcd at 9554,  3.L Noting that section 222 sets forth limitations on the ability of telecommunications carriers, their affiliates, and unaffiliated parties to obtain access to CPNI, the Commission further concluded that it was not necessary to bar completely certain of these"q *0*%%<<"  X-entities from accessing CPNI simply because they market alarm monitoring services.L+"< {Oy-ԍxId. at 9558,  11.L The Commission deferred deciding the issue of whether any restrictions on access to CPNI were  X-necessary to effectuate the prohibition contained in section 275(d).:,Z"< {O-ԍxId.:  X-   Xt-x9. ` ` On December 24, 1996, the Commission released the NonAccounting  XS-Safeguards Order, which adopted rules and policies governing the BOCs' provision of certain  X2-services through section 272 affiliates.-2"< {O -#c P2P#Ѝ NA ORDER  SGDS x#Xj PcXP##c P2P##X\  P6G;2P#In the Matter of Implementation of the NonAccounting Safeguards of Section 271 and 272 of the  {O -Communications Act of 1934, as amended, CC Docket No. 96149, First Report and Order and Further Notice of  {Oc -Proposed Rulemaking, 11 FCC Rcd 21905 (1996) (NonAccounting Safeguards Order), recon. pending, Order on  {O- -Reconsideration, 12 FCC Rcd 2297 (1997), Second Report and Order, 12 FCC Rcd 15756 (1997), aff'd sub nom.  {O -Bell Atlantic Telephone Companies, et al. v. FCC, et al., No. 971432, 1997 WL 783993 (D.C. Cir. 1997).#Xw PcXP#є In that order, the Commission concluded that the  X-nondiscrimination provisions of section 272(c)(1) govern the BOCs' use of CPNI and that the  X-BOCs must comply with the requirements of both sections 222 and 272(c)(1).N."< {OC-ԍxId. at 22010,  222.N The Commission deferred to this proceeding, however, all other issues concerning the interplay  X-between those provisions.:/8 "< {O-ԍxId.: On February 7, 1997, the Commission released the Electronic  X -Publishing Order, which adopted policies and rules governing, among other things, the BOCs'  Xd -provision of electronic publishing under section 274.)0^d "< {O-#c P2P#эEP EPUB x#Xj PcXP##c P2P##X\  P6G;2P#In the Matter of Implementation of the Telecommunications Act of 1996: Telemessaging, Electronic  {O-Publishing, and Alarm Monitoring Services, CC Docket No. 96152, Report and Order, 12 FCC Rcd 5361 (1997)  {Os-(Electronic Publishing Order), recon. pending. ) In that order, the Commission likewise deferred to this proceeding all CPNIrelated issues involved in the BOCs' marketing of  X -electronic publishing services.M1 "< {O-ԍxId. at 5432,  169.M In light of the Commission's determinations in the Non X -Accounting Safeguards and Electronic Publishing orders, the Bureau issued a Public Notice on February 20, 1997, seeking to supplement the record in this proceeding on specific issues  X-relating to the subjects previously noticed and their interplay with sections 272 and 274.2"< {O -ԍPNxCommon Carrier Bureau Seeks Further Comment on Specific Questions in CPNI Rulemaking, CC  {O!-Docket No. 96115, Public Notice, 12 FCC Rcd 3011 (1997) (Public Notice).  X-Finally, the Commission released the CMRS Safeguards Order on October 3, 1997, in which it eliminated section 22.903 of the rules generally, but expressly retained subsection 22.903(f),"u 20*%%<<" regarding the BOCs' sharing of CPNI with cellular affiliates, pending the outcome of this  X-proceeding.3^"< {OV-ԍCMRS ORDER CMRS  PARA48  CELLU xIn the Matter of Amendment of the Commission's Rules to Establish Competitive Service Safeguards for  {O -Local Exchange Carrier Provision of Commercial Mobile Radio Services, WT Docket No. 96162, Report and  {O-Order, 12 FCC Rcd 15668 (1997) (CMRS Safeguards Order) .  X-x 10.` ` In this Second Report and Order, we address the scope and meaning of section  Xv-222, as well as the issues deferred to this proceeding. We will consider subsequently, in a  XS-separate order, the meaning and scope of section 222(e) of the 1996 Act, relating to the  X0-disclosure of subscriber list information by local exchange carriers.O40"< yO -ԍx47 U.S.C.  222(e). O We note that LECs became obligated to disclose subscriber list information to directory publishers on nondiscriminatory rates, terms, and conditions, upon passage of the Act. Accordingly, the LEC's duty exists presently, independent of any implementing rules we might promulgate in the future, and a failure to discharge this duty may well, depending on the circumstances, constitute both a violation of section 222(e) and an unreasonable practice in violation of  X^ -section 201(b).G5^ ~"< yO-ԍx47 U.S.C.  201(b).G  X -#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP#  III.xCOMMISSION AUTHORITY   X -Xx A.` ` Background (#  X-x 11.` ` Shortly after passage of the 1996 Act, various telecommunications carriers and carrier associations, as indicated above, sought guidance from the Bureau regarding the scope  XF- of their obligations under section 222.{6F"< {O-ԍxSupra   FURCH6 ; supra note  FGR25 .{ In particular, several associations representing a majority of the local exchange carriers (LECs) asked, among other things, that the Commission commence a rulemaking to resolve questions concerning the LECs' responsibilities under the new CPNI provisions of the 1996 Act. In addition, NYNEX filed a petition for declaratory ruling seeking confirmation of its interpretation of one aspect of  X-section 222.@7"< {O-ԍxId.@  XQ-x 12.` ` The Commission tentatively concluded in the Notice that regulations interpreting and specifying in greater detail a carrier's obligations under section 222 would be  X -in the public interest, and sought comment on that tentative conclusion.P8 2 "< {O$-ԍxNotice at 12521,  15.P The Commission"  80*%%<<"  X-also sought comment on the extent to which section 222 permits states to impose CPNI requirements in addition to any adopted by the Commission, as well as on whether such state  X-CPNI regulation would enhance or impede valid federal interests with respect to CPNI.M9"< {O3-ԍxId. at 12522,  17.M The Commission further sought comment on whether the CPNI provisions of section 222 may, by themselves, give it jurisdiction over both the interstate and intrastate use and protection of  XQ-CPNI with respect to matters falling within the scope of that statutory provision.M:QZ"< {O\-ԍxId. at 12523,  18.M  X -x 13.` ` Parties commenting in response to the Notice generally join the petitioning carrier associations in urging the Commission to clarify the CPNI requirements established in  X-section 222.;"< {Od -ԍxSee, e.g., Arch Comments at 2; Sprint Comments at 2; Texas Commission Comments at 4. Some commenters further maintain that the Commission has authority to adopt  X-rules implementing section 222 that apply both to interstate and intrastate aspects of CPNI.<~"< {O-ԍxSee, e.g., Excel Comments at 23; LDDS Worldcom Comments at 6, LDDS Worldcom Reply at 2. Other parties, disagreeing, contend that section 222 does not give the Commission jurisdiction over interstate and intrastate use and protection of CPNI or that states should be free to adopt  X; -various CPNI requirements, or both.=; "< {O-ԍxSee, e.g., California Commission Comments at 8; CPSR Reply at 5; Washington Commission Comments at 2.  X -QXx B.` ` Discussion (#  X-x 14.` ` We confirm our tentative conclusion and find that our clarification of the CPNI obligations imposed on carriers by section 222 would serve the public interest. As discussed Qmore fully herein, we are persuaded that Congress established a comprehensive new framework in section 222, which balances principles of privacy and competition in connection  X#-with the use and disclosure of CPNI and other customer information.r>#j "< {O>-ԍxSee discussion infra Part VII.B.2. and Part VIII.B.2.r Given the conflicting interpretations of the statute proposed by the various parties, and drawing from our knowledge and historical experience regulating CPNI use and protection, we conclude that our clarification of this provision is necessary and consistent with what Congress envisioned to  X-ensure a uniform national CPNI policy.?$ "< {OD"-ԍxSee, e.g., Ad Hoc Reply at 7 (Commission should establish national rules); AirTouch Comments at 2 n.1  {O#-(same); CPI Reply at 2 (same); Frontier Comments at 12 (same); MFS Comments at 11 (same). See also Arch Comments at 2 (authority to interpret section 222 rests with the Commission); AT&T Comments at 1617 & n.21 (same). It is wellestablished that an agency has the" ?0*%%<<"  X-authority to adopt rules to administer congressionally mandated requirements.@$"< {Oy-ЍxSee, e.g., Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984); Morton v.  {OC-Ruiz,  415 U.S. 199, 231 (1974)(holding that "[t]he power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress). Indeed, courts repeatedly have held that the Commission's general rulemaking authority is "expansive" rather  X-than limited.A"< {O-ЍxNat'l Broadcasting Co. v. United States, 319 U.S. 190, 219 (1943); see also FCC v. Nat'l Citizens  {O-Comm. for Broadcasting, 36 U.S. 775, 793 (1978). We agree with the petitioning carrier associations, and essentially all other commenters, that our clarification of section 222 will serve to reduce confusion and  Xt-controversy.Bt"< {O5 -ԍxSee, e.g., Arch Comments at 2; Sprint Comments at 2; Texas Commission Comments at 4.   X.-x15.` ` We further conclude that our authority to promulgate regulations implementing  X -section 222 extends to both the interstate and intrastate use and protection of CPNI and other  X-customer information in several important respects.mC"< yO;-ԍxFor the reasons described above, there is no question that we have authority to regulate interstate use and protection of CPNI under section 222. We have historically regulated such interstate CPNI matters, and section 222 extends to all carriers, including interstate service providers. Indeed, section 222(f)(1)(B) expressly defines CPNI as including, among other things, "information contained in the bills pertaining to telephone  {O[-exchange service or telephone toll service received by a customer of a carrier." 47 U.S.C.  222(f)(1)(B).m Specifically, the Communications Act, as enacted in 1934, established a dual system of state and federal regulation over telecommunications. Section 2(a) extends jurisdiction for interstate matters to the Commission and section 2(b) reserves intrastate matters to the states. Based on the Act's grant of jurisdiction, the Commission has historically regulated the use and protection of  X9 -CPNI by AT&T, the BOCs, and GTE, through the rules established in the Computer III  X -proceedings. Sections 4(i),GD T "< yO-ԍx47 U.S.C.  154(i).G 201(b),GE "< yO-ԍx47 U.S.C.  201(b).G and 303(r)GF t"< yO=-ԍx47 U.S.C.  303(r).G of the Act authorize the Commission to adopt any rules it deems necessary or appropriate to carry out its responsibilities under the  X -Act, so long as those rules are not otherwise inconsistent with the Act.G "< {O!-ԍxSee, e.g., United States v. Storer Broadcasting Co., 351 U.S. 192, 20203 (1956). "G0*%%<<"Ԍ X-x16.` ` In Louisiana Pub. Serv. Comm'n v. FCC,H"< {Oy-ԍx476 U.S. 355, 37576 n.4 (1986)(Louisiana Commission). the Supreme Court held that, even where Congress has not provided the Commission with a direct grant of authority over intrastate matters, the Commission may preempt state regulation where such regulation would negate the Commission's exercise of its lawful authority because regulation of the interstate aspects of the matter cannot be severed from regulation of the intrastate aspects. The Court of Appeals for the Ninth Circuit applied this principle, generally referred to as the "impossibility exception," in the specific context of a state CPNI regulation even prior to the  X -1996 Act.I Z"< {O -ԍxCalifornia v. FCC, 39 F.3d 919 (9th Cir. 1994)(California III), supra note  RREMY32 . In California III, the Ninth Circuit upheld the Commission's preemption of California regulations that required prior customer approval for access to CPNI, under the  X-impossibility exception.VJ"< {Of -ԍxCalifornia III, 39 F.3d at 933.V We conclude that, in connection with CPNI regulation, the  X-Commission may preempt state regulation of intrastate telecommunications matters where such regulation would negate the Commission's exercise of its lawful authority because regulation of the interstate aspects of the matter cannot be severed from regulation of the  X= -intrastate aspects.K = ~"< yOl-ԍxBecause we conclude that we have authority to preempt conflicting state CPNI regulations under the "impossibility" exception, we do not reach, and offer no opinion on, MCI's further contention that we may preempt inconsistent state CPNI regulations on the basis of our authority pursuant to section 253 of the Act. MCI Comments at 15. As several parties observe, where a carrier's operations are regional or national in scope, state CPNI regulations that are inconsistent from state to state may interfere  X -greatly with a carrier's ability to provide service in a costeffective manner.L f "< yO-ԍxArch Comments at 2; Excel Comments at 2; Frontier Comments at 12; LDDS Comments at 6; MCI Comments at 1213; MFS Comments at 11. In addition, as MCI points out, even if a state written approval requirement were limited to the use of CPNI for the marketing of intrastate services, for example, it would disrupt interstate service  X-marketing because it would be impractical to limit marketing to interstate services.DM "< yO-ԍxMCI Comments at 13.D On this basis, we find inapplicable the limitation on federal regulation of purely intrastate"kN M0*%%<<g"  X-telecommunications matters in section 2(b) of the Act,gNX"< yOy-ԍxSection 2(b) provides, in pertinent part, that "nothing in this Act shall be construed to apply or give the [FCC] jurisdiction with respect to . . . charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communications service." 47 U.S.C.  152(b).g as well as Congress' prohibition on  X-implied preemption in section 601(c) of the 1996 Act.qOX"< yOv-ԍxSection 601(c) of the 1996 Act provides that the 1996 Act and its amendments "shall not be construed to modify, impair, or supersede Federal, State, or local law unless expressly so provided in such Act or amendments." 1996 Act,  601(c)(1), 110 Stat. 56, 143 (to be codified as a note following 47 U.S.C.  152).q  X-  X-x17.` ` Several commenters interpret California III to support their view that state  Xv-rules would conflict with section 222 if they are more restrictive that is, permit less carrier  XU-use and disclosure of CPNI than the Commission's implementing regulations.PU"< yO -ԍxBell Atlantic Comments at 10; MCI Comments at 12; NYNEX Comments at 1718; USTA Reply at 89. These  X2-commenters rely on California III, where the court specifically upheld the Commission's preemption of California's prior authorization rule in favor of the Commission's less  X-restrictive notice rule,\Q` "< {O-ԍxCalifornia III, 39 F.3d at 932. In California III, the U.S. Court of Appeals for the Ninth Circuit upheld the Commission's preemption of state CPNI regulations that required carriers to obtain prior customer authorization from all customers (not merely those with more than 20 lines) before they could use CPNI in connection with their enhanced services. At this time, California's prior authorization rule was inconsistent with  {O!-the CPNI regulations announced in the Commission's BOC Safeguards Order. \ reasoning that such state regulations would negate the Commission's  X-exercise of its lawful authority over interstate telecommunications services.RZ"< {O-ԍxCf. SBC Comments at 2021 (state CPNI regulations that permit greater use of CPNI than the Commission's rules, or that are more flexible with respect to customer approval, would be consistent with section 601(c)). In contrast,  X-other commenters contend that, consistent with California III, the Commission should establish minimum federal standards under section 222 for the use, disclosure, and permission  Xd -of access to CPNI, yet permit states to exceed those standards.~Sd 6"< yOK-ԍxAd Hoc Reply at 78; CFA Comments at 23; CPI Reply at 2; CPSR Reply at 4. ~ These parties reason that, although federal standards are needed to monitor the use of CPNI, state regulators are best  X -suited to deal with particular problems faced by consumers in their state,TX "< yO -ԍxAd Hoc Reply at 8; California Commission Comments at 8; CFA Comments at 23; CPSR Reply at 4; Texas Commission Comments at 5. In particular, the California Commission and the Texas Commission contend that states should have flexibility to establish rules that protect customer privacy expectations, while balancing competitive interests, because such state rules would not necessarily harm the development of a seamless, national telecommunications network. California Commission Comments at 5; California Commission Reply at 10; Texas Commission Comments at 5. The California Commission further asserts that states are better"}$S0*%%$" equipped to take account of customer privacy expectations that vary by state, region, or community, and it notes, in this regard, that the State of California has amended its Constitution to make the right to privacy an inalienable right. California Commission Reply at 10.  and further argue" T0*%%<< " that state requirements that provide additional privacy protections to consumers would not  X-conflict with the Commission's rules.U "< yOv-ԍxCalifornia Commission Reply at 2; CPI Reply at 2; CPSR Reply at 5; PaOCA Comments at 6; Sprint  yO>-Comments at 2; TRA Comments at 7. In particular, CPSR contends that there can be no "conflict" between the privacy goals of the Act and the strongest state CPNI rules because the fundamental federal CPNI policy is protecting consumer privacy. CPSR Reply at 5. Similarly, the California Commission contends that California's CPNI rules, which prohibit a telephone company from disclosing a residential customer's CPNI absent written  {O^ -customer consent, is consistent with the intent of the 1996 Act. California Commission Comments at 6; see also  yO( -Washington Commission Comments at 3 (federal preemption may not be necessary, noting that the Commission  {O -did not preempt state privacy protections in the Caller ID proceeding, and the resulting regulatory scheme has been workable).  X-x18. BALA ` ` Because no specific state regulations are before us, we do not at this time exercise our preemption authority. Rather, we agree with NYNEX that after states have had an opportunity to react to the requirements we adopt in this order, we should then examine  X.-any conflicting state rules on a casebycase basis.FV. "< yO-ԍxNYNEX Comments at 18.F State rules that likely would be vulnerable to preemption would include those permitting greater carrier use of CPNI than  X-section 222 and our implementing regulations announced herein, as well as those state regulations that sought to impose more limitations on carriers' use. This is so because state regulation that would permit more information sharing generally would appear to conflict with important privacy protections advanced by Congress through section 222, whereas state rules that sought to impose more restrictive regulations would seem to conflict with Congress' goal to promote competition through the use or dissemination of CPNI or other customer  X -information.W  L "< {O-ԍxIn particular, as discussed infra Part IV, we conclude that Congress intended for carriers to use and disclose information without express customer approval for marketing related offerings within the customers' total service offering, but not to permit carrier use of CPNI to market new categories of service outside that offering. If state regulation were to treat the scope of service differently, and restrict, for example, carriers from using CPNI to market distinct CMRS offerings, that would seem to conflict with section 222's balance of competition and privacy concerns. Bell Atlantic Comments at 10; MCI Comments at 1213. On the other hand, state rules that would give less weight to privacy concerns by permitting carrier use of CPNI outside the scope of section 222(c)(1) based on notice and optout approval would also appear to be in conflict with the balance  yOW!-struck by Congress. Arch Comments at 35; CFA Comments at 3.  In either regard, the balance would seemingly be upset and such state regulation thus could negate the Commission's lawful authority over interstate communication and stand as an obstacle to the accomplishment and execution of the full purposes and" W0*%%<<j"  X-objectives of Congress.X^"< {Oy-ԍxLouisiana Commission, 476 U.S. at 37576 n.4; Fidelity Federal Sav. & Loan Ass'n v. De La Cuesta,  {OC-458 U.S. 141, 153 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)); California III, 39 F.3d at 933;  {O -NARUC v. FCC, 880 F.2d 422, 429 (D.C. Cir. 1989). Other state rules, however, may not directly conflict with Congress' balance or goals, for example, those specifying various information that must be contained in the carrier's notice requirement, that are in addition to those specified in this order.  Xt-x19.` ` An alternative basis for concluding that our jurisdiction extends to the intrastate use and protection of CPNI stems additionally from section 222(f)(1)(B), which expressly defines CPNI as including, among other things, "information contained in the bills pertaining  X -to telephone exchange service or telephone toll service received by a customer of a carrier."^Y "< yO -ԍx47 U.S.C.  222(f)(1)(B)(emphasis added). ^ Section 222(e) similarly provides that: "[n]otwithstanding subsections (b), (c), and (d), a  X-telecommunications carrier that provides telephone exchange service shall provide subscriber  X-list information gathered in its capacity as a provider of such service on a timely and  X -unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions . . ."WZ ~"< yO-ԍx47 U.S.C.  222(e)(emphasis added).W  Xb -Insofar as telephone exchange service is virtually an exclusively intrastate service,[b "< {O!-ԍxImplementation of the NonAccounting Safeguards of Sections 271 and 272 of the Communications Act,  {O-as amended, CC Docket No. 96149, First Report and Order and Further Notice of Proposed Rulemaking, 11  {O-FCC Rcd 21905, 21926  38 (1996) (NonAccounting Safeguards Order), recon. pending. The 1996 Act defines "telephone exchange service" to mean: ". . . (A) service within a telephone exchange, or within a connected system of telephone exchanges within the same exchange area operated to furnish to subscribers intercommunicating service of the character ordinarily furnished by a single exchange, and which is covered by the exchange service charge, or (B) comparable service provided through a system of switches, transmission equipment, or other facilities (or combination thereof) by which a subscriber can originate and terminate a telecommunications service." 47 U.S.C.  153(47). these references expressly also extend the scope of section 222 to intrastate matters. For this reason as well we conclude that neither section 2(b) of the Communications Act of 1934 nor section 601(c) of the 1996Act precludes our regulation of the intrastate use and protection of  X -CPNI pursuant to section 222.\ "< {Ok-ԍxWe therefore disagree with those parties suggesting we lack such authority. See, e.g., CPSR Reply at 6 n.9; Washington Commission Comments at 2 n.2.  X-x20.` ` We thus conclude that section 222, and the Commission's authority thereunder, apply to regulation of intrastate and interstate use and protection of CPNI. We find, therefore, that the rules we establish to implement section 222 are binding on the states, and that the states may not impose requirements inconsistent with section 222 and our implementing regulations.">\0*%%<<"Ԍ X-ԙ#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP#  IV.XxCARRIER'S RIGHT TO USE CPNI WITHOUT CUSTOMER APPROVAL (#  X-Xx A.` ` Overview (#   Xt-x21.` ` Section222(c)(1) and section222(d) set forth the circumstances under which a carrier may use, disclose, or permit access to CPNI without customer approval. Specifically,  section222(c)(1) provides that a telecommunications carrier that receives or obtains CPNI by  X -virtue of its "provision of a telecommunications service shall only use, disclose, or permit  X-access to individually identifiable [CPNI] in its provision of (A) the telecommunications  X-service from which such information is derived, or (B) services necessary to, or used in, the  X-provision of such telecommunications service, including the publishing of directories."[]"< yO! -ԍx47 U.S.C. 222(c)(1) (emphasis added).[ Section222(d) provides: Xx[n]othing in this section prohibits a telecommunications carrier from using, disclosing, or permitting access to [CPNI] obtained from its customers, either directly or indirectly through its agents (1) to initiate, render, bill, and collect for telecommunications services; (2) to protect the rights or property of the carrier, or to protect users of those services and other carriers from fraudulent, abusive, or unlawful use of, or subscription to, such services; or (3) to provide any inbound telemarketing, referral, or administrative services to the customer for the duration of the call, if such call was initiated by the customer and the  X'-customer approves of the use of such information to provide such service.G^'X"< yO0-ԍx47 U.S.C. 222(d).G   X-x22.` ` Numerous parties comment on the proper interpretation of section222(c)(1) because this provision governs, among other things, the scope of a carrier's right to use CPNI for customer retention and marketing purposes, without having to seek some form of customer approval. Most carriers acknowledge that they view CPNI as an important asset of their business, and many state that they hope to use CPNI as an integral part of their future  X2-marketing plans._2"< {O-ԍxSee, e.g., PacTel ex parte (filed Nov. 22, 1996) at 9; SBC ex parte (filed Sept. 27, 1996) at 3; U S  {O-WEST ex parte (filed Oct. 17, 1996) at 8. Indeed, as competition grows and the number of firms competing for consumer attention increases, CPNI becomes a powerful resource for identifying potential  X-customers and tailoring marketing strategies to maximize customer response.`&D"< {O!-ԍ NTIA xNTIA ex parte (filed Apr. 14, 1997) at att. at 6 (Privacy and the NII: Safeguarding  {O"-TelecommunicationsRelated Personal Information) (NTIA Privacy Report). The NTIA Privacy Report further observes that, as competition squeezes profit margins, carriers have an incentive to sell their CPNI to supplement  {O=$-their revenue. Id. at 67. Accordingly, a broad interpretation of the scope of section222(c)(1) would afford carriers the opportunity to"2 `0*%%<<" use, disclose, or permit access to CPNI expansively. A narrow interpretation, conversely, would restrict the use carriers can make of CPNI absent customer approval.  X-x23.` ` We conclude that the general framework established under section222, considered as a whole, carves a limited exception in section222(c)(1) for carrier use, disclosure, and permission of access to sensitive customer information. Specifically, sections222(c)(1)(A) and (B), as well as the narrow exceptions in section222(d), represent the only instances where customer approval for a carrier to use, disclose, or permit access to personal customer information is not required. We believe that the language of section222(c)(1)(A) and (B) reflects Congress' judgment that customer approval for carriers  X-to use, disclose, and permit access to CPNI can be inferred in the context of an existing customercarrier relationship. This is so because the customer is aware that its carrier has access to CPNI, and, through subscription to the carrier's service, has implicitly approved the carrier's use of CPNI within that existing relationship.  X -x24.` ` The language also suggests, however, that the carrier's right under  X -section222(c)(1)(A) and (B) is a limited one, in that the carrier "shall only" use, disclose, or  X-permit access to CPNI "in the provision of" the telecommunications service from which such  X-CPNI is derived or services necessary to, or used in, such telecommunications service.Za"< yO -ԍx47 U.S.C. 222(c)(1)(emphasis added).Z Indeed, insofar as the customer consent in sections222(c)(1)(A) and (B) is inferred rather than based on express customer direction, we conclude that Congress intended that implied customer approval be restricted solely to what customers reasonably understand their telecommunications service to include. This customer understanding, in turn, is manifested in the complete service offering to which the customer subscribes from a carrier. We are persuaded that customers expect that CPNI generated from their entire service will be used by their carrier to market improved service within the parameters of the customercarrier  Xx-relationship.bxX"< yO-ԍxAs discussed more fully in the following paragraphs, our judgment concerning what customers expect is supported by our historical understanding of customer preferences as well as the present record. Moreover, we believe that it is in the public interest to implement section222 and clarify carrier CPNI obligations thereunder at this time. To the extent, however, that we are persuaded in the future that our view no longer manifests such customer expectations, and therefore would not appropriately reflect the scope of section222(c)(1)(A), we could, and would revisit our conclusions. Although most customers presently obtain their service from different carriers in terms of traditional categories of offerings local, interexchange, and commercial mobile radio services (CMRS) with the likely advent of integrated and bundled service packages, the "total service approach" accommodates any future changes in customer subscriptions to  X-integrated service.hc"< {Om#-ԍxSee discussion infra   BUGS58 .h "b c0*%%<<"Ԍ X-x25.` ` For the reasons described below, we believe that the total service approach best represents the scope of "the telecommunications service from which the CPNI is derived." Under the total service approach, the customer's implied approval is limited to the parameters of the customer's existing service, and is neither extended to permit CPNI use in marketing all of a carrier's telecommunications services regardless of whether subscribed to by the customer, nor narrowed to permit use only in providing a discrete service feature. In this way, the total service approach appropriately furthers Congress' intent to balance privacy and competitive concerns, and maximize customer control over carrier use of CPNI.  X-x26.` ` Also, as explained below, with respect to section222(c)(1)(B), we further conclude that a carrier may use, disclose, or permit access to CPNI without customer approval for the provision of inside wiring installation, maintenance, and repair services because they are "services necessary to, or used in, the provision of such telecommunications service" under section222(c)(1)(B). In contrast, CPE and information services are not "services necessary to, or used in, the provision of such telecommunications service" within the meaning of section222(c)(1)(B).  X-Xx B.X` ` Scope of a Carrier's Right Pursuant to Section222(c)(1)(A): the "Total  X-Service Approach" (#`  XD- XxX` ` 1.X Background (#  X-x27.` ` In the Notice, the Commission tentatively concluded that section222(c)(1)(A) should be interpreted as "distinguishing among telecommunications services based on  X-traditional service distinctions," specifically, local, interexchange, and CMRS.Pd"< {O3-ԍxNotice at 12524,  22.P Thus, for example, a local exchange carrier could use local service CPNI to market local service offerings, but could not use local service CPNI to target customers to market long distance offerings or CMRS, absent customer approval. The Commission further tentatively concluded that shorthaul toll should be treated as a local telecommunications service when provided by a LEC, and as an interexchange telecommunications service when provided by an  X-interexchange carrier (IXC).Ue\Z"< {O-ԍxId. The Commission noted that, for purposes of the Notice, "with respect to the BOCs, the term 'shorthaul toll' should be interpreted as 'intraLATA toll,' and the term 'interexchange' should be interpreted as  {O-'interLATA.'" Id. at 12524,  22 n.57.U The Commission sought comment on these and other possible distinctions among telecommunications services, the scope of the term "telecommunications service," and the costs and benefits of any proposed interpretation, including the  X-interpretation's impact on competitive and customer privacy interests.Xf~"< {O#-ԍxId. at 1252425,   2225.X The Commission also sought comment on the impact of changes in telecommunications technology and"\f0*%%<<<" regulation and on whether and when technological and market developments may require the  X-Commission to revisit the issue of telecommunications service distinctions.Mg"< {OV-ԍxId. at 12525,  23.M  X-x28.` ` Commenters recognize that the language of section222(c)(1)(A) is not clear, and propose at least five different interpretations. First, several parties urge us to interpret section222(c)(1)(A) as limited to each discrete offering or feature of service subscribed to by  X.-a customer.PhZ.Z"< yO9 -ԍxAd Hoc Reply at 34; CPSR Reply at 67; NTIA Further Reply at 914; Texas Commission Comments  {O -at 8. See also CFA Comments at 4 (supports discrete offering approach, but alternatively suggests that three category approach may also be adequate minimum standard).P This proposal, which we refer to as the "discrete offering approach," assumes that customers do not expect or understand, for example, that their local exchange carrier would use local CPNI to market the carrier's call waiting feature to them, absent their approval. Second, a number of parties urge us to adopt our tentative conclusion and define the scope of "the telecommunications service from which such [CPNI] is derived" according  X -to the three traditional service distinctions local, interexchange, and CMRS.i |"< yO-ԍxAICC Comments at 9; AirTouch Comments at 24 & n.2; California Commission Comments at 7; California Commission Reply at 56; CPI Reply at 78 & n.5; CompTel at 6; CompTel Reply at 24; Excel Comments at 3; Frontier Comments at 4; LDDS WorldCom Comments at 78; LDDS WorldCom Reply at 24; MobileMedia Reply at 3; PageNet Comments at 2; Sprint Comments at 23; Sprint Reply at 89; TRA  {O-Comments at 15; TRA Reply at 34, 1011 & n.23; Washington Commission Comments at 4; see also Ameritech Comments at 34 (supports three category approach if CPNI can be used by any affiliate of the carrier); Arch Comments at 34, 6 (supports categories but proposes two CMRS categories broadband and narrowband); CFA Comments at 45 (supports the three category approach as an alternative to the discrete offering approach; argues that the three category approach, although too broad, is minimum standard necessary); SBT Comments at 12 (argues that Commission should forbear from applying three category interpretation to small businesses). We note that NYNEX and PacTel also deemed the three category approach acceptable in their initial pleadings in this docket, although NYNEX would include shorthaul toll only in the local service category. NYNEX Comments at 810 & n.3; NYNEX Reply at 4 & n.7 (also supporting single category approach); PacTel  {O-Comments at 34; PacTel ex parte (filed Nov.22, 1996) at 7; PacTel ex parte (filed Jan.17, 1997) at 13. Since their respective mergers, which occurred after their comments were received in this proceeding, however, Bell  {Oh-Atlantic/NYNEX and SBC/PacTel now support the "single category approach." See, e.g., Ameritech, Bell  {O2-Atlantic, BellSouth, NYNEX, SBC, U S WEST (BOC Coalition) ex parte (filed May 9, 1997) at 14; BOC  {O-Coalition ex parte (filed Aug. 13, 1997) at 1112. We refer to this as the "three category approach." Under this approach, for example, a customer's local exchange carrier would be able to use local service CPNI to market a call waiting feature to them, as one of many offerings that make up local service, but would not be able to use  X -CPNI to market long distance or CMRS offerings, absent customer approval.jj ^"< {O#-ԍxSee, e.g., CPI Reply at 78; NYNEX Comments at 11. j " j0*%%<<"Ԍ X-x29.` ` Third, a variation on the three category approach is what we refer to as the "two category approach," where local and interexchange services constitute separate service  X-categories, but CMRS, like shorthaul toll, "floats" between them.qk "< yO3-ԍxMCI Comments at 35; MCI Reply at 4. In addition, BellSouth, GTE, NTCA/OPASTCO, and U S WEST support this approach as an alternative to their first choice, the single category approach. BellSouth Comments at 1112; GTE Comments at 1112; GTE Reply at 2, 4 & n.4; NTCA/OPASTCO Reply at 3; US WEST Comments at 5, 1213.q Under this approach, for example, an IXC would be able to use CPNI obtained from its provision of long distance service to market CMRS, but would not be able to use long distance CPNI to market local service, without customer approval. Fourth, 1 CATEGORYa number of parties urge us to interpret section222(c)(1)(A) as referring only to one broad telecommunications service that includes  X -all of a carrier's telecommunications service offerings.lz "< yOl -ԍxACTA Comments at 45; ALLTEL Comments at 34; Ameritech Comments at 3; AT&T Comments at 23, 611; AT&T Reply at 27, 910; Bell Atlantic Comments at 27; Bell Atlantic Reply at 46, att.; BellSouth Comments at 4, 610; BellSouth Reply at 46; CBT Comments at 35; GTE Comments at 1011; GTE Reply at 14; MFS Comments at 34; NTCA/OPASTCO Reply at 13; SBC Comments at 59; SBC Reply at 69; USTA Comments at 24; USTA Reply at 35; US WEST Comments at 46, 1012; US WEST Reply at 5 n.18, 7 n.30.  {OT-See also ICG Comments at 5 (single category approach should apply for CLECs, but not ILECs); NYNEX Reply at 4 (supports single category approach as alternative to three category approach). This approach, which we refer to as the "single category approach," would permit carriers to use CPNI obtained from their provision of any telecommunications service, including local or long distance service as well as CMRS, to market any other telecommunications service offered by the carrier, regardless of whether the customer subscribes to such service from that carrier. SURVEY SAYSx  X9 -x30. CLUSTER  CLUST ` ` Finally, several proponents of the various approaches further argue that we should permit carriers to share CPNI among all offerings and/or service categories subscribed  X -to by the customer from the same carrier.!m "< {O-ЍxSee, e.g., ACTA Comments at 4; Ameritech Comments at 12; MCI ex parte (filed Aug.15, 1997) at 1317; SBC Reply at 7 n.22; Sprint Comments at 23 (but only for entities without market power); Sprint Reply Comments at 810 (same). The Texas Commission and Ad Hoc support a total service approach, although they would permit the sharing of CPNI only between the discrete offerings to which a customer subscribes. Ad Hoc Reply at 56; Texas Commission Comments at 8. ! We refer to this concept as the "total service approach" because it allows carriers to use the customer's entire record, derived from the complete service subscribed to from that carrier, for marketing purposes within the existing service relationship. Although parties supporting this concept advance various alternative schemes, we view it as a separate interpretation of section222(c)(1)(A) that is defined by the customer's service subscription. Under the total service approach, for example, a carrier whose customer subscribes to service that includes a combination of local and CMRS would be able to use CPNI derived from this entire service to market to that customer all related offerings, but not to market long distance service to that customer, because the customer's service excludes any long distance component. Thus, under the total service approach, the"m0*%%<<r" carrier's permitted use of CPNI reflects the level of service subscribed to by the customer from the carrier.  X- Qx2.` ` Discussion (#`  XQ-x31. EXPECT  IMPLIEDA ` ` As discussed below, we conclude that the total service approach best protects customer privacy interests, while furthering fair competition, and thereby best comports with the statutory language, history, and structure of section222. Q  X-Qx` ` a. Statutory Language, History, and Structure   X -x32.` ` The statutory language makes clear that Congress did not intend for the implied customer approval to use, disclose, or permit access to CPNI under section222(c)(1)(A) to Qextend to all of the categories of telecommunications services offered by the carrier, as proposed by advocates of the single category approach. First, Congress' repeated use of the  X -singular "telecommunications service" must be given meaning. Section222(c)(1) prohibits a  X -carrier from using CPNI obtained from the provision of "a telecommunications service" for  X-any purpose other than to provide "the telecommunications service from which such  X-information is derived" or services necessary to, or used in, provision of "such  Xo-telecommunications service."Pno"< yO-ԍx47 U.S.C. 222(c)(1).P We agree with many commenters that this language plainly indicates that Congress both contemplated the possible existence of more than one carrier  X+-service and made a deliberate decision that section222(c)(1)(A) not extend to all.o+X"< {O4-ԍxSee, e.g., California Commission Comments at 7; CPI Reply at 7 n.5; Frontier Comments at 4; LDDS WorldCom Comments at 7; NTIA Further Reply at 1112 & n.13; Sprint Reply at 9; TRA Reply at 10. Indeed,  X-Congress' reference to plural "telecommunications services" in sections222(a) and 222(d)(1)  X-demonstrates a clear distinction between the singular and plural forms of the term.p"< yOJ-ԍxSection222(a) provides: "[e]very telecommunications carrier has a duty to protect the confidentiality of proprietary information of, and relating to, other telecommunication carriers, equipment manufacturers, and  {O-customers, including telecommunication carriers reselling telecommunications services provided by a telecommunications carrier." 47 U.S.C. 222(a)(emphasis added). Section222(d)(1) provides that: "[n]othing in this section prohibits a telecommunications carrier from using, disclosing, or permitting access to customer proprietary network information obtained from its customers . . . (1) to initiate, render, bill, and collect for  {O-telecommunications services; . . . " 47 U.S.C. 222(d)(1)(emphasis added). See also In the Matter of Federal {O-State Joint Board on Universal Service, Report and Order, CC Docket No. 9645, 12 FCC Rcd 8776 at  439  {O -(1997) (Universal Service Report and Order) ("[the] varying use of the terms 'telecommunications services' and 'services' in sections254(h)(1)(A) and 254(h)(1)(B) suggests that the terms were used consciously to signify different meanings."). Under wellestablished principles of statutory construction, "where Congress has chosen different language in proximate subsections of the same statute," we are "obligated to give that choice"p0*%%<<S"  X-effect."q$"< {Oy-ԍxCabell Huntington Hospital, Inc. v. Shalala, 101 F.3d 984, 988 (4th Cir. 1996); see also, e.g., Persinger  {OC-v. Islamic Republic of Iran, 729 F.2d 835, 843 (D.C. Cir. 1984)("When Congress uses explicit language in one part of a statute . . . and then uses different language in another part of the same statute, a strong inference arises that the two provisions do not mean the same thing."). Consistent with this, section222(c)(1)'s explicit restriction of a carrier's "use" of  X-CPNI "in the provision of" service further evidences Congress' intent that carriers' own use of  X-CPNI be limited to the service provided to the particular customer, and not be expanded to all  X-the categories of telecommunications services available from the carrier.Xr"< yO -ԍxTRA Comments at 15; TRA Reply at 3, 9. X  XW-x 33.` ` We therefore reject the single category approach as contrary to the statutory language. In particular, we do not agree with several parties' claim that the general definition  X-of "telecommunications service" found in Title I of the Act, which focuses on the offering of  X-"telecommunications . . . regardless of the facilities used,"7sD"< yO-ԍx"Telecommunications service" is defined as: "the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used." 47 U.S.C. 153(46). "Telecommunications" is defined in the Act as: "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." 47 U.S.C. 153(43). 7 indicates that Congress did not intend to differentiate among telecommunications technologies or services in  X-section222(c)(1)(A).t" "< {OQ-ԍxAT&T Comments at 67, 6 n.4; SBC Comments at 67; US WEST Reply at 5 & n.18; see also USTA Reply at 4 (definition of telecommunications service does not distinguish as to technology, service, or use); MFS Comments at 35 (Congress' inclusion of explicit definitions of "telecommunications," "telecommunications service," and "telecommunications carrier" indicates its intent that the Commission use those definitions).  We likewise find U S WEST's reliance on the general plural  X -reference included in the definition of "telecommunications" misplaced.u" "< yO-ԍxUS WEST argues that "telecommunications service" can be described as a "plural noun" because that term's statutory definition refers back to a definition that itself includes a plural reference, and because that term should also be construed similar to the 1992 Cable Act's use of "cable service" to include both basic tier and  {Op-premium services. US WEST ex parte (filed Apr.11, 1997) at 56 (citing 1992 Cable Act, 47 U.S.C. 551). Rather, we agree with the California Commission, CompTel, MCI, and TRA that the single category interpretation would render the specific limiting language in section222(c)(1)(A)  X -meaningless.v "< yO -ԍxCalifornia Commission Reply at 6; CompTel Comments at 45; CompTel Reply at 3; MCI Reply at 3;  {Oa!-MCI ex parte (filed June6, 1997) at 1; TRA Reply at 9. Approval would be necessary, if at all, only if a carrier wished to use CPNI  X -to market nontelecommunications services.Xw ""< yO#-ԍxCompTel Reply at 3 n.7; MCI Reply at 3.X Like Sprint, we conclude that, had Congress intended such a result, the text could have been drafted much more simply by stating that" w0*%%<<" carriers may use CPNI, without customer approval, only for telecommunicationsrelated purposes, instead of the language of section222(c)(1)(A), which expressly limits carrier use  X-to the "provision of the service from which [the CPNI] is derived."gx"< yO3-ԍxSprint Reply at 9. For the reasons stated above, we also reject AT&T's related argument that the 1996 Act's definitions of telecommunications and telecommunications service are equivalent in all material respects to  {O-the Commission's definition of "basic service" under the Computer III framework, thus suggesting that Congress intended to include all of a carrier's basic telecommunications services within the meaning of section222(c)(1).  {OU-AT&T Comments at 6; AT&T ex parte (filed Apr. 30, 1997) at att. at 1. g  Xt-x PARA14 !34. INCON  INTERP  PREC ` ` We likewise reject parties' suggestions that we interpret section222(c)(1)(A)  XQ-based on prior Commission decisions, including the McCaw orders,RyQ|"< {O~ -ԍ RECON MRO FOOTN39  CHRIS xIn Re Application of Craig O. McCaw, Transferor, and American Telephone and Telegraph Company,  {OH -Transferee, For Consent to the Transfer of Control of McCaw Cellular Communications, Inc. and its  {O -Subsidiaries, Memorandum Opinion and Order, 9 FCC Rcd 5836, 5886 (1994) (McCaw Transfer Order); In Re Application of Craig O. McCaw, Transferor, and American Telephone and Telegraph Company, Transferee, For  {O-Consent to the Transfer of Control of McCaw Cellular Communications, Inc. and its Subsidiaries, Memorandum  {On-Opinion and Order on Reconsideration, 10 FCC Rcd 11786, 11795, 11799 (1995) (McCaw Recon. Order); SBC  {O8-Communications v. FCC, 56 F.3d 1484 (D.C. Cir. 1995) (SBC v. FCC) (collectively referred to as McCaw  {O-orders). See, e.g., AT&T Comments at 911; AT&T Reply at 34; SBC Comments at 8; U S WEST Comments at 4.R various Computer III  X0-orders,_zr 0Z "< {O;-ԍxBOC CPE Relief Order, 2 FCC Rcd 143 at 147, supra note FOOTNOTE 3334; BOC Safeguards Order, 6 FCC Rcd  {O-7571 at 7610, supra note BOC SAFE32; Motion of Southwestern Bell Mobile Systems, Inc. for a Declaratory Ruling that Section22.903 and Other Sections of the Commission's Rules Permit the Cellular Affiliate of a Bell Operating Company to Provide Competitive Landline Local Exchange Service Outside the Region in Which the Bell  {O_-Operating Company is the Local Exchange Carrier, Memorandum Opinion and Order, CWD 955, 11 FCC Rcd  {O)-3386, 3395 (1995) (SBMS Waiver Order); Phase II Recon. Order, 3 FCC Rcd 1150, 1162, supra note PHASE II32;  Third  {O-Computer Inquiry, Notice of Proposed Rulemaking, CC Docket No. 85229, 50 Fed. Reg. 33581, 33592 n.58  {O-(1985); In the Matter of Furnishing of Customer Premises Equipment and Enhanced Services by American  {O-Telephone and Telegraph, Memorandum Opinion and Notice of Proposed Rulemaking, CC Docket No. 8526,  {OQ-102 FCC 2d 627, 63940 (1985), Order, 102 FCC 2d 655, 693 (1985), supra note FOOTNOTE 3032 for additional procedural  {O-history, (collectively referred to as Computer III orders). See, e.g., AT&T Comments at 911; AT&T Reply at 4;  yO-Bell Atlantic Comments at 6; SBC Comments at 8; U S WEST Comments at 4. _ as well as the Common Carrier Bureau's opinion in BankAmerica v. AT&T,n{^0"< {Ou-ԍ BANK xBankAmerica Corp. v. AT&T, File Nos. E-90-211, E-90-212, and E-90-213, Memorandum Opinion, 8  {O?-FCC Rcd 8782, 8787 (1993) (BankAmerica v. AT&T). See, e.g., Bell Atlantic Comments at 6; US WEST ex  {O -parte (filed Dec.2, 1996) at 6 & n.13.n which permitted the sharing of customer information among affiliated companies based on the existing business relationship and the perceived benefits of integrated marketing. First, with respect to prior Commission decisions, the 1996 Act, and section222 in particular, altered the regulatory landscape which served as the backdrop for those decisions. Congress adopted a specific provision regarding CPNI that differs in fundamental respects from the Commission's" {0*%%<< " existing CPNI regime. While the Commission previously may have permitted more sharing  X-of information under the rubric of Computer III and within a pre1996 Act environment that limited carriers' market entry, we conclude that Congress drew a specific and different balance in section222. To the extent our prior decisions are relevant at all to the interpretation of section222(c)(1)(A), they suggest Congress deliberately chose not to encourage the kind of information sharing that the Commission may have permitted in the past, and which is now proposed by advocates of the single category approach. For these  X -reasons, we similarly reject parties' reliance on other statutes, particularly the Cable  X-Television Consumer Protection and Competition Act (1992 Cable Act)|$"< yOe -ԍxCable Television Consumer Protection and Competition Act, Pub. L. No. 102-385, 106 Stat. 1460  {O- -(1992) (codified at 47 U.S.C. 551)(1992 Cable Act). See, e.g., Bell Atlantic Comments at 8; BellSouth  {O -Comments at 9; BOC Coalition ex parte (filed May21, 1997) at 16; PacTel ex parte (filed Nov.22, 1996) at 11; USTA Comments at 5; US WEST Comments at 8, 12 n.30.  and the Telephone  X-Consumer Protection Act of 1991 (TCPA),}"< yO0-ԍxTelephone Consumer Protection Act of 1991, Pub. L. No. 102243, 105 Stat. 2394 (1991)(codified at 47  {O-U.S.C. 227)(TCPA). BellSouth Comments at 9. as well as the Commission's implementation of  X-those Acts.~N"< {Oi-ԍTCPA-ORDERTCPA-ORDER TCPA xIn the Matter of the Telephone Consumer Protection Act of 1991, CC Docket No. 9290, Notice of  {O3-Proposed Rulemaking, 7 FCC Rcd 2736 (1992) (TCPA Notice). AT&T Comments at 89; AT&T Reply at 9. In  {O-the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket  {O-No. 9290, Report and Order, 7 FCC Rcd 8752 (1992) (TCPA Order). BellSouth Comments at 9; SBC  {O-Comments at 9; SBC Reply at 7; U S WEST Comments at 1617 n.41; U S WEST ex parte (filed Oct. 17,  {O[-1996) at 4; U S WEST ex parte (filed Feb. 19, 1997) at 4. U S WEST also cites the Consumer Credit Reporting  {O%-Reform Act of 1996, 142 Cong. Rec. H. 11,746 2402(e)(4)(i) (Sept. 28, 1996). U S WEST ex parte (filed Dec. 2, 1996) at 6 & n.16.  Neither of these statutes contains the specific and unique language of  X -section222 which expressly limits a carrier's "use" of customer information.} $"< {O\-ԍ CABLE xThe Act allows a general sharing of information "to render a cable service or other services provided by cable operator to the subscriber." 47 U.S.C. 551 (emphasis added). This language is in contrast to section222(c)(1)'s restriction on carrier CPNI use only for the provision of "the telecommunications service from which the information was derived" or "services necessary to, or used in, the provision of such  {O~-telecommunications service." For discussion of TCPA, and Commission's implementation of that Act, see infra PartV.B.2.} Again, to the extent other provisions are probative, they indicate that Congress was clear when it intended to exempt information sharing within the context of the existing business relationship from general consumer protection provisions, but chose not to in section222.  X -x"35.YELLOW-CAB` ` On the other hand, we also conclude, contrary to the suggestion of its  X-proponents, that the discrete offering approach is not required by the language of"0*%%<<i"  X-section222(c)(1)(A).-$"< yOy-ԍxProponents argue that the discrete offering interpretation is supported in particular by section222(c)(1)'s  {OA-singular use of the term "a telecommunications service," and section222(f)(1)(A)'s definition of CPNI as  {O -"information that relates to . . . use of a telecommunications service subscribed to by any customer." See, e.g.,  yO-CPSR Reply at 7; NTIA Further Reply at 11; Texas Commission Comments at 67.- Although the statutory language makes clear that carriers' CPNI use is limited in some respect, and thus fails to support the single category approach, it does not  X-dictate the most narrow possible interpretation (i.e., the discrete offering approach). Nor does the statutory language, however, rule out a more general subscriptionbased understanding of the phrase "telecommunication service from which such [CPNI] is derived," consistent with  XS-the total service approach. As discussed infra, we believe as a policy matter that the discrete category approach is not desirable because it is not required to protect either customers'  X-reasonable expectations of privacy or competitors' interests.i"< {Ot -ԍxSee discussion infra   PAULA57 .i Rather, we believe that the  X-best interpretation of section222(c)(1) is the total service approach, which affords carriers the right to use or disclose CPNI for, among other things, marketing related offerings within customers' existing service for their benefit and convenience, but which restricts carriers from  X -using CPNI in connection with categories of service to which customers do not subscribe. F"< {Oz-ԍxSee discussion infra   SUZANNE55ש HAN57 . Ć The total service approach permits CPNI to be used for marketing purposes only to the extent that a carrier is marketing alternative versions, which may include additional or related offerings, of the customer's existing subscribed service. The carrier's use of CPNI in this way fairly falls within the language of "the provision of the telecommunications service from  X -which such information is derived"M "< yO]-ԍx47 U.S.C. 222(c)(1)(A).M because it allows the carrier to suggest more beneficial ways of providing the service to which the customer presently subscribes.  Xk-x#36.BAL HISTORY ` ` Our rejection of the discrete category approach, and support for the total service approach, is also informed by our understanding of the relationship between sections222(c)(1)(A) and (d)(1). Specifically, the Texas Commission explains its discrete offering interpretation of section222(c)(1)(A) as limiting the carriers' CPNI use to the "initiation, provisioning, billing, etc. of, or necessary to," the discrete feature of service  X-subscribed to by the customer.Rh "< yO-ԍxTexas Commission Comments at 8. R We believe this view essentially interprets the scope of section222(c)(1)(A) as being no broader than section222(d)(1), which provides that carriers  Xv-may use, disclose, or permit access to CPNI to, among other things, "initiate" and "render"  XU-telecommunications services.KU "< yO#-ԍx47 U.S.C. 222(d)(1). K Although both sections222(c)(1) and (d) establish exceptions"U 0*%%<<Q"  X-to the general CPNI use and sharing prohibitions, and overlap in certain respects,k"< {Oy-ԍxSee discussion infra  PARA 8182.k these  X-provisions must be given independent effect.c\Z"< {O-ԍxSee, e.g., Harmelin v. Michigan, 501 U.S. 957, 978 (1991) ("When two parts of a provision . . . use different language to address the same or similar subject matter, a difference in meaning is assumed.")(citing  {Oz-Walton v. Arizona, 497 U.S. 639, 669670 (1990)). c Had Congress intended to permit carriers to use CPNI only for "rendering" service, as suggested under the discrete offering approach, and as explicitly provided in section222(d)(1), it would not have needed to create the exception in section222(c)(1)(A). In contrast, by interpreting section222(c)(1)(A) as we do, to permit some use of CPNI for marketing purposes, we give meaning to both statutory provisions. Indeed, in contrast with the various parties' views concerning the scope of section222(c)(1)(A), commenters that addressed the meaning of section222(d)(1) uniformly  X-suggest that it does not extend to a carrier's use of CPNI for marketing purposes.~"< {O-ԍxSee, e.g., MCI Further Comments at 1112 & n.20; MCI ex parte (Aug. 15, 1997) at 34; SBC Comments at 13.   X-x$37.BAL HISTORY ` ` The legislative history confirms our view that in section222 Congress intended neither to allow carriers unlimited use of CPNI for marketing purposes as they moved into new service avenues opened through the 1996 Act, nor to restrict carrier use of CPNI for marketing purposes altogether. Specifically, although the general purpose of the 1996Act was to expand markets available to both new and established carriers, the legislative history makes clear that Congress specifically intended section222 to ensure that customers retained control over CPNI in the face of the powerful carrier incentives to use such CPNI to gain a  X-foothold in new markets. The Conference Report states that, through section222, Congress  X-sought to "balance both competitive and consumer privacy interests with respect to CPNI."x"< {O-ԍxJoint Explanatory Statement at 205, supra note  JOINT2 . x Congress further admonishes that "[i]n new subsection222(c) the use of CPNI by  XD-telecommunications carriers is limited, except as provided by law or with the approval of the  X#-customer."L#j "< {O>-ԍxId. (emphasis added).L Contrary to Congressional intent as expressed in the legislative history, the single category approach asserts a broad carrier right, affording customers virtually no control over intracompany use of their CPNI. This approach would undermine section222's focus  X-on balancing customer privacy interests, "< {Og!-ԍxSee, e.g., NTIA Further Reply at 13; Texas Commission Comments at 78; TRA Reply at 9. and likewise would potentially harm competition. Carriers already in possession of CPNI could leverage their control of CPNI in one market to" 0*%%<<"  X-perpetuate their dominance as they enter other service markets."< {Oy-ԍxSee, e.g., California Commission Reply at 23; NTIA Further Reply at 1314; Texas Commission Comments at 7; TRA Reply at 910; Washington Commission Comments at 4. In these respects, therefore,  X-the legislative history wholly fails to support the single category approach. On the other hand, the legislative history makes no mention of any need or intention to restrict the carrier's  X-use of CPNI to market discrete offerings within the service subscribed to by the customer. In this regard, therefore, the legislative history likewise does not support the discrete offering approach.  X -x%38. HISTORY ` ` Thus, contrary to US WEST's suggestion, we do not believe that, because express service distinctions were eliminated during the Conference Agreement, Congress  X-intended to abandon them.""< {O -ԍxUS WEST Comments at 1011; see also SBC Comments at 7 (noting that traditional service distinctions are not referenced in the statutory text). Rather, Congress may well have deleted specific reference to local and long distance services in section222(c)(1)(A) because they were superfluous. The repeated use of the singular "service" and the restrictive language "the telecommunications  X\ -service from which such [CPNI] is derived" in section222(c)(1) serves to draw these same service distinctions. Moreover, although service distinctions are not expressly referenced in the language of section222(c)(1)(A), they are retained in the statutory definition of CPNI, which describes information contained in the bills pertaining to "telephone exchange service  X -or telephone toll service" |"< yO-ԍxSection222(f)(1)(B) provides: "[t]he term 'customer proprietary network information' means (B) information contained in the bills pertaining to telephone exchange service or telephone toll service received by a  {O-customer of a carrier." 47 U.S.C. 222(f)(1)(B). Cf. Frontier Comments at 4 (three category approach aligns with the two major service classifications in the 1996Act "telephone exchange service" and "telephone toll service").  In this definition, Congress also describes CPNI in terms of "a  X-telecommunications service subscribed to by any customer,"S. "< yO-ԍx47 U.S.C. 222(f)(1)(B).S which additionally suggests that Congress understood the scope of section222(c)(1) to be limited according to the total  Xk-service subscribed to by a customer.  X'-x&39.` ` Furthermore, in contrast with the single category approach, the limitations on carriers' use or disclosure of CPNI to the total service subscribed to by the customer would restrict carriers from using or disclosing CPNI without customer approval to target customers for new service offerings opened only through the 1996 Act, and accordingly would restrict carriers' opportunity to leverage large stores of existing customer information to their exclusive competitive advantage. Such CPNI limitations also further customer's privacy goals as they restrict the use to which carriers can make of CPNI for purposes beyond the parameters of the existing service relationship. As such, the total service approach protects the privacy and competitive interests of customers, and thereby appropriately furthers the" 0*%%<<" balance of these interests that Congress expressly directed, as explained in the Conference  X-Agreement."< {OV-ԍxJoint Explanatory Statement at 205, supra note  JOINT2 . As discussed supra  YELLOW-CAB35, although the discrete  {O -category approach is also protective of privacy and competitive interests, as several parties suggest, see, e.g., CFA Comments at 4; CPSR Reply at 67; NTIA Further Reply at 10, 12, 13; Texas Commission Comments at 78; we do not believe it is the only, or most appropriate balance. Unlike the total service approach, it fails to factor reasonable considerations of convenience and benefit to the customer that accompany permitting carriers to use CPNI for certain marketing purposes within the existing service relationship.  X-x'40.` ` We also reject U S WEST's claims, in support of the two category approach,  Xt-that Congress' failure to mention CMRS in the legislative history suggests that it did not view  XS-CMRS as a separate service offering,SSD"< yOH -ԍxUS WEST Comments at 10, 12.S but rather that CMRS is more appropriately treated as  X0-a technology or functionality of both local and long distance telecommunications service.A0"< {O-ԍxId. at 13.A  X -We do not find Congress' silence in connection with CMRS as dispositive, and reject the notion that CMRS is not a separate service offering. Indeed, as the Commission recently  X-recognized in its Second Annual CMRS Competition Report,#f "< {O-ԍxAnnual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile  {O-Services, Second Report, FCC 9775 (rel. March 25, 1997) (Second Annual CMRS Competition Report).# although CMRS offerings are  X-increasingly becoming substitutes for each other in the public's perception,.Z "< {O-ԍxId. The report acknowledged that, while mobile telecommunications initially consisted primarily of discrete services, interservice competition has increased dramatically, particularly with respect to cellular, PCS, paging and interconnected SMR.. and may someday directly compete with wireline service, "wireless services do not yet approach the  Xb -ubiquity of wireline telephone service."Fb "< {O-#X\  P6G;2P#эxId. at 53. On the other hand, because CMRS offerings are viewed as substitutes of each other, we  {O-decline to designate two separate categories for narrowband CMRS (e.g., paging and narrowband PCS) and  {O-broadband CMRS (e.g., cellular, SMR, broadband PCS), as Arch proposes. Arch Comments at 6. Rather, we agree with AirTouch, PageNet and PCIA that CMRS should be viewed in its entirety. AirTouch Comments at 2  yO-n.2; PageNet Comments at 23; PCIA Comments at 34. We likewise reject, as unsupported, US WEST's suggestion that, if we do not let all CMRS float, we should at least let paging and broadband PCS float because paging is "used in" the provision of a telecommunications service under 222(c)(1)(B), and broadband PCS is a form of exchange access that offers functionalities like wireline service. US WEST Comments at 14.  Moreover, we believe that the two category approach would not protect sufficiently privacy and competitive concerns, and would thereby violate the statutory intent expressly set forth in the legislative history. As Arch, Frontier," 0*%%<< " and AirTouch observe, allowing CMRS to "float" between the local and interexchange  X-categories may give incumbent carriers a competitive advantage."< {OV-ԍxArch Comments at 34; AirTouch ex parte (filed Apr. 17, 1997) at 2.  X-x(41.` ` We also disagree with MCI's argument in support of the two category approach that Congress solely intended for the new CPNI requirements set forth in section222 to protect against carriers using CPNI already in their possession to advantage  X.-them as they moved into new service markets opened only through the 1996 Act.E.Z"< yO9 -ԍxMCI Comments at 34.E MCI contends that, because wireline carriers could enter the CMRS market even before passage of the 1996 Act, CMRS should be considered "as a type of service that can fit into either the local or interexchange category and that should be treated the same as the predominant  X-category provided by the carrier in question.":"< {O=-ԍxId.: This argument is not supported by the statutory language, and we reject it accordingly. Section222 contains no exclusion, express or implied, for CPNI related to services provided in markets previously open to competitors, nor does the legislative history support this interpretation. Moreover, we further reject MCI's suggestion that because entry of wireline carriers into the CMRS market was previously permissible, no CPNI regulation is needed as a matter of policy. That argument is belied by the fact that, even before the 1996 Act, the Commission's regulations afforded considerable  X-CPNI protection related to cellular service.|"< yO-ԍxFor example, under rule 22.903(f), the Commission restricted CPNI sharing between a BOC wireline company and its cellular affiliate. 47 C.F.R. 22.903(f). Moreover, we believe that the statutory balance of privacy and competitive interests would be undermined if we were to remove those restrictions that prevent carriers from using wireline CPNI without customer approval to target new CMRS customers. Indeed, the elimination of such restrictions would offer LECs, in particular, a substantial and unjustified competitive advantage because they could use local wireline CPNI (available based on their historic monopoly status, but not available to their CMRS competitors) to target local customers that they believe would purchase their CMRS  X-service. ^"< yO=-ԍxThe Commission previously has recognized that local service CPNI is likely to provide carriers substantial benefits in marketing CMRS to new customers. That concern formed the basis for the Commission's  {O-adoption of section22.903(f) of its rules. Moreover, in the McCaw orders, supra note CHRIS121, the Commission permitted AT&T to share CPNI with its cellular affiliate only after finding that the CPNI derived from  {O_!-interexchange services would have comparatively little competitive value. McCaw Recon. Order, 10 FCC Rcd 11786, 11793,  10. In those orders, the Commission implicitly recognized that local service CPNI, in contrast, would afford LECs considerable competitive benefit in connection with the wireless market because it would allow them strategically to target new customers. While prior Commission CPNI precedent is of limited relevance because of the changes effected by the new statute, we nevertheless note that the rationale underlying"$0*%%$"  {O-the McCaw orders thus supports our conclusion that the two category approach should be rejected. We also are  {OZ-not persuaded by those comments, see, e.g., AT&T Comments at 89, 10; AT&T Reply at 89; SBC Comments  {O$-at 89, suggesting that McCaw either compels the two category approach, or supports its adoption." 0*%%<<"Ԍ X-ԙx)42. DELORES ` `  TAKING Finally, we also reject the various arguments advanced by GTE, PacTel, USTA, and US WEST that our adoption of an interpretation more limited than the single or two  X-category approaches raises Constitutional concern."< yOY-ԍxAlthough GTE, PacTel, and USTA only argue that approaches narrower than the three category approach would violate the Constitution, because US WEST presents similar claims regarding any approach narrower than the single or two category approaches, we address all constitutional arguments generally as if directed toward the total service approach. GTE Comments at 1416; PacTel Reply at 6 n.9; USTA Comments at 78; U S WEST Comments at 7, 19. In particular, they variously claim that such restriction on intracompany sharing of CPNI would: constitute a taking without just  Xt-compensation;t"< {O -ԍxSee, e.g., GTE Comments at 1314; PacTel Reply at 6 n.9; USTA Comments at 78; U S WEST  {O-Comments at 19; U S WEST ex parte (filed Apr. 4, 1996); U S WEST ex parte (filed Sept. 9, 1997) at 2.  seriously impair carriers' ability to communicate valuable commercial  XQ-information to their customers in violation of the First Amendment;Q "< {O-ԍxU S WEST ex parte (filed June 2, 1997) at 2. See also GTE Comments at 1415 (ability of carriers to inform customers of new or additional services effectively is part of the constitutionally protected "free flow of commercial information"); PacTel Reply Comments at 6 n.9 (agrees with U S WEST that excessive CPNI  yOV-restrictions will impair carriers' ability to communicate commercial information to their customers); USTA Comments at 7 (carrier's commercial business information is underpinning for protected commercial speech between it and its customers).  and violate Equal Protection principles because CPNI rules would discriminate against certain telecommunications service providers to promote competition by another class of providers  X-(e.g., cable providers that can use CPNI with implied consent).^t"< yO -ԍxUSTA Comments at 89 ( noncarrier competitors, such as cable operators, have no comparable restrictions on their use of nontelecommunications customer information to target customers for new  yO-telecommunications service offerings). In addition, U S WEST and USTA raise takings and equal protection challenges regarding our interpretations of sections222(c)(1) and 222(c)(3), which govern the disclosure of LEC  {O--aggregate customer information. We address these Constitutional claims infra PartVI. ^  X-x*43. PAMELA ` `  TAKING We reject the Constitutional takings arguments because, to the extent CPNI is  X -property, we agree that it is better understood as belonging to the customer, not the carrier.. &"< {OX -ԍxSee, e.g., CPI Reply at 12 (customer, not the carrier, generates the information); CPI Further Comments at 2 (same); ITAA Reply at 78 & n.21 (section222 confirms that both carriers and customers have a proprietary interest in CPNI); LDDS Worldcom Reply at ii, 9 (customer, not carrier, has the right to determine ultimate uses of CPNI); MCI Reply at 23 & n.3 (CPNI does not constitute carrier property simply because the carrier obtains the information from its provision of service to the customer).. " !0*%%<<# "  X-Moreover, contrary to the contentions raised by some parties,X"< {Oy-ԍxU S WEST ex parte (filed Sept.9, 1997) at 45, 7 (claims that anything less than the single or two  yOC-category approach combined with a notice and optout form of approval would, for instance, fatally cripple product development and design, tracking of consumer buying trends, and the ability to match certain types of consumers with offerings they would find attractive); GTE Comments at 1314 (CPNI sharing restrictions meet twopart test for what constitutes denying all economically beneficial use of property).X even assuming carriers have a property interest in CPNI, our interpretation of section222(c)(1)(A) does not "deny all economically beneficial" use of property, as it must,  X-to establish a successful claim.z"< {O -ԍxLucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Ď Under the total service approach, carriers can use CPNI for  Xt-a variety of marketing purposes which promote the interests of customers and carriers alike.}t "< {O1 -ԍxSee discussion infra   ECONBENE63, 64. } In addition, with customer approval, carriers are free to use CPNI to offer any combination of  X.-onestop shopping.l."< {O}-ԍxSee, e.g., CPI Reply at 12; ITAA Reply at 78 & n.21.l Accordingly, the total service approach does not deny carriers all economically beneficial use of CPNI; rather, carriers are free to market and discuss with their customers whatever service offerings they want, in whatever combination. On this basis we also reject U S WEST's claim that our interpretation may abridge the carrier's ability to communicate with its customers, and thereby violate its First Amendment rights. Government restrictions on commercial speech will be upheld where, as here, the government asserts a substantial interest in support of the regulation, the regulation advances that interest, and the  X9 -regulation is narrowly drawn.^9 0 "< {O-ԍxCentral Hudson Gas and Elec. v. Public Serv. Comm'n, 447 U.S. 557, 563 (1980). As discussed in  {O-greater detail infra   CONARG106שCONARG2107, we also reject U S WEST's contention that an express approval requirement  {O-under section222(c)(1) would violate the First Amendment rights of carriers and customers.   Section222(c)(1)(A), and our total service approach, promote the substantial governmental interests of protecting the privacy of consumers and  X -promoting fair competition.n V "< {O-ԍxSee, e.g., Edenfield v. Fane, 507 U.S. 761, 769 (1993).n We thus conclude that these Constitutional claims are without merit.  X- x+44.` ` We likewise reject parties' Equal Protection challenges based on section222's limitation to telecommunications carriers alone. In order to sustain an equal protection challenge, parties must prove the law has no rational relation to any conceivable legitimate  X!-legislative purpose.t!"< {O"-ԍxFCC v. Beach Communications, Inc., 508 U.S. 307 (1993).t We conclude that Congress' decision to extend the CPNI limitations in section222 only to telecommunications carriers, and not, for example to cable operators, does not support a Constitutional claim. The information telecommunications carriers obtain from""z0*%%<< " their customers, including who, where and when they call, is considerably more sensitive and  X-personal than the information cable operators obtain concerning their customers (e.g., whether they have premium or basic service). Given the differences in the type of information at issue, Congress' decision to mandate a higher level of privacy protection in the context of section222, applicable to telecommunications carriers, than in section551 of the 1992 Cable  XS-Act applicable to cable operators, is plainly rational. S"< {O-ԍxSee discussion supra note CABLE127. Moreover, under the 1992 Cable Act, carriers are not permitted to disclose private customer information relating to "any viewing or other use by the subscriber of a cable service or other service provided by the cable operator" without prior written or electronic consent. 57 U.S.C. 551(c)(2)(C)(ii). Therefore, in connection with personal customer information, cable operators and telecommunication carriers face similar statutory restrictions. Based on the statutory distinctions, we also reject the suggestion that we interpret section222 as we interpreted the 1992 Cable Act to ensure that cable operators and other nontelecommunications service providers do not receive a competitive advantage because section222  {OF -only extends to telecommunications carriers. USTA Comments at 9; PacTel ex parte (filed Nov. 22, 1996) at 11.  X -x INFS ,45. INSTALL  INFR ` ` NonTelecommunications Offerings. Several carriers argue that certain nontelecommunications offerings, in addition to being covered by section222(c)(1)(B), also should be included within any service distinctions we adopt pursuant to section222(c)(1)(A),  X-including inside wiring, customer premises equipment (CPE), and certain information  X -services. "< {O-ԍxSee, e.g., Bell Atlantic Comments at 12, 45; PacTel Comments at 4; PacTel Reply at 67; BOC  {O-Coalition ex parte (filed Aug. 22, 1996) at 6. Based on the statutory language, however, we conclude that inside wiring, CPE, and information services do not fall within the scope of section222(c)(1)(A) because they are  X= -not "telecommunications services."= "< {O-ԍxWe discuss whether these offerings come within the meaning of section222(c)(1)(B) infra PartIV.C. More specifically, section222(c)(1)(A) refers expressly  X -to carrier use of CPNI in the provision of a "telecommunications service."M "< yOU-ԍx47 U.S.C. 222(c)(1)(A).M In contrast, the word "telecommunications" does not precede the word "services" in section222(c)(1)(B)'s  X -phrase "services necessary to, or used in."V "< yO-ԍx47 U.S.C. 222(c)(1)(B).hhV The varying use of the terms "telecommunications service" in section222(c)(1)(A) and "services" in section222(c)(1)(B) suggests that the terms deliberately were chosen to signify different meanings. Accordingly, we believe that Congress intended that carriers' use of CPNI for providing telecommunications services be governed solely by section222(c)(1)(A), whereas the use of CPNI for providing nontelecommunications services is controlled by section222(c)(1)(B).  X-x-46.` ` Commission precedent has treated "information services" and "telecommunications services" as separate, non-overlapping categories, so that information"#0*%%<<"  X-services do not constitute "telecommunications" within the meaning of the 1996 Act.P"< {Oy-ԍxUniversal Service Report and Order, 12 FCC Rcd 8776, 9180,   788-89 (found that information service providers need not make universal service contributions, and are exempted from Title II regulation,  {O -because they do not provide "telecommunications"); see also Non-Accounting Safeguards Order, 11 FCC Rcd at  {O-21958,   104-05, supra note NA ORDER45 (treated information services as distinct from telecommunications). We note, however, that Congress has directed the Commission to undertake a review of its implementation of the provisions of the 1996 Act relating to universal service, including, among other things, the Commission's  yO/-interpretations of the statutory definitions of "telecommunications" and "telecommunications service." Pub. L.  {O-105-119, 623, 111 Stat. 2440 (1997) (Universal Service Report); see also Common Carrier Bureau Seeks  {O-Comment for Report to Congress on Universal Service Under the Telecommunications Act of 1996, Public Notice, CC Docket No. 96-45 (Report to Congress), DA 98-2 (rel. Jan. 5, 1998). We do not intend, in this proceeding, to foreclose any aspect of the Commission's ongoing examination of those issues.P Accordingly, we conclude that carriers may not use CPNI derived from the provision of a telecommunications service for the provision or marketing of information services pursuant to  X-section222(c)(1)(A).*2 "< {Oz-ԍ CENTREX ES ADJ-BAS xSee, e.g., AICC Comments at 9 (enhanced services, like alarm monitoring, should not be included in the local service category); MCI Reply at 5 (CPE and information services are not "telecommunications" because they do not constitute "transmission ... of information .. ."); MFS Comments at 34 ("information service" and  yO-"telecommunications service" have different statutory definitions). We note, however, that many of the services  yO-that commenters list as "enhanced services" or "information services" are, in fact, "adjuncttobasic" services.   {Od-See discussion infra   PGRH1673שPGRH1774 for description of what constitutes former adjuncttobasic services. The  {O.-Commission concluded in NonAccounting Safeguards Order that adjuncttobasic services constitute  {O-"telecommunications services" rather than "information services." NonAccounting Safeguards Order at 21,958,  {O-107. Accordingly, under the total service approach, such services would fall within the meaning of  {O-"telecommunications service" in section222(c)(1)(A) as well as section222(c)(1)(B). See discussion infra   yOV-PGRH1673שPGRH1774 (adjuncttobasic services constitute services under section222(c)(1)(B)). * We likewise conclude that inside wiring and CPE do not fall within the definition of "telecommunications service," and thus do not fall within the scope of section222(c)(1)(A). x  X - ADJUNCT x.47. ADJUNCT ` ` We recognize that the Commission has permitted CMRS providers to offer bundled service, including various "enhanced services" and CPE, prior to the 1996 Act. We disagree with PacTel, however, that, consistent with section222(c)(1)(A), CMRS providers should be able to use CMRSderived CPNI without customer approval to market these  X -offerings when they provide CMRS to a customer.D "< {O-ԍxPacTel ex parte (filed January 10, 1997) at 7. More specifically, PacTel cites: the Commission's  {O-conclusion that cellular, CPE, and enhanced services could be provided in one subsidiary in Policy and Rules Concerning the Furnishing of Customer Premises Equipment, Enhanced Services and Cellular Communications  {O*!-Commissions Services by Bell Operating Companies, CC Docket No.84637, 57 Rad. Reg. 2d 989 (1985); and  {O!-the Commission's authorization of bundled cellular CPE and service offerings in Bundling of Cellular Customer  {O"-Premises Equipment and Cellular Service, CC Docket No.9134, 7 FCC Rcd 4028 (1992). PacTel ex parte (filed Nov.19, 1996) at 45. PacTel further claims that CMRS is broadly defined and has never been subdivided  {OP$-into basic and enhanced services. Id. (citing Implementation of Sections3(n) and 332 of the Communications Act  {O%-Regulatory Treatment of Mobile Services, Second Report and Order, 9 FCC Rcd 1411 (1994)). Moreover,"%0*%%m%" PacTel contends that, like the Commission, Congress recognized that CMRSrelated CPE and information services should be considered part of wireless service as well, when, in other preAct legislation, it did not differentiate between mobile service and "enhanced service" in its definition of "commercial mobile service."  {O-PacTel ex parte (filed Jan. 10, 1997) at 6 (citing Omnibus Budget Reconciliation Act of 1993, 601(d) (Pub.L.No. 10366, Title VI 6002(d), 107 Stat. 312, 39596 (1993)). In the alternative, PacTel argues that all CPE and information services related to CMRS should be treated as "services necessary to, or used in the  {OB-provision of such telecommunications service." PacTel ex parte (filed Nov.19, 1996) at 6. See discussion infra  yO - RED-CAB77.  The 1996 Act defines "mobile service"" $0*%%<< " in pertinent part as a "radio communication service carried on between mobile stations or  X-receivers and land stations, and by mobile stations communicating among themselves . . . ."H"< yOb -ԍx47 U.S.C. 153(27).H  X-"Radio communication service," in turn, is defined in terms of "the transmission by radio of writings, signs, signals, pictures, and sounds of all kinds, including all instrumentalities, facilities, apparatus, and services (among other things, the receipt, forwarding, and delivery of  XS-communications) incidental to such transmission."HSd "< yOh-ԍx47 U.S.C. 153(33).H These definitions do not include information services or CPE within the meaning of CMRS. Accordingly, while nothing in section222(c)(1) prohibits CMRS providers from continuing to bundle various offerings  X-consistent with other provisions of the 1996 Act,y "< {O-ԍxSee generally CMRS Safeguards Order, supra note  CELLU51 .y including CMRSspecific CPE and information services, they cannot use CPNI to market these related offerings as part of the CMRS category of service without customer approval, because even when they are bundled with a CMRS service, they do not constitute CMRS and are not telecommunications services.  X; -x/48.` ` On the other hand, we also conclude that, to the extent that services formerly described as adjuncttobasic are offered by CMRS providers, these should be considered either within the provision of CMRS under section222(c)(1)(A), or as services necessary to,  X -or used in, CMRS under section222(c)(1)(B). "< {O -ԍ THET x Services formerly known as adjuncttobasic that may be offered by CMRS providers include, for example, call forwarding or call waiting. The Commission historically viewed these services as different from  {O-information services because they are necessary or used in call completion. See, e.g., North American Telecommunications Association Petition for Declaratory Ruling under Section64.702 of the Commission's Rules  {O--Regarding the Integration of Centrex, Enhanced Services, and Customer Premises Equipment, Memorandum  {O-Opinion & Order, 101 FCC 2d 349 (1985) (NATA Centrex Order), recon., 3 FCC Rcd 4385 (1988)(describing  {O -adjuncttobasic and enhanced services). Although the Commission's conclusion in the NonAccounting  {O!-Safeguards Order that adjuncttobasic services constitute "telecommunications services" rather than "information services" was in the context of the provision of local wireline service, we see no basis to restrict that conclusion  {O#-to the wireline context. See discussion infra at   PGRH1673שPGRH1774 for a more detailed description of formerly adjuncttobasic services and how they come within the meaning of section222(c)(1)(B). Thus, for example, a CMRS provider can use CMRS CPNI to market a call forwarding feature to its existing customer because call"%0*%%<<i" forwarding was classified as an adjuncttobasic service, but not to market an information service. In addition, we agree with the result advocated by WTR, and conclude that a reasonable interpretation of section222(c)(1)(A) permits carriers to use, disclose, or permit access to CPNI for the limited purpose of conducting research on the health effects of their  Xt-service.Dt"< yO-ԍxWhile we agree with WTR's basic premise that section222 reasonably permits carriers to use, disclose, or permit access to CPNI for the purpose of conducting research on the health effects of CMRS, we conclude that this specific use of CPNI constitutes an integral component of the actual provision of a telecommunications service within the scope of section222(c)(1)(A), rather than a "service necessary to, or used in, the provision of  {O -such telecommunications service," within the scope of section222(c)(1)(B). See generally WTR Reply (arguing that section222(c)(1)(B) is applicable to the use of CPNI for research purposes). Because of our conclusion here, there also is no need to exercise our forbearance authority under section10 of the Act to produce the same  {Og -result, as alternatively requested by WTR. WTR ex parte (filed Oct. 9, 1997) at 2.  In particular, we believe that, integral to a carrier's provision of a  XQ-telecommunications service is assuring that the telecommunications service is safe to use. Insofar as customers expect that the telecommunications service to which they subscribe is safe, use of CPNI to confirm as much would not violate their privacy concerns, but rather would be fully consistent with notions of implied approval. The research proposed by WTR, which uses CPNI disclosed by carriers relating to the time and duration of wireless telephone usage to determine the health risks posed to users of handheld portable wireless telephones, comes within the provision of CMRS service and therefore the meaning of  X\ -section222(c)(1)(A).6 \ "< yO-ԍxWe note that, in informal discussions, WTR explained the safeguards it employs in handling pre1996 Act CPNI. They include (1) carriers encrypting the last four digits of the customer's telephone number before sending data to WTR to maintain security during transit; (2) the information being written to disk by WTR upon  {O9-receipt, being stripped of any individually identifying characteristics (e.g., address, account number, and customer social security number), and being encrypted by giving each customer record a unique identifying number; (3) the original tapes from the carrier being either destroyed or returned to the carrier; (4) the encrypted information remaining in a separate database in a secure location with only specified staff members given access to unencryption programs and with one individual being responsible for the "key" file necessary to run such programs; (5) employees signing confidentiality agreements, receiving adequate training regarding the handling of the sensitive information, and being subject to various discipline upon any violations. Moreover, the study results presented by WTR are in aggregate form, with no individuals identified or personal information released.  {O{-WTR ex parte (filed Oct. 9, 1997) at exhibit A at 56. Based upon these minimum study protocols, we believe the privacy of consumer information is appropriately safeguarded during the epidemiological research WTR proposes, consistent with the meaning of section222(c)(1)(A).6  X -x049. MONOPOLY  SPECIAL ` ` Special Treatment for Certain Carriers. CLUSTER  We conclude that Congress did not intend to, and we should not at this time, distinguish among carriers for the purpose of applying section222(c)(1). Based on the statutory language, it is clear that section222 applies to all carriers equally and, with few exceptions, does not distinguish among classes of"&0*%%<<-"  X-carriers.X"< yOy-ԍxSections222(c)(3) and (e) establish additional requirements in connection with aggregate customer information and subscriber list information, respectively, which are applicable only to LECs. 47 U.S.C. 222(c)(3), 222(e). Accordingly, we reject the argument raised by several parties that we should  X-permit broader CPNI sharing for competitive LECs, but not for incumbent LECs,"< yOv-ԍxICG urges us to apply the single category approach for competitive LECs, but not for incumbent LECs. ICG Comments at 5. or that we  X-should limit the total service approach to entities without market power.G@"< yO -ԍxSprint Comments at 4. G As several parties suggest, customers' privacy interests are deserving of protection, regardless of which telecommunications carrier serves them, for customers' privacy expectations do not differ  XQ-based upon the size or identity of the carrier.Q"< {O -ԍxSee, e.g., CompuServe Comments at 67; BellSouth ex parte (filed Oct.17, 1996) at 3; BOC Coalition  {O-ex parte (filed Aug. 22, 1996) at 3. Moreover, we disagree with the suggestions of ICG, LDDS WorldCom, and Sprint that we should impose stricter restrictions on incumbent or dominant carriers, based on their greater potential for anticompetitive use or  X-disclosure of CPNI., "< yO-ԍxICG Comments at 5; LDDS WorldCom Comments at 8; LDDS WorldCom Reply at 45; Sprint Comments at 4. We believe at this time that the regulations and safeguards implemented in this order fully address competitive concerns in connection with all carriers' use, disclosure, or permission of access to CPNI.  X\ -x150.` ` We also decline to forbear from applying section222(c)(1), or any of our  X9 -associated rules, to small or competitive carriers, as SBT requests.H9 "< yOn-ԍxSBT Comments at 1, 23.H First, SBT has not explained adequately in its comments how it meets the three statutory criteria for  X -forbearance.X "< {O-ԍxSee generally 47 U.S.C. 160.X Second, while SBT points out that competitive concerns may differ according to carrier size, it does not persuade us that customers of small businesses have less meaningful privacy interests in their CPNI. We thus disagree with SBT that the three category approach gives large carriers flexibility to develop and meet customers' needs, but  Xg-may unnecessarily limit small business as competition grows.Ig"< yO!-ԍxSBT Comments at 23, 5. I Even if, as SBT alleges, a large carrier can base the design of a new offering on statistical customer data and market widely, but a small business can best meet specialized subscriber needs if it offers CMRS, local, and interexchange service tailored to the specific subscriber, the total service approach"'60*%%<<F" allows tailored packages. We likewise disagree, therefore, with USTA that small carriers could be competitively disadvantaged in any interpretation of section222(c)(1)(A) other than  X-the single category approach.E"< yO3-ԍxUSTA Comments at 3. E Rather, we are persuaded that the total service approach provides all carriers, including small and midsized LECs, with flexibility in the marketing of  Xt-their telecommunications products and services. In fact, if SBT's claims that small businesses typically have closer personal relationships with their customers are accurate, then small businesses likely would have less difficulty in obtaining customer approval to market services outside of a customer's service existing service.  X-x TWENFOUR 251. CORPSTR ` ` We also agree with a number of parties that there should be no restriction on the sharing of CPNI among a carrier's various telecommunicationsrelated entities that  X -provide different service offerings to the same customer.& X"< {O -ԍxSee, e.g., AT&T Further Comments at 89; AT&T Further Reply at 78; Bell Atlantic/NYNEX Further  {OR-Comments at A3; BellSouth Further Comments at 16; BellSouth ex parte (filed Oct.17, 1996) at 3; CBT  {O-Further Comments at 2; PacTel Further Comments at 910; SBC Further Comments at 78; US West ex parte (filed Dec.2, 1996) at 6. By its terms, section222(c)(1)(A) generally limits "a telecommunications carrier that receives or obtains [CPNI] by virtue of its provision of a telecommunications service" to use, disclose, or permit access to CPNI only in  X -"its provision of the telecommunications service from which such information is derived."M F"< yO -ԍx47 U.S.C. 222(c)(1)(A).M This language does not limit the exception for use or disclosure of CPNI to the corporate parent. Rather, we believe the language reasonably permits our view that the CPNI limitations should relate to the nature of the service provided and not the nature of the entity providing the service. In particular, under the total service approach, we interpret the scope of section222(c)(1)(A) to permit carriers to use or disclose CPNI based on the customer's implied approval to market related offerings within the customer's existing service  X!-relationship. To the extent a carrier chooses to (or must)!"< {O-ԍxSee, e.g., 47 U.S.C. 272 (requiring BOCs to establish separate affiliates for the provision of, among other things, long distance service). arrange its corporate structure so that different affiliates provide different telecommunications service offerings, and a customer subscribes to more than one offering from the carrier, the total service approach permits the sharing of CPNI among the affiliated entities without customer approval. In contrast, if a customer subscribes to less than all of the telecommunications service offered by these affiliated entities, then CPNI sharing among the affiliates would be restricted under the total  XO-service approach. In this circumstance, the restriction is not based on the corporate structure, but rather on the scope of the service subscribed to by the customer.  X- x TWENFOUR 352. CORPSTR ` `  For the reasons described herein, we believe that the sharing of CPNI permitted under the total service approach among affiliated telecommunications entities best balances"(0 0*%%<<" the goals of section222 to safeguard customer privacy and promote fair competition. Under a contrary interpretation, carriers would have to change their corporate structure in order to consolidate a customer's service record consistent with the total service approach. If other business considerations counselled against such corporate restructuring, the customer would ultimately suffer because it would not receive the advantages associated with the information sharing permissible under the total service approach. Moreover, we agree that CPNI distinctions based solely on corporate structure would be confusing and inconvenient for  X -customers.W "< yO-ԍxUSTA Comments at 4; USTA Reply at 34.W For all these reasons, we reject such an alternative interpretation.  X-tx` ` b. Statutory Principles of Customer Control and Convenience   X -xCAE453. CONTROL1  TAFF CONTROL PRINCIPLE1` ` In addition to finding that the total service approach is most consistent with the statutory language and legislative history, we are persuaded that, as a policy matter, the ttotal service approach also best advances the principles of customer control and convenience implicitly embodied in sections222(c)(1) and (c)(2). These statutory principles, as discussed below, in conjunction with our experience regulating carriers' CPNI use, guide our interpretation of the scope of section222(c)(1)(A). We agree with the observation of numerous commenters that Congress intended that section222(c) would protect customers' reasonable expectations of privacy regarding personal and sensitive information, by giving  Xg-customers control over CPNI use, both by their current carrier and third parties.2gX"< {Op-ԍxSee, e.g., ALLTEL Further Reply at 3; Bell Atlantic/ NYNEX Further Reply at 9; BOC Coalition ex  {O:-parte (filed May21, 1997) at 3; CPI Reply at 34; PacTel ex parte (filed Feb.21, 1997) at 11; TRA Reply at 9.2 First, as  XD-CPI observes,SD"< yO-ԍxCPI Further Comments at 23.S this principle of customer control is manifested in section222(c)(2), which provides: "A telecommunications carrier shall disclose customer proprietary network information, upon affirmative written request by the customer, to any person designated by  X-the customer."`D"< yO-ԍ 222C2 x47 U.S.C. 222(c)(2). ` In this provision, Congress requires that carriers must comply with the express desire of the customer regarding disclosure of CPNI, and in so doing establishes the  X-customer's right to direct who receives its CPNI and when it may be disclosed."< {O-ԍxIndeed, section222(c)(2) is titled "Disclosure on Request by Customers." Id.ą Second, section222(c)(1) requires carriers to obtain customer "approval" when they seek to use, disclose, or permit access to CPNI for purposes beyond those specified in sections222(c)(1)(A) and 222(c)(1)(B). By requiring that carriers obtain approval, Congress ensured that customers would be able to control any "secondary" uses to which carriers could" )f 0*%%<<"  X-make of their CPNI, and thereby restrict the dissemination of their personal information.\"< {Oy-ԍxCPSR Reply at 7 (privacy regulations traditionally limit "secondary uses" of information i.e., information gathered for one purpose can only be used for related purposes, or unrelated purposes that the  {O -customer authorizes). See discussion infra PartV for what constitutes adequate approval. Third, the principle of customer control also is reflected in sections222(c)(1)(A) and (B), which permit carrier use of CPNI absent customer approval only in certain limited circumstances. The restricted scope of the carrier's right to use CPNI under these provisions  Xt-é only in the provision of the telecommunications service from which the CPNI is derived, or services necessary to or used in that service evidences Congress' recognition that a  X0-customer's subscription to service constitutes only a limited form of implied approval.J0"< yO -ԍxArch Comments at 7.J  X-x554. QUEEN  CONTROL2 ` ` While sections222(c)(1)(A) and (B) embody the principle that customers wish to maintain control over their sensitive information, those provisions also manifest the  X-principle that customers want convenient service, as some commenters have observed.q|"< {O-ԍxSee, e.g., CFA Comments at 12; CPI Reply at 34, 7.q The notion of implied approval evidences Congress' understanding that customers desire their service to be provided in a convenient manner, and are willing for carriers to use their CPNI without their approval to provide them service (and, under section222(c)(1)(B), services necessary to, or used in, such service) within the parameters of the customercarrier relationship. Indeed, we agree with commenters that Congress recognized through sections222(c)(1)(A) and (B) that customers expect that carriers with which they maintain an established relationship will use information derived through the course of that relationship to  X-improve the customer's existing service."< {OK-ԍxSee, e.g., BellSouth Comments at 8; BellSouth Reply at 3; CBT Comments at 4; USTA Comments at 4;  yO-USTA Reply at 34. Accordingly, as many commenters observe, what the customer expects or understands is included in its telecommunications service represents  XF-the scope and limit of its implied approval under section222(c)(1)(A).\Fh "< {O_-ԍxSee, e.g., AT&T Comments at 23, 89; Bell Atlantic Comments at 12; BellSouth Further Comments at  {O)-1213; CPI Further Comments at 23; GTE ex parte (filed July17, 1997) at 2; PacTel Reply at 6 n.9; SBC Comments at 89; Sprint Comments at 34; Texas Commission Comments at 78; US WEST Comments at 13. As discussed below, we conclude that the total service approach, based on the customer's entire service subscription, best reflects these underlying principles of customer control and convenience.  X-x655.` ` Customers do not expect that carriers will need their approval to use CPNI  X-for offerings within the existing total service to which they subscribe.  SUZANNE We believe it reasonable to conclude  PGRH.37 that, where a customer subscribes to a diverse service offering a mixture of local, long distance, and CMRS from the same carrier or its subsidiary or affiliated companies, the customer views its telecommunications service as the total service"2* 0*%%<<2" offering that it has purchased, and can be presumed to have given implied consent to its carrier to use its CPNI for all aspects of that service. We find no reason to believe that customers would expect or desire their carrier to maintain internal divisions among the different components of their service, particularly where such CPNI use could improve the carrier's provision of the customer's existing service. We agree with Sprint and MCI that customers choosing an integrated product will expect their provider to have and use information regarding all parts of the service provided by that company, and will be confused  X -and annoyed if that carrier does not and cannot provide complete customer service. "< {O-ԍxSprint Comments at 34; MCI ex parte (Aug.15, 1997) at 1314. In this regard, we agree with the observations of single category approach advocates that sharing of CPNI within one integrated firm does not raise significant privacy concerns because customers would not be concerned with having their CPNI disclosed within a firm in order to receive increased competitive offerings. AT&T Comments at 79; AT&T Reply at 8 {O -10; PacTel ex parte at 36 (survey results); US WEST Comments at 5, 11; US WEST ex parte (filed Oct.17,  {Op -1996) at 35; US WEST ex parte (filed Feb.19, 1997) at 46. See also SBC Comments at 9 (customers are unlikely to object to carrier use of CPNI that benefits them, particularly because it is more convenient and less  {O-confusing when CPNI is not limited by the technology used (i.e., wireline v. wireless) or by whether the offerings are provided by one carrier or by affiliated carriers); CBT Comments at 4 (restrictive interpretation of telecommunications service will confuse customers); USTA Comments at 4 (customers do not think in terms of regulatory fiats of distinctive service offerings or technologies, or legal corporate jurisdictional separations like those among affiliates). Where we disagree with these single category supporters is their view that such customer expectation extends beyond using CPNI to improve the existing service relationship, as discussed above, particularly where such use ultimately can produce anticompetitive effects that are harmful to the consumer. For this reason, many of those parties favoring either the two or three category approach, while not advocating the total service approach explicitly, nevertheless support its principal tenet that, if customers' subscriptions change, perhaps in response to new integrated carrier  X -offerings, the scope of section222(c)(1)(A) must likewise change.}  P "< yO-ԍxCompTel Comments at 46; CompTel Reply at 2; CPI Reply at 89; GTE Comments at 1112; GTE Reply at 4; LDDS WorldCom Comments at 8; LDDS WorldCom Reply at 23; NTCA/OPASTCO Reply at 3; NYNEX Comments at 1011; NYNEX Reply at 45; PacTel Comments at 34; Sprint Comments at 23; Sprint Reply at 8; Washington Commission Comments at 5.} The total service concept is supported by some advocates of the discrete offering approach as well, who foresee  X9 -customer movement toward a more comprehensive service offering.m9 8"< yO"-ԍxFor example, the Texas Commission supports the sharing of CPNI for integrated service packages. Texas Commission Comments at 8. CPSR recognizes that service categories will change as technologies develop, even if discrete, narrowlydefined offerings continue to form the building blocks of any "bundled"  {Oz -service. CPSR Reply Comments at 7. But see CFA Comments at 45 (advocates that limits on the use of CPNI evolve to encompass additional service offerings within the three service categories once local markets are opened to competition). m  X -x TAILR 756. CONTROL2 TAICONTROL PRINCIPLE2` ` We believe the total service approach maximizes both customer control and convenience. Customers retain control over the uses to which carriers can make of their" +0*%%<<j"  X-CPNI, for example, to market services outside the total service offering currently subscribed to by the customer. This limitation, in turn, comports with our view that customers reasonably expect that carriers will not use or disclose CPNI beyond the existing service relationship. Once a carrier has successfully marketed a new offering to the customer, however, that offering would become part of the "telecommunication service" subscribed to by the customer, and the customers' entire service record would be available to the carrier to improve the existing customercarrier relationship. The customer's interest in receiving service in a convenient manner is thereby also served. In these ways, the total service approach serves the statutory principles of customer convenience and control, and best reflects customers' understanding of their telecommunication service.  X -x CHRI DISCRETE-PRIV857.HAN PAULA ` ` By contrast, neither the discrete offering approach nor the three category approach serves the statutory principle of customer convenience or reasonably reflects customers' expectations of what constitutes their telecommunications service. Prior to the 1996 Act, Commission policy permitted carriers to use CPNI to market related service  X -offerings. "< yOl-ԍxWe disagree with the Texas Commission's view that customers, having purchased their desired telecommunications offering, do not want to receive telemarketing from their carrier or any other vendor for related service offerings. Texas Commission Comments at 7. In any event, under our rules implementing the TCPA, consumers can ensure that a company which makes an unwelcome telephone solicitation will not call more than once. Given this environment, we conclude that customers expect and desire, for  X -example, that their local service carrier will make them aware of all local service offerings.R x"< yO-ԍxMobileMedia Reply at 23. R The discrete offering approach, on the other hand, would prevent a carrier, absent customer approval, from improving the range and quality of service offerings currently provided to the  Xg-customer and tailoring service packages for a customer's existing service needs.g"< {O -ԍxSee, e.g., BellSouth Reply at 5; CBT Comments at 4; CompTel Comments at 5; SBC Comments at 8;  yO-SBC Reply at 7; Sprint Reply at 9. On this basis, we reject NYNEX's position that shorthaul toll should be included only within the  X!-local service category.+Z!b "< {O4-ԍxNYNEX Comments at 810, 9 n.13; NYNEX Reply at 4, 4 n.7; see also TRA Comments at 15 (disagrees that shorthaul toll service should be treated as both a local and an interexchange telecommunications service); TRA Reply at 1011, 10 n.23 (same).+ Rather, we agree with commenters that, insofar as both LECs and IXCs currently provide shorthaul toll, it should be part of both local and longdistance  X-service. "< yO"-ԍxLDDS WorldCom Reply at 34; MCI Comments at 34; MCI Reply at 46; Sprint Reply at 8. Also, permitting shorthaul toll to "float" between the local and the interexchange offerings should not confer upon any carrier a competitive advantage, contrary to what",0*%%<<"  X-NYNEX argues.H"< yOy-ԍxNYNEX Comments at 910.H In fact, the intraLATA equal access and shorthaul toll markets are  X-competitive in several states.X"< {O-ԍxUSTA Comments at 4 n.6. But see NYNEX Comments at 89 (arguing that IXCs in numerous state and federal regulatory proceedings have pointed to a marginal presence of IXCs in the shorthaul toll market).  Moreover, LECs are not disadvantaged because they can  X-include their shorthaul toll with their local service CPNI for marketing purposes.E"< yO-ԍxSprint Reply at 89.E We similarly reject a three category approach, for where a customer subscribed to more than one carrier offering, the rigid categories would prevent a carrier, absent customer approval, from using the customer's entire service record to offer alternative improved versions of the  X.-existing service.U.B"< {O! -ԍxSee, e.g., ACTA Comments at 4.U Thus, although these approaches would afford customers control, it would be at the expense of customer convenience and would not reflect the customer's understanding of the total service relationship. We therefore reject these approaches as contrary to the Congressional design of section222, as well as to one of the 1996Act's general goals of avoiding excessive regulation.  X\ -x958. BUGS ` ` We also reject the discrete offering and three category approaches because we share the concern expressed by many parties that such restrictive interpretations may be difficult to implement as service distinctions, and corresponding customer subscriptions,  X -become blurred with market and technological advances. "< {Ox-ԍxSee, e.g.,  CompTel Comments at 56; CompTel Reply Comments at 2; CPI Reply at 89; GTE Comments at 1112; GTE Reply at 4; LDDS WorldCom Comments at 8; LDDS WorldCom Reply at 23;  {O -NTCA/OPASTCO Reply at 3; NYNEX Comments at 1011; PacTel Comments at 34; PacTel ex parte (filed Nov.22, 1996) at 7; NYNEX Reply at 45; Sprint Comments at 23; Sprint Reply at 8; Washington Commission  yO-Comments at 5.  The three category approach would require that we undertake a periodic review, beginning in the near future, to ascertain whether changes in the competitive environment translated into changes in service  X-categories. "< {O-ԍxSee, e.g., CPI Reply at 89; NYNEX Comments at 11. See also Washington Commission Comments at 5 (the term "telecommunications service" may attach a different meaning in the future, which may require  {OU-changes to CPNI restrictions). But see MCI Reply at 67 (arguing that no specific date need be set to reevaluate categories because adequate FCC procedures already exist for seeking such review). Moreover, as CompTel observes, endemic to any such future classification would be the difficult and controversial task of placing "new" service offerings into the rigid categories. CompTel Comments at 5.  In contrast, if customers embrace "onestop shopping," through marketdriven  Xg-integrated packages of service (e.g., bundled offering of local and longdistance services), the flexibility of the total service approach would not require us to revisit or modify categories to accommodate these changes. The categories would instead disappear naturally as customers"#-0*%%<<)"  X-begin purchasing integrated packages, without need for Commission intervention.z"< yOy-ԍxThe total service approach therefore renders largely unnecessary GTE's position we should be receptive to CPNIrelated forbearance petitions under section10 of the Act which seek to eliminate service categories, if  {O -we should adopt our tentative conclusion. GTE Comments at 1112; GTE Reply at 2. See also LDDS Worldcom Comments at 8 (unless the Commission determines in a section10 proceeding that it should forbear from applying continued regulatory oversight of incumbent LECs' local exchange and exchange access services, the Commission should rule that an incumbent LEC may not use local exchange service CPNI to market nonlocal exchange services); LDDS Worldcom Reply at 3 (supports GTE's position). Although the total service approach would still require that we maintain some service distinctions, unless and until customers subscribe to integrated products, it facilitates any convergence of technologies and services in the marketplace. Carriers have indicated, for example, that they are presently developing a hardwire cordless phone that can become a wireless product when taken a certain distance from its base. Under the total service approach, a carrier would be able to market related wireless and wireline offerings to a customer that subscribed to this  X -product, and not be forced somehow to separate wireline CPNI from wireless.S@  "< yO-ԍxWe note similarly that if customers subscribe to local, long distance and CMRS from the same carrier, this would effectively result in a "single category" of service, as advocated by the BOCs, AT&T and GTE, among others. The carrier would be able to market all related local, long distance and CMRS offerings without an express form of customer approval. On the other hand, if customers do not embrace integrated service, and subscribe to different service from several carriers, the total service approach appropriately limits the use to which these carriers can make of the CPNI to the existing service relationship. In any event, the market and customer subscriptions will drive carriers' permissible uses of CPNI, and will not be retarded by any rigid Commissiondefined service classifications.S Finally, the total service approach is also sufficiently flexible to accommodate future new service technologies that are beyond the three traditional categories, as such offerings would not be  X-artificially forced into a service category."< {Oe-ԍxOne example of such a service may be open video systems (OVS). See Implementation of Section302  {O/-of the Telecommunications Act of 1996, CS Docket No. 9646, Second Report and Order, 11 FCC Rcd 18223  {O-(1996) (OVS Second Report and Order) at  249. We note that, whether a new service offering should appropriately be considered as a separate type of service, or a related offering within a carrier's local or long distance service or CMRS, can only be decided upon an appropriate record, with the advent of the new service. The Commission will, of course, assist carriers as necessary, where such an issue arises in the future.   X\ -xDTA FISH :59. FISHY JP` ` In supporting the total service approach, we are nevertheless cognizant of the dangers, described by Cox, that incumbent LECs could use CPNI anticompetitively, for example, to: (1) use calling patterns to target potential long distance customers; (2) crosssell  X -to customers purchasing services necessary to use competitors' offerings (e.g., attempt to sell voice mail service when a customer requests from the LEC the necessary underlying service,  X-call forwardingvariable); (3) market to customers who call particular telephone numbers (e.g., prepare a list of customers who call the cable company to order payperview movies for use in marketing the LEC's own OVS or cable service); and (4) identify potential customers for  XH-new services based on the volume of services already used (e.g., market its online service to"H.0*%%<<"  X-all residential customers with a second line).c"< {Oy-ԍxCox ex parte (filed Feb.20, 1997) at 45. c We recognize that requiring carriers to obtain express customer approval for use of CPNI to target customers for new service offerings to which the customer does not subscribe protects against some, but not all, of these abuses. Nevertheless, our rejection of the discrete offering and three category approaches does not permit carriers to use CPNI anticompetitively within the customer's existing service. That is, while we interpret section222(c)(1)(A) to permit carrier use of CPNI for marketing of related service offerings, using local service CPNI to track, for example, all customers that call local service competitors, would not be a permissible marketing use because such CPNI use would not constitute "its provision of" its service. Such action would violate section222(c)(1) and, depending on the circumstances, may also constitute an unreasonable practice in violation of  X-section201(b).\Z"< {O -ԍx47 U.S.C. 201(b). We note further that, in the accompanying Further Notice of Proposed Rulemaking, we seek comment on whether additional safeguards are necessary to protect the proprietary information of  {O?-competing carriers from being used by network service carriers, pursuant to section222(b). See infra PartIX.  As the Commission has found in the past, such anticompetitive use of CPNI violates the basic principles of competition, and to the extent such practices rise to the level of anticompetitive conduct, we can and will exercise our authority to prevent such  X9 -discriminatory behavior.^\9 ~"< {Oh-ԍxSee, e.g., California v. FCC, 39 F.3d 919, 929 (9th Cir. 1994) (citing Commission's Investigation into  {O2-Southern Bell Telephone and Telegraph Company's Trial Provision of MemoryCall Service, Docket No. 4000U (GA. Pub. Svc. Comm'n June 4, 1991) at 2734). ^ In contrast, although carriers will benefit under the total service approach from being able to consolidate the customer's entire service record, we do not believe that this use of CPNI is anticompetitive or contrary to what Congress envisioned because such consolidation will not result in the targeting of new customers, but merely will  X-assist carriers in better servicing their existing customers.   Xg- x;60.` ` Customers do not expect that carriers will use CPNI to market offerings  XF-outside the total service to which they subscribe. We have concluded above that the single category approach is inconsistent with the language of section222. We also believe that, as a policy matter, it inadequately promotes the goals underlying section222. Several commenters, including the BOCs, AT&T, and GTE, argue that customers understand and desire for carriers to use, disclose, or permit access to CPNI freely within the same corporate family, regardless of whether the customer subscribes to the service offerings of the related  Xv-entities.$v"< {O -ԍxSee, e.g., AT&T Comments at 23; AT&T Reply at 23; AT&T Further Comments at 9; Bell Atlantic Comments at 12, 34; Bell Atlantic Reply at 46; BellSouth Comments at 8; BellSouth Reply at 35; CBT Comments at 4; GTE Further Reply at 45; NCTA/OPASTCO Reply at 2; PacTel Further Comments at 910;  {O##-SBC Comments at 8; SBC Reply at 7; USTA Comments at 4; US WEST ex parte (filed Dec.2, 1996) at 6.  As evidence, these parties offer a survey, commissioned by PacTel, which they claim shows consumer support for such information sharing, as well as an earlier study by"S/ 0*%%<<3"  X-CBT.  "< {Oy-ԍ PACTEL xSee generally PacTel ex parte (filed Dec. 12, 1996)(Westin study). PacTel commissioned Opinion Research Corporation of Princeton, New Jersey and Dr. Alan Westin, Professor of Public Law and Government at Columbia University, to develop, conduct, and report the results of a national survey of public opinion regarding carrier use of CPNI. The report, entitled "Public Attitudes Toward Local Telephone Company Use of CPNI," presents the findings of a telephone survey conducted during the period November 1417, 1996, among a national probability sample of 1011 adults 18 years of age and older, living in private households in the continental United States (Westin study). CBT commissioned Aragon Consulting Group of St. Louis, Missouri, to conduct a similar study regarding carrier use of CPNI. Aragon Consulting Group conducted a total of 227 interviews with a random sample of CBT residential customers. The survey purports to demonstrate that customers expect their carriers to keep them apprised of new offerings. CBT Comments at 8 n.10 and  {OK -Attachment A (CBT study). See, e.g., AT&T Reply at 3; Bell Atlantic Comments at 67; Bell Atlantic Reply at  {O -45, att.; Bell Atlantic ex parte (filed Feb.11, 1997) at 1; CBT Comments at 4; GTE Reply Comments at 34;  {O -PacTel ex parte (filed Dec.12, 1996) at att. A; USTA Reply at 4; US WEST ex parte (filed Jan.10, 1997) at 12.  In general, the survey results purport to show that a majority of the public believes it is acceptable for businesses, particularly local telephone companies, to examine customer  X-records to offer customers additional services.I "< yO-ԍxWestin study at 8.I PacTel claims that the Westin study also indicates that the public is confident that local telephone companies will use personal  Xt-information responsibly, and will protect the confidentiality of such information.Ht"< {O=-ԍxId. at 57.H  X.-x<61.COX-WESTIN` ` We are persuaded, however, that the Westin study may not accurately reflect customer attitudes, and fails to demonstrate that customers expect or desire carriers to use CPNI to market all the categories of services available, regardless of the boundaries of the existing service relationship. First, the Westin study does not identify the kind of telephone  X-information at issue.D"< yO-ԍ BLUE-CAB xFor example, question 10 of the survey asks generally: "[W]hen you call your local telephone company to discuss your services, the customer service representative that you speak with normally looks up your billing and account service record. As a result of talking with you and seeing the services you already have, the representative may also want to offer you new services. On that call, do you consider it acceptable for the  {O-representative to offer you new services?" Id. at att. E, at 8. Similarly, question 11 asks generally: "[Y]our local telephone company may also look at its customer records to see which of its current customers it thinks would be most interested in, or benefit from hearing about new services. Do you consider it acceptable for your  {Ow-local telephone company to look over customer records for this purpose?" Id. As Cox points out, the survey questions ask broadly whether it is acceptable for a customer's local telephone company to look over "customer records" to determine which customers would benefit from hearing about new services, without  X9 -explaining the specific types of information that would be accessed.a9 "< {O#-ԍxCox ex parte (filed Jan. 27, 1997) at 2. a Much CPNI, however, consists of highly personal information, particularly relating to call destination, including the" 0H0*%%<< " numbers subscribers call and from which they receive calls, as well as when and how frequently subscribers make their calls. This data can be translated into subscriber profiles containing information about the identities and whereabouts of subscribers' friends and relatives; which businesses subscribers patronize; when subscribers are likely to be home and/or awake; product and service preferences; how frequently and costeffectively subscribers use their telecommunications services; and subscribers' social, medical, business,  X.-client, sales, organizational, and political telephone contacts.d\."< {O-ԍxFBI ex parte (filed July9, 1997) at 3, 9; Cox ex parte (filed Feb. 20, 1997). FBI also asserts that unauthorized access to CPNI raises significant national security, law enforcement, and public safety concerns.  {O9 -See generally FBI ex parte (filed July9, 1997). d  X-x=62. ANGST ` ` Insofar as the Westin study failed to reveal to the respondents the specific uses of CPNI, we give little weight to the purported results as reflecting customer privacy  X-expectations.X"< yO?-ԍCBTxSimilar criticisms apply to CBT's survey results. CPNI was not described fully to those surveyed, and the examples of CPNI mentioned in the survey did not include call destination information. CBT Comments at app. A. In addition, the wording and order of the questions in the survey may have predisposed respondents to thinking that the information available would be nonsensitive. In particular, question 10 refers to the examination of records by customer service representatives as "normal," and implies that the representative will be looking only at the  X -services the customer has before offering new services.b "< {O-ԍxSee supra note BLUE-CAB227.b Survey respondents may have assumed that this was the information customer service representatives would be examining in question 11. The survey did not clarify that customer service representatives would also potentially examine sensitive CPNI, such as destinationrelated information. In addition, respondents may have treated questions 10 and 11 as asking them whether they want to learn about new services within the existing service relationship, and not as involving whether they think their CPNI is sensitive information or whether they want it to be disseminated outside that service relationship. Because certain CPNI, such as destination information, can be regarded as highly personal, we conclude that some customers may not desire or expect carriers to use such information for all categories of telecommunications service available, but  X-rather would wish to limit the dissemination of the information outside the service or services to which they subscribed. Indeed, contrary to U S WEST's assertion that customers do not suffer from "privacy angst," other sources suggest just the opposite. Within the last several months, numerous published articles have chronicled customer concern over the loss of  X,-privacy in this "information age."2(. ,"< {O{"-ԍxSee e.g., Joshua Quittner et al., Invasion of Privacy: Our Right to be Left Alone Has Disappeared, Bit  {OE#-by Bit, in Little Brotherly Steps, Time Magazine, Aug. 25, 1997, at 28; Mike Mills, "Call 54' Service Would  {O$-Reveal Addresses in Md., Washington Post, Dec. 2, 1997, at D1; Linda Himelstein et al., Web Ads Start to Click,  {O$-Business Week, Oct. 6, 1997, at 128; LexisNexis Agrees to Let Consumers See Data, Los Angeles Times, June"$0*%%%"  {O-24, 1997, at D3; James B. Rule, Our Data, Our Rules, Washington Post, Oct. 7, 1997, at A17. The Federal Trade Commission (FTC) recently held a three day symposium on privacy in the Internet where use of personal  {O"-information, even by the online provider, was hotly debated. Symposium, Consumers' and Children's Privacy  {O-On-line, Computer Databases, and Unsolicited Email, June 1013, sponsored by the FTC, Washington, D.C. The Westin study itself found, in questions that directly and specifically probed customers privacy attitudes (in contrast with the CPNIspecific questions) that "public concerns over threats to privacy and the desire for better control over the uses made by companies of customer information are very high, and still rising." Westin study at 3. Specifically, a majority (55%) of those surveyed were very concerned and 13% somewhat concerned about threats to their privacy. More to the point, half (50%) agree strongly that consumers have lost all control over how personal information is handled, and another third (32%) agree somewhat. Westin study at 4. The depth of feeling is striking (half or more feeling strongly about the issue) in comparison to the tepid response given by customers when generally asked whether they want to receive information regarding telephone company offerings, in which only a small proportion (16%) were very interested. Westin study at att. at 7.2 ",1 0*%%<<"Ԍ X-ԙx>63. ANGST ` ` Moreover, we do not believe we can properly infer that a customer's decision to purchase one type of service offering constitutes approval for a carrier to use CPNI to market other service offerings to which the customer does not subscribe, and that may not even have been previously available from that carrier. In the pre1996 Act environment, although customers could shop among long distance providers, CMRS providers, and information service providers (and among all these providers' respective discrete service offerings), most customers, as a general matter, could not choose among carriers offering  X -"onestop shopping" because such comprehensive service packages did not exist.l   "< yOz-ԍxWe note, moreover, that in the preAct environment, information protection practices differed little from carrier to carrier. This was based both on the Commission's nonstructural safeguards explicitly restricting CPNI sharing, as well as the structural separations operating in fact to prohibit carrier CPNI use for marketing other service offerings. Customers, therefore, did not and could not select carriers on the basis of their privacy protection policies, and in this regard, generally had little or no choice in connection with their control of their  yOb-CPNI. We agree with NTIA that, with the advent of competition, carrier policies concerning protection of  {O*-personal information may very well factor into the customer's selection of their carrier. NTIA Privacy Report at  {O-9 n.35, supraĠnote  NTIA96 . Because the competitive environment envisioned by the 1996 Act is in its nascency, however, neither customers nor carriers have developed such expectations or sophistication. l This is particularly true in connection with local service because incumbent LECs were regulated monopolies and therefore customers had no choice, and could not even shop, among local  X-service providers.`"< yO-ԍxLDDS Worldcom Further Reply at 34.` Accordingly, under these circumstances, it is highly unlikely that customers would have expected a carrier to which they subscribed for one service to use their CPNI for another service to which they did not subscribe and which previously may have been unavailable from that carrier.  X -x ECONBENE ?64. ONE STOP  FLEX1  ONESTOP  LISA  CAN JM1 ` ` Second, even if the survey accurately shows that customers desire "onestop shopping," and would permit carriers to share information in order to offer improved service, our interpretation of section222(c)(1) does not foreclose carriers' ability to offer integrated"2"0*%%<<-"  X-packages nor the beneficial marketing uses to which CPNI can be made."< yOy-ԍxCalifornia Commission Reply at 4 (CPNI is not necessary for onestop shopping). We agree with commenters that it is desirable for carriers to provide integrated telecommunications service  X-packages,\X"< {O-ԍxSee, e.g., Bell Atlantic Comments at 2, 34, 6; Bell Atlantic Reply at 46, att.; BellSouth Comments at 910; CBT Comments at 4; GTE Comments at 10; GTE Reply at 12, 34; SBC Comments at 8; SBC Reply at  {OU-7; US WEST Comments at 47, 11; US WEST Reply at 7; US WEST ex parte (filed Feb.19, 1997) at 10. and that the 1996 Act contemplates onestop shopping, as past "product market"  X-distinctions between local and long distance blur.]|"< yO -ԍxAT&T Comments at 23, 11; AT&T Reply at 67.] We are not persuaded, however, that the single category approach alone promotes these benefits. We believe the total service approach also accommodates these interests. The total service approach, for example, places  X.-no restriction on the offering of integrated service packages.". "< yO -ԍxFor example, customers that desire CMRS offerings as options in their telecommunications service can  {O-certainly have them as such. See US WEST Comments at 12. In another example, carriers are perfectly free to develop and promote "innovative, integrated services such as GTE's TeleGo." GTE Comments at 12; GTE  yOE-Reply at 4 n.4.ij Moreover, the carrier can use CPNI to market other offerings within an existing category of service, and when a customer subscribes to more than one, can share CPNI for marketing all offerings within the customer's total existing service. In this way, the total service approach allows a carrier to use a customer's account information to improve the quality of the service to which the customer currently subscribes, without the fatal statutory, privacy, and competitive flaws of the single category approach.  X -x ECONBENE @65. ONE STOP  FLEX1  ONESTOP ` ` On this basis, we likewise reject arguments in support of the two category approach that restrictions on using CPNI to market a carrier's wireline and wireless services only would serve to perpetuate artificially a landline/CMRS distinction and thereby discourage  X-innovative, integrated services. "< {OT-ԍxBellSouth Comments at 12; GTE Comments at 12; GTE Reply at 4 n.4; see also US WEST Comments at 1214 (CMRS is simply a means of receiving wirelinelike service without a tether to a physical plant; CPNI  {O-sharing promotes quality product development); BOC Coalition ex parte (filed Nov.19, 1996) at 8 (CPNI sharing between wireline and CMRS will improve product quality as the Commission recognized when it refused to prohibit AT&T from disclosing CPNI to McCaw because it wanted to encourage onestop shopping (citing  {O@-McCaw Transfer Order).  BellSouth argues that such CPNI sharing is crucial to effective joint marketing, and that treating CMRS as a separate service category for purposes of section222 thus would thwart the joint marketing relief granted to carriers through  XD-section601(d) of the 1996 Act.\Dt"< {Oi#-ԍxBellSouth Comments at 1112 (citing Telecommunications Act of 1996, Pub. L. No. 104104, 601(d),  {O3$-110 Stat. 56, 143 (to be codified as a note following 47 U.S.C. 152)); see also PacTel Reply at 6 n.8 (asserting that CMRS should not be a separate category if doing so would be inconsistent with the CMRS joint marketing"$0*%%%" provision of the 1996Act).  As discussed in the CMRS Safeguards Order, we disagree"D3X0*%%<<*" that the joint marketing relief granted by Congress in section601(d) renders the Commission  X-without power to regulate the nature of the joint marketing.X"< {O-ԍxCMRS Safeguards Order at   8285, supra note PARA4851. We believe the CPNI restrictions set forth herein are a reasonable exercise of our authority consistent with section601. Under the total service approach, where a customer obtains CMRS and local or long distance service from the same carrier, CPNI from the customer's entire service can be used to market related offerings, and improve the customer's existing service. Carriers are fully able to communicate with their existing customers and solidify the customercarrier relationship. This is precisely the benefit for which Congress contemplated, and customers expect, that CPNI would be used. Moreover, as CompTel points out, the principal  X-"inefficiency" and bar to the offering of integrated service alleged under ComputerII and  X-ComputerIII the inability of sales personnel to respond to customer inquiries regarding  X -other telecommunications service offerings is explicitly eliminated by section222(d)(3).E "< yO-ԍxCompTel Reply at 4. E Section222(d)(3) provides that nothing in section222 prohibits a carrier from using, disclosing, or permitting access to CPNI "to provide any inbound telemarketing, referral, or administrative services to the customer for the duration of the call, if such call was initiated by the customer and the customer approves of the use of such information to provide such  X -service."J z"< {O-ԍx 47 U.S.C. 222(d)(3). See infra at PartVIII.D (relying on section222(d)(3), among other things, to  {O-replace safeguards under Computer III involving access restrictions, with use restrictions). On this basis we also reject U S WEST's claim that restricting access to CPNI for purposes of product offerings is a form of passive structural separation that the Commission has repeatedly found not to be in the public interest. U S WEST  {O#-Comments at 5, app. A.   J  X-xA66. FLEX2  CAN JM2 ` ` To be sure, under the total service approach carriers may not use CPNI without prior customer approval to target customers they believe would be receptive to new categories of service. While this limitation under the total service approach might make incumbent carriers' marketing efforts less effective and potentially more expensive than the single  X-category approach,X0 "< yO-ԍxAT&T Comments at 2, 10 (restricting intrafirm use of CPNI makes product development and marketing more costly and less efficient, thereby raising prices and reducing the quality and variety of service); AT&T Reply at 4 (same).  we disagree that this is a wholly undesirable outcome or contrary to what Congress intended. The 1996Act was meant to ensure, to the maximum extent possible, that, as markets were opened to competition, carriers would win or retain customers on the basis of their service quality and prices, not on the basis of a competitive advantage conferred solely due to their incumbent status. We agree with several parties that the single category approach, in contrast with the total service approach, would give incumbent carriers"S4P 0*%%<<3"  X-an unwarranted competitive advantage in marketing new categories of services."< yOy-ԍxCalifornia Commission Reply at 23, 5; CompTel Reply at 3; MCI Comments at 3; MCI Reply at 3;  {OA-Sprint Comments at 3; TRA Reply at 910. See also CompTel Reply at 34 (approach based on three categories also allows onestop shopping, but, unlike the single category approach, it places incumbents and new entrants  {O-on equal footing). But see ACTA Comments at 45 (onestop shopping marketing may be useful in competing successfully); USTA Comments at 4 (onestop shopping will enhance competition by permitting customers to comparison shop for similar or better service packages more easily because they need to make fewer calls). New entrants, but not incumbents, would be forced to incur the costs to obtain approval for access to and use of CPNI, and may be placed at a competitive disadvantage because not all customers will approve access. This environment, in turn, might discourage new entrants, thus thwarting the 1996Act's goals of encouraging competition and investment in new  XQ-technology as well as accelerating the rapid deployment of advanced telecommunications.RQD"< yOF -ԍxCalifornia Commission Reply at 3.R  X -xB67.` ` Finally, we reject the claim put forth by several proponents of the single category approach that narrower interpretations of section222(c)(1)(A) would result in  X-significant administrative burdens for carriers."< yOJ-ԍxIn particular, SBC and USTA argue that a multiple category definition of telecommunications service would specifically burden small companies. SBC Reply at 8; USTA Comments at 3. According to USTA, smaller carriers would have to (1) establish internal procedures to differentiate between "discrete" services; (2) educate employees on differences between "discrete" services; (3) explain to customers why they are requesting to use information, thereby slowing service representatives' handling of calls; (4) design and deploy hardware and software systems to track approval granted; and (5) designate special employees to work with customers who restrict their CPNI. USTA Comments at 3. ALLTEL likewise agrees that multiple category approaches would make midsize and smaller carriers, which now offer a variety of services, establish costly, elaborate internal business procedures. ALLTEL Comments at 45; ALLTEL Reply at 1. Such shortterm immediate costs, according to USTA, would be financially prohibitive for most of the companies which have never had CPNI restrictions. USTA Comments at 3.  On the contrary, we conclude that the total service approach is the least onerous administratively. Under the total service approach, unlike under the category and discrete offering approaches, a carrier will be able to use the customer's entire customer record in the course of providing the customer service. Moreover,  X9 -given our decisions to permit oral, written, or electronic approval under section222(c)(1),J9 4"< {O-ԍxSee infra PartV.C.J  X -and to impose use rather than access restrictions,M "< {O -ԍxSee infra Part VIII.D.M the total service approach addresses any concern that CPNI restrictions will disrupt the customercarrier dialogue, and the carriers' ability to provide full customer service. "5X0*%%<<"Ԍ X-#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP#.Xx C.X` ` Scope of Carrier's Right Pursuant to Section222(c)(1)(B) (#`  X-XxX` ` 1.X Background (#  Xt-xC68.` ` Section222(c)(1) of the Act provides that, "except as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains .[CPNI] by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable [CPNI] in its provision of (A) the telecommunications  X-service from which such information is derived, or (B) services necessary to, or used in, the  X-provision of such telecommunications service, including the publishing of directories."Z"< yO@ -ԍx47 U.S.C. 222(c)(1)(emphasis added).Z In  X-the Notice, the Commission stated that CPNI obtained from the provision of any telecommunications service may not be used to market CPE or information services without prior customer authorization, and sought comment on which "services" should be deemed  X? -"necessary to, or used in" the provision of such telecommunications service.\? X"< {OH-ԍxNotice at 12526,  26.\ The Commission also sought comment on whether carriers, absent customer approval, may use CPNI derived from the provision of one telecommunications service to perform installation, maintenance, and repair for any telecommunications service, either under section222(c)(1)(B) because they are "services necessary to, or used in, the provision of such telecommunications service," or under section222(d)(1) because the CPNI is used to "initiate, render, bill and  Xm-collect for telecommunications services."m"< {O-ЍxId. See infra PartIV.D. for discussion of section222(d)(1). "J6|0*%%<<"Ԍ X-xD69.` ` Commenters focus on whether CPE, information services,2 "< yOy-ЍxCommenters generally refer to "enhanced services" and "information services" interchangeably. As  {OA-discussed supra note ENH-SERV30, the term "enhanced services" was used in the context of our Computer II and Computer  {O -III proceedings to refer to "services, offered over common carrier transmission facilities used in interstate communications, which employ computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information; provide the subscriber additional, different, or restructured information; or involve subscriber interaction with stored information." 47 C.F.R. 64.702(a). The Act defines the term "information service" as "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service." 47 U.S.C.  {OM -153(20). In the NonAccounting Safeguards Order the Commission held that all "enhanced services" are  yO -"information services," and that "adjuncttobasic" services would be considered telecommunications services. We accordingly consider commenters' reference to "enhanced services," apart from those services formerly classified  {O -as adjuncttobasic, to mean information services. For discussion of adjuncttobasic services, see infra at    yOq - ATB73 ש ATB274 . 2 or installation, maintenance, and repair services, should be deemed "services necessary to, or used in, the provision of such telecommunications service."  Xt-QXx` ` 2. Discussion (#  X.-xE70.` ` As a threshold matter, given the wide range of views on the interpretation of section222(c)(1)(B), we reject US WEST's assertion that we simply craft rules repeating,  X-Qverbatim, the statutory language.P "< {O-ЍxUS WEST Comments at 15; US WEST ex parte (filed Dec.2, 1996) at 45.  We clarify, however, that we do not attempt here to catalogue every service included within the scope of section222(c)(1)(B), but rather address the specific offerings that have been proposed in the record as falling within that section, in particular, CPE, certain information services, and installation, maintenance, and repair services. In so doing, we construe section222(c)(1)(B), like section222(c)(1)(A), to reflect the understanding that, through subscription to service, a customer impliedly approves its carrier's use of CPNI for purposes within the scope of the service relationship. As we  X -conclude in PartIV.B.2 supra, we believe that customers' implied approval in section222(c)(1)(A) is limited to the total service subscribed to by the customer. We likewise believe that section222(c)(1)(B) most appropriately is interpreted as recognizing that  X-customers impliedly approve their carrier's use of CPNI in connection with certain nonĪtelecommunications services. This implied approval, however, is expressly limited to those  XH-services "necessary to, or used in, the provision of such telecommunications service." Through this limiting language, we believe carriers' CPNI use is confined only to certain non X-telecommunications services (i.e. those "services" either "necessary to" or "used in"), as well  X-as to those services that comprise the customer's total service offering (i.e. "such [section222(c)(1)(A)] telecommunications service"). "70*%%<<5"Ԍ X-xF71.` ` CPE and Certain Information Services. Based on the statutory language we  X-conclude that, contrary to the position advanced by several parties,$"< {OX-ЍxSee, e.g., Ameritech Comments at 45; Ameritech Reply Comments at 56; Bell Atlantic Comments at 2, 35; BellSouth Reply Comments at 6; CBT Comments at 6; GTE Comments at 12 n.25; NYNEX Comments at  {O-1213; PacTel Comments at 4; PacTel Reply at 67; PacTel ex parte (filed Aug. 22, 1996) at 6, 12; SBC Reply at 9 n.32; USTA Reply at 5; US WEST Comments at 1415. a carrier may not use, disclose, or permit access to CPNI, without customer approval, for the provision of CPE and  X-most information services because, as other commenters assert,"< yO-ЍxAICC Comments at 9; CompuServe Comments at 45; ITAA Comments at 4; ITAA Reply at 47 &  {O -n.19; MCI Reply at 5; MCI ex parte (filed Aug. 15, 1997) at 12; Sprint Reply at 78; TRA Reply at 6.  they are not "services necessary to, or used in, the provision of such telecommunications service" under section222(c)(1)(B). First, with respect to CPE, the exception in section222(c)(1)(B) is  X0-expressly limited to nontelecommunications "services." CPE is by definition customer  X-premises equipment, and as such historically has been categorized and referred to as  X-equipment.!&"< {O-ԍxSee, e.g., NARUC v. FCC, 880 F.2d 422, 431 (D.C. Cir. 1989)(court refers to CPE as "equipment," but  {Ow-characterizes the installation and maintenance of inside wiring as "services"); Computer Communications Industry  {OA-Ass'n v. FCC, 693 F.2d 198 (D.C.Cir. 1982)(describes CPE as equipment). See also MCI ex parte (filed Aug. 15, 1997) at 1 (since CPE is not a service, it does not fall within the meaning of section222(c)(1)(B)). ! We give meaning to the statutory language, and find no basis to extend the exception in section222(c)(1)(B) to include equipment, even if it may be "used in" the provision of a telecommunications service. Accordingly, we conclude that the statutory limitation to "services" excludes CPE from section222(c)(1)(B), and carriers cannot use CPNI derived from their provision of a telecommunications service for purposes in connection with CPE.  X -xG72.` ` Second, we conclude that, while the information services set forth in the record  X -(e.g., call answering,z "< yO-CALL-ANSW׍xBell Atlantic Comments at 45; NYNEX Comments at 1213.z voice mail| "< {O-ԍxAmeritech Comments at 6; U S WEST ex parte (filed Dec.2, 1996) at 4.| or messaging,b "< yO-ԍxNYNEX Comments at 1213; U S WEST Comments at 15.b voice storage and retrieval services,F "< yO5-ԍxArch Comments at 78.F  X-fax store and forward,|>"< {O!-ԍxU S WEST Comments at 15; U S WEST ex parte (filed Dec.2, 1996) at 4.| and Internet access servicesx"< {O6#-INTERNET-ACC׍xU S WEST ex parte (filed Dec.2, 1996) at 4.x) constitute nontelecommunications "services," they are not "necessary to, or used in" the carrier's provision of telecommunications service. Rather, we agree with the observation of several commenters"o8b0*%%<<I" that, although telecommunications service is "necessary to, or used in, the provision of" information services, information services generally are not "necessary to, or used in, the  X-provision of" any telecommunications service."< {O3-ԍxSee, e.g., Sprint Reply at 78; MCI ex parte (Aug. 15, 1997) at 12; ITAA Reply at 56. As ITAA notes,G Z"< yO-ԍxITAA Reply at 5.G telecommunications  X-service is defined under the Act in terms of "transmission," ""< {O2-ԍx47 U.S.C. 153 (43) ("[T]elecommunications means the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received") (emphasis added); 47 U.S.C. 153 (46) ("[T]elecommunications service  yO -means the offering of telecommunications service for a fee directly to the public . . ."). and involves the establishment of a transparent communications path. The transmission of information over that path is provided without the carrier's "use" of, or "need" for, information services. In contrast, information services involve the "offering of a capability for generating, acquiring, storing,  X -transforming, processing, retrieving, utilizing, or making available information via  X-telecommunications."^ "< yOo-ԍx47 U.S.C. 153(20)(emphasis added).^ Indeed, the statute specifically excludes from the definition of  X-information service "any use of any such [information service] capability for the management,  X-control, or operation of a telecommunications system or the management of a  X -telecommunications service."L  d "< {O-ԍxId. (emphasis added).L Because information services generally, and in particular  Xf -those few identified in the record (i.e., call answering, voice mail or messaging, voice storage  XE -and retrieval services, fax store and forward, and Internet access services),~ E "< {O-ԍxSee supra notes CALL-ANSW258שINTERNET-ACC263.~ are provided to consumers independently of their telecommunication service, they neither are used by the  X -carrier nor necessary to the provision of such carrier's service.  X-xH73.ATB PGRH16 ` ` Contrary to NYNEX's argument, we conclude that Congress' designation of the publishing of directories as "necessary to, or used in" the provision of a telecommunications service does not require a broad reading of section222(c)(1)(B) that encompasses all  XP-information services.^P "< yO-ԍxNYNEX Comments at 13; NYNEX Reply at 5.^ ADJUNCT 2We are persuaded that section222(c)(1)(B) covers services like those formerly characterized as "adjuncttobasic," in contrast to the information services such as call answering, voice mail or messaging, voice storage and retrieval services, fax store and  X-forward, and Internet access services, that the parties identified in the record.h"< {O#-ԍxNonAccounting Safeguards Order at 21,954,  99 n.225; NATA Centrex Order, 101 FCC 2d 349 (1985)  {Oz$-recon., 3 FCC Rcd 4385 (1988)(describing adjuncttobasic and enhanced services). See supra notes CALL-ANSW258שINTERNET-ACC263.h As noted"9t0*%%<<"  X-supra, before the 1996Act, the Commission recognized that certain computer processing services, although included within the literal definition of enhanced services, were  X-nevertheless "clearly 'basic' in purpose and use" because they "facilitate use of traditional  X-telephone service.""< {O-ԍxSee supra note CENTREX173. NATA Centrex Order at 35861,   2324 (emphasis added). Examples of adjuncttobasic services include speed dialing, call forwarding, computerprovided directory assistance, call monitoring, caller ID, call tracing,  XU-call blocking, call return, repeat dialing, call tracking, and certain centrex features.UZ"< {O`-ԍxNonAccounting Safeguards Order at 21,958,  107 n.245; NATA Centrex Order at 35961,  2428. With respect to these services, the Commission stated that such computer processing applications  X-were "used in conjunction with 'voice' service"q"< {O -ԍxNATA Centrex Order at 358,  23 (emphasis added).q and "help telephone companies provide or manage basic telephone services," as opposed to the information conveyed through enhanced  X-services.~"< {O-ԍxNATA Centrex Recon. at 4391,  45. See also NATA Centrex Order at 360  26 (speed dialing and call forwarding facilitate "establishment of a transmission path over which a telephone call may be completed"). Although the Commission subsequently recognized these adjuncttobasic services  X-as being telecommunications services in the NonAccounting Safeguards Order, their appropriate service classification remained unclear at the time that Congress passed the 1996Act. Accordingly, we believe the language in section222(c)(1)(B), "services necessary to, or used in, the provision of such telecommunications service," reaches these adjuncttobasic services, which are "used in" the carrier's provision of its telecommunications service.  X -On this basis, we agree with those parties arguing that services such as call waiting,I "< yO-ԍxNYNEX Comments at 1213.I caller  X -I.D., h "< yO-ԍxBell Atlantic Comments at 45; CBT Comments at 6; NYNEX Comments at 1213; USTA Reply at 5. call forwarding,I "< yO-ԍxNYNEX Comments at 1213.I SONET,O "< yO-ԍxBell Atlantic Comments at 45.O and ISDNB "< {O-ԍxId. at 45.B would fall within the language of section222(c)(1)(B); therefore, carriers need not obtain express approval from the customer to use CPNI to market those services. We disagree, however, that other services, now classified as information services, such as call answering, voice mail or messaging, voice storage and  XL-retrieval services, fax store and forward, and Internet access services,L"< {O"-ԍxSee supra notes CALL-ANSW258שINTERNET-ACC263.Ą would come within its meaning. ":<0*%%<<("Ԍ X-xI74. PGRH17  ATB2 ` ` Our interpretation is supported by Congress' example of the publishing of directories. The publishing of directories, like those services formerly described as adjuncttobasic, can appropriately be viewed as necessary to and used in the provision of complete and adequate telecommunication service. As the Commission reasoned, in connection with finding directory assistance to be an adjuncttobasic service: "[w]hen a customer uses directory assistance, that customer accesses information stored in a telephone company data base. . . . [Such] service provides only that information about another subscriber's telephone  X -number which is necessary to allow use of the network to place a call to that other  X-subscriber."H"< {Oc -ԍxNATA Centrex Order at 360  26 (emphasis added). By contrast, the Common Carrier Bureau, in concluding that reverse directory service is an enhanced service, and not adjunct to basic, reasoned: "[W]e find that the primary purpose for [the reverse directory] service is not to facilitate call completion. We conclude that  {O -unlike directory assistance, which the Commission has found adjunct to basic because it provides information  {O -necessary to make a call, the reversesearch capability provides additional information that is not necessary to make a call (because the subscriber already has the telephone number) and which could be used for a number of  {O-other purposes." In the Matter of U S WEST Communications, Inc., CC Docket No. 90623, Order, 11 FCC Rcd 1195, 11991200,  30 (1995). As with directory assistance services, if listings are not published, many calls cannot, and will not, be made. In this way, the publishing of directories is likewise necessary to facilitate call completion. This is the view taken by numerous state courts that have explicitly found that the publishing of telephone listings is a necessary component of the  X^ -provision of basic telephone service.l ^ "< yO-ԍxThe Supreme Court of North Carolina has held that the publishing of a directory is an essential part of  {O-providing reasonably adequate telephone service. State of North Carolina ex rel. Utilities Commission v.  {Oy-Southern Bell Tel. & Tel. Co., 391 S.E.2d 487, 49091 (N.C.S.Ct. 1990). Similarly, the United States Court of Appeals for the District of Columbia Circuit affirmed the Public Service Commission of the District of Columbia's order finding that "the basic lightfaced classified listings, which all subscribers are entitled to as part  {O-of their service, perform a necessary reference function in connection with telephone service." Classified  {O-Directory Subscribers Ass'n v. Public Service Comm'n of the District of Columbia, 383 F.2d 510, 511 (D.C. Cir.  {Og-1967). See also Mountain States Tel. & Tel. Co. v. Public Service Comm'n of Wyoming, 745 P.2d 563, 570 (1987) ("[A] listing of telephone numbers like the white pages is part and parcel of the 'service to or for the  {O-public.'"); Solomon v. Public Serv. Comm'n, 286 A.D. 636, 639 (1955) ("If the Telephone Company publishes a classified directory for use by the public, the listing therein of a particular customer or associates of a customer  yO-becomes an important part of the telephone service.").   In contrast, most information services are not "used  X; -in, or necessary to" the provision of the carrier's telecommunications service.; "< {O-ԍxITAA Reply at 57; see also Sprint Reply at 7 (argues that CPE is only used by the customer and not the carrier and therefore does not come within section222(c)(1)(B)). Based on our reasoning above, even if we accept US WEST's suggestion to interpret "necessary" under section222(c)(1)(B) as we did in connection with  {OR!-section251(c)(6) in the Local Competition Order, information services would not come within the statutory  {O"-meaning of section222(c)(1)(B). US WEST ex parte (filed Dec. 2, 1996) at 5 n.10 & n.11 (citing the Local  {O"-Competition Order at 15,794,  579). " ;0*%%<< "Ԍ X-xJ75.` ` As a matter of statutory construction, we find that the language of section222(c)(1)(B) is clear and unambiguous, and does not permit the interpretation that CPE and most information services are "services necessary to, or used in, the provision of such telecommunications service." But even if that language is ambiguous, we are unpersuaded by parties' contrary arguments based on the legislative history and policy considerations. Specifically, we disagree with US WEST's claim that the absence in section222 of an express CPE and information services marketing prohibition, which was contained in the House bill, indicates that Congress intended to allow CPNI use for marketing  X-CPE and information services without customer approval.N"< yOa -ԍxUS WEST Comments at 15 n.36.N We do not believe that this  X-legislative history indicates Congress' intent one way or the other . Because any change from prior versions is not explained in the Conference Report, we decline to speculate about the possible reasons underlying the revisions to this provision. Moreover, as ITAA and CompuServe argue, including information services within the scope of section222(c)(1)(B) may give an unfair competitive advantage to incumbent carriers in entering new service  X -markets.\ X"< {O-ԍxITAA Comments at 4; CompuServe Comments at 4; see also ATSI ex parte (filed Oct.29, 1996) at 2  {O-(Commission should ensure that the CPNI custodian (i.e., the carrier) and an information service provider will be  yO-in the same position when offering competing information services).  Accordingly, restricting CPNI use in the CPE market is consistent with Congress' express intent that, as part of the balance, we protect competitive concerns regarding CPNI use.  X-xK76.` ` We also reject suggestions that restrictions on CPNI sharing in the context of  Xg-CPE and information services would be contrary to customer expectations,fg|"< {O-ԍxSee, e.g., Ameritech Comments at 56 (because CPE and information services have many natural  {O^-affinities with telecommunications services, customers might expect them to be combined, e.g., voice mail);  {O(-Ameritech Reply at 67 (same); AT&T ex parte (filed Oct.8, 1996) at 12 (customers do not recognize basic/enhanced/CPE distinction); BellSouth Reply at 6 (voice messaging service is viewed by customers as part of their communications service, especially in states where it must be offered under tariff); USTA Reply at 5;  {O-see also Ad Hoc Reply at 56 (carriers can use CPNI to market CPE and other services that are "necessary to, or  {OL-used in" providing a telecommunications service (e.g., caller ID terminals), but not if they are only "related to"  {O-that service (e.g., PBX equipment or Centrex service to local exchange)); Ameritech Comments at 5 (should permit use of CPNI to develop and market CPE and certain information services because they are natural "adjuncts" to telecommunications services); Ameritech Reply at 56 (same); AT&T Comments at 8 n.5 (same);  {Op-AT&T Reply at 56 & n.11 (same); GTE Comments at 12 n.25 (same); GTE Reply at 4 n.4 (same).  f as well as  XD-detrimental to the goals of customer convenience' ZD"< {O!-ԍxUS WEST ex parte (filed Dec.2, 1996) at 4 (permitting carriers to offer CPE on a service call increases consumer efficiencies because the customer receives the CPE, and corresponding service, more  yOq#-quickly).' and onestop shopping.!D "< {O-ԍxSee, e.g., Ameritech Comments at 5; Ameritech Reply at 6; Bell Atlantic Reply at 46; USTA Reply at  {OZ-45; AT&T Reply at 6; Bell Atlantic Comments at 12, 45. See also U S WEST ex parte (filed Dec. 2, 1996) at 5 n.11 (public interest is advanced by broad interpretation of "necessary" with respect to customercarrier transactions, where customers are trying to meet their needs in the most efficient way possible); GTE Comments  yO-at 12 n.25 (consumers benefit from joint marketing of CPE and information services with basic services); CBT Comments at 6 (features such as caller ID may enhance local, long distance, or wireless service). As ITAA"D<D!0*%%<<"  X-notes, CPNI is not required for onestop shopping.F"D"< yO-ԍxITAA Reply at 7 n.19.F Our interpretation of section222(c)(1)(B) does not prohibit carriers from bundling services that they are otherwise able to bundle under the 1996 Act, or from marketing integrated service offerings. The restrictions merely would require the carrier to obtain customer approval before using CPNI  Xt-for such purposes.M#Bt"< {O -ԍxSee discussion supra   LISA64  regarding how CPNI restrictions in connection with section222(c)(1)(A) do not undermine onestop shopping goals. We note further that, in the specific context of CPE and information services, the CPNI restrictions announced herein may have even less effect on carriers' joint marketing efforts. As Ameritech and MCI point out, customer information derived from the provision of any nontelecommunications service, such as CPE or information services, is not covered by section222(c)(1), and thus may be used to provide or market any telecommunications service regardless of telecommunications service categories or customer approval. Ameritech Comments at 5 n.6; MCI Reply at 5 n.8 (except for section275(d) alarm monitoring restrictions). M  X.-xL77.PACTEL CMRS (B) RED-CAB ` ` Finally, we reject parties' contentions that we should permit carriers to use CPNI in connection with CPE and information services because the Commission in the past  X-permitted more information sharing.$\"< {Ow-ԍxSee, e.g., US WEST Comments at 15 & n.37 (citing BOC CPE Relief Order on Recon supra note  BCPE34 , where the Commission recognized that allowing CPNI use for CPE and enhanced services can benefit the public  {O -interest); Ameritech Comments at 6 (citing BOC Safeguards Order, 6 FCC Rcd at 7610,  85). PacTel argues that CMRSrelated CPE and information services come within the meaning of section222(c)(1)(B) because the Commission previously had not restricted CMRS carriers' use of CMRS CPNI to market  X -these offerings.% "< {O2-ԍPACxPacTel ex parte (filed Jan.10, 1997) at 210; see also Arch Comments at 78 (voice storage and retrieval services should be deemed "used in" provision of CMRS, as they routinely are coupled with CMRS); AT&T Reply at 56 & n.11 (cellular CPE is necessary to or used in provision of cellular service); CBT  {O-Comments at 6 (services like cellular need the associated CPE); US WEST ex parte (filed Dec.2, 1996) at 4 n.8 (CMRS CPE is so specialized that it must often be made available at the point of service sale in order for service to begin in a timely fashion).  While it is true that the Commission previously had allowed CMRS carriers to use CMRS CPNI to market CMRSrelated CPE and information services, Congress  X9 -was well aware of the Commission's treatment of CMRS CPNI, and of our framework of nonstructural safeguards in connection with CPE and information services. In its place, Congress enacted section222 which extends to all telecommunications carriers and thus all" =~%0*%%<< " telecommunications services, and which contains no exception for CMRSrelated CPE and information services. Moreover, we note that the efficiencies gained through permitting CPNI use for marketing enhanced services, described by the Commission in a pre1996 Act  X-proceeding, were in the context of an inbound call.&"< {O-ԍxAmeritech Comments at 6 (citing BOC Safeguards Order, 6 FCC Rcd at 7610,  85, supra note  BSAFE32 ). Section222(d)(3) expressly permits use of CPNI upon the approval of the customer in this inbound context, and therefore, would not preclude the onestop shopping envisioned by the Commission in that order. Thus, while the Commission previously chose to balance considerations of privacy and competition that permitted more sharing of information in these contexts, Congress struck a different balance  X-in section222, which now controls.k'~Z"< {O -ԍxSee discussion supra   INCON34  (describing that, to the extent Commission's prior orders are inconsistent with  {O -the new statutory scheme, section222 prevails), and discussion infra PartVIII regarding the Computer III framework (same). We likewise reject US WEST's contention that the 1992 Cable Act controls our construction of section222(c)(1)(B). US WEST Comments at 810. Although the 1992 Cable Act's general and unrestricted term "other service" may support broad sharing of customer information in the cable context, Congress did not use such language in section222(c)(1)(B), but rather used the limiting language "necessary to,  {O-or used in." See discussion of the 1992 Cable Act supra  INTERP34. k We also note, however, that the record in this proceeding does not indicate whether, as a matter of policy, carriers should be prohibited from marketing CPE under the total service approach. Section64.702(e) of the Commission's rules specifies that CPE is separate and distinct from the provision of common carrier  X\ -communications services.K(\ "< yO-ԍx47 C.F.R. 64.702 (e).K It nevertheless may be appropriate in the future for us to examine whether the public interest would be better served if carriers were able to use CPNI, within the framework of the total service approach, in order to market CPE.  X -x MAIN-REP M78.` ` Installation, Maintenance, and Repair Service.  We conclude that, pursuant to section222(c)(1)(B), a carrier may use, disclose, or permit access to CPNI, without customer approval, in its provision of inside wiring installation, maintenance, and repair services. We  Xi-note at the outset that commenters responded quite generally to the Notice's question on this issue, with several concluding, with little or no discussion, that "carriers may use CPNI derived from the provision of one telecommunications service to perform installation,  X-maintenance, and repair for any telecommunications service" under section222(c)(1)(B).)0 "< {O-ԍxSee, e.g., Ameritech Comments at 1112 & n.12; CBT Comments at 67; PacTel Comments at 5; Sprint Comments at 4; Sprint Reply at 7, 7 n.15; USTA Reply at 5; US WEST Reply at 56. Apart from the context of inside wiring, we are uncertain as to what other installation, maintenance, and repair services parties contend that CPNI could be used. Because commenters failed to specify their views further, we reject as unsupported and unclear, the general claim that CPNI derived from the provision of "one telecommunications service" may  XS-be used to provide installation, maintenance, and repair services for any telecommunications"S> )0*%%<<3"  X-service. *X"< yOy-ԍxOn this basis, we similarly reject as unsupported Arch's general claim that installation, maintenance, and repair of telecommunications "equipment" are services necessary to provision of the telecommunications service. Arch Comments at 7.  Nevertheless, the record supports permitting the provision of inside wiring installation, maintenance, and repair services under section222(c)(1)(B), and we accordingly limit our discussion of installation, maintenance, and repair services to inside wiringrelated services.  XQ-xN79.` ` Specifically, we are persuaded that installation, maintenance, and repair of  X.-inside wiring is a service both "necessary to" and "used in" a carrier's provision of wireline  X -telecommunications service.f+ "< yO -ԍxBell Atlantic Comments at 2, 45; NYNEX Comments at 1213; NYNEX Reply at 5; PacTel Comments  {Ol -at 5; Sprint Comments at 4; Sprint Reply at 7; US WEST Reply at 56; US WEST ex parte (filed Dec.2,  {O6 -1996) at 4. See also Ad Hoc Reply at 56 (would allow use of CPNI to market CPE, inside wiring, and other services that are "necessary to or used in" providing a telecommunications service); CBT Comments at 67 (carrier should be able to use CPNI to perform installation, maintenance, and repair under 222(c)(1)(B)).f As such, carriers may use, without customer approval, CPNI derived from wireline service for the provision of inside wiring installation, maintenance, and  X-repair services.,"< yO-ԍxBecause inside wiring installation, maintenance, and repair is not used in or necessary to CMRS, however, CMRSonly CPNI could not be used in the provision of such inside wiring services. As US WEST points out, inside wiring has little purpose beyond  X-physically connecting the telephone transmission path.-Z "< {OG-ԍxU S WEST Reply at 56; US WEST ex parte (filed Dec.2, 1996) at 4. See also Bell Atlantic Comments at 5 (without inside wiring, "telephone signals will never reach beyond the customer's rate demarcation point"). We also agree with PacTel that the carrier's "provision" of a telecommunications service includes keeping the telecommunications  X\ -service in working order through installation, maintenance, and repair services.L.\ "< yO#-ԍxPacTel Comments at 5.L The  X9 -Commission's decision in the Universal Service Order regarding intraschool and intralibrary  X -connections supports our interpretation. In that order, the Commission found that the installation and maintenance of internal connections constitute "additional services" and thus  X -are eligible for universal service support under section254 of the 1996 Act.=/F "< {O)-ԍxFederalState Joint Board on Universal Service, Report and Order, CC Docket No. 9645, 12 FCC Rcd  {O-8776, 901622,  45161 (1997). As previously noted, supra note  MACEY? , the Commission will be reporting to  {O -Congress on universal service matters in April 1998. We further note, however, that the Universal Service Order is consistent with several earlier decisions where the Commission blurred any distinction between inside wiring and its installation, maintenance, and other servicing. For example, in explaining how telephone companies were historically prevented from either requiring customers to buy or pay a charge for using inside wire that had previously been installed, or from prohibiting customers from removing or maintaining inside wire using sources of their own choosing, the Commission stated: "From the deregulation of inside wire, . . . would come"$.0*%%$"  {O-unregulated and highly competitive markets for all telephonerelated services performed on the customer side of  {OZ-the demarcation point separating the customer premises from the telephone network." Telecommunications  {O$-Services Inside Wiring, Notice of Proposed Rulemaking, CS Docket No. 95184, 11 FCC Rcd 2747, 276667,  {O-4041 (1996)(emphasis added). See also, e.g., Detariffing the Installation and Maintenance of Inside Wiring,  yO-Memorandum Opinion and Order, CC Docket No.79105, 1 FCC Rcd 1190, 1190,  1 n.1 (1986) ("In a physical sense, inside wiring refers to 'the customer premises' portion of the telephone plant which connects station components to each other and to the telephone network. ... For accounting purposes, inside wiring includes both the costs of the wiring described above and the labor and other costs associated with installing that wiring on the customer's side of the demarcation point.").=" ?/0*%%<<"Ԍ X-ԙxO80.` ` We further believe that our conclusion is fully consistent with customer  X-expectation,0 "< yO. -ԍxAmeritech Reply at 6 (customers expect carriers to use CPNI to market "reasonably associated" services,  yO -such as local service and inside wiring); Sprint Comments at 4 (customers expect good service to involve installation, maintenance, and repair of the subscribed telecommunications service); Sprint Reply at 7 & n.15 (same). and thereby furthers the statutory principles of customer control and  X-convenience embodied in section222.1X "< yO-ԍxAccordingly, we reject ITAA's argument that a construction of section222(c)(1)(B) permitting use of CPNI to market inside wiring, among other things, would "undo the statute altogether." ITAA Reply at 67 & n.19. Although inside wiring installation, maintenance, and repair services may be purchased separately from telephone services, they constitute nontelecommunications services that carriers effectively need and use in order to provide wireline telecommunications services. We believe such services represent core carrier offerings that are both necessary to and used in the provision of existing service, which is precisely the purpose for which both Congress intended, and we believe customers expect, that CPNI be used. Because we conclude that such CPNI use by carriers is within customers' expectations, we do not believe that our interpretation of section222(c)(1)(B) jeopardizes privacy interests. Moreover, insofar as the Commission did not restrict LEC use of CPNI to market inside wiring maintenance contracts prior to the 1996 Act, our interpretation of section222(c)(1)(B) will not increase any existing competitive advantage. x  X - Xx D.X` ` Scope of Carrier's Right Pursuant to Section222(d)(1) (#`  X -Xx` ` 1. Background (#  X-xP81.` ` The Commission observed in the Notice that section222(d)(1) enables carriers to use, disclose, or permit access to CPNI "to initiate, render, bill, and collect for  XF- telecommunications services."2"F"< {O"-ԍxNotice at 12526,  26. Specifically, section222(d)(1) provides in pertinent part: "[N]othing in this section prohibits a telecommunications carrier from using, disclosing, or permitting access to customer proprietary network information obtained from its customers, either directly or indirectly through its agents (1)to initiate, render, bill, and collect for telecommunications services; . . ." 47 U.S.C. 222(d)(1). After generally acknowledging that section222 restricts the"F@20*%%<<" unapproved use of CPNI for any purpose other than those specified in section222(c)(1) and the exceptions listed in section222(d), the Commission sought specific comment on whether carriers, absent customer approval, may use CPNI derived from the provision of one telecommunications service to perform installation, maintenance, and repair for any telecommunications service to which a customer subscribes, either under section222(d)(1) because they are used "to initiate, render, bill, and collect for telecommunications services" or  X.-section222(c)(1)(B).3."< {O-ԍxId. See supra PartIV.C for discussion of section222(c)(1)(B).  X- QXx` ` 2. Discussion (#  X-xQ82. OTL23  PARA 81 ` ` In the context of installation, maintenance, and repair of inside wiring, we conclude that section222(d)(1), as well as section222(c)(1)(B), permit carrier use of CPNI  X\ -Qwithout customer approval for the provision of such services.4\ Z"< yOg-ԍxBased on the lack of clarity in the record on what parties mean by "installation, maintenance, and repair services" we again limit our discussion to the context of inside wiring. We agree with virtually all commenters that section222(d)(1)'s permission for carriers to use CPNI "to initiate, render, bill, and collect for telecommunications services" includes the actual installation, maintenance,  X -and repair of inside wiring.w5 "< yOV-ԍxNYNEX Comments at 12 n.15; PacTel Comments at 5; SBC Comments at 13. w  X-xR83. OTL23 ` ` Our conclusion is consistent with Equifax's concerns that we not interpret sections222(d)(1) as well as 222(d)(2) in a manner that impedes carriers' access to information for the purpose of billing, fraud prevention, and related services, as well as the  XD-carriers' ability to provide the required information.D6DB"< yO7-ԍxEquifax Reply at 5.D We agree that section222(d)(2)'s exception for the disclosure of CPNI "to protect the rights or property of the carrier, or to protect users of those services and other carriers from fraudulent, abusive, or unlawful use of,  X-or subscription to, such services"J7"< yO^-ԍx47 U.S.C. 222(d)(2).J includes the use and disclosure of CPNI by carriers to  X-prevent fraud. Sections222(d)(1) and (2) establish that the carrier and public's interest in accurate billing and collecting for telecommunications services and in preventing fraud and abuse outweigh any privacy interests of those who might attempt to avoid payment of their  XO-bills or perpetrate a fraud.   X - xS84.` ` Contrary to the claims of AT&T and MCI,8 b "< {O$-ԍxAT&T Comments at 5, 18; MCI Further Comments at 1112; but see Bell Atlantic Reply at 910. we further conclude, however, that the term "initiate" in section222(d)(1) does not require that CPNI be disclosed by"A 80*%%<<" carriers when competing carriers have "won" the customer. We agree with GTE that section222(d)(1) applies only to carriers already possessing the CPNI, within the context of  X-the existing service relationship, and not to carriers seeking access to CPNI.A9"< yO3-ԍxGTE Reply at 10.A We note, however, that section222(c)(1) does not prohibit carriers from disclosing CPNI to competing carriers, for example, upon customer "approval." Accordingly, although an incumbent carrier  XQ-is not required to disclose CPNI pursuant to section222(d)(1) or section222(c)(2)J:QX"< yOZ-ԍx47 U.S.C. 222(c)(2).J absent an affirmative written request, local exchange carriers may need to disclose a customer's  X -service record upon the oral approval of the customer to a competing carrier prior to its  X-commencement of service as part of the LEC's obligations under sections251(c)(3) and  X-(c)(4).;< "< {O^ -ԍx47 U.S.C. 251(c)(3), (4). See, e.g., Implementation of the Local Competition Provisions in the  {O(-Telecommunications Act of 1996, CC Docket No. 9698, First Report and Order, 11 FCC Rcd 15499, 1576364,  {O-1576667,   518, 52123 (1996)(Local Competition Order) aff'd in part and vacated in part sub nom.  {O-Competitive Telecommunications Ass'n v. FCC, 117 F.3d 1068 (8th Cir. 1997); vacated in part on reh'g, Iowa  {O-Utils. Bd. v. FCC, 120 F.3d 753, further vacated in part sub nom. California Public Utilities Comm'n v. FCC,  {OP-124 F.3d 734 (8th Cir. 1997), writ of mandamus issue sub nom. Iowa Utilities Bd. v. FCC, No. 963321 (8th Cir.  {O-Jan. 22, 1998), petition for cert. granted (collectively, Iowa Util. Bd.), Order on Recon., 11 FCC Rcd 13042 (1996), Second Order on Recon., 11 FCC Rcd 19738 (1996), Third Order on Recon and Further Notice of  {O-Proposed Rulemaking, FCC 97295 (rel. Aug. 18, 1997), further recon. pending; In the Matter of Application of Ameritech Michigan Pursuant to Section271 of the Communications Act of 1934, as amended, To Provide In {O>-Region, InterLATA Services in Michigan, Memorandum Opinion and Order, 1997 WL 522784, FCC 97298 (rel.  {O-Aug. 19, 1997) at  139 n.341; see also PacTel ex parte (filed Feb. 3, 1997) at 3 (written authorization may not be needed for the release of CPNI to a competitor who has won away a carrier's customer). In this way, section222(c)(1) permits any sharing of customer records necessary for the provisioning of service by a competitive carrier, and addresses the competitive concerns  X -raised by AT&T and MCI.  X9 -xD1T85. SLAMMN AMERITECH` ` Furthermore, a carrier's failure to disclose CPNI to a competing carrier that seeks to initiate service to a customer that wishes to subscribe to the competing carrier's service, may well, depending upon the circumstances, constitute an unreasonable practice in  X -violation of section201(b).<  "< yOm-ԍx47 U.S.C. 201(b). We agree with MCI that section201(b) remains fully applicable where it is demonstrated that carrier behavior is unreasonable and anticompetitive. MCI Further Comments at 13. As MCI suggests, this may be shown in any number of contexts involving use or disclosure of customer information that unreasonably favors the incumbent LEC to the disadvantage of the competing LEC.  We also do not believe, contrary to the position suggested by  X-AT&T,a="< {O2#-ԍxAT&T ex parte (filed Nov. 17, 1997).a that section222(d)(1) permits the former (or soontobe former) carrier to use the  X-CPNI of its former customer (i.e., a customer that has placed an order for service from a competing provider) for "customer retention" purposes. Consequently, a local exchange"iBf=0*%%<<I" carrier is precluded from using or accessing CPNI derived from the provision of local exchange service, for example, to regain the business of a customer that has chosen another provider. The use of CPNI in this context is not statutorily permitted under section222(d)(1), insofar as such use would be undertaken to market a service to which a customer previously subscribed, rather than to "initiate" a service within the meaning of that provision. Nor do we believe that the use of CPNI for customer retention purposes is permissible under section222(c)(1) because such use is not carried out "in [the] provision" of service, but rather, for the purpose of retaining a customer that had already undertaken steps to change its service provider. Customer approval for the use of CPNI in this situation thus may not be appropriately inferred because such use is outside of the customer's existing service relationship within the meaning of section222(c)(1)(A).  X\ -#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP#  V.Xx"APPROVAL" UNDER SECTION 222(c)(1) (#  X -Xx A.` ` Overview (#  X -xU86.` ` Under sections222(c)(1), (c)(2), and (d)(3), a carrier may (or must) use, disclose, or permit access to CPNI upon the customer's approval. In contrast to sections 222(c)(2) and (d)(3) of the Act, in which Congress made clear the form of customer  Xg-approval,>xg"< yO-ԍxSection222(c)(2) provides that: "[a] telecommunications carrier shall disclose [CPNI], upon affirmative written request by the customer, to any person designated by the customer." 47 U.S.C. 222(c)(2). Section222(d)(3) provides, in pertinent part, that: "[n]othing in [section222] prohibits a telecommunications carrier from using, disclosing, or permitting access to [CPNI] obtained from its customers, either directly or indirectly through its agents . . . to provide any inbound telemarketing, referral, or administrative services to the customer for the duration of the call, if such call was initiated by the customer and the customer approves of the use of such information to provide such service." 47 U.S.C. 222(d)(3). section222(c)(1) does not specify what kind of approval is required when it permits a carrier upon "approval of the customer" to use, disclose, or permit access to CPNI  X!-for purposes beyond the limited exceptions set forth in sections222(c)(1)(A) and (B).?!"< yO-ԍx47 U.S.C. 222(c)(1). Section222(c)(1) also permits a carrier to use, disclose, or permit access to CPNI as required by law. 47 U.S.C. 222(c)(1). Because the form of approval has bearing on carriers' use of CPNI as a marketing tool, we received considerable comment concerning the proper interpretation of "approval" under section222(c)(1). In general, parties offer three separate views, ranging from a most restrictive interpretation that would require approval to be in writing, to a permissive one, where carriers merely would need to provide customers with a notice of their intent to use CPNI, and a mechanism for customers to "optout" from this proposed use (notice and opt X,-out).@,` "< yO=#-ԍxA notice and optout mechanism also is referred to as a "negative option." We refer to oral, electronic, and written forms of approval collectively as "affirmative" or "express" approval. ` ` " C @0*%%<<"Ԍ X-xV87.` ` We conclude that the term "approval" in section222(c)(1) is ambiguous because it could permit a variety of interpretations. We resolve that ambiguity by implementing the statute in a manner that will best further consumer privacy interests and competition, as well as the principle of customer control. We conclude that carriers must obtain express written, oral, or electronic approval for CPNI uses beyond those set forth in sections222(c)(1)(A) and (B). Further, in order to ensure that customers can provide informed approval under section222(c)(1), we require that carriers give customers explicit notice of their CPNI rights prior to any solicitation for approval. By implementing the approval requirements of section222(c)(1) in this manner, we will minimize any unwanted or unknowing disclosure of CPNI by customers, consistent with Congress' concern for consumer privacy interests. In addition, as explained below, we determine that this form of approval will minimize the competitive advantages that might otherwise accrue unnecessarily to incumbent carriers.  X -Xx gB.` ` Express Versus Notice and OptOut (#  X -Xx` ` 1. Background (#  X-xW88.` ` The Commission sought comment in the Notice on which methods carriers may  Xi-use to obtain customer approval consistent with section222.PAi"< {O-ԍxNotice at 12526,  27.P The Commission recognized  XF-gthat, in the Computer III proceedings, prior to the 1996Act, it established certain authorization requirements applicable solely to the enhanced services operations of AT&T, the  X-BOCs, and GTE, and to the CPE operations of AT&T and the BOCs.OBZ"< {O -ԍxId. at 12516,   45; ComputerIII supra note  CIII32 . We discuss the ComputerIII rules specifically, and  {O-eliminate them in favor of the framework established by Congress in section222, see discussion infra Part VIII.O Under these  X-ComputerIII rules, for example, the BOCs, AT&T, and GTE are required to provide multi X-line business customers with written notification of their right to restrict CPNI use.fC^"< {O%-ԍxCustomers with two or more access lines are multiline customers. ComputerIII PhaseII Order, 2  {O-FCC Rcd at 309397   141174, supraĠnote  BSAFE32 ; GTE Safeguards Order, 9 FCC Rcd at 494445  45,  {O-supraĠnote  GTE33 .f Absent customer direction to the contrary, we permit these carriers to use their respective CPNI for marketing purposes as proposed in their notice. This notice and optout approach does not extend, however, to business customers with twenty or more access lines. For these large business customers, we require the BOCs and GTE to obtain affirmative written authorization"2DC0*%%<<"  X-before using CPNI to market enhanced services.D"< {Oy-ԍxBOC Safeguards Order, 6 FCC Rcd at 760514  7689, supraĠnoteBOC SAFE32; GTE Safeguards Order, 9 FCC  {OC-Rcd at 494445  45, supra note  GTE33 . The Commission invited comment in the  X-Notice on whether these ComputerIII requirements should remain in view of section222.QE$"< {O-ԍxNotice at 12530,  41. Q  X-xX89.` ` The Commission also sought comment in the Notice on a number of alternative methods by which carriers may obtain customer approval under section222(c)(1). The Commission noted, for example, that carriers may choose a written method, in the form of a letter or billing insert sent to the customer that contains a summary of the customer's CPNI rights and is accompanied by a postcard that the customer could sign and return to the carrier  X-to authorize CPNI use.MF"< {OS -ԍxId. at 12527,  29.M The Commission sought comment on the privacy and competitive implications, as well as the costs and benefits, of requiring carriers to obtain prior written  X-approval before they could use, disclose, or permit access to customer CPNI.MGH"< {O-ԍxId. at 12527,  31.M  X` -xY90.` ` Alternatively, the Commission sought comment on whether section222(c)(1) allows carriers to engage in outbound telemarketing to obtain oral customer approval for  X -CPNI use.MH "< {O-ԍxId. at 12527,  30.M The Commission observed that sections222(c)(2) and (d)(3) give rise to  X -conflicting inferences as to whether approval can be oral.:I l "< {O-ԍxId.: The Commission noted, for example, that section222(c)(2) requires telecommunications carriers to disclose CPNI "upon affirmative written request by the customer, to any person designated by the customer," and that the absence of a similar written requirement in section222(c)(1) suggests that oral  Xk-approval is permitted under that provision.:Jk "< {O-ԍxId.: On the other hand, section222(d)(3) provides that telecommunications carriers may use, disclose, or permit access to CPNI "to provide any inbound telemarketing, referral, or administrative services to the customer for the duration of the call, if such call was initiated by the customer and the customer approves of the use of  X-such information to provide such service."MK "< {O "-ԍxId. at 12527,  31.M The Commission stated that section222(d)(3) could be interpreted to suggest that oral consent was not permissible for a broader purpose or a longer duration, or, in the alternative, to allow a carrier to use CPNI to provide a customer with information for the duration of an inbound call, even if the customer has otherwise"vE"K0*%%<<"  X-restricted the carrier's use of CPNI.:L"< {Oy-ԍxId.: The Commission sought comment on how  X-section222(c)(1) should be interpreted in light of these other provisions.:MZ"< {O-ԍxId.:  X-XxQ` ` 2. Discussion (#  XQ-xZ91.` ` As noted above, while section222(c)(1) requires customer approval for carrier use of CPNI outside the scope of sections222(c)(1)(A) and (B), it does not expressly state the Qform of this approval. In order to implement this provision, we therefore must determine what method of approval will best further both privacy and competitive interests, while preserving the customer's ability to control dissemination of sensitive information. We  X-conclude, contrary to the position of a number of parties,ENX"< yO?-ԍxALLTEL Comments at 56; Ameritech Comments at 9; AT&T Comments at 3; Bell Atlantic Comments at 7; BellSouth Comments at 18; CBT Comments at 8; GTE Comments at 3, 6; NYNEX Comments at 15; PacTel Comments at 5; SBC Comments at 10; USTA Comments at 5; US WEST Comments at 1719.E that an express approval mechanism is the best means to implement this provision because it will minimize any  X\ -unwanted or unknowing disclosure of CPNI.COX\ "< yO-ԍxArch Reply at 45; California Commission Reply at 67; CompTel Reply at 46; CPSR Reply at 1011; Frontier Comments at 78; ITAA Reply at 4, 912; LDDS WorldCom Reply at 8; MCI Reply at 8; Sprint Reply at 45; TRA Reply at 6, 8, 1112; Washington Commission Comments at 67.C In addition, such a mechanism will limit the potential for untoward competitive advantages by incumbent carriers. Our conclusion is guided by the natural, common sense understanding of the term "approval," which we believe  X -generally connotes an informed and deliberate response.P , "< yO-ԍxIndeed, a canvass of definitions of "approve" from a variety of sources confirms that the root of the  {O-term is "to prove," which connotes an active, affirmative meaning. See, e.g., Webster's New International Dictionary of the English Language 133 (2nd ed. 1934)(1. To demonstrate the truth or correctness of; to establish as the fact or as being sound; to corroborate; to authenticate; 2. To afford proof of, as by active demonstration); Webster's Third New International Dictionary of the English Language Unabridged 106 (1971) (1. To demonstrate the truth or correctness of; establish as fact or as being sound; 2. test, try; 3. to make or show to be worthy of approbation or acceptance; to offer proof of by active demonstration: manifest or display actually or practically; exhibit; 5. to express often formally agreement with and support of or commendation of as meeting a standard); The American Heritage Dictionary of the English Language (1976) (1. regard favorably; commend by word or action; consider right or good; 2. To confirm or consent to officially; to sanction; ratify). An express approval best ensures such a knowing response. In contrast, under an opt-out approach, as even its proponents  X-admit,sQ"< {O$#-ԍxSee, e.g., Bell Atlantic Reply at 7; GTE Comments at 56, 9.s because customers may not read their CPNI notices, there is no assurance that any"FXQ0*%%<<"  X-implied consent would be truly informed.RZ"< {Oy-ԍxFrontier Comments at 78; ITAA Reply at 1112; MCI Reply at 8; Sprint Reply at 5; see also California Commission Comments at 8 (notice and optout raises concerns regarding the verification and accuracy of CPNI notices). We agree with the observations of MCI and Sprint that, insofar as customers may not actually consider CPNI notices under a notice and opt-out approach, they may be unaware of the privacy protections afforded by section222, and may not understand that they must take affirmative steps to restrict access to sensitive  Xt-information.SSt"< yO -ԍxMCI Reply at 8; Sprint Reply at 5.S We therefore find it difficult to construe a customer's failure to respond to a notice as constituting an informed approval of its contents. Accordingly, we adopt a mechanism of express approval because we find that it is the best means at this time to achieve the goal of ensuring informed customer approval.  X-x[92.` `  MEANING We are not persuaded by the statutory argument raised by the BOCs, AT&T, and GTE that Congress' requirement of an "affirmative written request" in section222(c)(2) means that Congress intended to permit notice and optout when it required only "approval"  X\ -in section222(c)(1).T\ z"< yO-ԍxAmeritech Comments at 910; AT&T Comments at 13; BellSouth Comments at 18; GTE Comments at 7; NYNEX Comments at 15; PacTel Comments at 7; SBC Comments at 10; US WEST Comments at 15. While we agree that we should give meaning to Congress' use of two different terms in sections222(c)(1) and (c)(2), we believe that Congress' use of "approval" in section222(c)(1) can more reasonably be construed to permit oral, in addition to written approval, rather than to require notice and optout. Our interpretation is consistent with the suggestion by several parties that Congress intended to recognize the existing customercarrier  X-relationship through permitting "approval" in section222(c)(1), which governs the existing  X-carrier's use, disclosure, and permission of access to CPNI, as opposed to requiring an "affirmative written request" as in section222(c)(2), which governs disclosure to "any  XF-party."UF"< {O-ԍxSee, e.g., ALLTEL Comments at 56; Ameritech Reply at 7; Bell Atlantic Comments at 79; GTE Comments at 6, 78; NYNEX Comments at 1617; USTA Comments at 5. We are not persuaded, however, that Congress intended for its encouragement of the customercarrier relationship to translate to support for notice and optout within the meaning of section222(c)(1). Rather, insofar as oral approval promotes customer and carrier  X-convenience, as discussed infra, we believe that Congress sought to facilitate the existing customercarrier relationship by permitting "approval" that is oral, in addition to written, in  X-both sections222(c)(1) and (d)(3), but not notice and optout as well. In addition, we are not persuaded that use of the term "affirmative" in section222(c)(2) suggests that the absence of such term in section222(c)(1) evinces Congressional support for an optout method because a common sense interpretation of "approval" suggests a knowing acceptance, which optout cannot ensure. We also reject the argument that Congress contemplated that approval in" G, U0*%%<<"  X-section222(c)(1) would be notice and optout based on an existing business relationship.EVX"< yOy-ԍxALLTEL Comments at 56; Ameritech Comments at 9; AT&T Comments at 3; Bell Atlantic Comments at 7; BellSouth Comments at 18; CBT Comments at 8; GTE Comments at 3, 6; NYNEX Comments at 15; PacTel Comments at 5; SBC Comments at 10; USTA Comments at 5; US WEST Comments at 1617.E Because section222(d)(3) explicitly excepts from the general CPNI restrictions a carrier's use of CPNI to engage in "inbound telemarketing . . . [and other] services" for the duration of the call if the customer that placed the call grants express (oral) approval, we conclude that Congress could not have contemplated that the only form of approval in the context of an existing business relationship would be notice and optout. The exception in section222(d)(3), which permits a form of express approval, is applicable only in the context of an existing business relationship.  X-x\93.` ` We likewise reject US WEST's claim that the earliest versions of what  X-became H.R. 1555 requires that we interpret "approval" to permit notice and optout.jW"< {O;-ԍxUS WEST ex parte (filed Sept. 11, 1997) at App. B.j US WEST argues that a change in language from "affirmative request," used in H.R. 3432 (introduced in 1993 during the first session of the 103rd Congress), to "approval" in the subsequent bill H.R. 3626 (introduced in 1994 during the second session of the 103rd Congress) signifies Congress' intent not to require affirmative approval in what later became H.R. 1555 (introduced in 1995, during the 104th Congress), directly preceding section222(c)(1) of the Act. Based on established principles of statutory interpretation, we generally accord little weight to textual changes made to such early predecessor bills in the preceding Congressional session, unless the reason for such changes are explained in relevant  Xg-legislative history.Xgz"< {O-ԍxMead Corp. v. B. E. Tilley, 490 US 714, 723 (1989); Rastelli v. Warden, 782 F.2d 17, 23 (2d Cir.  {O\-1986); Drummond Coal Co. v. Watt, 735 F.2d 469, 474 (11th Cir. 1984). Even if we consider the earlier language, we are not persuaded that a change from "affirmative request" to "approval" was intended to be substantive. It is equally plausible (and we believe more likely) that the sponsors of these bills viewed the term approval, as we do, to be synonymous with affirmative request, and made the change for  X-other stylistic reasons.!Y"< yOb-ԍxFor example, the drafters could have chosen to use "approval" rather than "affirmative request" to better  {O*-distinguish it from the "affirmative written request" requirement, in what later became section222(c)(2). !  X-x]94. CONC ` ` In contrast, we believe that, although the legislative history offers no specific guidance on the meaning of "approval" in section222(c)(1), the language in the Conference Report, explaining that section222 strives to "balance both competitive and consumer privacy  X,-interests with regard to CPNI,"wZ,0 "< {O $-ԍxJoint Explanatory Statement at 205, supra note  JOINT2 .w strongly supports our conclusion that express approval is the better reading of the statutory language. In contrast with notice and optout, an express" H Z0*%%<<"  X-approval requirement best protects both privacy and competitive concerns.["< {Oy-ԍxSee, e.g., Arch Reply at 45; California Commission Reply at 8; Sprint Comments at 5; Sprint Reply at 5; Washington Commission Comments at 7. We believe that imposing an express approval requirement provides superior protection for privacy interests because, unlike under an optout approach, when customers must affirmatively act before their CPNI is used or disclosed, the confidentiality of CPNI is preserved until the customer is actually informed of its statutory protections. This ensures that customers' privacy rights are protected against unknowing and unintended CPNI disclosure. We disagree with PacTel's contention that the use of CPNI does not pose the same privacy risks as the use of medical and financial records, and therefore that the express consent typically required for the use of  X-such records is not warranted for CPNI.\""< {O -ԍxPacTel ex parte (filed Jan. 24, 1997) at Att. at 45. PacTel submitted an analysis of privacy issues authored by Privacy and Legislative Associates. PacTel specifically maintains that the following three factors customarily are used to rank the sensitivity of personal information: (1) the subject matter to which the information pertains; (2) the relationship between the individual about whom the information is collected and the collector of the information; and (3) the actual and potential use of the information. According to PacTel, an  {O-analysis of these three factors indicates that CPNI is not as sensitive as medical or financial records. Id. at 8. Although PacTel observes that the content of phone calls is sensitive, it fails to recognize that call destinations and other details about a  X-call, which constitute CPNI, may be equally or more sensitive.]"< {O-ԍxCox ex parte (filed Jan. 27, 1997) at 2; FBI ex parte (filed July 7, 1997) at 3, 9. Indeed, PacTel's own survey, the Westin study, reported finding that a majority (53 percent) of the public believes it is "very important" that telephone companies adopt strong privacy policies, which is indicative of the public's concern that this information may be abused, and should be  X -considered sensitive.j^ 0 "< {O-ԍxPacTel ex parte (filed Jan. 24, 1997) at Att. at 7.j Thus, even assuming that an optout approach can be appropriate for less sensitive customer information, such an approach would not be appropriate for the disclosure of personal CPNI. We also note that section222 establishes various categories of customer information and different privacy protections for these categories. In particular,  X-section222 distinguishes among "CPNI" (e.g., sections222(c)(1), 222(c)(2)), "aggregate  Xi-information" (e.g., section222(c)(3)),Z_i "< {O-ԍxSee discussion infra Part VI.Z and "subscriber list information" (e.g., section222(e)). This suggests that Congress did not intend to require that customer information be delineated into further categories. We thus reject Cox's contention that the  X-sensitivity of the CPNI should govern the form of express approval required.L`T "< yO"-ԍxCox Further Reply at 34. L The delineation of information categories in section222 also undermines NTIA's and other commenters' suggestion that CPNI is not understood as personal or sensitive information, and"I`0*%%<<"  X-that a notice and optout approach is therefore appropriate.a"< yOy-ԍxBellSouth Comments at 1920; NTIA Reply at 27 n.36; PacTel Comments at 78; US WEST Reply at 10. Section222 accords the most protection to CPNI, by requiring customer approval before it may be disseminated beyond the  X-existing customercarrier relationship.b "< yO-ԍxWe note that, unlike the other parties, NTIA supports notice and optout in conjunction with a discrete offering interpretation of "telecommunications service" under section222(c)(1). NTIA Reply at 914.  Xt-x^95.` ` In connection with competitive concerns, we agree, as several parties suggest,c"tx"< {O -ԍxArch Reply at 5; California Commission Reply at 8; MCI Reply at 8; Sprint Comments at 5; see also TRA Reply at 8 (permitting notice and optout would undermine the intent of section222 because it would result in greater use of CPNI, thereby advancing neither privacy nor competitive interests, but instead serving only to preserve the competitive advantage for incumbent carriers). that notice and optout is likely to result in a greater percentage of implied "approvals," and thus may place certain carriers at a competitive disadvantage relative to incumbent carriers that possess most of the CPNI. Even if market forces provide carriers with incentives not to  X-abuse their customer's privacy rights, as some parties suggest,db "< yO-ԍxBellSouth Reply at 13; MobileMedia Reply at 3; PacTel Comments at 6; PacTel Reply at 9; US WEST Reply at 9. these forces would not protect competitors' concerns that CPNI could be used successfully to leverage former monopoly power into other markets. Moreover, because section222 applies to all telecommunications carriers, and thus all services offered by such carriers (not merely CPE and enhanced services), we believe that there is greater incentive for carriers to use CPNI under this new statutory scheme, and thus greater potential for abuse. In particular, inasmuch as the 1996Act sought to open new telecommunications markets to all carriers, such as the long distance and local markets, we believe that carriers may have greater incentive to use  X -CPNI to gain a foothold in these new markets than they did under ComputerIII. This is particularly true for the long distance and local markets as entry into these markets would be more lucrative than the CPE and enhanced services markets that were the subject of  Xi-ComputerIII. Furthermore, we believe that CPNI may be a more useful marketing tool in the context of entry into these service areas, in contrast with the limited context of CPE and enhanced services. Accordingly, we believe that an express approval requirement most appropriately balances the competitive and privacy concerns at stake when carriers seek to use, disclose, or permit access to CPNI for purposes beyond sections222(c)(1)(A) and (B).  X-x_96.` ` We recognize, as several parties point out,eZ "< yO#-ԍxAmeritech Comments at 8; AT&T Comments at 15 n.18; AT&T Reply at 13 n.31; Bell Atlantic Comments at 8; BellSouth Comments at 3, 12, 14, 19; BellSouth Reply at 23; GTE Comments at 9; NYNEX  {O$-Comments at 16; PacTel Comments at 78; USTA Comments at 5; US WEST Comments at 16 & n.41. See"$d0*%%$"  {O-ComputerIII, supra note  CIII32 .  that the Commission in the past"JZe0*%%<<q" allowed a notice and optout mechanism for the use of CPNI to market enhanced services and  X-CPE under the ComputerIII CPNI framework.bfZ"< {O-ԍxSee infra  CIII FRAMEWORK176.b  COMPUTR It is wellestablished, however, that an administrative agency may depart from precedent so long as it provides a reasoned  X-justification.,gZ"< {O6-ԍxSEC v. Chenery Corp., 318 U.S. 80, 88 (1943) (in determining whether an agency has provided a reasoned explanation for departing from precedent or treating similar situations differently, the court looks only to the reasons given by the agency)., Consistent with this principle, for the reasons described herein, we find that the enactment of section222, and the framework and principles it embodies, justifies our adoption of an express approval requirement. Unlike the Commission's preexisting policies  X0-under ComputerIII, which largely were intended to address competitive concerns,h0"< {O -ԍxSee, e.g., BOC Safeguards Order, 6 FCC Rcd at 7611 n.159, supra note  CIII32 . section222 of the Act explicitly directs a greater focus on protecting customer privacy and control. This new focus embodied in section222 evinces Congress' intent to strike a balance between competitive and customer privacy interests different from that which existed prior to the 1996Act, and thus supports a more rigorous approval standard for carrier use of CPNI  X -than in the prior Commission ComputerIII framework.zi "< yO-ԍxGiven this new balance struck by Congress in section222, we also decline to permit notice and optout based on arguments that such mechanisms are used commonly in other contexts. Ameritech Comments at 11 (optout is common commercial practice where there are numerous consumers); US WEST Comments at 67, 1617 (optout is used by direct marketing industries); PacTel Comments at 8 (optout procedures are used in a  {O-variety of different contexts); PacTel ex parte (filed Oct. 3, 1996) at 23 (same); PacTel ex parte (filed Jan. 16, 1997) at 7 (same).z  X? -x`97.` ` Other policies the Commission adopted in the past that permitted nonexpress  X -approval are likewise distinguishable. For example, GTE cites prior decisions in the Billing  X -Name and Address (BNA)j "< {O-ԍxIn Local Exchange Carrier Validation and Billing Information for Joint Use Calling Cards, 8 FCC Rcd  {O-8798, 8810   6873 (1993) (BNA proceeding), the Commission permitted the disclosure of BNA of unlisted or nonpublished subscribers, unless such subscribers affirmatively requested that the BNA not be disclosed. We also stated that LECs should inform unlisted and nonpublished subscribers of this right and advise them that the "presumption in favor of consent for disclosure [would] begin 30 days after those customers receive[d] those notices." GTE Comments at 8, 10. and Caller ID proceedings.Fk\ "< {OB"-ID-CALLER׍xIn the Matter of Rules and Policies Regarding Calling Number Identification Service Caller ID,  {O #-Report and Order and Further Notice of Proposed Rulemaking, 9 FCC Rcd 1764 (1994) (Caller ID Order); GTE Comments at 8, 10.F Contrary to GTE's contentions, we believe that the concerns associated with the disclosure of CPNI in section222 are" Kk0*%%<<"  X-qualitatively different from those at stake in the BNA and Caller ID proceedings. Unlike BNA, which only includes information necessary to the billing process, CPNI includes sensitive and personal information about whom a subscriber calls, the time of day the call is  X-made, and how often the subscriber calls a particular number,Ql"< {O-ԍxSee 47 U.S.C. 222(f).Q among other things.m(Z"< {O-ԍxAs the Commission stated in the BNA Order, "BNA is essential to make validation service of any  {On-practical value to those IXCs who do not have billing and collection agreements with the LECs." Policies and  {O8-Rules Concerning Local Exchange Carrier Validation and Billing Information for Joint Use Calling Cards,  {O -Report and Order, 7 FCC Rcd 3528, 3535  38 (1992) (BNA Order).  Xv-Moreover, the Commission noted in the BNA Order that customers expect BNA to be used  XU-for billing purposes only, and it limited carriers' use based on that expectation.n\UJ"< {OP -ԍxIn the Matter of Policies and Rules Concerning Local Exchange Carrier Validation and Billing  {O -Information for Joint Use Calling Cards, Second Report and Order, 8 FCC Rcd 4478, 4483  27 (1993). In so doing, we expressly rejected US WEST's argument that it should be able to use BNA for nonbilling purposes. This reasoning is fully consistent with our interpretation in connection with CPNI announced herein. CPNI and caller ID are similarly distinguishable. In the case of caller ID services, the only information that can be transmitted through the network includes the caller's name  X-and the calling party number.oXn "< yO-ԍxThe transmission of the calling party number, however, is blocked in the case of unlisted and nonpublished numbers and also may be blocked if a listed caller manually withdraws his or her number on a per call basis. We find that the transmission of this information is far less sensitive than the disclosure of CPNI. Furthermore, consistent with our approach herein, the  X -Commission in the Caller ID proceedings restricted the use by businesses of information regarding the identity of calling parties to marketing purposes within the existing customer  X? -relationship.p\? "< {O~-ԍxCaller ID Order, 9 FCC Rcd at 1773  58, (concluding that "an ANI (automatic number identification) services subscriber may use ANI to offer products or services to an established customer that are directly related  {O-to products or services previously provided by the ANI services subscriber to that customer."), supra note ID-CALLER363.   X -xa98.` ` Finally, several parties, pointing to our implementation of the TCPA,yq "< {O\-ԍx47 U.S.C. 227; TCPA Order supra note  TCPA126 .y argue that we recognized in that order that solicitations to persons with whom the carrier has a prior business relationship do not adversely affect customer privacy interests, and may even be  X-deemed to be invited based on that preexisting relationship.r"D"< yO"-ԍxBell Atlantic Comments at 8; GTE Comments at 8; US WEST Comments at 16. The TCPA is codified  {OM#-at section227 of the Communications Act, as amended.  See 47 U.S.C. 227. Section227(a)(3) of the Act defines "telephone solicitation" as "the initiation of a telephone call . . . for the purpose of encouraging the purchase or rental of, or investment in, property goods, or services, which is transmitted to any person, but such"$q0*%% %" term does not include a call or message . . . (B) to any person with whom the caller has an established business relationship. . . ." 47 U.S.C. 227(a)(3). Section227(b)(1)(B) of the Act generally prohibits the initiation of a telephone call to any residential subscriber using artificial or prerecorded voice messages. 47 U.S.C. 227(b)(1)(B). Section227(b)(2)(B) allows the Commission to make exceptions to this prohibition, however, for calls made for commercial purposes that it determines "will not adversely affect the privacy rights that [section227] is intended to protect," and "do not include the transmission of any unsolicited advertisement." 47 U.S.C. 227(b)(2)(B)(ii). The rules we adopted to implement this provision exempted from the general prohibition any prerecorded or artificial voice message calls from a person with whom the subscriber has an established business relationship. 47 C.F.R. 64.1200(a)(2).  While we crafted an"Lr0*%%<<h" exception for established business relationships in implementing the TCPA, our action in that proceeding is not inconsistent with the express approval requirement we adopt in this order. In contrast to section222, section227 specifically excepts from the definition of "telephone solicitation" a call or message "to any person with whom the caller has an established  Xt-business relationship."Jst"< yO -ԍx47 U.S.C. 227(a)(3).J Congress did not so except from the approval requirement of section222(c)(1) calls made to customers with whom a carrier has a preexisting business  X.-relationship.t.( "< yO-ԍxIn addition, our interpretation of section222 does recognize that customers expect their carriers to offer related offerings within the total service to which they subscribe, and in this way is not inconsistent with the result the Commission reached in implementing the TCPA. We simply disagree that such expectation extends to all of a carrier's available service offerings, regardless of the existing service relationship with the customer, as suggested by some parties. ALLTEL Comments at 56; Ameritech Reply at 7; Bell Atlantic Comments at 79;  {O-GTE Comments at 68; NYNEX Comments at 1617; USTA Comments at 5. See supra  QUEEN54 שCONTROL PRINCIPLE256. We likewise reject the arguments that Congress' express provision for a notice and optout mechanism in section551 of the Act somehow compels that result here even though the language of section222 contains no similar express reference to such a  X-mechanism.Fu"< yO-ԍxUS WEST Comments at 710; Bell Atlantic Comments at 8 & n.20, 22; Bell Atlantic Reply at 23;  {O-BellSouth Comments at 1920; see also USTA Comments at 89 (permitting optout approval will avoid market  {O-confusion and advance equal treatment between telecommunications carriers and cable operators); see discussion  {Ot-of 1992 Cable Act, supra note CABLE127. In general, section551 of the Act requires cable companies to provide a written notice informing subscribers of the nature of "personally identifiable information" sought to be collected, as well as the frequency and purpose for such collection, among other things, in order to use such information to render a cable service or other service. 47 U.S.C. 551. The term "other service" is defined in section551 as "any wire or radio communications service provided using any of the facilities of a cable operator that are used in the provision of cable service. . . ." 47 U.S.C. 551(a)(2)(B).F To the contrary, section551 confirms that Congress knew how to draft a notice and optout provision when it determined that such an approach was appropriate. For all these reasons we reject commenters' arguments that notice and optout is in some manner  X\ -required by the language of section222, or other precedent.#vX\ x"< yO#-ԍxAmeritech Comments at 910; Ameritech Reply at 7; AT&T Comments at 13; BellSouth Comments at 18; GTE Comments at 7; GTE Reply at 45; NYNEX Comments at 15; PacTel Comments at 7; SBC Comments at 10; SBC Reply at 1011; US WEST Comments at 15.#"\ Mv0*%%<< "Ԍ X-ԙxb99.` ` Our express approval requirement also is justified by the principles of customer  X-control and convenience that are embodied in section222.w"< {OV-ԍxSee supra  CONTROL PRINCIPLE153שCONTROL PRINCIPLE256. These principles contemplate that the customer, not the carrier, will decide whether and to what extent CPNI is used. Consistent with these principles, we find that express approval, in contrast to a notice and optout approach, best ensures that customers maintain control over carrier use of sensitive CPNI, and that those that wish to limit the use and dissemination of their information will  X.-know how, and be able to do so.8xZ.Z"< {O9 -ԍxSee CPI Reply at 4 (while some consumers may find it useful to allow information to be made available to carriers that can provide tailored offerings, others express concern about the availability of information concerning their use of telecommunications). 8 A market trial conducted by US WEST supports the view that, when asked, customers more often than not want to limit their carrier's use of their CPNI for purposes beyond the existing service relationship. In its trial, US WEST attempted to obtain affirmative approval through various means, including inbound and outbound telephone solicitations, as well as through direct mail. In seeking approval from its local service customers, US WEST generally explained that:   We're calling all of our customers to ask for their permission to continue to  X -share information about their telephone account services within the expanding US WEST family of product areas. This will allow us to keep on working  X -cooperatively with other US WEST product areas like wireless, long distance and the Internet to customize product packages to match your  X-individual needs.^y|$ {O-ԍxUS WEST ex parte (filed Oct. 8, 1997).^    The study generally found that, of those customers even willing to listen to US WEST's  X%-request for approval (e.g., in the outbound telephone solicitation, those that did not hang up or were otherwise not reached), the majority of customers contacted did not approve the carrier's  X-use of their CPNI as proposed by US WEST.|z"< {O-ԍxUS WEST ex parte (filed Sept. 9, 1997). Only six to eleven percent of residential customers and five to nine percent of small business customers in US WEST's direct mail trial approved the use of CPNI for  {O2-marketing purposes. Id. Similarly, only about 28 percent of residential customers in US WEST's outbound  {O-telephone solicitation trial consented to CPNI use. Id. at 10. US WEST was able to secure a 72 percent  {O-affirmative response rate in its inbound telephone solicitation trial. Id. at 9.| This failure to obtain approval from most customers resulted regardless of whether the solicitation for approval was undertaken by  X-telephone or by mail, or accompanied by financial incentives.:{ "< {O#-ԍxId.: For example, the outbound telephone solicitation trial produced a weak response, with more residential customers"xNX {0*%%<<p"  X-denying rather than granting approval for CPNI use.|&"< {Oy-ԍxId. at 10. US WEST contacted 578 residential customers in its outbound telephone solicitation trial.  {OC-About 28 percent of these customers granted approval for CPNI use; 33 percent denied approval. Id. The remainder of customers sampled represented "hangups" or "unworkables," or requested to be placed on a "do {O-notcall" list. Id.  Similar results were obtained in  X-response to the direct mail campaign, even when financial inducements were provided.}z"< yOD-ԍ SURV xUS WEST's direct mail trial was conducted via first class mail to 15,200 individuals, separate from any US WEST billing, and specifically requested an affirmative response. Some respondents were asked to mail back a form, while others were asked to call a tollfree number. Some mailings offered no incentive to respond, while others offered one dollar or five dollar incentives. According to US WEST, response rates were low, regardless of the specific notification approach and the response media used. As noted above, positive response rates ranged from six to eleven percent for residential customers and from five to nine percent for small business  {O -customers. Id. at 11.   X-xc100.` ` US WEST argues that these findings reflect consumers' aversion to marketing generally, rather than any particular privacy concern regarding CPNI, and further show that affirmative customer consent, whether written or oral, is too difficult and expensive to secure  X.-to be practical.B~. "< {O-ԍxId. at 15. B We believe, however, that an equally plausible interpretation of these results is that they suggest that many customers value the privacy of their personal information, and do not want it used or shared for purposes beyond the existing service  X-relationship.D "< yO-ԍxOnly five to eleven percent of the respondents in US WEST's direct mail campaign granted approval,  {O-even when financial inducements were offered. Id. at 11. By contrast, an epidemiological research team studying cellular phone users was able to elicit a 71 percent response to a survey conducted by mail, with thirty minutes of free airtime offered in exchange. Dennis P. Funch, Kenneth J. Rothman, Jeanne E. Loughlin, and Nancy A. Dreyer, "Utility of Telephone Company Records for Epidemiologic Studies of Cellular Telephones," submitted by Wireless Technology Research. WTR Reply at Attachment C at 299. The higher response rate obtained in this context may be interpreted to suggest that customers are willing to grant approval for uses of  {Oz-CPNI that they perceive to be valuable or beneficial, such as scientific research, but not marketing.  Moreover, even if US WEST is correct, and customers do not grant approval simply because they do not want to be marketed to, this finding would not support permitting notice and optout. Indeed, it would suggest, as MCI observes, that contrary to US WEST's claim, customers do not want to hear about "expanding service offerings," and in particular do  X9 -not want their CPNI used toward that end.GX9 "< {O -ԍxMCI ex parte (filed Oct. 8, 1997) at 4. MCI contends that the negative response obtained by US WEST in its affirmative approval trial is attributable to the inherent difficulty of telemarketing generally, rather than the difficulty of obtaining affirmative approval. In addition, MCI argues that the negative response obtained by US WEST indicates that an affirmative approval requirement would not have a significant impact on US WEST's telemarketing activities because the large portion of customers denying approval would not want to  {Oj$-receive subsequent telemarketing calls based on their CPNI in any event. Id. As discussed infra note GRANT403,"j$0*%%$" however, when customers are engaged in communications with their carrier regarding the servicing of their account, they are more likely to grant approval for the use of CPNI. This further supports our view that customers are able and willing to grant approval, but on their terms, not the carriers'. G "9 O0*%%<< "Ԍ  X-xd101.` ` The findings of the Westin study do not persuade us differently.h"< {Ov-ԍxWestin study; see supra note PACTEL224.h In general, the survey results purport to show that a majority of the public believes it is acceptable for businesses, particularly local telephone companies, to use customer records to offer customers  Xt-additional services when a notice and optout mechanism is employed.:tz"< {O -ԍxId.: Contrary to PacTel's assertions, however, we believe that these survey results fail to demonstrate that customers expect or desire carriers to use CPNI to market to them service offerings beyond  X -the existing service relationship. As discussed supra, the lack of question specificity, and  X-even the ordering of the questions, make it problematic to rely on these findings. "< {O-ԍxSee supra   COX-WESTIN61ש62. As discussed supra note  CBT230 , similar criticisms apply to CBT's survey, which, some parties claim, demonstrates that customers, especially business customers, do not wish to be burdened with an affirmative prior authorization requirement, but instead expect their carriers to keep them apprised of new offerings. CBT Comments at 8 n.10 and Att. A; GTE Comments at 56; USTA Comments at 6; US WEST Comments at 17. For example, the Westin study does not identify the telephone information at issue, does not illustrate the specific types of information that would be accessed, and does not explain that  X -use of the customer's information can reveal many of the customer's habits and actions.] "< {O-ԍxSee supra COX-WESTIN61.] The results of Westin's survey also would appear to conflict with the results of US WEST's affirmative approval trial, discussed above, which suggest that customers do not wish to be marketed new services. Given the less theoretical nature of a market trial, US WEST's trial arguably was more likely to yield "true" results than PacTel's opinion survey. Moreover, contrary to US WEST's trial, the Westin survey did not make clear for what "services" PacTel sought to use the CPNI. Accordingly, customers could very well have interpreted the questions as consistent with the kind of information sharing permitted under the total service approach. That is, customers' apparent support may have been for carrier use of CPNI for the marketing of improved alternative versions of their existing service, not for the marketing of all offerings available from the carrier. Because of this ambiguity, the Westin study does not contradict our view that customers want to be given the opportunity to control their carrier's use of their sensitive personal information for the marketing of additional offerings outside of the customer's existing service relationship, which control is best secured through an affirmative approval requirement. "tPP 0*%%<<R"Ԍ X-xe102.` ` We reject PacTel's and US WEST's contention that customers do not expect carriers to seek affirmative approval for the use of information to market services to which  X-they do not subscribe, and that to do so would confuse them."< {O3-ԍxPacTel Comments at 9; US WEST Comments at 16, 17 n.42; see also US WEST ex parte (filed Sept. 9, 1997) at 14 (oral notification of CPNI rights does not lend itself to easy explanation, and such communications may suggest to the customer that there is something inappropriate about the use of CPNI). PacTel and USTA similarly contend that notice and optout minimizes customer confusion. PacTel Comments at 9; USTA Reply at 6. To the contrary, based on the results of US WEST's affirmative approval market trial, as well as those of a similar trial reported by Ameritech, we believe that, when customers wish to do so, they have no problem understanding a carrier's solicitation for approval and granting consent for the use of CPNI  X.-outside the scope of their total service offering..z"< yOY -ԍxIn the context of inbound telemarketing, 72 percent of customers in US WEST's trial approved of the  {O! -use of CPNI for marketing purposes. US WEST ex parte (filed Sept. 9, 1997) at 9. Ameritech similarly  {O -reported that it achieved an even higher inbound response rate of about ninety percent. Ameritech ex parte (filed  {O-Oct. 6, 1997) at Att. B. See also Bell Atlantic ex parte (filed Sept. 22, 1997) (representing that customers wish to discuss service options when they call Bell Atlantic regarding their service, and that Bell Atlantic generally is able to obtain approval for the use of CPNI in this context).  X-xf103.` ` By not mandating a particular form of express approval (i.e., oral, electronic, or  X-written), as discussed infra, we also believe Congress has furthered the principle of customer convenience. We are not persuaded that we must permit notice and optout based on arguments that an express approval requirement is unduly burdensome to customers, as some  X` -parties suggest.s` "< {O -ԍxSee, e.g., Bell Atlantic Reply at 7; GTE Comments at 56, 9.s The BOCs, AT&T, and GTE argue, for example, that only those customers wishing to restrict carrier access to CPNI would have to respond to CPNI notices, and  X -therefore an optout approach would reduce the burden on the majority of customers. "< yOU-ԍxAT&T Comments at 15; BellSouth Comments at 3; GTE Comments at 9; SBC Comments at 1011; USTA Comments at 6. USTA and SBC also note that permitting notice and optout would reduce the administrative  X -burden on carriers.[ "< yOg-ԍxSBC Comments at 1011; USTA Comments at 6.[ Ameritech further argues that a notice and optout mechanism would insulate customers who fail to respond to CPNI notices from repeated followup efforts, while  X-still allowing them to restrict carrier access to or use of CPNI.Mr"< yO!-ԍxAmeritech Comments at 1011.M Contrary to these arguments, we believe that an express approval requirement would not be significantly more burdensome to customers than notice and optout. Under either an express or notice and opt"HQ0*%%<<H"ԫ X-out approach, the customer will be contacted because a notice must be provided.k"< {Oy-ԍxSee discussion of notification infra Part V.F.k As CPSR points out, the fact that section222(c)(2) requires that customers provide an "affirmative written request" for the disclosure of CPNI suggests Congress believed that even a written  X-approval requirement was not unduly burdensome to customers.EZ"< yO-ԍxCPSR Comments at 10.E C3  XQ-xg104.` ` Although we agree that notice and optout would produce more customer  X.-approvals,"."< yO -ԍxGTE Comments at 56, 9; GTE Reply at 89; PacTel Comments at 89; US WEST Comments at 19;  {O -see also Bell Atlantic Reply at 68 (even though carriers engaged in repeated mailings and substantial publicity in connection with the postdivestiture selection of long distance carriers, many customers failed to choose a carrier). we reject the argument that imposing an express approval requirement will "effectively eliminate integrated marketing" and thwart the development of onestop  X-shopping.7X"< yOm-ԍxAmeritech Reply at 8; AT&T Comments at 15; AT&T Reply at 1213; Bell Atlantic Reply at 68; BellSouth Comments at 3; GTE Comments at 56, 9; PacTel Comments at 89; SBC Comments at 1011; USTA Comments at 56; US WEST Comments at 19; US WEST Reply at 910, 12.7 While section222 precludes carriers from jointly marketing certain services through the use of CPNI, nothing in section222 prevents carriers from jointly marketing  X-services without relying on CPNI, as CPI and Cox point out.s "< {OG-ԍxCox ex parte (filed Jan. 27, 1997) at 2 n.4; CPI Reply at 4.s Moreover, while the use of CPNI may facilitate the marketing of telecommunications services to which a customer does not subscribe, such use is not necessary for carriers to engage in joint marketing. We thus reject PacTel's contention that an express approval requirement would vitiate section601(d) of the 1996Act, which allows carriers to market CMRS services jointly with other telecommunications services, and section272(g) of the Act, which permits BOC joint marketing of telephone exchange service and inregion interLATA service, under certain  X-conditions.M "< yO-ԍxPacTel Comments at 9 & n.18.M To the contrary, carriers are free to market jointly telecommunications services without using CPNI to the extent such marketing is otherwise permissible under other provisions. In addition, as TRA points out, a customer desiring an integrated telecommunications service offering tailored to its needs simply may give approval to allow  X!-its carrier to access CPNI for purposes outside of sections222(c)(1)(A) and (B).@!"< yO!-ԍxTRA Reply at 9.@ This is true as to sophisticated business as well as residential customers. Indeed, the rules we establish in this order permitting carriers flexibility to secure various forms of approval under section222(c)(1), in our view, facilitate the furnishing of integrated total service offerings"R0*%%<<"  X-suited to the customer's needs. Moreover, as discussed supra, given that carriers may use CPNI without prior customer approval to market any aspect of a customer's total service,  X-carriers currently retain considerable ability to market jointly telecommunications services.s"< {O5-ԍxSee supra  CAN JM164שCAN JM266.s  Xv-xh105.` ` We are not persuaded by US WEST's contention that an express approval requirement would yield an insufficient number of approvals to justify the expense of conducting solicitation campaigns. MCI reports, to the contrary, "based on MCI's experience and knowledge of telemarketing generally, a 29% positive response rate on outbound calling  X-to a carrier's customer base is fairly successful."O~Z"< {O -ԍ GRANT xMCI ex parte (filed Oct. 8, 1997) at 4. We further note that in the context of inbound telemarketing, 72 percent of customers approved of the use of CPNI for marketing purposes. In a similar trial, Ameritech reported  {O -that it achieved an even higher inbound response rate of about ninety percent. Ameritech ex parte (filed Oct. 6, 1997) at Att. B. Thus, affirmative approval in the inbound situation is little barrier to carrier marketing efforts.  {O-See also Bell Atlantic ex parte (filed Sept. 22, 1997) (representing that customers wish to discuss service options when they call Bell Atlantic regarding their service, and that Bell Atlantic generally is able to obtain approval for the use of CPNI in this context). O In addition, as MCI further observes, US WEST's negative response rate reflects the difficulty of telemarketing generally, not any inherent difficulty of obtaining affirmative approval specifically. Therefore, we agree that, to the extent the large number of customers failing to give their approval likewise would not want to receive subsequent telemarketing calls based on the use of their CPNI, "US WEST's own analysis shows that even with the 'optout' procedure it advocates, it would not have  X -much better luck telemarketing to those customers."^ "< {Oi-ԍxMCI ex parte (filed Oct. 8, 1997) at 4.^ Moreover, even assuming, arguendo, that an express approval requirement would make targeted marketing more difficult, we find that such a result would not be inconsistent with customer expectations or desires. Given the new emphasis on customer privacy embodied in section222, we believe that Congress did not intend for countervailing considerations, such as the promotion of onestop shopping, to outweigh customers' interest in maintaining the privacy of their sensitive information.  X%-xi106. CONARG ` ` Finally, we reject US WEST's argument that an express approval requirement under section222(c)(1) would impermissibly infringe upon a carrier's First Amendment  X-rights.L2 "< {O-ԍxUS WEST ex parte (filed June 2, 1997) at 4. US WEST submitted an analysis prepared by Professor Laurence H. Tribe regarding First Amendment issues associated with US WEST's access to and use of CPNI,  {OT!-and the sharing of that CPNI among affiliated US WEST companies. Id. In general, US WEST argues that the collection and distribution of CPNI is protected under the First Amendment, and, thus, any regulation of  {O"-CPNI is governed by free speech principles. Id. at att. at 2. L US WEST contends that CPNI is information owned by the carrier that forms the basis for informed speech between US WEST and its customers or potential customers, and that any restrictions on such "inputs" beyond reasonable time, place and manner restrictions,"S0*%%<<q"  X-such as affirmative approval requirement for the use of CPNI, thus are unconstitutional.J"< {Oy-ԍxUS WEST ex parte (filed June 2, 1997) Att. at 3. In particular, US WEST argues that, because the U.S. Supreme Court has found that regulations relating merely to physical objects essential to the formulation and communication of speech violated the First Amendment, it follows that similar restrictions on intangible  {O-inputs such as CPNI similarly would not be constitutionally permissible. Id. citing Minneapolis Star v.  {O-Minnesota Comm'r of Revenue, 460 U.S. 574, 581 (1983) (the imposition of a state use tax on the cost of paper  {Og-and ink products used in the production of newspapers violates the First Amendment); Cincinnati v. Discovery  {O1-Network, Inc., 507 U.S. 410, 42629 (1993) (a prohibition on the use of newsracks to hold commercial handbills where no comparable ban applies to newsracks containing newspapers violates the First Amendment).  US WEST also maintains that the communication of CPNI between or among US WEST corporate entities is a protected speech activity. We disagree that an express approval requirement would impermissibly infringe upon a carrier's First Amendment rights. At the outset, we think there is a substantial question as to whether CPNI restrictions even implicate constitutionally protected "speech." Carriers remain free to communicate with present or potential customers about the full range of services that they offer, and section 222 therefore does not prevent a carrier from engaging in protected speech with customers regarding its business or its products. What carriers cannot do is use confidential CPNI in a manner that is not permitted by the statute. While section 222 may constrain carriers' ability to more easily "target" certain customers for marketing by limiting in some circumstances their internal use of confidential customer information, we question whether that of itself constitutes a  X\ -restriction on protected "speech" within the purview of the First Amendment.\ "< {O-ԍxSee MCI ex parte (filed July 8, 1997) at 3-4 (arguing that protected commercial speech is not implicated because internal carrier use of CPNI is not equivalent to proposing a transaction or informing the public). Nevertheless, to the extent that it were concluded that CPNI restrictions under section 222 did affect carrier communications with their customers or unrelated third parties in such a way as to implicate the First Amendment, at most commercial speech would be at issue since any limitations  X -under section 222 relate solely to the economic interests of the speaker and its audience.oZ 4 "< yO-ԍxThe U. S. Supreme Court has defined commercial speech as speech that "propose[s] a commercial  {O}-transaction." Central Hudson Gas and Elec. v. Public Serv. Comm'n, 447 U.S. 557, 563 (1980) (commercial speech informs the public so that it can make a reasoned choice among products or services). o But any governmental restrictions on commercial speech will be upheld where, as here, the government asserts a substantial interest in support of the regulation, the regulation advances  Xg-that interest, and the regulation is narrowly drawn.WgV "< {On-ԍxCentral Hudson, 447 U.S. at 557.W As the Supreme Court has observed, it has never deemed it an abridgement of freedom of speech to make a course of conduct illegal merely because the conduct was initiated or conducted in part through language; to the contrary, similar regulation of business activity has been held not to violate the first  X-Amendment.q"< {Ot$-ԍxOhralik v. Ohio State Bar Ass'n, 436 U.S. 447, 456 (1978).q"Tz0*%%<<"Ԍ X-ԙxj107. CONARG2 ` ` The U.S. Supreme Court has held that protecting the privacy of consumers, and  X-eliminating restraints on competition, are "substantial" government interests.a~"< {OV-ԍxSee, e.g., Edenfield v. Fane, 507 U.S. 761, 769 (1993) (holding that the Florida Board of Accountancy's rule prohibiting certified public accountants from engaging in direct, inperson, uninvited solicitation to obtain new clients violated the First and Fourth Amendments because the ban was not reasonably tailored to serve a  {O-substantial state interest) ("the protection of potential clients' privacy is a substantial state interest"); Turner  {Oz-Broad. Sys., Inc., v. FCC, 512 U.S. 622, 663 (1994) ("[T]he Government's interest in eliminating restraints on fair competition is always substantial, even when the individuals or entities subject to particular regulations are engaged in expressive activity protected by the First Amendment.") (citations omitted).a An express approval requirement directly advances the protection of customer privacy by vesting control over the dissemination of CPNI with the customer, rather than the carrier, and by limiting the ability of incumbent carriers to leverage their control over monopolyderived CPNI into emerging telecommunications markets. In addition, an express approval requirement is narrowly tailored to achieve these Congressional objectives. Contrary to US WEST's contention, we further conclude that an express approval requirement would not violate the  X-free speech rights of customers.H"< {O-ԍxUS WEST ex parte (filed June 2, 1997) at Att. at 510. US WEST maintains that the rates for optin requests are so low that imposing an optin rule would effectively prohibit the use and transmission of CPNI, and  {O9-that such an approach is particularly suspect given that there are less restrictive means of securing approval, i.e.,  {O-a notice and optout mechanism. Id. (citing Martin v. Struthers, 319 U.S. 141 (1943) (a city ordinance that forbids doortodoor solicitations unless household residents affirmatively request such solicitations is an unconstitutional burden on speech)). US WEST also suggests that an express approval requirement would be  {O]-constitutionally suspect because it would infringe on the right of customers to receive information. Id. at Att. at 78.  To the extent a customer wishes to receive information on offerings outside the scope of its total service offering, it simply may grant approval under section222(c)(1). As we previously noted, to the extent customers are engaged in communications with their carrier regarding the servicing of their account, they are more  X\ -likely to grant approval.Y\ "< {O+-ԍxSee supra note GRANT403.Y Finally, for the reasons discussed supra, we reject US WEST's contention that an express approval requirement effectively would deprive carriers of the use  X -of their property, and thus would constitute a taking without just compensation. "< {Oy-ԍxUS WEST Reply at 12. See supra  DELORES42, PAMELA43; see infra   TANYA148, CYNTRA149, INDEA152. " UB0*%%<< "Ԍ X-Xx  C.` ` Written, Oral and/or Electronic Approval (#  X-Xx` ` 1. Background (#  Xt-xk108.` ` The Commission observed in the Notice that section222 neither specifies the procedures that a carrier must use to obtain customer approval, nor addresses whether  X0-section 222(c)(1) approval must be written or oral.\0"< {O-ԍxNotice at 1252627,   27, 30.\  X-XxQ` ` 2. Discussion (# x  X-xl109. ORAL1 ` ` While we believe that carriers should be required to obtain express approval for uses of CPNI outside the scope of sections222(c)(1)(A) and (B), we conclude that carriers Qshould be permitted to obtain such approval through written, oral, or electronic means, as  X; -several commenters contend.; Z"< yOF-ԍxBellSouth Comments at 1819; GTE Comments at 7; NYNEX Comments at 15; NYNEX Reply at 6; PacTel Comments at 67, PacTel Reply at 7; SBC Comments at 12. Allowing carriers to obtain customer approval through any or all of these three approval methods comports with the language and design of section222, and is consistent with the principles of customer control and convenience that are manifested  X -in section222. "< yO5-ЍxBellSouth Comments at 1819; GTE Comments at 7; NYNEX Comments at 15; NYNEX Reply at 6; PacTel Comments at 67; PacTel Reply at 7; SBC Comments at 12. Moreover, this approach gives carriers flexibility without sacrificing customer control over sensitive information. We thus agree with MCI that carriers should be able to use the advanced technologies of their networks, including 800 numbers, 888 numbers, and email, to obtain customer approval, in addition to using various types of written  XF-approval, such as billing inserts, that are returned to the carrier.@F "< yO-ԍxMCI Reply at 8.@  X#-  X-xm110.` ` We disagree with parties arguing that section222 mandates written approval.x"< yOK-ԍxAd Hoc Comments 7; AICC Comments at 911; AirTouch Comments at 6; Arch Comments at 8, 11, Arch Reply at 2; California Commission Comments at 11; California Commission Reply at 9; CFA Comments at 5; CompTel Comments at 3; CompTel Reply at 7; CompuServe Comments at 35; CPI Comments at 9; CPSR Reply at 10; CWI Comments at 8; Excel Comments at 5; Frontier Comments at 79; ICG Comments at 6; ITAA Comments at 5; ITAA Reply at 8; LDDS WorldCom Comments at 10; LDDS WorldCom Reply at 67; NARUC Comments at 3; Texas Commission Comments at 810; TRA Comments at 16; TRA Reply at 8; Washington Commission Comments at 5, 89. We find nothing in the language or design of section222 that limits carriers to obtaining only"V0*%%<<"  X-written approval, despite arguments advanced by some of these commenters."< yOy-ЍxAICC Comments at 11; CompTel Comments at 7 n.5; CompTel Reply at 6; CPI Comments at 9; Frontier Comments at 9; TRA Reply at 8; Washington Commission Comments at 89. Indeed,  X-contrary to the claims made by AICC and CompTel,_ "< yO-ԍxAICC Comments at 10; CompTel Comments at 67. _ we believe that the requirement in section222(c)(2) that a carrier obtain a "written" request before disclosing CPNI to any person, in contrast to the term "approval" in section222(c)(1), suggests that Congress did not  Xt-intend to limit section222(c)(1) to only written approval.zt"< yO -ԍxBell Atlantic Comments at 2; BellSouth Comments at 16, 1819; DMA Reply at 1, 34; GTE Comments at 7; GTE Reply at 45; ICG Comments at 6; MCI Comments at 89; NTCA/OPASTCO Reply at 3; NYNEX Comments at 15; NYNEX Reply at 6; PacTel Comments at 67; PacTel Reply at 7; SBC Comments at 12; Sprint Comments at 45; Sprint Reply at 3; TCG Comments at 67; Texas Commission Comments at 8; US  {O -WEST Comments at 17 n.44; US WEST Reply at 8. See supra  MEANING92 (discussing meaning of Congress' use of different terms in sections222(c)(1) and (2)). z Given that nothing in section222(c)(1) expressly limits approval to only written means, we conclude that carriers should be given flexibility to secure approval through written, oral or electronic methods.  X-xn111. EXCEPT ` ` We also reject the contention that section222(d)(3) of the Act supports a  X-written approval requirement.* "< {O-ԍxSee, e.g., AICC Comments at 1011; CompTel Comments at 7; CPI Comments at 9; Frontier Comments at 9; Washington Commission Comments at 89. While section222(d)(3) contemplates oral approval in creating an exception for CPNI use during an inbound call, section222(d)(3) also may be interpreted simply to permit a carrier to use CPNI to provide a customer with information for the duration of an inbound call, based on oral approval, even if the customer otherwise has  X9 -restricted the carrier's use of its CPNI, as Ameritech points out.I9 "< yOn-ԍxAmeritech Comments at 1.I This exception may be significant, based on the results of US WEST's approval solicitation trial. US WEST found that, in the context of inbound calls, 72 percent of customers approved of the use of CPNI for  X -marketing purposes, as opposed to 29 percent in the outbound context.g "< {O-ԍxUS WEST ex parte (filed Sept. 9, 1997) at 910.g In a similar trial, Ameritech reported that it achieved an even higher inbound response rate of about 90  X-percent.i"< {O -ԍxAmeritech ex parte (filed Oct. 6, 1997) at Att. B.i We agree with US WEST that, to the extent these findings are valid, they suggest that when customers call their carrier, they are interested in the servicing of their account, and thus are considerably more likely to approve the use of CPNI than when customers even these very same ones are "cold called" by the carrier. In this way, the inbound"!W80*%%<<G" telemarketing exception in section222(d)(3) offers a meaningful, specific right, different from the general "approval" exception in section222(c)(1).  X-x ORAP o112.TIG BURDEN  ABUSE ` ` We do not believe that permitting outbound oral solicitations will have negative  Xt-privacy consequences, as some commenters suggest.w t"< yO-ЍxCalifornia Commission Comments at 11; California Commission Reply at 8; CFA Comments at 5; CompuServe Comments at 6; CPI Comments at 34; CPSR Reply at 1011; LDDS WorldCom Comments at 1011; LDDS Worldcom Reply at 7; NARUC Comments at 3; TRA Comments at 16; TRA Reply at 78; Washington Commission Comments at 5, 8.w Because allowing carriers to obtain oral approval does not divest the customer of control over CPNI, but affords the additional benefits of customer convenience, we find that permitting such approval will advance the goals of section222. We recognize, however, as several parties suggest, that oral customer approval may be more difficult to verify than written approval, because carriers typically  X-would have no physical record that such approval had been given. "< yO&-ԍxAICC Comments at 910; California Commission Comments at 11; California Commission Reply at 8; CFA Comments at 5; CompuServe Comments at 6; CPI Comments at 910; CWI Comments at 8; Frontier Comments at 78; LDDS Comments at 10; NARUC Comments at 3; Texas Commission Comments at 810; TRA Comments at 16, TRA Reply at 78; Washington Commission Comments at 8.  Nevertheless, we find that any verification problems can be adequately addressed through measures other than an  X -outright prohibition on oral approval under section222(c)(1). Accordingly, as discussed infra, we conclude that a carrier relying on oral customer approval should be required to notify customers of their CPNI rights, and should bear the burden of demonstrating that a customer has granted approval subsequent to such notification pursuant to the rules we adopt in this  X -order.IZ "< {O>-ԍxAs discussed infra Part V.E., because notification is an element of informed approval, we also find it appropriate to place the burden on carriers providing oral notification of CPNI rights to demonstrate that such notification has been given in compliance with our rules. I Shifting the burden to such carriers, in addition to establishing minimum notification requirements, as we do herein, also should address any concerns that, if oral approval is permitted, customers will not consider their options due to pressure from telemarketers, that substantially greater FCC and state commission resources will be incurred, or that carriers will engage in "slamming" practices through telemarketing. We believe the notification requirements we adopt will reduce the likelihood that carriers will violate customer privacy by abusing oral approval mechanisms. In addition, as one party suggests, certain mechanisms  X-are currently available that make verbal approvals as readily verifiable as written approvals._ "< {Ok -ԍxVoiceLog ex parte (filed Nov. 12, 1996)._ "XL 0*%%<<"Ԍ X-xp113. OVERSELL ` ` We share the concern that oral approval mechanisms may be subject to greater  X-abuse than written approval mechanisms."< {OV-ԍxCPSR Reply at 1213; see also Frontier Comments at 8 (slamming problems militate in favor of written approval. If the Commission allows oral approval, it should establish safeguards similar to those adopted in the  {O-context of PIC changes). Contra GTE Reply at 8 (Commission should not adopt slamminglike rules, which were designed to address the problem of carrier switching of customers from chosen carrier to one they did not select). CPSR further argues that, with oral approval, consumers will not be permitted to consider their options due to pressure from telemarketers, and that different adults residing in one household may disagree on whether, or to what extent, the privacy of sensitive information should be safeguarded. CPSR Reply at 1213. CFA argues that, even if such abuses are later discovered, customer privacy, as well as competition, will already have been damaged. CFA Comments at 7. In this regard, Excel and Frontier raise the concern that, because oral approvals are less specific and verifiable, permitting carriers to obtain such approvals will result in disputes that will implicate FCC and state commission resources. Excel Comments at 5; Frontier Comments at 89.  To the extent our decision to permit oral approval may result in carrier abuses, including, for example, the overselling of services, as  X-CPSR argues,, "< yOt-ԍxTo the extent CPSR's concerns regarding "overselling" refer to either the situation in which a carrier makes frequent outbound calls to a customer for the purpose of soliciting oral approval for CPNI use, or where a carrier makes such calls to market services after approval has been obtained, the TCPA would offer additional protections. Specifically, customers may be asked to be placed on "donotcall" lists pursuant to the regulations we adopted to implement the TCPA, which we believe would apply to marketing generally and to solicitations  {O\-for approval. See TCPA Order, supra note TCPA-ORDER126. we find that such a result does not warrant mandating written approval.E"< yO-ԍxCPSR Reply at 1213.E Assuming the term "oversell" is intended to refer to a situation in which a carrier frequently telephones a customer to solicit section222(c)(1) approval, we believe that carriers have an incentive not to abuse outbound solicitation mechanisms as a tool for obtaining verbal approval, since such abuse ultimately may result in the loss of the customer. Carriers that make frequent outbound calls to obtain oral approval therefore do so at the risk of losing their customer base.  X -x KITE q114. LUCY  CLEO  SIZE ` ` On the other side of the balance, we are not convinced, despite arguments  X\ -advanced by some parties,\ 6"< yOC-ԍxAirTouch Comments at 6; CWI Comments at 8, 9 n.7; LDDS WorldCom Comments at 34; TRA Reply at 78. that permitting oral and electronic, in addition to written, approval would raise significant competitive concerns. Proponents of written approval generally maintain that any type of nonwritten approval will result in a greater percentage of approvals, and thereby place small carriers at a competitive disadvantage relative to  X -incumbent carriers, which have the largest amount of, and most useful, CPNI. "< yO#-ԍxAirTouch Comments at 6; CWI Comments at 8, 9 n.7; LDDS Comments at 34; TRA Reply at 78. These parties further contend that any rules we establish should ensure a "level playing field" for"Y0*%%<<i"  X-new entrants."< yOy-ЍxCompuServe Comments at 3, 56; CPSR Reply at 10; ITAA Comments at 45; ITAA Reply at 6; TRA Reply at 78. Accordingly, these parties argue, because third parties must obtain affirmative written approval to gain access to CPNI pursuant to section222(c)(2), all carriers, including AT&T, the BOCs, and GTE, similarly should be required to secure written  X-customer approval. "< yOh-ԍxCompuServe Comments at 3, 56; CPSR Reply at 10; ITAA Comments at 45; TRA Reply at 78. Even if our decision to permit oral approval results in a greater number of approvals, because all carriers must obtain such approval to use CPNI outside the scope of section222(c)(1), no particular class of carriers is placed at a competitive disadvantage in  X.-connection with the CPNI use of their own customers.-Z."< {O -ԍxIndeed, to the extent section222 applies to all carriers, the burden imposed on small carriers by a written approval requirement may outweigh any benefit such carriers enjoy by subjecting incumbent carriers to more onerous approval requirements.-  ORAL2 In addition, we find no reason to impose a written approval requirement only on incumbent carriers, while allowing carriers in competitive markets the option of obtaining written, oral or electronic approval, as some  X-parties suggest."< {OH-ԍxSee, e.g., AirTouch Comments at 6 n.8; Arch Comments at 910; Frontier Comments at 7 n.13; ICG Comments at 6. Because oral approval constitutes a form of express approval, we believe that permitting incumbent carriers to obtain such approval for uses of CPNI outside the scope of section222(c)(1) would not allow incumbent carriers to leverage their dominant position in entering new markets.  X -Xx  D.` ` Duration, Frequency, and Scope of Approval (#  X -Xx` ` 1. Background (#  X-xr115.` ` The Commission sought comment in the Notice on whether requirements should be established regarding (1)how long a customer's approval should remain valid;  (2)how often carriers may contact a customer in order to attempt to obtain approval, regardless of whether the customer has restricted its CPNI; and(3) whether and to what extent customers may approve of partial access to their CPNI, for example, limited to certain  X-uses or time periods.P, "< {O-ԍxNotice at 12528,  33.P Commenters set forth differing views as to how long approval should remain valid. Some parties argue, for example, that approval should remain valid until the customer indicates otherwise, while others contend that approval should be renewed periodically, or should be valid only for the duration of a transaction. Parties similarly argue for differing limitations on how frequently a carrier may contact a customer to solicit approval, ranging from one year from the date of solicitation, to no limitation at all. " Z 0*%%<<"Ԍ X-XxQ` ` 2. Discussion (#  X-xs116.` ` We conclude that approval obtained by a carrier for the use of CPNI outside of section222(c)(1), whether oral, written, or electronic, should remain in effect until the  Xt-Qcustomer revokes or limits such approval, as some parties suggest.o t"< yO-ԍxAmeritech Comments at 11; Arch Comments at 1112; AT&T Comments at 16; AT&T Reply at 15; Bell Atlantic Reply at 2; CBT Comments at 8; CompTel Comments at 7; GTE Comments at 6; MCI Comments at 12; PacTel Comments at 1011; PacTel Reply at 78; SBC Comments at 11; SBC Reply at 11; Sprint Comments at 6; USTA Reply at 7.o We find that this interpretation is consistent with the language and design of section222. In particular, as PacTel notes, the language of section222(d)(3) stating that carriers may "provide inbound  X -telemarketing, referral, or administrative services to the customer for the duration of the call" suggests that Congress expressly limited the duration of approval where it wanted to so specify, and thus the absence of similar language in section222(c)(1) evidences that Congress did not limit as a statutory matter the time period within which customer approval remains  X -valid._ "< yO-ԍxPacTel Comments at 1011; PacTel Reply at 78._ We also find that, so long as a customer is informed of its CPNI rights prior to granting approval, permitting such approval to remain effective until it is revoked or circumscribed does not infringe on a customer's privacy interests. We thus do not require  X -carriers to renew customer approval periodically, for example, annuallyF @"< yO -ԍxAd Hoc Comments at 7.F or semiannually,U "< yO-ԍxTRA Comments at 16; TRA Reply at 13.U or to presume that customer approval is valid only for the duration of the transaction, if the customer has not otherwise specified the time period during which the approval remains  X-valid.C` "< yO-ԍxCFA Comments at 8.C Requiring customers who have provided section222(c)(1) approval to renew such approval periodically would be inconsistent with the focus on customer convenience in section222, and would not provide any significant additional privacy protections given the  XF-notification requirements we adopt in this Order.  X-xt117.` ` We decline to establish at this time a restriction on the number of times a carrier may contact a customer to obtain approval for the use of CPNI outside of  X-section222(c)(1), despite arguments raised by some parties.a "< yO]!-ԍxAirTouch Comments at 12; Arch Comments at 1112.a As PacTel points out, section222 does not expressly establish a limit on how often a carrier may contact a  Xv-customer in order to obtain section222(c)(1) approval.Gv "< yO$-ԍxPacTel Comments at 11.G We also find that such a restriction"v[0*%%<<p" is unnecessary at present because carriers likely will not seek to jeopardize the good will of their customers, through repeatedly attempting to obtain their approval, given the potential  X-that irritated customers would go elsewhere.`"< yO3-ԍxCompTel Comments at 78; PacTel Comments at 11.` In addition, as MCI points out, the rules we adopted pursuant to the TCPA, including the requirement that telephone solicitors maintain "donotcall" lists, provide customers with a mechanism by which they may halt unwanted  XQ-telephone solicitations.QX"< yOZ-ԍxMCI Comments at 12. The Telephone Consumer Protection Act of 1991 (TCPA), amended Title II of the Communications Act of 1934, by adding new section227. 47 U.S.C. 227. In general, the TCPA imposes restrictions on the use of automatic telephone dialing systems, of artificial or prerecorded voice messages, and  {O -of telephone facsimile machines to send unsolicited advertisements. See 47 U.S.C. 227(b)(1)(A)(C). The TCPA also required that the Commission consider several methods to accommodate telephone subscribers who  {OD -do not wish to receive unsolicited advertisements. See 47 U.S.C. 227(c)(1)(4). In implementing the TCPA,  {O -the Commission adopted rules requiring, inter alia, that commercial telemarketers maintain lists of customers  {O -who do not wish to be called, and develop written policies for maintaining such lists. See 47 U.S.C. 64.1200(e)(2)(i), (ii), (iii), (vi).  To the extent our assumption that competitive marketplace forces will regulate a carrier's actions proves to be incorrect, however, or carriers engage in outbound solicitations to such an extent that intrudes upon customer privacy, we can  X-reevaluate this conclusion in the future. @  X-xu118.` ` Finally, we note that section222(c)(1) is silent on the issue of whether a customer may grant a carrier partial use or access to CPNI outside the scope of  X\ -section222(c)(1).T\ 0 "< {O=-ԍxSee 47 U.S.C. 222(c)(1).T We conclude that allowing a customer to grant partial use of CPNI is consistent with one of the underlying principles of section222 to ensure that customers maintain control over CPNI. A customer could grant approval for partial use, for example, by limiting the uses made of CPNI, the time period within which approval remains valid, and the types of information that may be used. Moreover, we believe that section222 affords customers the right to authorize partial use of CPNI in the context of section222(d)(3), which allows a carrier to provide any inbound telemarketing, referral or administrative services for the duration of the call to a customer based on oral approval. In this situation, therefore, a carrier could obtain partial use by virtue of its ability to view customer records for a limited duration, notwithstanding the customer's restriction of CPNI use. "\ 0*%%<<"Ԍ X-Xx  E.X` ` Verification of Approval (#`  X-Xx` ` 1. Background (#  Xt-xv119.` ` In the Notice, the Commission proposed that, to the extent oral approval is permitted under section222(c)(1), carriers choosing to obtain oral approval should bear the  X0- burden of proof associated with such a scheme in the event of a dispute.P0"< {O-ԍxNotice at 12528,  32.P The Commission stated that such carriers would be required to show through credible evidence that they have obtained the required customer authorization prior to granting access to CPNI for purposes  X-that otherwise would be unlawful.;Z"< {O -ԍxId. ; Parties present differing views as to whether carriers  X-should bear the burden of demonstrating oral approval.pp  X^ -Xx Q` ` 2. Discussion (#  X -xw120.` ` We conclude that a carrier relying on oral approval under section222(c)(1) should bear the burden of demonstrating that such approval has been given in compliance  X -Qwith the rules we adopt in this order, as a number of parties contend. "< yOo-ԍxCalifornia Commission Comments at 11; California Commission Reply at 9; CWI Comments at 8; MCI Comments at 11; Sprint Comments at 5; Sprint Reply at 3. In general, we find  X-that shifting the burden to such carriers will make it easier to verify oral approval.ZD"< {O-ԍxSee supra  BURDEN112.Z While section222 does not expressly require that carriers bear the burden of demonstrating oral  Xi-approval as PacTel points out,Yi"< yO-ԍxPacTel Comments at 6; PacTel Reply at 8.Y we find that shifting the burden in this manner is consistent with the intent of section222 to protect the confidentiality of sensitive customer information. Shifting the burden is justified, given the potential for abuse of oral approval mechanisms that  X-could lead to unauthorized dissemination of CPNI.f "< {O-ԍxSee discussion of potential abuses of oral approval mechanisms supra   ABUSE112שOVERSELL113. In addition, if we were to require a complaining party to bear the burden of demonstrating that it had not granted oral approval, carriers may not have an incentive to develop verification processes that are adequate to protect customer privacy. We also conclude that shifting the burden to carriers relying on oral approval strikes an appropriate balance in permitting a less rigorous mechanism than written approval.  X.-  X -xx121.` ` Because carriers must bear the burden of demonstrating that they have obtained oral approval under section222(c)(1), we find it unnecessary to mandate specific verification"] 0*%%<<" mechanisms at this time. We believe that carriers will have an incentive to develop on their  X-own processes to show that they have obtained approval in order to satisfy this burden.Y"< yOV-ԍxPacTel Comments at 6; PacTel Reply at 8.Y We note, however, that while carriers may use any method of verification that they see fit, certain methods may carry greater weight than others in determining whether a carrier has satisfied its burden. In general, we agree with those commenters arguing that a carrier relying on oral approval should be able to meet its burden by, for example, audiotaping customer  X.-conversations,0X.X"< yO7 -ԍxBell Atlantic Comments at 2, 9; MCI Comments at 11; TRA Comments at 16. We note that, to the extent required by other laws or rules, carriers choosing to audiotape customer conversations must announce to the customer that the conversation is being taped.0 or by demonstrating that a qualified independent third party operating in a location physically separate from the carrier's telemarketing representative has obtained customer approval under section222(c)(1) subsequent to adequate notification of its CPNI  X-rights, and has confirmed the appropriate verification data, e.g., the customer's date of birth  X-or social security number. x"< {O-ԍxCalifornia Commission Comments at 12; CWI Comments at 8; MCI Comments at 11; see also AirTouch Comments at 911 (any approval obtained by carrier under section222(c)(1), whether written, oral or electronic, must confirm subscriber billing name and address, as well as each telephone number covered by the approval, and must acknowledge that customer is aware of its right to restrict access to CPNI, but nevertheless authorizes release of CPNI to carrier, its affiliates, and potentially unaffiliated third parties; approval, if written, must be signed and dated by subscriber or any authorized representative). We adopted a similar requirement in  {O-the context of PIC change verifications. See 47 C.F.R. 64.1100(c). One variation on these two verification mechanisms that also may allow a carrier to meet its burden, suggested by VoiceLog, is the use of an independent recording service bureau, which audiotapes and maintains scripted requests for oral approval, as well  {O-as customer responses to those requests. VoiceLog ex partes (filed Sept. 3, 1996 and Nov. 12, 1996). VoiceLog states that the use of a recording service bureau enables a carrier to set up a threeway call between the customer, the carrier and the recording system. According to VoiceLog, the system plays an announcement that the conversation will be recorded and then begins recording, at which point, the carrier's telephone representative explains the customer's rights with regard to CPNI use, and asks for the customer's permission to use CPNI.  {O-VoiceLog ex parte (filed Sept. 3, 1996) at 1. In contrast, we would likely not consider the mere absence of any CPNI restriction in the customer's database or other account record sufficient to verify that a customer has given express approval in accordance with section222(c)(1), despite  X; -SBC's suggestion.U; "< yO-ԍxSBC Comments at 12; SBC Reply at 10.U In addition, because carriers are required under our rules to notify customers of their CPNI rights prior to soliciting approval, we do not require them to send  X -followup letters to customers confirming approval, contrary to some parties' contentions.i "< yO6"-ԍxCalifornia Commission Comments at 12; CWI Comments at 8.i " ^ 0*%%<<"Ԍ X-xy122.` ` Although we require carriers to certify that they are in compliance with our  X-CPNI requirements,}"< {OV-ԍxSee infra Part VIII.D. for a discussion of additional CPNI safeguards.} such certifications, standing alone, would not be adequate to satisfy a  X-carrier's burden of demonstrating oral approval, despite AirTouch's contention.KZ"< yO-ԍxAirTouch Comments at 12. K Allowing carriers to satisfy their burden through electronic or written entries obtained outside of the independent third party verification process, or merely by certifying that they are in compliance with our rules, would undermine the intent of section222 to protect the confidentiality of sensitive customer information, since permitting carriers to do so could potentially result in abuses that lead to the unauthorized use or dissemination of CPNI. x  X-xz123.` ` Finally, we require that carriers maintain records of notification and approval, whether written, oral, or electronic, and be capable of producing them if the sufficiency of a  X -customer's notification and approval is challenged. "< yO-ԍxAirtouch Comments at 12. AirTouch argues further that LECs should be required to maintain copies of  {O-solicitation and consent forms in a file available for public inspection. Id. Maintenance of such records will facilitate the disposition of individual complaint proceedings. We thus require that carriers maintain such records for a period of at least one year in order to ensure a sufficient  X -evidentiary record for CPNI compliance and verification purposes. D"< {O -ԍxSee ITAA Comments at 5 (urging adoption of specific requirement as to how long carriers must maintain records of notification and approval). In any event, carriers generally will have an incentive to maintain such records for evidentiary purposes in the event of a dispute with a customer or other "person" under section222(c)(2). This is true particularly in the case of oral approvals (including oral notification), which carriers bear the burden of demonstrating have been given in accordance with our rules.  XD-Xx  F.` ` Informed Approval Through Notification(#  X-Xx` ` 1. Background (#  X-x{124.` ` Section222 of the Act does not expressly require that carriers notify customers of the privacy protections afforded by section222 if they wish to use CPNI for marketing  Xr- purposes beyond sections222(c)(1)(A) and 222(c)(1)(B).Nr"< {O -ԍxSee 47 U.S.C. 222.N The Commission tentatively  XO-concluded in the Notice that carriers seeking approval for CPNI use within the meaning of section222(c)(1) should be required to notify customers of their right to restrict carrier use"._0 0*%%<<2"  X-of, or access to, CPNI.S"< {Oy-ԍxNotice at 1252627,  28.S The Commission reasoned that customers must know that they have  X-the right to restrict carrier CPNI use, before they can waive that right.:Z"< {O-ԍxId.:  X-x|125.` ` Under the ComputerIII rules, AT&T, the BOCs, and GTE are required to notify their multiline business customers annually of their right to restrict before using CPNI  XS-to market enhanced services.S"< {O -ԍxSee ComputerIII PhaseII Order, 2 FCC Rcd at 309397   141174; GTE Safeguards Order, 9 FCC Rcd at 4943. In addition, the BOCs and GTE, but not AT&T, are required  X0-to notify their multiline business customers annually before using CPNI to market CPE.0F"< {O' -ԍxSee BOC CPE Relief Order, 2 FCC Rcd at 144   5570, supra noteFOOTNOTE 3334. These carriers, however, are not subject to a general obligation to notify residential or singleline business customers of their right to restrict carrier CPNI use prior to marketing enhanced services or CPE. In November1996 and in December1997, the Common Carrier Bureau and the Policy and Program Planning Division, respectively, waived these annual notification  X -requirements pending our action in this proceeding.u^ "< {O -ԍxPetition for Exemption from Customer Proprietary Network Information Notification Requirements,  {O-Order, 12 FCC Rcd 15134 (1996); In the Matter of Waiver from Customer Proprietary Network Information  {O-Notification Requirements, CCB Pol 97-13, DA 972599 (rel. Dec. 16, 1997).u  X; -x}126.` ` One party, BellSouth, contends that we need not require telecommunications  X -carriers to notify customers of their CPNI rights.J "< yO-ԍxBellSouth Comments at 13.J All other commenters generally agree with our tentative conclusion that telecommunications carriers should be required to notify customers because, absent a notification requirement, customers will be unaware of their  X-CPNI rights.z "< {O-ԍxSee, e.g., Bell Atlantic Comments at 1011; CompTel Comments at 11.z A number of parties argue further, however, that carriers should be required to provide this notification only if they wish to use, disclose or permit access to CPNI beyond the purposes specified in sections222(c)(1)(A) and (B). "F` 0*%%<<f"Ԍ X-Xx Q` ` 2. Discussion (#  X-x~127. PURPOSE ` ` Although section222 does not expressly require notification of a customer's CPNI rights, we conclude that telecommunications carriers should be required to notify  Xt-Qcustomers of their right to restrict carrier use of CPNI.`"t"< {O-ԍxSee, e.g., Ad Hoc Comments at 7; Bell Atlantic Comments at 10; CompTel Comments at 11; CPI Comments at 10; DMA Reply at 2; Excel Comments at 5; GTE Comments at 3; ITAA Comments at 57; LDDS Worldcom Comments at 9; NYNEX Comments at 1213; TCG Comments at 6; Washington Commission Comments at 78. ` We believe that notification of a customer's CPNI rights is an element of informed "approval" within the meaning of section222(c)(1). Thus, because section222(c)(1) by its terms requires express approval for carrier uses of CPNI beyond the scope of the existing service relationship, carriers likewise must provide notification for the use of CPNI beyond the scope of the existing service  X-relationship.""< {O(-ԍxSee, e.g., AICC Comments at 10; Ameritech Comments at 7; AT&T Comments at 3; California Commission Comments at 1011; CPSR Reply at 8; CWI Comments at 3; MCI Comments at 9; SBC Comments at 1011; Sprint Comments at 45; TCG Comments at 67; Texas Commission Comments at 1112; TRA Comments at 1516; TRA Reply at 4, 11; US WEST Comments at 2122. Although section222 does not specifically impose this obligation on carriers  X-as BellSouth points out,J"< yO-ԍxBellSouth Comments at 13.J we believe that such a requirement is consistent with Congress' intent to safeguard the confidentiality of sensitive information, and to vest control over such information with the customer. We therefore require carriers to provide notification if they wish to use, disclose or permit access to CPNI beyond the purposes specified in sections222(c)(1)(A) and (B); at this time, however, we make no decision on whether notice  X -is required for use of CPNI within the scope of sections222(c)(1)(A) and (B). , "< {O-ԍxBecause the Notice did not seek comment on the issue of whether a customer has the right to restrict  {O-carrier use of CPNI within the scope of sections222(c)(1)(A) and 222(c)(1)(B), our decision here is limited to  {Od-the circumstance identified in the Notice, i.e., where a carrier seeks approval for CPNI use outside of section222(c)(1). The issues of whether, and what form of, notice for restricting a carrier's section222(c)(1)(A)  {O-and (B) uses of CPNI may be required are discussed in our Further Notice of Proposed Rulemaking infra PartIX.  X-x128. PUREND ` ` More specifically, we agree with the majority of commenters that customers must be made aware of their CPNI rights before they can be deemed to have "waived" those  Xg-rights. Requiring notification will not cause confusion to customers as BellSouth suggests,Cg"< {O!-ԍxId. at 15. C but rather will ensure that customers either grant or deny approval in an informed fashion. "Da>0*%%<<*" Moreover, we find that a notification requirement would provide customers maximum control  X-over carrier use of CPNI, and thus would further the objectives of section222.H"< yOV-ԍxCompTel Comments at 11.H  X-  X-x129.` ` We reject BellSouth's contention that customers reasonably expect businesses with whom they have a preexisting relationship to use CPNI to offer new services, and that therefore carrier use of CPNI for the development and marketing of services should be  X.-deemed to be permitted or invited, in the absence of specific notification to the customer.cX.X"< yO7 -ԍxBellSouth Comments at 1214 (pointing out that, in implementing the TCPA, we did not require companies engaged in outbound telephone solicitations to inform customers of their right to be placed on "donotcall" lists, but instead, provided for notification through a consumer alert and industry bulletin).c As we conclude elsewhere in this order, we find that a customer's expectation, and implied approval, for the use of CPNI for marketing purposes extends only to offerings within the customer's total service relationship with the carrier. Consequently, specific notification of the customer's CPNI rights, as a component of informed "approval" under section222(c)(1),  X -is warranted for uses of CPNI outside the customer's total service offering. xx 0  X9 -Xx  G.` ` Form and Content of Notification (#  X -Xx` ` 1. Background (#  X-x130.` ` The Commission sought comment in the Notice on whether it should allow notification to be given orally and simultaneously with a carrier's attempt to seek approval for  Xi- CPNI use, or whether it should instead require advance written notification.Six"< {O-ԍxNotice at 1252627,  28.S The Commission further sought comment on what is the least burdensome method of notification  X#-that would meet the objectives of the 1996Act, and noted that, under ComputerIII, AT&T, the BOCs and GTE are required to provide to multiline business customers written  X-notification of their CPNI rights.: "< {O-ԍxId.: The Commission also sought comment on whether it needed to specify the information that should be included in the customer notification, and, if  X-so, the disclosure requirements that it should adopt.:"< {O-ԍxId.: "vb. 0*%%<<p"Ԍ X-x131.` ` A number of commenters, advocating prior written notification, argue that such  X-notification would help to ensure customer understanding and uniformity among carriers."< yOV-ԍxArch Comments at 8, 11; California Commission Comments at 10; CBT Comments at 8; CFA Comments at 6; CPI Comments at 1011; CPSR Reply at 8; CWI Comments at 56; Excel Comments at 4; ITAA Comments at 5, 8; LDDS WorldCom Comments at 910; LDDS WorldCom Reply at 56; MFS Comments at 11; SBC Comments at 1011; Sprint Comments at 4; Texas Commission Comments at 11; Washington Commission Comments at 5.  X-Other parties maintain that carriers should be permitted to give oral notification.Xx"< yO-ԍxAmeritech Comments at 89; AT&T Comments at 16; AT&T Reply at 1415; BellSouth Comments at 1316; GTE Comments at 6 n.10; MCI Comments at 10; NYNEX Comments at 14; TCG Comments at 67; TRA Comments at 16; US WEST Reply at 8. Still other commenters generally contend that we should require written notice for dominant telecommunications carriers, but permit oral notice for other carriers, including small carriers  XQ-or carriers in competitive markets.Q"< yO-ԍxAirTouch Comments at 4; Arch Comments at 810; LDDS WorldCom Comments at 11; MobileMedia Reply at 3. Several parties also maintain that carriers should be  X.-given discretion to determine the content of notification.. "< {O-ԍxSee, e.g., BellSouth Comments at 14, 1718; NYNEX Comments at 14; PacTel Comments at 12; PacTel Reply at 8; SBC Comments at 10; Sprint Comments at 45. Other commenters assert that we  X -should specify minimum notification requirements," J "< {O-ԍxSee, e.g., AICC Comments at 10; AT&T Comments at 15; California Commission Comments at 10; CompTel Comments at 11; CPI Comments at 11; CPSR Reply at 8; CWI Comments at 67, 9; Excel Comments at 4; ITAA Comments at 68; ITAA Reply at 9; LDDS WorldCom Comments at 10; LDDS WorldCom Reply at 910; Texas Commission Comments at 911; TRA Reply at 11; Washington Commission Comments at 78.  and propose specific content requirements. x  X-Xxs` ` 2. Discussion (# x  X\ -x132.` ` Form of Notification. We conclude that a carrier should be permitted to  X; -provide either written or oral notification, as a number of parties contend.X; 4"< yO -ԍxAmeritech Comments at 89; AT&T Comments at 16; AT&T Reply at 1415; BellSouth Comments at 1316; GTE Comments at 6 n.10; MCI Comments at 10; NYNEX Comments at 14; TCG Comments at 67; TRA Comments at 16; US WEST Reply at 8.  Such  X -snotification, for example, may take the form of a bill insert,  T"< yO"-ԍxBellSouth Comments at 16; California Commission Comments at 10; CWI Comments at 6; DMA Reply at 2; GTE Comments at 3, 6; SBC Comments at 11; Texas Commission Comments at 1112; US WEST Reply at 9. We are not persuaded that bill inserts are ineffective based on CPSR's bare assertion that customers routinely discard them. CPSR Reply at 8. To the contrary, based on the California Commission's success in"u$0*%%$" using bill inserts as a means of customer notification in the caller ID and other contexts, we conclude that carriers should be permitted to provide notice through bill inserts. California Commission Comments at 10.  an individual letter, "< {O-ԍxSee, e.g., BellSouth Comments at 16; CWI Comments at 6; US WEST Reply at 9. or an" c0*%%<< " oral presentation that advises the customer of his or her right to restrict carrier access to CPNI. We conclude that allowing carriers to provide notification through these means will give them flexibility, while ensuring that customers are informed of their right to restrict access to CPNI, consistent with the intent of section222. In addition, as a number of carriers suggest, allowing carriers to choose between oral and written notification is less burdensome  XQ-for carriers.Q"< yO -ԍxAmeritech Comments at 89; AT&T Comments at 16; BellSouth Comments at 1316; GTE Comments at 6 n.10; NYNEX Comments at 14; TCG Comments at 67; US WEST Reply at 8.  X -x133.` ` We are not persuaded by parties' assertions that oral notification is necessarily  X-less verifiable than written,P "< yO-ԍxLDDS WorldCom Comments at 910.P will result in abuses,A"< yO3-ԍxTRA Reply at 11.A create greater disputes and confuse  X-customers,Z* "< yO-ԍxCWI Comments at 56; Excel Comments at 4.Z is too difficult to accomplish successfully,E "< yO0-ԍxExcel Comments at 4.E or could be used to dissuade  X-customers from releasing CPNI to a competitor.:J "< {O-ԍxId.: Any verification concerns that may arise where carriers provide verbal notice of CPNI rights can be adequately addressed through measures less restrictive than an outright prohibition on oral notification mechanisms. For example, any verification problems concerning oral notice, like oral approval, may be addressed by requiring carriers to bear the burden of demonstrating that such notice has been  X -given in the event of a dispute.J "< {O-ԍxSee supra Part V.E.J We therefore conclude that a carrier providing verbal notification of a customer's CPNI rights must carry the burden of showing that such notice has been given, in compliance with the requirements we adopt in this order. Shifting the burden to such carriers will ensure that customers are adequately informed of their CPNI rights. We further find that carriers may use any reasonable method for verifying oral notification that adequately confirms that such notification has been given, including, but not limited to, audiotaping customer conversations or using an independent third party verification process. Likewise, any concerns regarding customer confusion or carrier abuse are adequately"dn0*%%<<" addressed through the minimum content requirements for notification that we adopt in this  X-order.w"< {OV-ԍxSee infra   CONTENT1135שCONTENT2142.w  X-xSMALL-NOT134.` ` We find no reason to impose different notification requirements on large and  Xt-small carriers, as some commenters suggest.tZ"< yO-ԍxAirTouch Comments at 4; Arch Comments at 810; LDDS WorldCom Comments at 34, 11; MobileMedia Reply at 3. As noted supra, although competitive concerns may justify different regulatory treatment for certain carriers, concerns regarding  X0-customer privacy are the same irrespective of the carrier's size or identity.Z0"< {O -ԍxSee supra  SPECIAL49.Z Section222's requirements apply to all carriers.  X-x135. CONTENT1 ` ` Content of Notification. We agree with those commenters that suggest we  X-establish minimum notification requirements.D"< yO-ԍxAICC Comments at 10 n.18; AT&T Comments at 15; California Commission Comments at 10; CompTel Comments at 11; CPI Comments at 11; CPSR Reply at 8; CWI Comments at 69; Excel Comments at 4; ITAA Comments at 68; LDDS WorldCom Comments at 10; LDDS WorldCom Reply at 910; Texas Commission Comments at 9, 11, Attachment at 1920; TRA Reply at 11; Washington Commission Comments at 78. Prescribing minimum content requirements  X -will reduce the potential for customer confusion and misunderstanding, "< yO(-ԍxAT&T Comments at 15; LDDS WorldCom Comments at 10; LDDS WorldCom Reply at 910. as well as the  X` -potential for carrier abuses.^` "< yO-ԍxLDDS WorldCom Reply at 910; TRA Reply at 11.^ While the minimum requirements we establish in this order do not provide precise guidance to carriers, we believe that prescribing such requirements is preferable to other approaches that parties have suggested. Developing general notice requirements strikes an appropriate balance between giving carriers flexibility to craft specific CPNI notices, and ensuring that customers are adequately informed of their CPNI rights.  X-x136.` ` Establishing notice requirements should not confuse customers or constrain a  Xk-carrier's ability to make timely notice changes, as BellSouth suggests.Qk"< yO0 -ԍxBellSouth Comments at 14, 1718.Q To the contrary, we find that such requirements generally will reduce confusion by clarifying the customer's CPNI rights, thereby ensuring that any decision by a customer to grant or deny approval is fully informed. While it is possible that customers may experience some initial confusion, given that carriers were not required, in most cases, to provide notification of CPNI rights under our  X-preexisting requirements, the benefit to consumers of such notification, i.e., heightened"e0*%%<<" awareness of the right to restrict access to sensitive information, is consistent with the intent of section222, and outweighs any countervailing disadvantages that may result from such notice, such as this initial customer confusion. In addition, because we establish only general notification requirements, carriers retain considerable flexibility to craft notices as they see fit, and thus should not be constrained from making lastminute changes to CPNI notices contrary  XQ-to BellSouth's contention.:Q"< {O-ԍxId.: Finally, we disagree with BellSouth that specifying minimum  X.-notification requirements will waste Commission resources.:.Z"< {O9 -ԍxId.: To the contrary, the failure to set forth such requirements would be far more administratively burdensome, given that any challenges to the adequacy of carrier notices would need to be addressed through individual complaint proceedings under sections207 and 208 of the Communications Act. We also reject as unduly burdensome CompTel's and ITAA's suggestion that carrier notices be subject  X -to prior Commission review.\ "< yO-ԍxCompTel Comments at 11; ITAA Comments at 7.\ For the reasons discussed above, we also reject CPI's contention that only the largest incumbent LECs should be required to use a Commission X9 -prescribed form apprising the customer of its CPNI rights. 9 |"< yOf-ԍxCPI Further Comments at 8. CPI further asserts that this process should be applied to incumbent LECs based on the size categories established in the 1996Act. For example, CPI contends that incumbent LECs with fewer than two percent of the nation's access lines should be subject to these requirements unless they obtain a waiver by demonstrating that compliance with a Commissionprescribed form would be unnecessarily burdensome, and that rural incumbent LECs should not be subject to the requirements unless an individual carrier can show why the incumbent LEC should be required to use such a form. In the case of solicitations for approval by BOC affiliates and competitive carriers, however, CPI contends that such entities need not use a  {O-Commissionprescribed form, nor inform the customer of its right to disclose CPNI to other carriers. Id. at 810.  {O-See supra  SMALL-NOT133.  X -x137.` ` We decline to adopt PacTel's suggestion to establish a "safe harbor" specifying  X -the form of notice that would conclusively be presumed reasonable. P "< yO-ԍxPacTel Comments at 12. According to PacTel, such "safe harbor" requirements might include, among other things, a list of the ways in which the carrier intended to use CPNI. The specific  X-requirements for the form and content of notices that we establish in this Order provide carriers with adequate guidance, while still preserving carrier flexibility to craft notices as best suits their individual business plans. We explain these requirements in detail below.  X#-x138.` ` At a minimum, customer notification, whether oral or written, must provide sufficient information to enable the customer to make an informed decision as to whether to permit a carrier to use, disclose, or permit access to CPNI. If a carrier intends to share CPNI with an affiliate (or nonaffiliate) outside the scope of section222(c)(1), the notice must state"f0*%%<<" that the customer has a right, and the carrier a duty, under federal law, to protect the  X-confidentiality of CPNI."< yOV-ԍxCompTel Comments at 11; CPI Comments at 11; CWI Comments at 6; ITAA Comments at 67; ITAA Reply at 9; SBC Comments at 11; Washington Commission Comments at 78. In addition, the notice must specify the types of information that  X-constitute CPNIA "< yO-ԍxCPSR Reply at 8.A and the specific entities that will receive the CPNI,"< yO-ԍxSBC Comments at 11; Texas Commission Comments at 911; US WEST Comments at 18. describe the purposes  X-for which the CPNI will be used,m@"< yO -ԍxCPSR Reply at 8; CWI Comments at 9; US WEST Comments at 18.m and inform the customer of his or her right to disapprove  Xt-those uses, and to deny or withdraw access to CPNI at any time.]t"< yO -ԍxAd Hoc Comments at 78; CFA Comments at 8. ] The notification also must advise customers of the precise steps they must take in order to grant or deny access to CPNI, and must clearly state that a denial of approval will not affect the provision of any services to which the customer subscribes. Any notification that does not provide the customer the option of denying access, or implies that approval is necessary to ensure the continuation of services to which the customer subscribes, or the proper servicing of the customer's account, would violate our notification requirements.  X\ -x139.` ` We also require that any notification provided by a carrier for uses of CPNI  X9 -outside of section222(c)(1) be reasonably comprehensible and nonmisleading.l9 ` "< yOJ-ԍxCPSR Reply at 8; CWI Comments at 6, 8; US WEST Reply at 9.l In this regard, a notification that uses, for example, legal or technical jargon could be deemed not to be "reasonably comprehensible" under our requirements. If written notice is provided, the  X -notice must be clearly legible, "< yOq-ԍxUS WEST Reply at 9. US WEST asserts, however, that communications about the value of  {O9-information sharing within one corporate enterprise are not "promotional or marketing" in nature. Id. at 9 n.41. use sufficiently large type, and be placed in an area so as to  X-be readily apparent to a customer."J "< {O-ԍxCPSR Reply at 8; CWI Comments at 6, 8; US WEST Reply at 9. As an example of a misleading notification, AirTouch points to a PacTel brochure that, it argues, proposes to offer customer awards in exchange for granting the carrier and its affiliates approval to use CPNI to market other services. Airtouch Comments at 9 and Att. A. According to AirTouch, the solicitation for approval to use CPNI is included in small print, and "buried" at the end of the brochure. AirTouch Comments at 9." Finally, we require that, if any portion of a notification is translated into another language, then all portions of the notification must be translated into"g0*%%<<"  X-that language.J"< yOy-ԍxUS WEST Reply at 9 n.41.J We note that this requirement is similar to one we adopted in the context of  X-letters of agency for PIC changes.UX"< {O-ԍxSee 47 C.F.R. 64.1150(g).U  X-x140.` ` We agree with CWI that a carrier should not be prohibited from stating in the notice that the customer's approval to use CPNI may enhance the carrier's ability to offer  XQ-products and services tailored to the customer's needs.C Q"< yO -ԍxCWI Comments at 6.C We also do not preclude a carrier from addressing the rights of unaffiliated third parties to obtain access to the customer's CPNI. Consequently, a carrier would not be prohibited from, for example, informing a customer that it may direct the carrier to disclose CPNI to unaffiliated third parties upon submission to the carrier of an affirmative written request, pursuant to section222(c)(2) of the  X-Act.W Zz"< yO-ԍxAs noted above, section222(c)(2) of the Act provides that "[a] telecommunications carrier shall disclose [CPNI], upon affirmative written request by the customer, to any person designated by the customer. 47 U.S.C.  {O]-222(c)(2). See supra note 222C2196.W However, a carrier would be prohibited from including any statement attempting to  X -encourage a customer to freeze third party access to CPNI.l  "< yO-ԍxCWI Comments at 67; Washington Commission Comments at 78.l  X9 -x141.` ` We also conclude that carriers must provide notification of a customer's CPNI rights, whether oral or written, prior to any solicitation for approval. As stated above, a customer must be fully informed of its right to restrict carrier access to sensitive information before it can waive that right. Any notification that is provided subsequent to a solicitation for customer approval under section222(c)(1) is inadequate to inform a customer of such right. This conclusion is consistent with the underlying purpose of section222 to safeguard customer privacy and control over sensitive information. The notification may be in the same conversation or document as the solicitation for approval, as long as the customer would hear or read the notification prior to the solicitation for approval. Finally, we conclude that the solicitation for approval to use CPNI, whether in the form of a signature line, checkoff box or other form, should be proximate to the written or oral notification, rather than at the end of a long document that the customer might sign for other purposes, or at the conclusion of a lengthy conversation with the customer, for example. Similarly, the solicitation for approval, if written, should not be on a document separate from the notification, even if such document is included within the same envelope or package. The notice should state that any customer approval, or denial of approval, for the use of CPNI outside of section222(c)(1) is valid until the customer affirmatively revokes or limits such approval or denial. "h, 0*%%<<"Ԍ X-x142. CONTENT2 ` ` We conclude that carriers need only provide onetime notification to customers  X-of their CPNI rights, as suggested by some parties.o "< {OV-ԍxSee, e.g., AT&T Comments at 1415; Ameritech Reply at 9.o Given the notification requirements we adopt in this order, including the requirement that carriers inform customers that approval to use CPNI under section222(c)(1) is valid until revoked, we believe that customers granting approval will have been fully informed of the scope and duration of a carrier's use of CPNI,  XQ-contrary to some parties' assertions. XQZ"< yO\-ԍxAICC Comments at 10 n.18; CFA Comments at 67; CompTel Comments at 11; CPSR Reply at 9; ITAA Comments at 5; LDDS WorldCom Reply at 6; Sprint Comments at 4; Washington Commission Comments at 7. Although we imposed a periodic notice requirement in  X.-ComputerIII, such a requirement was more appropriate in that context because the notice and  X -optout mechanism generally permitted in ComputerIII militated in favor of more rigorous notification standards. That is, because carriers generally were not subject to an express prior  X-approval requirement for the use of CPNI under ComputerIII, but rather, were permitted to share CPNI based only on notice and optout, the approval that was implied under such an approach was based largely on a customer's notification of his or her CPNI rights. In addition, as some parties suggest, requiring carriers to provide periodic notification may be more intrusive to customer privacy than marketing contacts resulting from section222(c)(1)  X -approval.a z"< yOG-ԍxPacTel Reply at 89; US WEST Reply at 8 n.33. a For these reasons, we reject CWI's contention that an annual notification  X -requirement should be applied only to incumbent LECs,X "< yO-ԍxCWI Comments at 7. We likewise decline to adopt CPI's suggestion that the notification requirements should vary depending upon the size of the incumbent LEC or the identity of the carrier seeking approval. CPI Further Comments at 8.  as well as CPSR's assertion that  X -oral notices should be repeated when a customer changes or adds services.A * "< yO-ԍxCPSR Reply at 9.A  X-#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP#Q VI.xAGGREGATE CUSTOMER INFORMATION    XJ-x A. ` ` Overview   X-x143.` ` QTo promote the interests of fair competition, section 222 also establishes important carrier obligations regarding aggregate customer information that expressly work in tandem with the carrier requirements surrounding CPNI. Aggregate customer information is defined separately from CPNI in section 222, and involves collective data "from which  Xx-individual customer identities and characteristics have been removed."Jx "< yO#-ԍx47 U.S.C.  222(f)(2).J On the one hand, as the Commission has found in the past, disclosure of aggregate information by LECs, when"UiJ 0*%%<<o" used to gain entry in new markets, is valuable and important to the LECs' competitors in these new markets. On the other hand, because aggregate customer information does not involve personally identifiable information, as contrasted with CPNI, customers' privacy interests are not compromised by such disclosure. New section 222(c)(3) governing aggregate customer information, accordingly, strikes a balance different from that governing CPNI. It extends the Commission's requirement that aggregate customer information be disclosed, which operated solely in the enhanced services and CPE markets and which applied only to the BOCs and GTE, to the new statutory scheme applicable to all markets, including long distance and CMRS, and to all LECs.  X-x144.` ` As we discuss below, because section 222(c)(3) offers an important competitive benefit, which is integral to the balance Congress drew regarding carrier use of customer information and rationally distinguishes among carriers, we reject claims that section 222(c)(3) in conjunction with section 222(c)(1) may constitute an unconstitutional taking or an equal protection violation. Rather, as implemented in this order, section 222(c)(3) permits LECs to use aggregate customer information to improve their customers' existing service, and when they choose to use it for purposes beyond their provision of service in section 222(c)(1)(A), they must make it available to their competitors upon request. We further conclude that section 222(c)(3)'s nondiscrimination obligation requires that LECs honor standing requests for disclosure of aggregate customer information at the same time and same price as when they disclose to, or use on behalf of, their affiliates.  X- xB. ` ` Background   X-x145.` ` Section 222(f)(2) defines  TAKING aggregate customer information as: "collective data that relates to a group or category of services or customers, from which individual customer  Xr-identities and characteristics have been removed.""r"< {O-ԍxId. This contrasts with CPNI, which is defined in section 222(f)(1) as including personal information such as "(A) information that relates to the quantity, technical configuration, type, destination , and amount of use of a telecommunications service subscribed to by any customer . . and (B) information contained in the bills pertaining to telephone exchange service or telephone toll service reviewed by a customer of a carrier; . . . ." This definition is virtually identical to the definition of "aggregate information" promulgated by the Commission prior to the 1996"Oj0*%%<<"  X-Act."< {Oy-ԍxPrior to the 1996 Act, in the context of the Caller ID. proceedings, the Commission defined the term "aggregate information" in its rules to "mean collective data that relate to a group or category of services or customers, from which individual customer identities or characteristics have been removed." 47 C.F.R.  64.1600(a). The only difference between this definition of aggregate information and section 222(f)(3)'s is that the former definition used "or" rather than "and" in the final clause. This understanding of the term aggregate  {Oc-information is reflected as well in the Commission's Computer III proceedings, which consistently described aggregate information in terms of anonymous, noncustomer specific information, involving data showing traffic  {O-and usage patterns. See, e.g., Computer III Phase II Order at 309697,  16674; BOC CPE Relief Order at 153,  70. Section 222(c)(3), which governs carriers' use of aggregate customer information, provides: XxA telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service may use, disclose, or permit access to aggregate customer information other than for the purposes described in paragraph [222(c)](1). A local exchange carrier may use, disclose, or permit access to aggregate customer information other than for purposes described in paragraph (1) only if it provides such aggregate information to other carriers or persons on reasonable and  X-nondiscriminatory terms and conditions upon reasonable request therefor.L"< yO-ԍx47 U.S.C.  222(c)(3). L   X\ -x146.` ` Although section 222(c)(3) concerning aggregate customer information differs from section 222(c)(1) governing CPNI, the obligations in these provisions expressly dovetail. Section 222(c)(3) provides that when carriers, other than LECs, aggregate their individually identifiable customer information, they may use, disclose or permit access to such aggregate customer information for purposes other than those permitted under section 222(c)(1). In this way, for carriers other than LECs, section 222(c)(3) operates to eliminate the limitations in section 222(c)(1) on carrier use of customer information, when individually identifiable characteristics and identities are removed. When LECs use, disclose, or permit access to aggregate customer information for purposes beyond section 222(c)(1)(A) or (B), they must provide such aggregate customer information on a nondiscriminatory basis to other persons, including carriers, upon reasonable request.  X- x147.` `  TAKING As part of the Computer III rules established prior to the 1996 Act, the Commission requires the BOCs and GTE to provide aggregate customer information to enhanced service providers when they share such information with their enhanced service  XQ-affiliates.<Z\Q. "< {O0#-ԍx#]\  PC2P#GTE Safeguards Order at 4945,  45; Computer III Phase II Order at 309697,   166174. The Commission recognized that aggregate customer information is beneficial for competitors because "one can infer that the information has potential value if the carrier's own enhanced service operations make use of it." "$0*%%$"  {O-Computer III Phase II Order at 3097,  172. Competing enhanced service providers indicated in that proceeding as well, that they pay considerable sums of money to gather comparable information, particularly traffic and  {O"-usage patterns, from public sources. Id. at 3096,  167.< The Commission also requires the BOCs to provide aggregate customer"Qk0*%%<<"  X-information to CPE suppliers when they share such information with their CPE affiliates.\"< {O-ԍxBOC CPE Relief Order at 153,  70.\ In addition, the Commission presently requires the BOCs and GTE generally to notify carriers when aggregate customer information is available, and the Commission has approved a series  X-of alternatives for compliance with such notification obligation.~"< {O -ԍxBOC ONA Order at 23334,   448 450. GTE ONA Order, 11 FCC Rcd 1388 (1995). The Commission excluded AT&T from the aggregate disclosure and notice requirements, reasoning that "if AT&T had to make aggregated CPNI available, there is a strong possibility that its network service competitors would obtain this information and use it in their basic service marketing efforts. The BOCs do not face the same potential competitive threat to their network service  X-operations from the aggregated CPNI requirement.""< {O-ԍx#]\  PC2P#Computer III Phase II Recon. Order at 1164,  115.  X-  X- x148. TANYA ` `  TAKING Commenters raise two issues in connection with section 222(c)(3)'s new aggregate customer information requirements. First, U S WEST and USTA argue that, if we adopt an interpretation of the scope of sections 222(c)(1)(A) and (B) narrower than the single category approach, as we do in this order, the disclosure obligation of LECs regarding  X -aggregate customer information under section 222(c)(3) would correspondingly be greater.a "< yOi-ԍxU S WEST Comments at 20; USTA Comments at 78. a As such, they claim that the operation of these two provisions would constitute both an unconstitutional taking and an Equal Protection violation because it would force LECs to release commercially valuable information to third parties, while their competitors would have  X-no comparable obligation.<2 "< {Om-ԍxId. < Second, in the Notice, the Commission sought comment on whether, in addition to the statutory requirements of section 222, the Commission should also require all LECs to notify others of the availability of aggregate customer information prior to  X#-their using the information, as is required under the Computer III framework. Q# "< {O-ԍxNotice at 12529,  37. Q  Several parties argue that we should not impose such a requirement because there is no notice  X-requirement under section 222(c)(3).ZV "< yO"-ԍxALLTEL Comments at 6; Ameritech Reply at 10; NYNEX Comments at 23; SBC Reply at 13; USTA  {O#-Reply at 8; see also CBT Comments at 11(the Commission should not adopt a notification requirement for LECs).   Furthermore, they argue, notice of the availability of"lx0*%%<<" LEC aggregate customer information would give competitors unfair notice of LEC marketing  X-plans.^"< yOV-ԍxAmeritech Reply at 10; NYNEX Comments at 23. ^  In contrast, ITAA disagrees, and further suggests that there may be more efficient  X-ways of giving notice than what we require under Computer III (e.g., publishing in trade  X-publications or newsletters).EX"< yO-ԍxITAA Comments at 8. E  XS- xC.` ` Discussion   X -x 149. CYNTRA ` `  TAKING We reject the claim that our interpretation of sections 222(c)(1) and 222(c)(3)  X-would constitute an unlawful taking. As we discussed earlier,`"< {O -ԍxSee discussion supra Part IV.` even assuming carriers have a property interest in either CPNI or aggregate customer information, our interpretation of sections222(c)(1) and 222(c)(3) does not "deny all economically beneficial" use of property,  X -as it must, to establish a successful claim.  z"< {O-ԍxLucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Ď First, under our interpretation of these provisions, when CPNI is transformed into aggregate customer information, carriers, other than LECs (and LECs with disclosure), are free to use the aggregate CPNI for whatever purpose they like, including for example, to assist in product development and design, as well as in tracking consumer buying trends, without customer approval. This means that a long distance carrier, for example, may use collective data regarding customer usage patterns, derived from its long distance service, to assist its CMRS affiliate; such collective data may indicate, for instance, which regions are experiencing growth and thereby help identify where to locate CMRSrelated regional sales forces. Aggregate information may also be useful to carriers to match certain types of consumers with service offerings that they may find attractive. A long distance carrier, again for example, could aggregate its CPNI to develop profiles of customers most likely to purchase CMRS service. Under our interpretation of section 222(c)(1)(A), for customers that are also the carrier's CMRS customer, the carrier could use the profile to identify customers that may favor the new CMRS offering. For existing long distance customers that do not also subscribe to the carrier's CMRS, the carrier would have to obtain customer approval to use the customers' CPNI to market CMRS service to them. With customer approval, however, by operation of section 222(c)(3), the long distance carrier could compare the customer profile (derived from aggregate customer information) with the customer's CPNI, to tailor its marketing strategy for new CMRS service to that customer. In these ways, by permitting aggregate information to be used in these ways, section 222(c)(3) affords important commercial benefits for carriers and customer alike, without impacting customer privacy concerns. . "m  0*%%<<y"Ԍ X-x150.` ` Although LECs face certain obligations when they use aggregate customer  X-information under section 222(c)(3), Congress did not require that LECs give aggregate customer information to their competitors upon request in all circumstances. Rather, when LECs use this aggregate information only to tailor their service offering to better suit the needs of their existing customers that is, within the scope of sections 222(c)(1)(A) and (B),  XS-LECs do not need to disclose the aggregate information.!"S"< yO-ԍxWe agree that, under the terms of section 222(c)(3), aggregate customer information used for purposes  {O-within Section 222(c)(1) is not subject to the nondiscrimination disclosure requirement. See, e.g., Ameritech Reply at 10; GTE Comments at 3 n.5; Pacific Telesis Reply at 13; SBC Reply at 1314 & n.49; U S WEST Comments at 20.  Moreover, LECs are permitted to use the aggregate information when targeting new service customers that is, for purposes beyond the scope of section 222(c)(1)(A) and (B). When they do so, LECs simply must give that information to others upon request. This means that, as in the example above, LECs, like long distance carriers may use aggregate customer information for valuable business and marketing purposes. Where LECs use or disclose the aggregate information for marketing service to which the customer does not subscribe, however, LECs can still use the information, but must disclose the aggregate information to others upon request. Our interpretation, therefore, does not deprive LECs of all economic benefit associated with their customer information, and we accordingly find claims to the contrary to be without merit.  X -x151.` ` We also reject parties' Equal Protection challenge. In order to sustain an equal protection challenge, parties challenging the law must prove that the law has no rational  X-relation to any conceivable legitimate legislative purpose.t""< {O-ԍxFCC v. Beach Communications, Inc., 508 U.S. 307 (1993).t Making LEC aggregate customer information available on nondiscriminatory terms, when used for purposes beyond those in sections 222(c)(1)(A) and (B), is reasonably related to the legitimate goal of promoting open competition in telecommunications markets. Indeed, as CFA points out, Congress sought a balance in the relationship between the carrier's permissible uses of CPNI in sections 222(c)(1)(A) and (B), which need not be disclosed to competitors because personal information is at stake, and section 222(c)(3)'s aggregate customer information, which  X-requires disclosure based on competitive interests.I#D"< yO-ԍxCFA Comments at 6.I In singling out LECs in section 222(c)(3), Congress reasonably recognized that LECs, as former monopoly providers, maintain a competitive advantage with regard to use of customer information. Specifically, because of their former monopoly status, LECs enjoy the benefit of accumulated customer information on all telephone subscribers within a certain geographic location, not merely those that have "chosen" their service. Also, to the extent there is some correlation between usage of local exchange and long distance service or CMRS, LECs theoretically "know" the  X-most profitable customers (i.e., heaviest users) of all IXCs and CMRS providers operating within their region, as well. LECs obtained this information, as AT&T argues, not because"n#0*%%<<[" they provided exceptional service, but because customers had no choice but to subscribe to  X-them.I$"< yOV-ԍxAT&T Further Reply at 6.I  X- x152. INDEA ` ` Section 222 requires only that when LECs seek to target customers based on aggregate customer information which create generalized "profiles" of groups of customers likely to respond favorably to service offerings outside their existing service, they must also make these group profiles available to their competitors. In this way, Congress sought to rectify the LECs' advantage in scope and wealth of CPNI, while at the same time not compromising customers' privacy interests. The aggregate rule rationally serves Congress' goal of encouraging competitive markets, through availability of aggregate customer information, while protecting CPNI from disclosure absent customer approval, and thus is  X-Constitutional.%X"< {O -ԍxSee, e.g., FCC v. Beach Communications, Inc., 508 U.S. 307 (1993); see also California v. F.C.C., 39  {Ou -F.3d 919, 92324. (9th Cir. 1994) (California III) (subsequent history omitted)(upheld Commission's differential treatment and regulation of BOCs in their provision of enhanced services based on BOCs potential power to exploit their monopoly to obtain an unfair competitive advantage in other markets and prevent the development of enhanced services competition). We note that the practical effect of the distinction in section 222(c)(3) may wane with the advent of local competition and LEC entry into long distance markets. This is so because, if the carriers are correct, and customers will obtain all their telecommunication services in "onestop" from one carrier, then use of aggregate information to provide their customers such "full service" will trigger no disclosure obligation by LECs; the nondiscrimination obligation in section 222(c)(3) applies only for use of aggregate information to market outside the customer's total service relationship.  TAKING   X\ -x153.` ` Finally, regarding the LECs' notice obligations, the nondiscrimination requirement in section 222(c)(3) protects competitors from anticompetitive behavior by requiring that LECs make aggregate customer information available "upon reasonable  X -request." We interpret these terms to permit a requirement that LECs honor standing requests for disclosure of aggregate customer information at the same time and same price as when disclosed to, or used on behalf of, their affiliates. We are persuaded that such standing requests adequately address the competitive concerns formerly protected through our notice requirement.  X!-  X` hp x (#%'0*,.8135@8: "< {O-ԍxSee discussion supra Parts IV and V, announcing our interpretation and implementation of section222(c)(1). Oral approval appropriately limits carrier's anticompetitive use of  X-CPNI.i?n"< {O -ԍxSee discussion supra   LUCY114 .i As we have explained above, CPNI sharing among affiliated entities to whom the customer already subscribes is unlikely to have anticompetitive effects since any such sharing does not allow carriers to target new customers, but merely assists carriers in tailoring their  XD-service offering in a manner that may be more beneficial to existing customers.U@D"< {O$-ԍxSee supra   JP59 .U "Du@0*%%<<*"Ԍ X-ԙx165.DISCLOSE2` ` Second, competitors are afforded access to customer CPNI through section222(c)(2), which requires disclosure of CPNI to entities unaffiliated with BOCs upon  X-their obtaining a customer's affirmative written request."JA"< yO3-ԍx47 U.S.C. 222(c)(2).J Through this provision, BOCs cannot exclusively advantage their affiliates, and must provide competitors access when the customer says so. Third, section222(c)(3), which governs aggregate customer information, directly addresses the particular competitive advantages obtained by LECs' store of customer information. As discussed earlier, through this provision, Congress sought to rectify the LECs' advantage in scope and wealth of CPNI, that derives from their historic and continuing market power and not from their skill in competition, while at the same time not  X-compromising customers' privacy interests.ZBX"< {O -ԍxSee discussion infra Part VI.Z  X -x166. ` ` Further mitigating competitive concerns, beyond section222, is the fact that, BOCs, as incumbent local exchange carriers, may also be subject to obligations under section251 to disclose customer information as part of their interconnection obligations upon  X -the oral approval of customers.^C "< {O-ԍxSee discussion supra Part IV.D.2.^ In addition, as we indicated earlier, section201(b) remains fully applicable where it is demonstrated that carrier behavior is unreasonable and anticompetitive.  X-x167. KATE  ` ` Finally, we note that our conclusion is consistent with the regulatory symmetry  Xg-Congress intended for carrier marketing activities.Dg|"< yO-ԍx# iTWI ) I## ]\  PC2P#This regulatory symmetry is evidenced by the interrelationship of sections271(e) and 272(g). Section271(e)(1) imposes a prohibition on the joint marketing of interLATA services and resold BOC local services by interexchange carriers until a BOC receives 271 approval to enter into inregion interLATA services or until 36 months have passed from the date of enactment of the 1996 Act, whichever is earlier. We noted in  {O-the NonAccounting Safeguards Order that Congress adopted section271(e) in order to limit the ability of interexchange carriers with more than 5% of the Nation's presubscribed access lines to provide "onestop shopping" of certain services until a BOC similarly is authorized to provide interLATA service in the same territory. Section272(g)(2) further limits a BOC's provision of interLATA services by providing that a BOC's section272 affiliate may not market or sell interLATA services within any of its inregion States until the BOC is authorized to provide interLATA services in such State under section271(d).  Our interpretation requires that all carriers, including BOCs, LECs, CLECs, and IXCs, obtain customer approval before using CPNI to market offerings outside the customer's existing service relationship. In this way, no  X-carrier or group of carriers obtain a competitive advantage in marketing.E""< {O"-ԍxSee e.g., Ameritech Further Comments at 7 (to ensure that BOCs are able "to engage in the same type marketing activities as other service providers," the consent requirements imposed on a BOC's use of CPNI to market the services of its section272 affiliate should be no more onerous than those imposed on AT&T's or MCI's use of interLATA CPNI in the marketing of their local exchange services).  DISCLOSE2DISCLOSE2"vE0*%%<<"Ԍ X-ԙx168. KATE  ` ` The fact that Congress requires BOCs to establish separate affiliates that must operate independently from the BOC entity that offers local exchange service, does not, as  X-some parties contend,F "< yO3-ԍxAT&T Further Comments at 78 (section272(a)(1)(A)'s requirement that affiliates be "separate from any operating company entity" and section272(b)(1)'s prescription that separate affiliate "operate independently" from the BOC form bases for treating BOC affiliates as unaffiliated entities); AT&T Further Reply at 45 (same); MCI Further Comments at 1516 (same).  alter our conclusion. Rather, the separate affiliate requirement serves other important purposes such as preventing anticompetitive cost-shifting that may arise when a BOC enters the interLATA services market in an in-region state in which the local  XQ-exchange market is not yet fully competitive. Moreover, in the NonAccounting Safeguards  X0-Order, the Commission held that the "operate independently" requirement in section272(b)(1)  X-does not preclude the sharing of administrative and other services.G"< {Op -ԍxNonAccounting Safeguards Order, 11 FCC Rcd at 21986,  168. The scope of what constitutes administrative services is currently among the pending issues on reconsideration. In addition, the exception in section272(g)(2) further contemplates that BOCs can maintain relationships with their long distance affiliates, when they jointly market the services of these affiliates, that would not be subject to nondiscrimination principles. Accordingly, suggestions that Congress intended to erect a kind of impermeable "Chinese wall" between BOCs and their section272 affiliates, for all purposes, are overstated. Rather, section272 is intended to ensure that BOCs do not give their affiliates a competitive advantage, and for the reasons described herein, section222 fully and specifically balances these concerns in relation to CPNI for LECs. In contrast, applying section272 to the BOCs' sharing of CPNI with their statutory affiliates would not permit the goals and principles of section222 to be realized fully as we believe Congress contemplated. We resolve this conflict between sections272 and 222, therefore, in favor of the interpretation that, as a policy matter, we believe best furthers all of Congress' goals that section222, and not section272, governs all carriers, including BOCs,  XH-use and protection of CPNI.H H "< yO-ԍxAlthough some have argued that our resolution of this issue is inconsistent with the manner in which we have resolved tensions between sections222 and 275(d), we disagree. The relevant language of section275(d) is quite distinct from the language in section272(c)(1), and those textual differences merit different resolutions of tensions between section222 and sections275(d) and 272, respectively.  X-x169. KATE  ` ` For all these reasons, we conclude that the most reasonable interpretation of sections222 and 272 is that section272 imposes no additional CPNI requirements on BOCs' sharing of CPNI with their section272 affiliates. Accordingly, we overrule our prior  X-conclusion to the contrary in the NonAccounting Safeguards Order. "xw H0*%%<<4"Ԍ X-gXx C. X` ` Section222 and Section274 (#`  X-Xx X` ` 1.X Background (#  Xt-x170. ` ` The Commission confirmed that electronic publishing is an information service  XQ-in its Electronic Publishing Order, released on February 7, 1997.IQ"< {O-ԍxElectronic Publishing Order, 12 FCC Rcd at 540708,  110, supra note  EP48 . Section222(c)(1), as gimplemented in this proceeding, restricts carriers from using, disclosing, or permitting access to CPNI, derived from the provision of a telecommunications service, for marketing  X-information services and other services unless they obtain express customer approval.^JZ"< {O -ԍxSee discussion supra Part IV.C.2.^ This  X-means that customer approval is a prerequisite for any carriers use or disclosure of CPNI for electronic publishing purposes.  X` -x171.` ` Section274 permits BOCs to provide electronic publishing services only through a "separated affiliate" or "electronic publishing joint venture" that meets certain  X -separation, nondiscrimination, and joint marketing requirements.8K "< yO-ԍxIn particular, in the joint marketing provision, two nondiscrimination obligations are imposed. First, section274(c)(2)(A) provides that: "[a] Bell operating company may provide inbound telemarketing or referral services related to the provision of electronic publishing for a separated affiliate, electronic publishing joint  {O-venture, affiliate, or unaffiliated electronic publisher: Provided, That if such services are provided to a separated  {O-affiliate, electronic publishing joint venture, or affiliate,  such services shall be made available to all electronic  {O-publishers on request,  on   nondiscriminatory terms." (emphasis added). Second, section274(c)(2)(B) provides:  {Om-[a] Bell operating company may engage in  nondiscriminatory teaming or business arrangements to engage in electronic publishing with any separated affiliate or with any other electronic publisher if (i) the Bell operating  {O-company only provides facilities,  services, and basic telephone service information as authorized by this section, and (ii) the Bell operating company does not own such teaming or business arrangement." (Emphasis added). 8 In the Electronic  X -Publishing Order, the Commission promulgated policies and rules governing the BOCs'  X -provision of electronic publishing under section274. The Commission deferred to this proceeding any decision on the extent that section222 affects implementation of the joint  X-marketing provisions of section274.L "< {O-ԍxElectronic Publishing Order, 12 FCC Rcd at 5420,  142, supra note  EPUB48 . The Commission also deferred to this proceeding the following issues: (i) whether the term "basic telephone service information," as defined in section274(i)(3), includes CPNI; (ii) whether section222 requires a BOC engaged in permissible marketing activities under section274(c)(2) to obtain customer approval before using, disclosing, or permitting access to CPNI; and (iii) whether or to what extent section274(c)(2)(B) imposes any obligations on BOCs that use, disclose, or permit access to  X-CPNI pursuant to a "teaming" or "business arrangement" under that section.QM "< {O$-ԍx Id. at 543233,  169.Q"xM0*%%<<"Ԍ X- ę#o\  PCcXP# x172.` ` In the Public Notice released by the Common Carrier Bureau on February 20, 1997, further comment was also sought regarding the interplay between sections222 and 274, including on, among other things: (i) the meaning and application of the nondiscrimination obligations in sections274(c)(2)(A) and 274(c)(2)(B); and (ii) customer approval requirements for BOCs sharing of CPNI with electronic publishing affiliates, joint ventures, and unaffiliated  XS-entities.QNS"< {O-ԍxSupra note  PN50 .Q In response to this notice, two commenters contend that section274, like section272, imposes additional requirements on the ability of BOCs to provide certain services and to share information with their electronic publishing affiliates or partners in  X-particular contexts that go beyond the requirements of section222.OZ"< yO -ԍxAT&T Further Comments at 21; Cox Further Comments at 12. In particular, these commenters argue that, if a BOC intends to access a customer's CPNI, without a customer's affirmative written consent, as part of an inbound telemarketing contact or referral service for the benefit of a separated affiliate or joint venture, it  {OM -would have to make the CPNI available on nondiscriminatory terms to any unaffiliated electronic publisher. Id. Moreover, although section222(d)(3) may provide telecommunications carriers greater latitude in responding to customer inbound marketing requests generally, Cox contends that section274(c)(2)(A) mandates that unaffiliated entities be given access to the same services offered to BOC subsidiaries or joint venture partners, including access to CPNI. Cox Further Comments at 11. Finally, AT&T argues that if a BOC obtains verbal customer consent for use of CPNI in an inbound telemarketing or referral context, it must similarly solicit blanket consent to disclose CPNI to other unaffiliated providers of electronic publishing services. AT&T Further Comments at 21.  In contrast, although the BOCs acknowledge that some form of customer approval is required before CPNI can be used to market electronic publishing services, they argue that there is no statutory requirement  X -related to the disclosure of CPNI in section274(c)(2)(A).mP "< yO-ԍxSBC Further Comments at 16; U S WEST Further Comments at 26.m In addition, the BOCs argue that they have no general obligation under either section274(c)(2)(A) or 274(c)(2)(B) to solicit  X= -customers to obtain CPNI release for any entity, whether affiliated or unaffiliated. Q= L "< {O:-ԍxSee, e.g., Bell Atlantic/NYNEX Further Comments at A11; BellSouth Further Comments at 33; SBC Further Comments at 22, 24; U S WEST Further Comments at 3132, 34. Also, according to the BOCs, the First Amendment prohibits the Commission from compelling a BOC to contact its customers and speak on behalf of nonaffiliated entities. They reason, neither section274(c)(2)(A) nor section274(c)(2)(B) can be interpreted or applied to impose an unconstitutional burden on the BOCs. BellSouth Further Comments at 2930, 32; PacTel Further Comments at 2628, 3133; SBC Further Comments at 24. Bell Atlantic/NYNEX also rejects any suggestion that the seeking of customer approval is a transaction under section274(b)(3), but rather  yO-represents an arrangement between a BOC and its customer. Bell Atlantic/NYNEX Further Comments at A11;  {O| -but see PacTel Further Comments at 34 (a BOC seeking approval for or on behalf of a separated affiliate or electronic publishing joint venture would be a transaction subject to 274(b)(3), and the BOC would be required to comply with the requirements of the Commission s order in CC Docket 96150). " yQ0*%%<< "Ԍ X-QXx` ` 2. Discussion (#  X-x173.` ` For the reasons discussed in connection with section272, we are likewise persuaded here that we should interpret section274 to impose no additional CPNI Qrequirements regarding the BOCs' use of CPNI in connection with their provision of electronic publishing. We find that both privacy and competitive concerns regarding BOCs' use, disclosure, or permission of access to CPNI for electronic publishing purposes, are protected in section222(c)(1) through the requirement that customers must give their approval  X-for such use.R""< {Oa -ԍxSee discussion supra   INFR45  regarding the treatment of information services under section222(c)(1). Based on that interpretation, we agree with MCI that, insofar as electronic publishing is an information service,  yO -customer approval is a prerequisite for any carriers use or disclosure of CPNI for electronic publishing purposes.  MCI Further Reply at 45. Likewise, section222(c)(2) ensures competitive access to CPNI by "any person," which therefore includes unaffiliated electronic publishers. Finally, pursuant to section222(c)(3), competing electronic publishers would be entitled to obtain any aggregate customer information used by BOCs to market their, or an affiliated or related entity's, electronic publishing services. Thus, as in the case of section272, where section222 appropriately balances the potentially competing interests in the specific context of carriers' use and disclosure of CPNI, we conclude that we should not upset the balance by "superimposing" nondiscrimination standards in section274.  X-#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP#  VIII.XxCOMMISSION'S EXISTING CPNI REGULATIONS (#  Xg-Xx A. ` ` Overview (#  X!-x174.` ` In the Computer III,S!"< {O-ԍxComputer III Phase I Order, 104 FCC 2d 958, #X\  P6G;2P#supra note  CIII32 . GTE ONA,T!D"< {O-ԍx#X\  P6G;2P#GTE ONA Order, 11 FCC Rcd 1388, supra note  GTE33 . and BOC CPE ReliefU!"< {O-ԍ#X\  P6G;2P#xBOC CPE Relief Order, 2 FCC Rcd 143, supra note  READ34 . proceedings, the Commission established a framework of CPNI requirements applicable to the enhanced  services operations of AT&T, the BOCs, and GTE and the CPE operations of AT&T and the  X-BOCs (Computer III CPNI framework).Vh "< yO-ԍx#X\  P6G;2P#The Commission defines "enhanced services" as services "offered over common carrier transmission facilities used in interstate communications, which employ computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information; provide the subscriber additional, different, or restructured information; or involve subscriber interaction with stored  {O"-information." 47 C.F.R.  64.702(a); NATA Centrex Order, 101 FCC 2d 349, see supra note  THET178 . As we observed in the Notice, the Commission  X-adopted the Computer III CPNI framework, together with other nonstructural safeguards, to protect independent enhanced services providers and CPE suppliers from discrimination by"xzV0*%%<<4"  X-AT&T, the BOCs, and GTE.eW"< {Oy-ԍxNotice at 12516, 12530,   4, 40.e The framework prohibited these carriers' use of CPNI to gain an anticompetitive advantage in the unregulated CPE and enhanced services markets, while protecting legitimate customer expectations of confidentiality regarding individually  X-identifiable information.LXZ"< {O-ԍxId. at 12516,  4.L Alternatively, for those carriers that maintain structurally separate  Xt-affiliates in connection with their CPE and enhanced services operations, our Computer IIYt"< {O -ԍx#X\  P6G;2P#Supra note  RCA31 .  XS-rule 64.702(d)(3) prohibits carriers from sharing CPNI with those affiliates unless it is made  X0-publicly available.JZ0~"< yO_ -ԍx47 CFR  64.702(d)(3).J We likewise prohibit the BOCs from providing CPNI to their cellular  X -affiliates unless they make the CPNI publicly available on the same terms and conditions.[ "< yO-ԍx47 C.F.R.  22.903(f). This rule was part of the Commission's structural separation requirements in connection with the BOC provision of cellular services. That structural separation regime was implemented  {O\-sixteen years ago, but recently was revised substantially in the CMRS Safeguards Order, supra note  CMRS51 . The Commission expressly retained rule 22.903(f) in that order, however, pending the outcome of this CPNI proceeding.  X-x175.` ` We conclude that the new CPNI scheme that we implement in this order, which is applicable to all telecommunications carriers, fully addresses and satisfies the  X -competitive concerns that our Computer III framework as well as our Computer II and BOC CPNI cellular rules sought to address. Accordingly, we eliminate these existing CPNI  X= -requirements in their entirety.\L= "< yO- SKUNKY ЍxWe do not, however, disturb the CPNI requirements which protect foreignderived U.S. customer CPNI  {Ov-that the Commission recently implemented in the Rules and Policies on Foreign Participation in the U.S.  {O@-Telecommunications Market, IB Docket Nos. 97-142 & 95-22, Report and Order and Order on Reconsideration,  {O -FCC 97-398, at   172176 (rel. Nov. 26, 1997) (Foreign Participation Order), recon. pending. These requirements are based on the general duty of every telecommunications carrier to protect the confidentiality of  {O-customer information, established in section222(a), and are fully consistent with section222(c). Id. at 176 &  {Of-n.356. Accordingly, unlike the Computer III requirements that predated section222, the requirements in the  {O0-Foreign Participation Order remain in full force.  Nevertheless, the record supports our specifying general minimum safeguards, applicable to all carriers, to ensure compliance with section222's statutory scheme. Toward that end, we first require that all carriers conform their database systems to restrict carrier use of CPNI as contemplated in section222(c)(1) and section222(d)(3), through file indicators that flag restricted use, in conjunction with personnel training and supervisory review. Second, we impose recording requirements on carriers that serve both to ensure that use restrictions are being followed and to afford a method of verification in the event they are not. "%{\0*%%<<)"Ԍ X< Xx B.` ` Computer III CPNI Framework (#  X-Xx` ` 1. Background (#  Xu-x176.CIII FRAMEWORK` ` The CPNI framework the Commission adopted prior to the 1996 Act, which applies only to the BOCs, AT&T, and GTE, and only in connection with their use of CPNI to  market CPE and enhanced services, involves five general components. The first concerns customer notification. The current framework requires the BOCs, AT&T, and GTE to send annual notices of CPNI rights regarding enhanced services to all their multi-line business  X-customers.]\"< {O? -ԍxCustomers with two or more access lines are multiline customers. Computer III Phase II Order, 2 FCC Rcd 3072 (1987) at 309397,   141174 (AT&T, BOCs must notify multi-line business customers of  {O -CPNI rights on annual basis); GTE Safeguards Order, 9 FCC Rcd at 4943 (applied CPNI requirements to GTE). With respect to CPE, the BOCs must also send annual notices to multi-line business customers, and AT&T must provide a onetime notice to its WATS and private line customers. Each notice must be written, describe the carrier's CPNI obligations, the customer's CPNI rights, and include a response form allowing the customer to restrict access  X: -to CPNI.^: "< {O-ԍxAT&T Structural Relief Recon. Order, 104 FCC 2d at 76468,   4553; BOC CPE Relief Order, 2  yO-FCC Rcd at 15153,   5570. Second, the BOCs and GTE, but not AT&T, must obtain prior written  X -authorization from business customers with 20 or more access lines before using CPNI to  X -market enhanced services._ F"< {O-ԍxBOC Safeguards Order, 6 FCC Rcd at 760514,   7689; GTE Safeguards Order, 9 FCC Rcd at 494445,  45 (applied CPNI requirements to GTE). All BOC and AT&T customers with fewer lines have the right to restrict access to their CPNI by carrier CPE personnel, and along with GTE customers,  X-enhanced services personnel as well.`l "< {O-ԍxAT&T Structural Relief Order, 102 FCC 2d at 69194,   6267 (reasoning that customers who have the desire to have CPNI available only to network services personnel should be able to obtain network services on that basis, Commission required AT&T to limit CPNI access to network services personnel who have no  {OY-involvement in CPE sales); Computer III, Phase I Order, 104 FCC 2d at 108692,   256265 (in connection with its provision of enhanced services, AT&T must permit customers the right to restrict access to CPNI to  {O-network personnel); BOC CPE Relief Order, 2 FCC Rcd at 15153,   5570 (customers can restrict access to  {O-CPNI by BOC CPE marketing personnel); Computer III Phase II Order, 2 FCC Rcd at 309397,   141174 (BOCs may use CPNI in their enhanced service operations provided that they establish procedures to honor the  {OG-requests of customers to withhold CPNI from BOC enhanced services personnel); GTE Safeguards Order, 9 FCC  {O -Rcd at 494445,  45 (applied CPNI requirements to GTE); BOC ONA Order, 4 FCC Rcd at 20934,   398 yO -450 (ordered SBC to amend plan regarding residential and single line customers to permit all customers the right to restrict). These carriers must also accommodate customer"|`0*%%<<Z"  X-requests for partial or temporary restrictions on access to their CPNI.%a~"< {Oy-ԍxComputer III Phase II Recon. Order, 3 FCC Rcd at 116164,   86115 (customers may authorize  {OC-release of some or all of its CPNI for a specific time and/or for specific purposes); GTE Safeguards Order, 9  {O -FCC Rcd at 494445,  45 (applied CPNI requirements to GTE); BOC ONA Order, 4 FCC Rcd at 20934,    yO-398450 (accepted BOC plans for partial and temporary restrictions as well as U S WEST's and BellSouth's plan that if a customer seeks to restrict only a part of his or her CPNI, the company will advise the customer to restrict all of his or her CPNI and then authorize disclosure of selected portions of it to their enhanced services personnel).% Third,   we require the BOCs, AT&T, and GTE to make CPNI available to unaffiliated enhanced services providers and CPE suppliers at the customer's request on the same terms and conditions as the CPNI is  X-made available to their personnel.tb"< {OV -ԍxAT&T Structural Relief Order, 102 FCC 2d at 69194,   6267 (AT&T must make CPNI available to  {O -competing CPE suppliers at the customer's request); Computer III, Phase I Order, 104 FCC 2d at 108692,   256265 (AT&T must make CPNI available to competing enhanced services providers upon customer's request);  {O -BOC CPE Relief Order, 2 FCC Rcd at 15153,   5570 (BOCs must make CPNI available to competing CPE  {O|-suppliers upon customer's request); Computer III Phase II Order, 2 FCC Rcd at 309397,   141174 (BOCs  {OF-must make CPNI available to other enhanced services vendors upon customer's request); GTE Safeguards Order, 9 FCC Rcd at 494445,  45 (applied CPNI requirements to GTE).t Fourth, the BOCs must provide unaffiliated enhanced services and CPE providers any nonproprietary, aggregate CPNI that they share with their  XQ-own personnel on the same terms and conditions.|cQX "< {OZ-ԍxComputer III Phase II Order, 2 FCC Rcd at 309397,   141174.| GTE is subject to the same requirement  X.-for its enhanced services operations.kd."< {O-ԍxGTE Safeguards Order, 9 FCC Rcd at 494445,  45.k AT&T, however, is not subject to any Commission  X -requirements with respect to aggregate CPNI.|e |"< {O8-ԍxComputer III Phase II Order, 2 FCC Rcd at 309397,   141174.| Finally, the BOCs, AT&T, and GTE must use passwords to protect and block access to the accounts of customers that exercise their  X-right to restrict.f"< {O-ԍxBOC ONA Order, 4 FCC Rcd at 209234,   398450; AT&T ONA Order, 4 FCC Rcd at 245556,    {ON-4855; GTE ONA Order, 11 FCC Rcd at 141925,   7386.  We also mandate that the BOCs and GTE address their compliance with  X-our CPNI requirements in their ONA, CEI, and CPE relief plans.gj"< {O-ԍxComputer III Phase II Order, 2 FCC Rcd at 3095,  156 (BOC ONA plans); GTE ONA Order, 11 FCC  yO-Rcd at 141925,   7386.  X\ -XX(Px177.` ` The Commission acknowledged in the Notice that section 222 may address the  X; -anticompetitive concerns that its existing CPNI requirements had sought to address, and the Commission invited comment on which, if any, of its requirements may no longer be" }g0*%%<< "  X-necessary in view of section 222.Qh"< {Oy-ԍxNotice at 12530,  41. Q The Commission tentatively concluded that it should not extend its CPNI requirements to carriers that are not affiliated with AT&T, the BOCs, or  X-GTE._iZ"< {O-ԍxId. at 1251516, 12530,   3, 40._ The Commission also recognized that, in certain respects, the Computer III CPNI  X-framework is more restrictive than the 1996 Act.Mj"< {O6-ԍxId. at 12529,  38.M The Commission decided that these additional restrictions would remain in effect, pending the outcome of this rulemaking, to the  XS-extent that they do not conflict with section 222._kS~"< {O -ԍxId. at 1251516, 12529,   3, 38._ The Commission also asked parties to address whether privacy, competitive concerns, or other considerations justified the retention of our existing CPNI requirements, what the costs and benefits of retaining these CPNI requirements would be, and how changing our CPNI requirements might influence other  X-nonstructural safeguards adopted prior to the 1996Act.Ml"< {O-ԍxId. at 12530,  41.M In the event the Commission concluded that we should continue to subject the BOCs, AT&T, and GTE to CPNI requirements that are more restrictive than those applicable to other carriers, the Commission sought comment on whether such differential treatment should be permanent or limited in  X; -duration and, if limited, what sunset provisions should apply.dm; "< {O-ԍxId. at 125152516, 1253031,   3, 42.d  X -x178.` ` The Commission also tentatively concluded that AT&T's recent classification  X -as a nondominant carrier for domestic services, and its plan to separate its equipment business from its telecommunications service business, justified removal of our CPNI  X-requirements as to it.n\4 "< {Oq-ԍxId. at 1251516, 1253031, 12533,   3, 42, 48 (citing Motion of AT&T Corp. to be Reclassified as a  {O;-NonDominant Carrier, 11 FCC Rcd 3271 (1995), Order on Reconsideration, Order Denying Petition for  yO-Rulemaking, Second Order on Reconsideration in CC Docket No 9661, 12 FCC Rcd 20787 (1997). The Commission asked whether AT&T continues to possess a competitive advantage with respect to access to and use of customer CPNI, and whether privacy concerns, competitive concerns, or any other considerations justify special regulatory  X#-treatment of AT&T with regard to CPNI.Xo#X "< {O,!-ԍxId. at 1253031,  42. X "~o0*%%<<F"Ԍ X-x179.` ` Several parties argue that our existing Computer III CPNI framework for the  X-BOCs and GTE is unnecessary and should be eliminated.p""< yOX-ԍxAd Hoc Reply at 9; Ameritech Comments at 14; Bell Atlantic Comments at 2, 9; Bell Atlantic Reply at  {O -8; BellSouth ex parte (filed Oct. 17, 1996); BOC Coalition ex parte (filed Aug. 13, 1997); BellSouth Comments at 22; GTE Comments at 16; NYNEX Comments at 1819; PacTel Comments at 14; PacTel Reply at 34; SBC Comments at 14; SBC Reply at 5; USTA Reply at 3; U S WEST Comments at 20, 21. AT&T and LDDS Worldcom argue that, in any event, the Commission's existing CPNI requirements should not continue to  X-apply to AT&T because it has beenclassified as nondominant.|q"< yO-ԍxAT&T Comments at 4 n.3; AT&T Reply at 8 n.17; LDDS Worldcom Comments at 12.| Other parties argue that we  Xv-should retain the Computer III CPNI requirements for the BOCs and GTE,rvB"< yOi -ԍxACTA Comments at 6; AICC Comments at 8; ALLTEL Comments at 2; ALLTEL Reply at 3; Arch Comments at 1213; AT&T Comments at 4; CPI Reply at 13; CompTel Comments at 3, 8; CompTel Reply at 8; Excel Comments at 56; ICI Reply at 4; ITAA Comments at 910; LDDS WorldCom Comments at 12; LDDS WorldCom Reply at 1011; MCI Comments at 1819; MCI Reply at 14; Sprint Comments at 7; Sprint Reply at 11; TCG Comments at 24; TRA Comments at 17; TRA Reply at 4; Washington Commission Comments at 910. and additionally  XU-for AT&T.sU "< {O-ԍxSee, e.g., Arch Comments at iv, 1213; Excel Comments at 6; TRA Reply at 4. Several of these commenters further contend that we should extend some or all  X2-of the preexisting requirements to carriers other than AT&T, the BOCs, and GTE.pt2L "< {O/-ԍxSee, e.g., MCI Comments at 21; PaOCA Comments at 5. p  X-SXx` ` 2.  Discussion (#  X-x180.10` ` We conclude that retaining the Computer III CPNI requirements, applicable  X -solely to the BOCs, AT&T and GTE, would produce no discernable competitive protection,  Xb -Sand would be confusing to both carriers and customers.ub "< {O-ԍxSee, e.g., Bell Atlantic Comments at 10; NYNEX Comments at 2021; PacTel Comments at 17; SBC Reply at 5; USTA Reply at 3. We accordingly reject CPI's suggestion that we should consider repeal of the  yO-CPNI requirements in a separate proceeding after this order, so that parties would be able to comment  {OK-specifically on whether our Computer III CPNI requirements should be retained in light of the new CPNI scheme. CPI Reply at 1314. The record is developed on this issue, and we believe that delay would only serve  yO-to confuse customers and carriers for no particular benefit.  The statutory scheme we  X? -implement in this order effectively replaces our Computer III CPNI framework in all material  X -respects.v^ Z"< {O)"-ԍxSee, e.g., Ameritech Comments at 1516; Ameritech Reply at 4; BellSouth Comments at 22; SBC Reply  {O"-at 5; see also NYNEX Comments at 19 (Congress has occupied the field as shown by its tracking of and  {O#-rejection of certain elements in the Computer III requirements).  For example, like under the Computer III CPNI framework, our new scheme establishes the extent that carriers, including AT&T, the BOCs, and GTE, must notify" v0*%%<<" customers of their CPNI rights, obtain customer approval before using CPNI for marketing purposes, and accommodate customer requests for partial or temporary restrictions on access  X-to CPNI.w$"< {O3-ԍxSee discussion supra Part V. Moreover, our interpretation of section 222(d)(3), which permits partial and temporary permission for carrier use of CPNI, is consistent with our prior CPNI requirements requiring as  {O-much. Computer III Phase II Recon. Order, 3 FCC Rcd at 116164,   86115 (customers may authorize the release of some or all of its CPNI for a specific time and/or for specific purposes).  We also set forth under the new scheme the circumstances under which carriers, including AT&T, the BOCs, and GTE, must make individually identifiable and aggregate  Xt-CPNI available upon request.x t"< yO -ԍxSection 222(c)(2) expressly replaces our prior requirement which provided for the BOCs', AT&T's, and  yO -GTE's release of CPNI to competitors upon the customer's request.  Likewise, section 222(c)(3) replaces our  yOi -aggregate requirements in connection with the BOCs and GTE. Ameritech Comments at 1516 (these two provisions of the Act incorporate virtually the same requirements as the FCC rules).   X.-x181.` ` The legislative history is silent on the issue of the Computer III requirements. Some commenters argue that we should interpret Congress' silence as indicating its intention  X-that the Computer III CPNI requirements be retained.ky"< yO7-ԍxLDDS Worldcom Reply at 1011; Sprint Reply at 1112. k  Other parties argue that the silence  X-indicates the intention that the existing framework be eliminated.z, "< {O-ԍxSee e.g., GTE Comments at 1617; GTE Reply at 2, 5, 9; PacTel Reply at 46, 1314.    Because Congress offered  X-no explanation on this point, we do not find the history helpful either way. Rather, we find  X -that the rules we implement in this order satisfy the concerns upon which the Computer III framework is based, and therefore we replace them with the new scheme. We note that,  XA -although we eliminate our Computer III approval and notification requirements, as requested  X -by several carriers, the rules we implement herein are actually more in line with those endorsed by carriers urging us to retain our prior framework in which the BOCs, AT&T, and GTE provide notification to their multiline business customers, and need prior authorization  X-in the case of twenty or more lines.i{ "< {O&-ԍxSee, e.g., C&W Comments at 4; MFS Comments at 11.i   Xq- x ALLCARR 182.` ` We are persuaded that the competitive and privacy concerns upon which the  XN-Computer III CPNI framework rests are fully addressed by our new CPNI scheme, and that,  X--continued retention of our Computer III CPNI framework would produce no additional  X -benefit.|" P "< yO "-ԍxIn this regard, we disagree with parties to the extent they argue that competitive considerations no  {O"-longer justify certain protective CPNI requirements. See, e.g., Ameritech Comments at 1516; Bell Atlantic  yO#-Comments at 9; Bell Atlantic Reply at 3; NYNEX Comments at 20; PacTel Comments at 14, 17. Rather, we agree with commenters that competitive considerations continue to support CPNI regulation, although under"g${0*%%$"  {O-section 222, we extend the framework to all carriers, not just those carriers with market power. See, e.g., Arch Comments at 13; Excel Comments at 56. Indeed, in two important respects, the rules we promulgate herein implementing" "|0*%%<<"  X-section 222 afford information services providers and CPE suppliers greater protection from carriers' anticompetitive CPNI use. First, the new scheme applies to all carriers, and in so  X-doing, extends the scope of protection consistent with section 222.}""< yO-ԍxWe note that issues relating to whether we should apply CPNI rules for larger carriers that are different from those we apply to small carriers are addressed in section VIII(D). We believe applying our new CPNI rules to all carriers generally furthers the objective of section 222 of safeguarding customer privacy.  X.-x ACPNI 183.ACI` ` Second, several of the new scheme's CPNI requirements operate to make  X -carriers' anticompetitive use of CPNI more difficult. Unlike the Computer III CPNI framework, which requires customer authorization only from businesses with over twenty  X-lines, we now require that all carriers obtain customer approval from all customers, including  X-small businesses and residential customers with any number of lines, before carriers can use  X -CPNI to market information services or CPE.o~ z"< {O-ԍxSee discussion supra Part V;   10180 .o Although the Computer III CPNI framework affords customers the right to restrict access to their CPNI records, whereas under our new scheme the customer's right is to withhold approval, the result nevertheless is the same the customer has the right to control whether a carrier uses, discloses, or permits access to its  X -CPNI. "< {O-ԍxSee discussion infra Part VIII.D.2, in connection with safeguards. Indeed, in contrast with the Computer III CPNI framework, which generally permits  X -CPNI use unless and until the customer affirmatively acts to restrict, our new scheme prohibits carriers from using CPNI unless and until they obtain customer approval, and in this  X-way offers customers greater control.H"< yO-ԍxBecause of this change, several of our prior requirements, which clarify the duration and timing of a  {O-customer's right to restrict CPNI, are rendered either unnecessary or redundant. See e.g., BOC CPE Relief  {Os-Recon. Order, 3 FCC Rcd at 24, 25,   16, 22 (establishing that a customer need not annually request that its CPNI be withheld from the BOC's CPE operations; a customer's assertion of confidentiality remains in effect until the customer explicitly states otherwise; a customer may require and receive confidential treatment of its  {O-CPNI before the customer receives the first annual notification of its CPNI rights); Computer III Phase II Recon.  {O-Order, 3 FCC Rcd at 116164,   86115 (a customer's election to restrict CPNI remains in effect unless specifically modified).  Moreover, we conclude that carriers must notify all customers of their CPNI rights under our new scheme, not merely their multi-line business  XL-customers as is required under the Computer III CPNI framework.[L"< {O"-ԍxSee discussion supra Part V.F.[ This notice requirement, therefore, similarly affords greater competitive protections. Finally, by its terms, section 222(c)(3) extends the obligation to provide nondiscriminatory access to aggregate customer"@0*%%<<" information, when used for purposes outside of the provision of the customer's total service  X-offering, to all LECs, not just the BOCs and GTE. Thus, under section 222(c)(3), information service providers and CPE suppliers are entitled to competitively useful aggregate information  X-from more carriers than they had been in the past.`"< {O-ԍxSee discussion supra Part VI.` In these ways, the new scheme is more  Xv-protective of competitive and privacy interests than currently exists under the Computer III  XU-CPNI framework.UZ"< {O`-ԍxAlthough we eliminate password I.D. and access restrictions, as discussed infra Part VIII.D, we replace these safeguards with equally effective mechanisms that complement our new scheme. We thus find no competitive or privacy justification at this time to retain our former framework.  X-x184.` ` Nor will the elimination of the Computer III CPNI framework weaken other nonstructural safeguards. We agree with Ameritech, PacTel and GTE that the Commission's  X-other Computer III requirements are independent of CPNI regulation, and would continue to prohibit discriminatory network access and protect against any alleged "bottleneck"  Xd -leverage.vd "< yO-ԍxAmeritech Reply at 5; GTE Comments at 16 n.39; PacTel Comments at 15.v Finally, we conclude that, insofar as we eliminate the Computer III CPNI  XC -requirements, carriers' ONA and CEI plans no longer have to address CPNI.qC D"< {O8-ԍxComputer III Further Remand Further Notice, supra note 32.q  X <Xx C. X` ` BOC Cellular CPNI Rule 22.903(f) and Computer II Rule 64.702(d)(3) (#`  X-Xx` ` 1. Background (#  Xr-x185.` ` Under section 22.903(f) of the Commission's rules,Kr"< yO-ԍx47 C.F.R.  22.903(f). K BOCs may not provide CPNI to their cellular affiliates unless the information is made publicly available on the same  X,-terms and conditions. The Commission invited comment in the CMRS Safeguards Notice(,f "< {OC-ԍxIn the Matter of Amendment of the Commission's Rules to Establish Competitive Service Safeguards for  {O -Local Exchange Carrier Provision of Commercial Mobile Radio Services, WT Docket No. 96162, Notice of  {O-Proposed Rulemaking, Order on Remand, and Waiver Order, 11 FCC Rcd 16639 (1996) (CMRS Safeguards  {O-Notice).  X -on whether rule 22.903(f) should be eliminated in light of section 222 of the Act.P V "< {O"-ԍxId. at 1667576,  72.P The" 0*%%<<"  X-Commission expressly retained the rule in the CMRS Safeguards Order pending the resolution  X-of CPNI issues in this proceeding."< {OX-ԍx CMRS Safeguards Order, FCC 97352 at  95, supra note CMRS ORDER51.  X-x186.` ` Established in the context of the Computer II proceeding, and similar to rule  Xx-22.903(f), rule 64.702(d)(3)MxZ"< yO-ԍx47 CFR  64.702(d)(3). M prohibits common carriers from sharing CPNI with their structurally separate enhanced services and CPE affiliates unless the CPNI is made publicly  X2-available.2"< {O -ԍxThe Computer III framework involving nonstructural safeguards, and not this rule, governs when CPE and enhanced services are provided by carriers on an integrated basis. In the Notice in this proceeding, the Commission sought comment generally on whether we should retain the current CPNI rules which were developed in a series of Commission proceedings in connection with the BOCs, AT&T and GTE's provision of  X-enhanced services and CPE, including, among others, Computer II.RD"< {O-ԍxNotice at 1251516,  3.R  X -x187.` ` Several commenters argue that continued retention of the BOC CPNI cellular rule 22.903(f) is important because CPNI derived from former monopoly local exchange operations provides BOCs with an advantage in assisting their CMRS affiliates, and unless this information is also made available to nonLECaffiliated entities, competition is  X -undermined. "< {O-ԍxComments received in the CMRS Safeguards proceeding will be referenced as "Safeguards Comments" or "Safeguards Reply." AT&T Wireless Safeguard Comments at 23; AirTouch Safeguards Comments at 34; CMT Safeguards Comments at 12; Comcast Safeguards Comments at 1416; Cox Safeguards Comments at 9; Radiofone Safeguards Comments at 10. Comcast and Cox further argue that without strong CPNI rules in place the Congressional intent behind section 601(d) would be shattered because the incumbent LECs would not be operating on par with their competitors. Comcast Safeguards Comments at 16; Cox Safeguards Comments at 9.  No commenter specifically supports continued retention of rule 64.702(d)(3), although many commenters generally argue that all of our existing CPNI regulations, of  X-which rule 64.702(d)(3) is a part, should remain."P "< {O-ԍxSee e.g., AirTouch Comments at 12; ACTA Comments at 6; Arch Comments at 13; ATSI ex parte (filed Oct. 29, 1996) at 3; CBT Comments at 910; CPI Reply at 13; Excel Comments at 6; Frontier Comments at 8, n.15; ITAA Comments at 9; LDDS Worldcom Reply at 1011; MCI Comments at 18; Sprint Reply at 1112; TCG Comments at 4. In contrast, the BOCs and GTE argue that we should eliminate rule 22.903(f), and all of the Commission's other pre1996 Act rules  Xo-(e.g., Computer II and Computer III CPNI regulations) because section 222 and its"o:0*%%<<g" implementing regulations now govern a carrier's use of CPNI in the context of all  X-telecommunications services, including cellular and other CMRS offerings.nX"< yOV-ԍxBell Atlantic/NYNEX Safeguards Comments at 1718; Bell Atlantic/NYNEX Safeguards Reply at 23; BellSouth Safeguards Comments at 40, 53; CBT Safeguards Comments at 8; GTE Safeguards Comments at 15,  yO-29; GTE Safeguards Reply at 15; PacTel Further Reply at 1819; SBC Safeguards Comments at 13. n  X-Xx ` ` 2. Discussion (#  XQ-x188.` ` We conclude that we should eliminate both rules 22.903(f) and 64.702(d)(3).ZQ"< {O -ԍxAmeritech Safeguards Reply at 8; PacTel Safeguards Reply at 79; see also AirTouch Further Comments at 5 (rule 22.903(f) may need to be changed because it contemplated disclosure of CPNI without customer approval).   X.-We described supra that BOCs do not have additional obligations under sections 272 and 274 of the Act when they share local service CPNI with their statutory affiliates. For these  X-reasons, we likewise believe that the new scheme implemented in this order comprehensively replaces these additional obligations. This new paradigm appropriately and sufficiently protects customers' privacy interests as well as competitors' concerns when carriers, including  X -BOCs, share CPNI with their CMRS, information services and CPE affiliates. "< {O>-ԍxSee generally supra   ALIZA160שKATE167, 168, 169. Specifically, carriers are prohibited from using or disclosing CPNI derived from either their local or long distance service to target customers that they wish to market CMRS offerings, unless the  X -customer approves, or unless the customer is also an existing CMRS customer.S "< {Og-ԍxSupra   TAFF53 .S This new  X -scheme protects against anticompetitive use of CPNI.T . "< {O-ԍxSupra   FISHY59 .T Replacing 22.903(f) with the new scheme also more appropriately extends the anticompetitive mechanisms of section 222 to all  X-LECs, not just BOCs, and in connection with all CMRS, not just cellular service.0Z "< yO"-ԍxWe thus agree in this regard with those commenters urging that the competitive safeguard be so  {O-extended. See, e.g., AirTouch Safeguards Comments at 68; AT&T Wireless Safeguards Comments at 23; Comcast Safeguards Comments at 14.0 Carriers are also not permitted to use CPNI in connection with CPE and most information services  Xk-absent customer approval.Gk"< {O -ԍxSupra Part IV.C.G In contrast, retaining rule 22.903(f) would likely result either in BOCs electing not to share CPNI with their CMRS affiliate, to avoid the requirement that they give the information to competitors, or in disclosure on terms that may undermine customers' privacy and customer convenience goals. These likewise would be the same options faced by carriers when they sought to share CPNI with their CPE or information"t0*%%<< " service affiliates should we retain rule 64.702(d)(3). Neither result would further the policies of section 222.  X-x189.` ` We also reject parties' alternative argument, raised in connection with rule 22.903(f), that we exercise our general authority to require that LECs only disclose CPNI to  XQ-their CMRS providers upon the customer's written approval that has been gathered by the  X.-affiliate, not the LEC.."< {O-ԍxAirTouch ex parte (filed April 17, 1997) at 2; Radiofone Safeguards Reply at 1113. At this time, the record does not support the view that additional  X -requirements would be necessary. Such a written approval requirement imposes an additional burden on carriers and inconveniences the customer. Moreover, as discussed below, we are persuaded that the safeguards we announce in this order protect carriers' competitive concerns, as well as customers' interests, such that modification of our rule would be both  X -unnecessary and unwise.B Z"< yO -ԍxWe accordingly also reject commenters' particular suggestions regarding the type of notification BOCs would have to give when sharing CPNI with their cellular affiliate. For example, several carriers suggest that customers be afforded the opportunity to authorize the sharing of CPNI with unaffiliated entities when solicited by the BOCs. AirTouch Safeguards Comments at 7; CMT Safeguards Reply at 12. These carriers and others  yO-further suggest that we require that customers must provide their approval in advance and not be given the option  {Or-to approve making CPNI available only to BOC affiliates. Comcast Safeguards Comments at 1516; Comcast Safeguards Reply Comments at 1718; Cox Safeguards Comments at 9; Radiofone Safeguards Comments at 10; Radiofone Safeguards Reply at 1113. Rather, the notification rules announced herein govern.  X9 -0Xx D.` ` Safeguards Under Section 222 (#  X -Xx ` ` 1. Background (#  X-x190.` ` To ensure compliance with our Computer III framework, we have considered a  X-0variety of safeguards, consisting both of "access" and "use" restrictions.{\d "< {O-ԍ#]\  PC2P#xSee generally Filing and Review of Open Network Architecture Plans, 8 FCC Rcd 2606, 261011,    {Ok-1826 (1993); BOC ONA Order, 4 FCC Rcd at 22224,   426430 (describing password/ID access systems and alternative "flagging" systems). { As a general matter, access restrictions prohibit carrier personnel from physically accessing customer records, and include personnel restrictions, such as separate marketing sales forces authorized  X#-to access CPNI, as well as network password/I.D. restrictions.# "< yO\ -ԍxOther options for access restrictions can include rotating passwords, encryption of CPNI, and computer  {O$!-firewalls between databases. See CPSR Comments at 13.#x6X@`7X@# With use restrictions, in  X-contrast, employees are able to access customer records, but they are given clear guidelines as to when CPNI use is, and is not, permitted. Use restrictions rely on employee training and software "flags" which indicate, for example, whether customer approval to use CPNI for marketing purposes has been secured. "0*%%<<q"Ԍ X-ԙx191.` ` The Commission tentatively concluded in the Notice that "all telecommunications carriers must establish effective safeguards to protect against unauthorized  X-access to CPNI by their employees or agents, or by unaffiliated third parties."w"< {O5-ԍx#X\  P6G;2P#Notice at 12528,  35.w The  X-Commission sought specific comment on whether the Computer III safeguards should  Xx-continue to apply to the BOCs, AT&T, and GTE,xZ"< {O-ԍx#X\  P6G;2P#Id. at 12528,  35.  #x6X@KX@#Ѧ whether they should be extended to other  XU-carriers, as well as what other safeguards may be necessary.U"< {O -ԍx#X\  P6G;2P#Id. at 1252829,  36.#x6X@`7X@#ў The Commission also required  X2-that "AT&T, the BOCs and GTE must maintain any previously approved mechanisms (i.e., computer password systems, filing mechanisms) to restrict unauthorized internal access to  X-CPNI."P~"< {O-ԍxId. at 1252930,  39.P The Commission proposed waiting to specify safeguards for telecommunications  X-carriers not currently subject to the Computer III requirements, but encouraged these carriers  X-to consider applying the Computer III restrictions to fulfill their obligation to develop  X -effective safeguards.g "< {OJ-ԍx#X\  P6G;2P#Id.g The Commission further noted, however, that should the record  Xf -indicate a need for safeguards applicable to all carriers, the Commission would adopt them.f "< {O-ԍx#X\  P6G;2P#Id. at 12530,  41. #x6X@`7X@#Ѣ  X -x192.` ` All of the commenters generally agree with our conclusion that carriers must  X -establish safeguards pursuant to section 222 to protect against unapproved use of CPNI. 4 "< {O-ԍxSee, e.g., ACTA Comments at 4, 6; Bell Atlantic Comments at 2; CPSR Comments at 13; NTIA  yO-Comments at 17; NTIA Further Comments at 1617; U S WEST Comments at 21. Several carriers assert that they should be permitted to select the means or safeguards they  X-deem appropriate. "< {O-ԍxSee, e.g., Arch Comments at 13; AT&T Reply at 13 n.32; U S WEST Reply at iv. Others propose that we adopt specific safeguards.O "< {O-ԍxFor example, AirTouch proposes that we apply our "slamming" rules as a model. In the Matter of Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996;  {O -Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94129, Further Notice of Proposed Rulemaking and Memorandum Opinion and Order on Reconsideration, 12  {O!-FCC Rcd 10674 (1997) at 1068182,  10. See discussion supra Part V.G.O In addition, several of the commenters argue that our safeguards should distinguish among carriers and that we"0*%%<<"  X-should continue to apply the Computer III safeguards to the BOCs, AT&T, and GTE alone.&"< {Oy-ԍxATSI ex parte (filed Oct. 29, 1996) at 3; CBT Comments at 910; CPI Reply at 13; Excel Comments at  {OC-6; see also, e.g., LDDS Worldcom Comments at 1112 (believing that the Computer III requirements should not  {O -apply to nondominant carriers, including AT&T); Sprint Comments at 7 (Computer III requirements should apply to the BOCs and GTE).  X-In contrast, other commenters claim we should eliminate all vestiges of Computer III,  X-including its safeguards, in light of the enactment of section 222.q\"< {O%-ԍxAd Hoc Reply at 9; Ameritech Comments at 14; Bell Atlantic Reply at 8; BellSouth ex parte (filed Oct.  {O-17, 1996); BOC Coalition ex parte (filed Aug. 13, 1997); GTE Reply at 5; NYNEX Comments at 18, 2021; PacTel Reply at 34; SBC Reply at 5; USTA Reply at 3; U S WEST Comments at 21.q  Xx-SXx` ` 2. Discussion (#  X2-x193.` ` We confirm our tentative conclusion that the Computer III safeguards, as they currently operate, should not be applied to other carriers. Insofar as the statutory scheme we  X-Simplement in this order fully supplants our Computer III CPNI framework, we are further  X-persuaded that we should likewise not retain the CPNI safeguards designed to ensure  X-compliance within the Computer III framework. The record nevertheless supports the need to specify safeguards to prevent unapproved use, disclosure, and access to customer CPNI by  Xf -carrier personnel and unaffiliated entities under the new scheme. We agree with commenters expressing concern regarding carrier incentives to use CPNI for marketing purposes as well as  X -the potential for anticompetitive behavior.r "< {O-ԍxSee, e.g., AICC Comments at 8; Sprint Reply at 1112.r In light of these concerns, we reject suggestions that we generally limit our CPNI requirement to, or impose different CPNI requirements on, large or incumbent carriers. Although local exchange and other incumbent carriers may have more potential for anticompetitive use of CPNI because of their large customer base, we believe competitive concerns raised in the record are addressed generally more effectively by  Xq-applying our new CPNI scheme to all carriers. As several parties observe,ql "< {O-ԍxSee, e.g., Bell Atlantic Reply at 8; GTE Comments at 17; GTE Reply at 5; NYNEX Comments at 20; SBC Comments at 3; SBC Reply at 3; U S WEST Comments at 21. privacy is a concern which applies regardless of carrier size or market share. Indeed, Congress intended  X+-for all carriers to safeguard customer information.R\+ "< {O-ԍxSection 222(a) provides: "[e]very telecommunications carrier has a duty to protect the confidentiality of  {Ol -proprietary information . . ." (emphasis added). See also Ameritech Comments at 13; Bell Atlantic Comments  yO6!-at 910. R Therefore, we reject proposals that we generally should limit our new CPNI rules to, or impose different CPNI requirements on, large or incumbent carriers. "0*%%<<"Ԍ X-x194.` ` We recognize, however, that our new CPNI scheme will impose some  X-additional burdens on carriers, particularly carriers not previously subject to our Computer III CPNI requirements. We believe, however, that these requirements are not unduly burdensome. All carriers must expend some resources to protect certain information of their customers. Indeed, section 222(a) specifically imposes a protection duty; "[e]very telecommunications carrier has a duty to protect the confidentiality of proprietary information of, and relating to, other telecommunications carries, equipment manufacturers, and  X -customers."G "< yO-ԍx47 U.S.C.  222(a).G In addition, for carriers that offer only one service, such as local exchange, the  X-CPNI requirements are minimal, and thus, not overly burdensome.X"< {O -ԍxSee discussion supra Part IV (carriers only need to notify and obtain approval when they seek to use CPNI outside the customer's total service offering). Moreover, although we believe different rules are not generally necessary for small or rural carriers, we note that such carriers may seek a waiver of our new CPNI rules if they can show that our rules would be unduly burdensome, and propose alternative methods for safeguarding the privacy of their customers, consistent with section 222.  X -x195.` ` Access Restrictions. We decline to require restrictions that would prohibit  X -carrier personnel from accessing CPNI of customers who have either failed, or expressly declined, to give requisite approval for carrier use of CPNI for marketing purposes. Although access restrictions offer considerable protection against carrier CPNI misuse, we nevertheless  X-agree with those parties that contend that such restrictions are inconsistent with the statutory  Xm-language and impractical and unnecessary under the statutory scheme.\m"< {O-ԍxAmeritech ex parte (filed Oct. 6, 1997); AT&T ex parte (filed Aug. 19, 1997); Bell Atlantic/NYNEX ex  {O-parte (filed Sept. 22, 1997); BOC Coalition ex parte (filed Aug. 13, 1997); but see MCI ex parte (filed Aug. 15, 1997) (access restrictions appropriate in some retail marketing circumstances). We conclude that general access restrictions are not compatible with the exception set forth in section 222(d)(3), which expressly permits carriers to use CPNI for marketing purposes when customers so approve during inbound calls. Access restrictions preclude any dynamic override capability that would permit marketing employees to access records upon receiving customer approval.  X-According to various commenters, in a password/I.D. system, personnel either have access to  X-the entire customer service record or do not have access."< {O"-ԍxSee, e.g., BOC Coalition ex parte (filed Aug. 13, 1997); Sprint ex parte (filed Aug. 1, 1997). ij Our existing password/I.D.  Xx-restriction, applied to the new statutory scheme would mean that carrier representatives would not be able to market additional services to a customer during an inbound call. Rather, the customer who had initiated the call would have to be transferred to another carrier representative with password clearance to access the customer's records for marketing"h 0*%%<<"  X-purposes.Z"< {Oy-ԍxMCI ex parte (filed Aug. 15, 1997).Z This system inconveniences the customer as well as burdens the carriercustomer  X-dialogue, in conflict with the language and purpose of section 222(d)(3).~Z"< {O-ԍxIn the Further Notice of Proposed Rulemaking, infra Part IX.B, we seek comment on whether access restrictions are required to protect carrier and customer interests in the wholesale and resale context, pursuant to  yOz-obligations established under sections 222(a) and (b). In this regard, several carriers have indicated that access  {OB-restrictions may be appropriate and consistent with the statute in this limited respect. Ameritech ex parte (filed Oct. 6, 1997). Accordingly, we note that our decision not to impose access restrictions at this time in the retail context does not, in our judgment, foreclose the possibility of subsequent access requirements in the wholesale or  {O -resale circumstance, based on the record developed through the Further Notice.   X-x196.` ` Conversely, we do not believe that the language in section 222(c)(1) requires that we adopt access restrictions. Although section 222(c)(1)(A) prohibits carriers from  XQ-"[permitting] access to individually identifiable [CPNI]," we interpret this language to obligate carriers to establish sufficient protections against external parties gaining access to customer databases. We agree with Ameritech that the limitations on the access of CPNI apply solely to entities outside of the carrier's organization, whereas the use and disclosure restrictions  X-apply to the carrier.J"< yO-ԍxAmeritech Comments at 13.J  Because customer information is competitively valuable, marketplace forces will ensure that carriers, as a part of normal operating procedures, will protect against unaffiliated entities acquiring access to their customer information. Thus, although we require carriers to establish procedures to protect against unauthorized access to CPNI from unrelated entities, we decline at this time to establish specific restrictions.  X -x197.` ` Moreover, a mechanical access system is expensive to establish and to  X -maintain.$ 0 "< yO-ԍxFor example, the BOCs argue, based upon U S WEST estimates, that a computerized access system  {O{- could cost as much as $100 million and take approximately five years to implement.  BOC Coalition ex parte  yOE-(filed Aug. 13, 1997).  Use restrictions, in contrast, they claim would cost approximately $700,000 and take  {O -about 918 months to implement. Id.  Because we find that section 222 applies to all telecommunications carriers, and in contexts beyond CPE and enhanced services markets, any access restriction requirement  X-under section 222 would represent a considerable expansion of the existing Computer III  Xk-regulatory framework. We are not persuaded that the increased protection afforded through access restrictions or separate marketing personnel would justify the additional expense of such a system, which would be borne by all carriers, including those medium and small sized carriers that have never before been subject to CPNI regulation. Such a requirement may produce inefficiencies particularly for small carriers, and may thereby dampen competition by  X-increasing the costs of entry into telecommunications markets.  We conclude that use restrictions, as described below, can and will be effective when coupled with personnel"0*%%<<q" training. In addition, they promote customer convenience and permit carriers to operate more  X-efficiently with less regulatory interference.\"< yOV-ԍxOn this basis, we further reject MCI's suggested access restrictions that carriers have separate groups of  {O-marketing personnel who either are authorized to access CPNI or who are not. MCI ex parte (filed Aug. 15,  {O-1997). Should a record of CPNI misuse develop, however, we can and will revisit our conclusions. Infra   33202 .  X- x 198.` ` Use Restrictions and Personnel Training. We specifically require that carriers develop and implement software systems that "flag" customer service records in connection with CPNI. Carriers have indicated that their systems could be modified relatively easily to  X0-accommodate such CPNI "flags."0"< {O -ԍxSee, e.g,, AT&T ex parte (filed Aug. 19, 1997); Bell Atlantic/ NYNEX ex parte (filed Sept. 22, 1997);  {O -Sprint ex parte (Aug. 1, 1997). The flag must be conspicuously displayed within a box or comment field within the first few lines of the first computer screen. The flag must indicate whether the customer has approved the marketing use of his or her CPNI, and reference the existing service subscription. In conjunction with such software systems, we require that all employees with access to customer records be trained as to when they can and  X -cannot access the customer's CPNI. H"< yOz-ԍxAirTouch Comments at 12 (employee training about CPNI prohibitions and public descriptions of safeguards systems are essential to ensure proper use of CPNI). Carriers must also maintain internal procedures to  X^ -handle employees that misuse CPNI contrary to the carriers' stated policy. These requirements represent minimum guidelines that we believe most carriers can readily  X -implement and that are not overly burdensome.m\ "< yOi-ԍxEmployee training is presently undertaken by most carriers, as a matter of business practice, to assure  {O1-the privacy of customer information. See, e.g., Bell Atlantic/ NYNEX ex parte (filed Sept. 22, 1997); BOC  {O-Coalition ex parte (filed Aug. 13, 1997).m  X -x199.` ` Access Documentation. To encourage carrier compliance with our CPNI restrictions and to ensure a method of verification in the event of a subsequent dispute, we require that carriers maintain an electronic audit mechanism that tracks access to customer accounts. The system must be capable of recording whenever customer records are opened, by whom, and for what purpose. We believe awareness of this "audit trail" will discourage unauthorized, "casual" perusal of customer accounts, as well as afford a means of documentation that would either support or refute claimed deliberate carrier CPNI violations. Such access documentation will not be overly burdensome because many carriers maintain such capabilities to track employee use of company resources for a variety of business purposes unrelated to CPNI compliance, such as to document the volume of computer and" 0*%%<<q"  X-database use, as well as for personnel disciplinary matters.$"< {Oy-ԍxSee e.g., AirTouch ex parte (filed Oct. 29, 1997); AT&T ex parte (filed Aug. 19, 1997); Bell  {OC-Atlantic/NYNEX ex parte (filed Sept. 22, 1997). See also U S WEST ex parte (filed Nov. 14, 1997) at 1011 ("U S WEST currently has the capability to assess if an individual accesses a system inappropriately, when such access was accomplished, and in most circumstances what information was retrieved.").  We further require that carriers maintain such contact histories for a period of at least one year to ensure a sufficient evidentiary record for CPNI compliance and verification purposes.  Xt-x200.` ` Supervisory Review for Outbound Marketing Campaigns. In addition to the electronic use restrictions, personnel training, and access documentation, we require carriers to establish a supervisory review process that ensures compliance with CPNI restrictions when conducting outbound marketing. Although supervisory review would neither be convenient  X-nor practical when customers initiate a service call (i.e., in the inbound marketing context), we believe that such review is fully warranted in connection with outbound marketing campaigns. There is both less likelihood that customers will detect CPNI violations and greater incentive for sales employees to misuse CPNI when the dialogue with the customer is initiated by the carrier. Indeed, a major focus of outbound sales representatives is on the acquisition of new customers rather than on the retention of, and service to, current customers. Accordingly, we require that sales personnel obtain supervisory review of any proposed request to use CPNI for outbound marketing purposes. Requiring prior supervisory review of marketing plans will safeguard against overzealous sales representatives, as well as afford a subsequent means of verifying CPNI compliance. Moreover, insofar as marketing plans are presently developed, reviewed and maintained as a matter of sound business practice, our requirement should not be burdensome to carriers. As MCI explains, "event histories" (like contact histories) are routinely evaluated by carriers to determine the success  X%-of marketing campaigns.%"< {O-ԍx MCI ex parte (filed Aug. 15, 1997) (makes distinction among safeguards applicable to outbound and inbound marketing). We require carriers to maintain a record of these event histories for at least one year from the date of the marketing campaign.  X-    X-x201.` ` Corporate Certification. Finally, we agree with AirTouch that corporate  X-certification is an appropriate and effective additional safeguard.I"< yOZ-ԍxAirTouch Comments at 12.I Accordingly, we require each carrier to submit a certification signed by a current corporate officer, as an agent of the corporation, attesting that he or she has personal knowledge that the carrier is in compliance with our CPNI requirements on an annual basis. This certification must be made publicly available, and be accompanied by a statement explaining how the carrier is implementing our  X-CPNI rules and safeguards."< {O;$-ԍx#]\  PC2P#We similarly require commercial broadcasters to keep publicly available inspection files on site. See 47  yO%-C.F.R.  73.3526.#x6X@KX@#" 0*%%<<"Ԍ X-ԙx202.3333` ` Additional requirements. The Commission will enforce all rules announced in this order upon their effective date. Because carriers may need time to conform their data systems and operations to comply with the software flags and electronic audit mechanisms required under this order, however, we will not seek enforcement of these specific safeguard  Xv-rules for a period of eight months from the date these rules become effective.dv"< {O-ԍxBOC Coalition ex parte (filed Aug. 13, 1997).d After that time, we authorize the Chief of the Common Carrier Bureau to undertake enforcement actions when necessary and appropriate, and, to the extent that carrier behavior justifies requirements beyond those outlined herein, to establish additional safeguards. This delegation to the Common Carrier Bureau will facilitate the handling of CPNI compliance issues in an expedited manner.  X -#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP# IX.XxFURTHER NOTICE OF PROPOSED RULEMAKING (#  X; -x203.` ` Implementation of Sections 222(a) and (b). The Commission in the Notice  X -focused on issues relating to the implementation of sections 222(c)(f).S Z"< {O%-ԍxNotice at 12514,  2 n.7.S Based on various responses from parties, we now seek further comment on three general issues that principally involve carrier duties and obligations established under sections 222(a) and (b) of the Act. Specifically, section 222(a) requires telecommunications carriers "to protect the confidentiality of proprietary information of, and relating to, other telecommunication carriers, equipment manufacturers, and customers, including telecommunication carriers reselling  XH-telecommunications services provided by a telecommunications carrier."GH"< yO-ԍx47 U.S.C.  222(a).G Section 222(b) 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  X-efforts."G|"< yO-ԍx47 U.S.C.  222(b).G  Xv- QxA.` ` Customer Right to Restrict Carrier Use of CPNI for Marketing Purposes (#`  X0-x204.` ` Section 222(c)(1) prohibits carriers from using, disclosing, or permitting access to CPNI without customer approval for purposes other than those expressly provided in Qsections 222(c)(1)(A) and (B), and those in connection with the exceptions established in  X-sections 222(d)(1)(3).J "< yO#-ԍx47 U.S.C.  222(c)(1).J Section 222, however, is silent on whether a customer has the right to restrict a telecommunications carrier from using, disclosing, or permitting access to CPNI"0*%%<<"  X-within the circumstances defined by subsections 222(c)(1)(A) and (B). While the Notice referred to customers' "rights to restrict access to their CPNI," it did so in the context of when carriers must seek approval for CPNI use for purposes outside the scope of the  X-exceptions in sections 222(c)(1)(A) and (B).U"< {O-ԍxNotice at 1252627,  28. U  XS-x205.` ` One view is that customers should be able to restrict carrier use of CPNI for all marketing purposes, even within the customer's total service offering. This position may be supported by the privacy protection in section 222(a), which imposes on every telecommunications carrier "a duty to protect the confidentiality of proprietary information of,  X-and relating to . . . customers . . . ,"GZ"< yO -ԍx47 U.S.C.  222(a).G as well as by the principle of customer control  X-implicitly embodied in section 222(c).G"< yO?-ԍx47 U.S.C.  222(c).G In addition, interpreting section 222 to permit customers to restrict all marketing use of CPNI could be viewed as furthering the privacycompetition balance struck in section 222, insofar as such a right would allow customers to prevent carrier marketing practices that they found objectionable as their service relationship  X -with the carrier grew. Under this view, the only limitations on the customer's right to restrict uses of CPNI within sections 222(c)(1)(A) and (B) arguably would be those "required by law"  X -in accordance with section 222(c)(1), as well as those set forth in section 222(d).fX z"< yO-ԍxThe preface in section 222(d) establishes that "[n]othing in [section 222] prohibits a telecommunications carrier from using, disclosing, or permitting access to [CPNI] obtained from its customers, either directly or indirectly through its agents" in the three specified circumstances. 47 U.S.C.  222(d).f We seek comment on this issue of whether customers have a right to restrict all marketing uses of CPNI. Parties supporting a particular interpretation should state the statutory as well as policy basis for their conclusion and should demonstrate why other conclusions are not justified.  X-Qx B.` ` Protections for Carrier Information and Enforcement Mechanisms   X-x206.` ` We seek comment on what, if any, safeguards are needed to protect the confidentiality of carrier information, including that of resellers and information service Qproviders, that are in addition to those adopted in this accompanying order. We note that Congress expressly protected carrier information in section 222(a), as well as in the specific  X.-limitations on the use of that information in section 222(b).L."< yOy"-ԍx47 U.S.C.  222(a), (b).L We believe that Congress' goals of promoting competition and preserving customer privacy will be furthered by protecting the competitivelysensitive information of other carriers, including resellers and information service providers, from network providers that gain access to such information"* 0*%%<<" through their provision of wholesale services. Therefore, we seek comment on what, if any, additional regulations or safeguards are necessary to further this goal. These safeguards, for  X-example, may include personnel and mechanical access restrictions."< yO3-ԍxTRA has proposed five specific safeguards to protect the confidentiality of competitivelysensitive data  yO-of resellers. TRA Comments at 312. Certain commenters have indicated that safeguards beyond access restrictions may be appropriate and technically feasible in the context of their wholesale services operations. In  {O-fact, these carriers have indicated that such safeguards either are already in place or forthcoming shortly. See,  {OU-e.g., U S WEST ex parte (filed Nov. 14, 1997) at 1011 & n.33; Ameritech ex parte (filed Oct. 6, 1997).  Parties identifying specific safeguards should comment explicitly on the costs and benefits of imposing such regulation.  X.-x207.` ` We also seek comment on what, if any, further enforcement mechanisms we should adopt to ensure carrier compliance with our rules, or that may be necessary to encourage appropriate carrier discharge of their duty under section 222(a) to protect the confidentiality of customer information. We note, for example, that the Commission in other proceedings has sought to compensate carriers who have become victims of anticompetitive  X -behavior,F |"< yO-ԍxSection 258 of the Act addresses remedies for illegal changes in subscriber carrier selection providing that "[a]ny telecommunications carrier that violates the verification procedures described in subsection (a) and that collects charges for telephone exchange service or telephone toll service from a subscriber shall be liable to the carrier previously selected by the subscriber in an amount equal to all charges paid by such subscriber after  {O-such violation." 47 U.S.C.  258; cf. In the Matter of Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996: Policies and Rules Concerning Unauthorized  {O^-Changes of Consumers' Long Distance Carriers, CC Docket No. 94129, 12 FCC Rcd 10674, Further Notice of  {O(-Proposed Rulemaking and Memorandum Opinion and Order on Reconsideration (1997) (Slamming FNPRM).  as well as to streamline and update the formal complaint process in order to  X\ -promote the policies of the 1996 Act.kJ\ "< {O-ԍxCf. Common Carrier Bureau Seeks Comment Regarding Accelerated Docket for Complaint  {Oa-Proceedings, CC Docket No. 96238, Public Notice, DA 972178 (rel. Dec. 12, 1997) (Accelerated Docket  {O+-Public Notice); Implementation of the Telecommunications Act of 1996: Amendment of Rules Governing  {O-Procedures to Be Followed When Formal Complaints Are Filed Against Common Carriers, CC Docket No. 96 {O-238, Report and Order, FCC 97396 (rel. Nov. 25, 1997). In the Accelerated Docket Public Notice, the Commission sought comment on whether the needs of industry participants for an expedited complaint process could be met better by a hearingtype, accelerated complaint process administered by the Common Carrier's Enforcement Division.k Parties identifying specific enforcement mechanisms should comment explicitly on the costs and benefits of imposing such regulation. " 0*%%<< "Ԍ X-Qx C.` ` Foreign Storage of, and Access to, Domestic CPNI   X-x208.` ` The Federal Bureau of Investigation (FBI) asks the Commission to regulate the foreign storage of, and foreignbased access to, CPNI of U.S. customers who subscribe to  Xt-Qdomestic telecommunications services (domestic CPNI).$t"< {O-ԍxFBI ex parte (filed Jul. 9, 1997) at 1. Domestic CPNI is CPNI derived from telecommunications services rendered solely within the United States. Domestic CPNI is therefore different from the "foreign  {O-derived U.S. customer CPNI" identified in the Foreign Participation Order, FCC 97-398, at  175 n. 351, supra  yOI-note SKUNKY604.  The FBI contends that vital law enforcement, public safety, national security, business, and personal privacy reasons justify a prohibition under section 222 on carriers storing domestic CPNI in foreign countries, for any  X -purpose, including billing and collection.C "< yOp -ԍxFor example, the FBI notes that the foreign storage or direct foreign access to the CPNI of intelligence officers or U.S. government employees could compromise national security and ongoing investigations, and be perhaps lifethreatening to those individuals. Furthermore, the FBI notes that the CPNI of U.S. governmental officials and the personal nature of such information could be used as "blackmail" or as leverage to recruit such  {O-officials. FBI ex parte (filed Jul. 9, 1997) at 8 n.17 & n.18. C The FBI further maintains that permitting direct foreign access or foreignstorage of CPNI would seriously undermine important U.S. governmental, business, and privacybased protections afforded to CPNI under other  X-international and bilateral treaties.@f "< {O-ԍxId. at 2.@ According to the FBI, the Commission has the authority to prohibit such foreign storage or access based upon our jurisdiction conferred in section  X\ -222.:\ "< {O-ԍxId.: We seek comment on the FBI's proposal. In particular, we seek comment on whether the duty in section 222(a) upon all telecommunications carriers to protect the confidentiality of customers' CPNI, or any other provision, permits and/or requires us to prohibit the foreign storage or access to domestic CPNI.  X-x209.` ` As an exception to this administrative prohibition, the FBI suggests that foreign storage or access to domestic CPNI may be permitted upon informed written customer  Xg-approval.@g "< {O-ԍxId. at 9.@ When a U.S. domestic customer consents to having his or her CPNI stored or accessed from a foreign country, the FBI further proposes, however, that we require carriers to keep a copy of that customer's CPNI record within the U.S. for public safety, law enforcement, and national security reasons, so that such information is available promptly to  X-law enforcement.F"< {O#-ԍxId. at 10 n.20.F We seek comment on whether requiring written customer consent to store or access CPNI from a foreign country and maintaining duplicate CPNI records in the"0*%%<<" U.S are necessary to protect customer confidentiality under section 222(a) or any other provision.  X-x210.` ` Finally, the FBI also requests that we require carriers to maintain copies of the CPNI of all U.S.based customers, regardless of whether they are U.S. domestic customers, because of the need for prompt, secure, and confidential law enforcement, public safety, or  X.-national security access to such information, pursuant to lawful authority.$."< {O-ԍxId. at 5 n.8. The FBI distinguishes among "Domestic Customers" and U.S.based customers. Id. at 1 n.1. The latter includes those customers that make calls pursuant to special contract, tariff arrangements, international services or similar volume discount arrangements. Domestic customers, in contrast, are those whose  {O -customers whose telecommunications service is "essentially intraU.S. in nature." Id. The FBI cites the  X -need of such information for investigations and as trial evidence.K "< {Op -ԍxSee, e.g., id. at 7.K We seek comment on this proposal.  X-#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP# #Xj\  P6G;cXP# X.XxPROCEDURAL ISSUES (#  X\ -Xx A.X` ` Second Report and Order (#`  X -Xx` ` 1. Final Regulatory Flexibility Analysis (#  X -x211.` ` As required by the Regulatory Flexibility Act (RFA), 5 U.S.C.  603, an Initial  X-Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice.v^F"< {O-ԍxIn the Matter of Implementation of the Telecommunications Act of 1996: Telecommunications Carriers'  {On-Use of Customer Proprietary Network Information and Other Customer Information, Notice of Proposed  {O8-Rulemaking, CC Docket No. 96115, 11 FCC Rcd 12513 (1996) (Notice).v The  Commission  X-sought written public comment on the proposals in the Notice, including the IRFA. The  Xk-Commission's Final Regulatory Flexibility Analysis (FRFA) in this Second Report and Order conforms to the RFA, as amended by the Contract With America Advancement Act of 1996  X'-(CWAAA), Pub. L. No. 104121, 110 Stat. 847 (1996).v'l "< yOD-ԍx#X\  P6G;2P#5 U.S.C.  604.v  X-QXx` `  a.Need for and Objectives of the Proposed Rules (#  X-x212.` ` The Commission, in compliance with section 222 of the 1996 Act, promulgates rules in this order to reflect Congress' directive to balance the competitive and customer Qprivacy interests associated with the use and protection of customer proprietary network information (CPNI), while fully considering the impact of these requirements on small carriers. This order reflects the statutory principle that customers must have the opportunity to protect the information they view as sensitive and personal from use and disclosure by" 0*%%<<" carriers. As a general matter, we find that customer approval for carriers to use, disclose, or permit access to CPNI is inferred from the existing customercarrier relationship; therefore, we conclude that such consent should be limited to the "total service offering" to which the customer subscribes from a carrier. To preserve the customer's control over the dissemination of sensitive information, we require an express approval requirement for the use of CPNI beyond the total service offering to which the customer subscribes from a carrier. While these rules permit customers to decide whether and to what extent their CPNI is used, they also restrict carriers' anticompetitive use of CPNI.  X-.Xx` `  b.Summary of Significant Issues Raised by the Public  X-Comments in Response to the IRFA (#  X\ -x213.` ` In the IRFA, the Commission generally stated that any rule changes that might occur as a result of this proceeding could impact small business entities. Specifically, in the .IRFA, the Commission indicated there were no reporting, recordkeeping, or other compliance requirements. The IRFA solicited comment on alternatives to our proposed rules that would minimize the impact on small entities consistent with the objectives of this proceeding. In  X-response we received no comments specifically directed to the IRFA. As noted infra Part X.A.1.e of this FRFA, in making the determinations reflected in this order, we have given consideration to those comments of the parties that addressed the impact of our proposed rules on small entities.  X- Xx` `  c.Description and Estimate of the Number of Small Entities to  X-Which Rules Will Apply (#  X-x214.` ` The RFA directs agencies to provide a description of and, where feasible, an  Xt-estimate of the number of small entities that will be affected by our rules.Xt"< yO-ԍx5 U.S.C.  603(b)(3), 604(a)(3).X The RFA generally defines the term "small entity" as having the same meaning as the terms "small  X.-business," "small organization," and "small governmental jurisdiction."F.X"< yO7-ԍx5 U.S.C.  601(6).F For the purposes of this order, the RFA defines a "small business" to be the same as a "small business concern" under the Small Business Act, 15 U.S.C.  632, unless the  Commission has developed one or  X-more definitions that are appropriate to its activities."< yO^ -ԍx5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 5 U.S.C. 632). Under the Small Business Act, a "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the"@0*%%<<["  X-Small Business Administration (SBA).J"< yOy-ԍx15 U.S.C.  632.J The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small entities when they have no  X-more than 1,500 employees.HX"< yO-ԍx13 C.F.R. 121.201.H We first discuss generally the total number of small telephone companies falling within both of those SIC categories. Then, we discuss the number of small businesses within the two subcategories, and attempt to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.  X-x215.` ` Although affected incumbent local exchange carriers (ILECs) may have no more than 1,500 employees, we do not believe that such entities should be considered small entities within the meaning of the RFA because they either are dominant in their field of operations or are not independently owned and operated, and are therefore by definition not "small entities" or "small business concerns" under the RFA. Accordingly, our use of the terms "small entities" and "small businesses" does not encompass small ILECs. Out of an abundance of caution, however, for regulatory flexibility analysis purposes, we will separately consider small ILECs within this analysis and use the term "small ILECs" to refer to any  X-ILECs that arguably might be defined by SBA as "small business concerns."Y"< yOF-ԍx13 C.F.R. 121.210 (SIC 4813).Y  Xg-x216.` ` Total Number of Telephone Companies Affected. The United States Bureau of the Census (the Census Bureau) reports that at the end of 1992, there were 3,497 firms  X#-engaged in providing telephone services, as defined therein, for at least one year.!#x"< {OL-ԍ 92CENSUS xUnited States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {O-Communications, and Utilities: Establishment and Firm Size, at Firm Size1-123 (1995) (1992 Census).! This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, PCS providers, covered SMR providers, and resellers. It seems certain that some of those 3,497 telephone service firms may not  Xt-qualify as small entities because they are not "independently owned and operated."Kt"< yO-ԍ x15 U.S.C.  632(a)(1).K For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It seems reasonable to conclude, therefore, that fewer than 3,497 telephone service firms are either small entities or small incumbent LECs that may be affected by this order. "d 0*%%<<"Ԍ X-x217.` ` Wireline Carriers and Service Providers. The SBA has developed a definition of small entities for telephone communications companies other than radiotelephone (wireless) companies. The Census Bureau reports there were 2,321 such telephone companies in  X-operation for at least one year at the end of 1992.k"< {O-ԍx1992 Census, supra note 92CENSUS725.k According to the SBA's definition, a small business telephone company other than a radiotelephone company is one employing  XS-fewer than 1,500 persons.~SZ"< yO^-ԍx13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. ~ All but 26 of the 2,321 nonradiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 nonradiotelephone companies that might qualify as small entities or small incumbent LECs. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of wireline carriers and service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that fewer than 2,295 small entity telephone communications companies other than radiotelephone companies are small entities or small ILECs that may be affected by this order.  X -x218.` ` Local Exchange Carriers. Neither the Commission nor the SBA has developed a definition of small providers of local exchange services. The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of LECs nationwide of which we are aware appears to be the data that we collect annually in  X%-connection with the Telecommunications Relay Service (TRS).%"< {O-ԍxFederal Communications Commission, Telecommunications Industry Revenue: TRS Fund Worksheet  {O-Data, Figure 2 (Number of Carriers Paying into the TRS Fund by Type of Carrier) (Nov. 1997). According to our most recent data, 1,371 companies reported that they were engaged in the provision of local  X-exchange services.:F"< {O-ԍxId.: Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, or are dominant we are unable at this time to estimate with greater precision the number of LECs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that fewer than 1,371 small providers of local exchange service are small entities or small ILECs that may be affected by this order.  X-x219.` ` Interexchange Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of interexchange services (IXCs). The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most"0*%%<<y" reliable source of information regarding the number of IXCs nationwide of which we are aware appears to be the data that we collect annually in connection with TRS. According to our most recent data, 143 companies reported that they were engaged in the provision of  X-interexchange services.:"< {O-ԍxId.: Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 143 small entity IXCs that may be affected by this order.   X-x220.` ` Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of competitive access services (CAPs). The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of CAPs nationwide of which we are aware appears to be the data that we collect annually in connection with the TRS. According to our most recent data, 109 companies reported that they were engaged in the  X -provision of competitive access services.: Z"< {O-ԍxId.: Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of CAPs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 109 small entity CAPs that may be affected by this order.  X-x221.` ` Operator Service Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of operator services. The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of operator service providers nationwide of which we are aware appears to be the data that we collect annually in connection with the TRS. According to our most recent data, 27 companies reported that they were engaged in  X -the provision of operator services.: "< {O-ԍxId.: Although it seems certain that some of these companies are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of operator service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 27 small entity operator service providers that may be affected by this order. ";~0*%%<<"Ԍ X-x222.` ` Pay Telephone Operators. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to pay telephone operators. The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of pay telephone operators nationwide of which we are aware appears to be the data that we collect annually in connection with the TRS. According to our most recent data, 441 companies reported that they were engaged in the provision of  X -pay telephone services.: "< {O-ԍxId.: Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of pay telephone operators that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 441 small entity pay telephone operators that may be affected by this order.  X -x223.` ` Wireless Carriers. The SBA has developed a definition of small entities for radiotelephone (wireless) companies. The Census Bureau reports that there were 1,176 such  X -companies in operation for at least one year at the end of 1992.k Z"< {O-ԍx1992 Census, supra note 92CENSUS725.k According to the SBA's definition, a small business radiotelephone company is one employing no more than 1,500  X-persons.~"< yO+-ԍx13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. ~ The Census Bureau also reported that 1,164 of those radiotelephone companies had fewer than 1,000 employees. Thus, even if all of the remaining 12 companies had more than 1,500 employees, there would still be 1,164 radiotelephone companies that might qualify as small entities if they are independently owned are operated. Although it seems certain that some of these carriers are not independently owned and operated, we are unable at this time to estimate with greater precision the number of radiotelephone carriers and service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 1,164 small entity radiotelephone companies that may be affected by this order.   X0-x224.` ` Cellular Service Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of cellular services. The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of cellular service carriers nationwide of which we are aware appears to be the data that we collect annually in connection with the TRS. According to our most recent data, 804 companies reported that they were engaged in the provision of"`|0*%%<<<"  X-cellular services.`"< {Oy-ԍxId. This category includes PCS carriers.` Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of cellular service carriers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 804 small entity cellular service carriers that may be affected by this order.  X -x225.` ` Mobile Service Carriers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to mobile service carriers, such as paging companies. The closest applicable definition under the SBA's rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of mobile service carriers nationwide of which we are aware appears to be the data that we collect annually in connection with the TRS. According to our most recent data, 172 companies reported that they were engaged in  X -the provision of mobile services.; Z"< {O#-ԍ xId.; Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of mobile service carriers that would qualify under the SBA's definition. Consequently, we estimate that there are fewer than 172 small entity mobile service carriers that may be affected by this order.  XF-x226.` ` Broadband PCS Licensees. The broadband PCS spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission has defined small entity in the auctions for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar  X-years. "< {OY-ԍxAmendment of Parts 20 and 24 of the Commission's Rules - Broadband PCS Competitive Bidding and  {O#-the Commercial Mobile Radio Service Spectrum Cap, Report and Order, 11 FCC Rcd 7824 (1996).  For Block F, an additional classification for "very small business" was added and is defined as an entity that, together with its affiliates, has average gross revenue of not more  Xv-than $15 million for the preceding three calendar years.:vH"< {Oo-ԍxId.: These regulations defining small entity in the context of broadband PCS auctions have been approved by the SBA. No small business within the SBA-approved definition bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small businesses won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. However, licenses for Blocks C through F have not been awarded fully; therefore, there are few, if any, small businesses currently providing PCS services. Based on this information, we conclude that the number of small broadband PCS"0*%%<<y" licensees will include the 90 winning bidders and the 93 qualifying bidders in the D, E, and F Blocks, for a total of 183 small PCS providers as defined by the SBA and the Commission's auction rules.  Xt-x227.` ` Narrowband PCS Licensees. The Commission does not know how many narrowband PCS licenses will be granted or auctioned, as it has not yet determined the size or number of such licenses. Two auctions of narrowband PCS licenses have been conducted for a total of 41 licenses, out of which 11 were obtained by small businesses owned by members of minority groups and/or women. Small businesses were defined as those with  X-average gross revenues for the prior three fiscal years of $40 million or less.|$"< {O@ -ԍxImplementation of Section 309(j) of the Communications Act - Competitive Bidding, PP Docket No.  {O -93-253, and Amendment of the Commission's Rules to Establish New Narrowband PCS, GEN Docket No. 90-314, Competitive Bidding Third Memorandum Opinion and Order and Further Notice, 10 FCC Rcd 175, 208 (1994).| For purposes of this FRFA, the Commission is utilizing the SBA definition applicable to radiotelephone  X -companies, i.e., an entity employing no more than 1,500 persons.v "< yO-ԍx13 C.F.R.  121.201, Standard Industrial Classification Code 4812.v Not all of the narrowband PCS licenses have yet been awarded. There is therefore no basis to determine the number of licenses that will be awarded to small entities in future auctions. Given the  X -facts that nearly all radiotelephone companies have fewer than 1,000 or fewer employeesD D"< yO-ԍxThe 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau of the Census, shows that only 12 radiotelephone firms out of a total of 1,178 such firms which operated during 1992  {O-had 1,000 or more employees. U.S. Bureau of the Census, U.S. Department of Commerce, 1992 Census of  {Oi-Transportation, Communications, and Utilities, UC92-S-1, Subject Series, Establishment and Firm Size, Table 5, Employment Size of Firms: 1992, SIC Code 4812 (issued May 1995).D and that no reliable estimate of the number of prospective narrowband PCS licensees can be made, we assume, for purposes of the evaluations and conclusions in this FRFA, that all the remaining narrowband PCS licenses will be awarded to small entities.  Xk-x228.` ` SMR Licensees. Pursuant to 47 C.F.R.  90.814(b)(1), the Commission has defined "small entity" in auctions for geographic area 800 MHz and 900 MHz SMR licenses as a firm that had average annual gross revenues of less than $15 million in the three previous calendar years. This definition of a "small entity" in the context of 800 MHz and  X-900 MHz SMR has been approved by the SBA. "< {O -ԍxAmendment of Parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels Outside the Designated Filing Areas in the 896901 MHz and the 935940 MHz Bands Allotted to the Specialized  {O"-Mobile Radio Pool, PR Docket No. 89583, Second Order on Reconsideration and Seventh Report and Order, 11  {O"-FCC Rcd 2639, 2693702 (1995); Amendment of Part 90 of the Commission's Rules to Facilitate Future  {O#-Development of SMR Systems in the 800 MHz Frequency Band, PR Docket No. 93144, First Report and Order, Eighth Report and Order, and Second Further Notice of Proposed Rulemaking, 11 FCC Rcd 1463 (1995). The rules adopted in this order may apply"x0*%%<<" to SMR providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended implementation authorizations. We do not know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of less than $15 million. We assume, for purposes of this FRFA, that all of the extended implementation authorizations may be held by small entities, which may be affected by this order.   X-x229.` ` The Commission recently held auctions for geographic area licenses in the 900 MHz SMR band. There were 60 winning bidders who qualified as small entities in the 900 MHz auction. Based on this information, we conclude that the number of geographic area SMR licensees affected by the rule adopted in this order includes these 60 small entities. No auctions have been held for 800 MHz geographic area SMR licenses. Thus, no small entities currently hold these licenses. A total of 525 licenses will be awarded for the upper 200 channels in the 800 MHz geographic area SMR auction. The Commission, however, has not yet determined how many licenses will be awarded for the lower 230 channels in the 800 MHz geographic area SMR auction. Moreover, there is no basis on which to estimate how many small entities will win these licenses. Given that nearly all radiotelephone companies have fewer than 1,000 employees and that no reliable estimate of the number of prospective 800 MHz licensees can be made, we assume, for purposes of this FRFA, that all of the licenses may be awarded to small entities who, thus, may be affected by this order.  X-x230.` ` Resellers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to resellers. The closest applicable definition under the SBA's rules is for all telephone communications companies. The most reliable source of information regarding the number of resellers nationwide of which we are aware appears to be the data that we collect annually in connection with the TRS. According to our most recent data, 339 companies reported that they were engaged in the resale of telephone  X.-services.:."< {O-ԍxId.: Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of resellers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are fewer than 339 small entity resellers that may be affected by this order.  X\-0Xx` `  d.Description of Projected Reporting, Recordkeeping and  X9-Other Compliance Requirements (#  X-x231.` ` In this Second Report and Order, if carriers choose to use CPNI to market service offerings outside the customer's existing service, we obligate these carriers to (1) 0obtain customer approval; (2) provide their customers a onetime notification of their CPNI"!Z0*%%<<e"" rights prior to any solicitation for approval; and (3) maintain records of customer notification and approval, whether oral, written, or electronic.  X-x232.` ` We require carriers to develop and implement software systems that "flag" customer service records in connection with CPNI. The flag must be conspicuously displayed within a box or comment field within the first few lines of the first computer screen, and the flag must indicate whether the customer has approved the marketing use of his or her CPNI, and reference the existing service subscription. Also in connection with the software systems, carriers must implement internal standards and procedures informing employees when they are authorized to utilize CPNI. In addition, they must develop standards and procedures to handle employees who misuse CPNI.  X\ -x233.` ` We further require that carriers maintain an electronic audit mechanism that tracks access to customer accounts and is capable of recording whenever customer records are opened, by whom, and for what purpose. Carriers must maintain these "contact histories" for a period of at least one year to ensure a sufficient evidentiary record for CPNI compliance  X -and verification purposes. Additionally, sales personnel must obtain supervisory review of any proposed request to use CPNI for outbound marketing purposes, to ensure compliance  X-with CPNI restrictions when conducting such campaigns.  XD-x234.` ` Finally, carriers must submit on an annual basis a certification signed by a current corporate officer, as an agent of the corporation, attesting that he or she has personal knowledge that the carrier has complied with the rules adopted in this order. The certification must be made publicly available, and be accompanied by a statement explaining how the carrier is implementing our CPNI rules and safeguards.  Xr- Xx` `  e.Significant Alternatives and Steps Taken by Agency to Minimize Significant Economic Impact on a Substantial Number of Small Entities Consistent with Stated Objectives(#  X -  X-x235.` ` After consideration of possible alternatives, we have concluded that our rules should apply equally to all carriers. Several parties in their comments address the impact of  X- possible changes in our CPNI rules on small entities.z"< {O-ԍxSee supra Parts IV, V, VIII.D of the Second Report and Order.z As a general matter, various small entities express concern that, having never been required to comply with CPNI regulations in the past, any regulation that extends to them will impose immediate costs. Specifically, SBT argues that we should forbear from applying section 222(c)(1) to small businesses, and thereby permit their use of CPNI for all marketing purposes, because small entities need more flexibility to use CPNI to be competitive in the marketplace. SBT likewise opposes a three category approach, claiming it gives large carriers flexibility to develop and meet customers' needs, but may unnecessarily limit small business as competition grows. SBT maintains that small carriers could be competitively disadvantaged by any interpretation of section""Z0*%%<<F#" 222(c)(1)(A) other than the single category approach because a large carrier can base the design of a new offering on statistical customer data and market widely, while a small business can best meet specialized subscriber needs if it offers local, interexchange, and CMRS tailored to the specific subscriber. ALLTEL and SBC agree with USTA that a multiple category definition of telecommunications service would specifically burden small companies.  X -x236.` ` As we discussed in this order, we decline to forbear from applying section 222(c)(1) to small carriers because we are unpersuaded that customers of small businesses have less meaningful privacy interests in their CPNI. We believe that the total service approach furthers the balance of privacy and competitive considerations for all carriers and provides all carriers with flexibility in marketing their telecommunications products and services. Indeed, if SBT is accurate in its claim that small businesses typically have closer personal relationships with their customers, then small businesses likely would have less difficulty in obtaining customer approval to market services outside of a customer's existing service. Under the total service approach, carriers are able to use the customer's entire customer record in the course of providing the customer service, and no business is prohibited from meeting customer needs by offering tailored packages of local, interexchange, and CMRS with customer approval. Moreover, to the extent carriers do not choose to use CPNI for marketing purposes, or do not want to market new service categories, they do not need to comply with our approval or notice requirements. Finally, given our decisions to permit oral, written, or electronic approval under section 222(c)(1), and impose use rather than access restrictions, the total service approach addresses any concern that CPNI restrictions will disrupt the customercarrier dialogue or the carriers' ability to provide full customer service.  X-x237.` ` Some commenters urge the Commission to adopt notification rules which would require dominant carriers to give their customers written notification of their CPNI rights, while smaller carriers or carriers in competitive markets would be permitted to give oral notification to its customers. We find no reason to impose a written notification requirement only on incumbent carriers. While competitive concerns may justify different regulatory treatment for certain carriers, we believe all customers, despite the size or identity of their carrier, have similar and important privacy concerns.  X}-x238.` ` We also reject the suggestion by Arch, LDDS WorldCom, MCI, Sprint, and TCG that our rules in connection with CPNI safeguards be limited to large or incumbent carriers, as they had been previously. Rather, we maintain that Congress intended for all carriers to safeguard customer information, and that the safeguards we adopt today do not impose a greater administrative burden on small carriers. We remain unconvinced that the burdens of section 222 are so great on small carriers that they cannot comply with reasonable restrictions. Indeed, the mechanisms we require expressly factor commercial feasibility and practice into an appropriate regulatory framework, and represent minimum general requirements. We also find that the use of an electronic audit mechanism to track access to customer accounts is not overly burdensome because many carriers already maintain such"B$0*%%<<$" capabilities for a variety of business purposes unrelated to CPNI. Carriers have indicated that such capabilities are important, for example, to track employee use of company resources, including computers and databases, as well as for personnel disciplinary purposes. The contact histories that we require carriers to maintain for a period of at least one year also should not be burdensome to carriers because carriers routinely evaluate these contact histories to determine the success of marketing campaigns. As we discuss in this order, we believe the safeguards we adopt in this order will afford carriers the flexibility in conforming their systems, operations, and procedures to assure compliance with our rules. Furthermore, in an effort to reduce, for all carriers, the administrative burden of compliance with our rules, we specifically decline to impose a password access restriction on carrier use of CPNI. We also conclude that use restrictions are less burdensome to all carriers, including medium and small sized carriers. We decline at this time to impose a requirement of separate marketing personnel on the basis that such a rule may produce inefficiencies particularly for small carriers, and thereby may dampen competition by increasing the costs of entry into telecommunications markets.  X -  X -SXx` ` 2. Paperwork Reduction Act Analysis (#  X-x239.` ` The Notice of Proposed Rulemaking from which this order issues proposed changes to the Commission's information collection requirements. As required by the SPaperwork Reduction Act of 1995, Pub. L. No. 10413, the Commission sought comment from the public and from the Office of Management and Budget (OMB) on the proposed  X-changes. This Second Report and Order contains several new, proposed information collections. We describe our proposed collections as follows:  X-x240.` ` In this order, if carriers choose to use CPNI to market service offerings outside the customer's existing service, we obligate these carriers to obtain customer approval and document such approval through software "flags" on customer service records indicating whether the customer has approved or declined the marketing use of his or her CPNI when solicited. These requirements constitute new "collections of information" within the meaning of the Paperwork Reduction Act of 1995, 44 U.S.C.   35013520. Implementation of this requirement is subject to approval by the Office of Management and Budget as prescribed by the Paperwork Reduction Act.  X^-x241.` ` Additionally, we require all telecommunications carriers that choose to solicit customer approval to provide their customers a onetime notification of their CPNI rights prior to any such solicitation. Pursuant to this onetime notification requirement, these carriers must maintain a record of such notifications. This requirement constitutes a new "collection of information" within the meaning of the Paperwork Reduction Act of 1995, 44 U.S.C.   35013520. Implementation of this requirement is subject to approval by the Office of Management and Budget as prescribed by the Paperwork Reduction Act. "i#0*%%<< $"Ԍ X-x242.` ` All carriers must record whenever customer records are opened, by whom, and for what purpose, and maintain these contact histories for a period of at least one year. These requirements constitute new "collections of information" within the meaning of the Paperwork Reduction Act of 1995, 44 U.S.C.   35013520. Implementation of this requirement is subject to approval by the Office of Management and Budget as prescribed by the Paperwork Reduction Act.  X -x243.` ` Finally, we have adopted rules in this order requiring all telecommunications carriers to submit on an annual basis a certification signed by a current corporate officer attesting that he or she has personal knowledge that the carrier is in compliance with the rules we promulgated in this order, and to create an accompanying statement explaining how the carriers are implementing our rules and safeguards. Pursuant to this recordkeeping requirement, all telecommunications carriers must maintain in a publicly available file the compliance certificates and accompanying statements. This requirement constitutes a new "collection of information" within the meaning of the Paperwork Reduction Act of 1995, 44 U.S.C.   35013520. Implementation of all of these recordkeeping requirements are subject to approval by the Office of Management and Budget as prescribed by the Paperwork Reduction Act.  Xg- Xx B.` ` Further Notice of Proposed Rulemaking (# x  X!-Xx` ` 1. Ex Parte Presentations (#  X-x244.` ` This matter shall be treated as a "permit-but-disclose" proceeding in accordance  X-with the Commission's ex parte rules. 47 C.F.R. 1.1200 et seq. Persons making oral ex  X- parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented  X0-is generally required. See 47 C.F.R. 1.1206(b)(2), as revised. Other rules pertaining to oral and written presentations are set forth in Section 1.1206(b) as well.  X-SXx ` ` 2. Initial Paperwork Reduction Act Analysis (#  X-x245.` ` This Further Notice contains either a proposed or modified information collection. As part of its continuing effort to reduce paperwork burdens, we invite the general Spublic and the Office of Management and Budget (OMB) to take this opportunity to comment  X-on the information collections contained in this Further Notice, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 10413. Public and agency comments are due at the  X -same time as other comments on this Further Notice; OMB comments are due 60 days from  X!-the date of publication of this Further Notice in the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to"J$0*%%<<$" enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.  Xt-q Xx ` ` 3. Initial Regulatory Flexibility Act Analysis (#  X.-x246.` ` As required by the Regulatory Flexibility Act (RFA), as amended,~Z."< {O-ԍx#]\  PC2P#5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).~ the Commission has prepared this present Initial Regulatory Flexibility Analysis (IRFA) of the expected significant economic impact on small entities by the policies and rules proposed in  X-this Further Notice of Proposed Rulemaking (Further Notice). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be  X -filed by the deadlines for comments on the Further Notice. The Commission will send a  X` -copy of the Further Notice, including this IRFA, to the Chief Counsel for Advocacy of the  X? -Small Business Administration. See 5 U.S.C.  603(a). In addition, the Further Notice and  X -IRFA (or summaries thereof) will be published in the Federal Register. See id.q  X -x  X -x` `  a.Need for, and Objectives of, the Proposed Rules  X-x247.` ` The Commission is issuing the Further Notice to seek comment on whether customers may restrict a carrier's use of CPNI for all marketing purposes, even within sections 222(c)(1)(A) and (B). The Commission also seeks comment on what, if any, additional further safeguards may be needed to protect the confidentiality of carrier information, including that of resellers and information service providers, and on what further enforcement mechanisms, if any, should be adopted to ensure carrier compliance with the  X-rules adopted pursuant to the Second Report and Order. The Commission seeks comment on whether the duty in section 222(a) upon all telecommunications carriers to protect the confidentiality of customers' CPNI, or any other provision, permits or requires the Commission to prohibit the foreign storage of, or access to domestic CPNI, as requested by the FBI based on their national security concerns.  X-x` `  b.Legal basis  X-x248.` ` The Further Notice is adopted pursuant to Sections 1, 4(i), 222, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 222, and 303(r). "j0*%%<<"Ԍ X-0x` `  c.` Description and Estimate of the Number of Small Entities to  X-Which the Proposed Rules will Apply (#  X-x249.` ` Consistent with our conclusions in the present Second Report and Order, our rules apply to all telecommunications carriers; therefore, any new rules or changes in our  XS-0rules adopted as a result of the Further Notice might impact small entities, as described in the  X2-Final Regulatory Flexibility Analysis supra. For a list of the small entities to which the  X-proposed rules would apply, see the Second Report and Order Final Regulatory Flexibility  X-Analysis supra Part X.A.1.c (Description and Estimate of the Number of Small Entities to Which the Proposed Rules will Apply). We hereby incorporate that description and estimate into this IRFA. These entities include telephone companies, wireline carriers and service providers, local exchange carriers, interexchange carriers, competitive access providers, operator service providers, pay telephone operators, wireless carriers, cellular service carriers, mobile service carriers, broadband PCS licensees, narrowband PCS licensees, SMR licensees,  X -and resellers. We discussed supra the number of small businesses falling within both of the SIC categories, and attempted to refine further those estimates to correspond with the categories of telephone companies that are commonly used under our rules.  X-x` `  d.` Description of Projected Reporting, Recordkeeping, and  Xs-Other Compliance Requirements (#  X--x250.` ` Because we have not made any tentative conclusions or suggested proposed rules, we are unable at this time to describe any projected reporting, recordkeeping, or other  X-compliance requirements. We have discussed generally in the Further Notice, supra Part IX, however, the possibility that such proposals, if adopted, might entail additional obligations for carriers.  X]-x` `  e.`  Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered(#  X-  X-x251.` ` As noted supra, we seek comment on whether customers may restrict a carrier's use of CPNI for all marketing purpose, and on what, if any, additional safeguards may be needed to protect the confidentiality of carrier information, as well as what further enforcement mechanisms, if any, should be adopted to ensure carrier compliance with our rules. In addition, we seek comment on whether the duty in section 222(a) upon all telecommunications carriers to protect the confidentiality of customers' CPNI, or any other provision, permits or requires the Commission to prohibit the foreign storage of, or access to  X -domestic CPNI. Consistent with our rules in the Second Report and Order, our intent is to further the statutory principle that customers must have the opportunity to protect the information they view as sensitive and personal from use and disclosure by carriers. Because we have not proposed any rules, at this juncture, we are unable to forecast the economic impact on small entities. x` ` "T$0*%%<<$"Ԍ X-x` `  f.` Federal Rules that May Duplicate, Overlap, or Conflict with  X-the Proposed Rules (#  X-x252.` ` None  XQ-QXx ` ` 4. Comment Filing Procedures (#  X -x253.` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on or Qbefore March 30, 1998, and reply comments on or before April 14, 1998. To file formally in this proceeding, you must file an original and six copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original and eleven copies. Comments and reply comments should be sent to Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W., Room 222, Washington, D.C., 20554, with a copy to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Parties should also file one copy of any documents filed in this docket with the Commission's copy contractor, International Transcription Services, Inc., 1231 20th Street, N.W., Washington, D.C., 20036. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C., 20554.  X-x254.` ` Comments and reply comments must include a short and concise summary of the substantive arguments raised in the pleading. Comments and reply comments must also  X-comply with Section 1.49 and all other applicable sections of the Commission's Rules.2Z"< yO1-ԍx47 C.F.R.  1.49. However, we require here that a summary be included with all comments and reply  {O-comments, regardless of length. This summary may be paginated separately from the rest of the pleading (e.g., as "i, ii").2 We also direct all interested parties to include the name of the filing party and the date of the filing on each page of their comments and reply comments. All parties are encouraged to utilize a table of contents, regardless of the length of their submission.  X -x255.` ` Parties are also asked to submit comments and reply comments on diskette. Such diskette submissions would be in addition to and not a substitute for the formal filing requirements addressed above. Parties submitting diskettes should submit them to Janice Myles of the Common Carrier Bureau, 1919 M Street, N.W., Room 544, Washington, D.C., 20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect 5.1 software. The diskette should be submitted in "read only" mode. The diskette should be clearly labeled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter. " 0*%%<<!"Ԍ X-x256.` ` You may also file informal comments or an exact copy of your formal comments electronically via the Internet at . For information on filing comments via the  Z$}V Internet, please see . Only one copy of electronicallyfiled comments must be submitted. You must put the docket number of this proceeding in the body of the text if you are filing by Internet. You must note whether an electronic submission is an exact copy of formal comments on the subject line. You also must include your full name and Postal Service mailing address in your submission. "0*%%<<"  X-#X\  P6G;2P#X01Í ÍX01Í Í#Xj\  P6G;cXP# QXI.XxORDERING CLAUSES(#  X-  X-x257.` ` Accordingly, IT IS ORDERED that pursuant to Sections 1, 4(i), 222 and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.   151, 154(i), 222 and 303(r), a QREPORT AND ORDER and FURTHER NOTICE OF PROPOSED RULEMAKING is hereby ADOPTED.  X -x258.` ` IT IS FURTHER ORDERED that, pursuant to our own motion, paragraph 222  X-of In the Matter of Implementation of the NonAccounting Safeguards of Section 271 and 272  X-of the Communications Act of 1934, as amended, CC Docket No. 96149, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 21905 (1996), is hereby OVERRULED.  X= -x259.` ` IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference Operations Division, SHALL SEND a copy of this SECOND REPORT AND ORDER and FURTHER NOTICE OF PROPOSED RULEMAKING, including the associated Final Regulatory Flexibility Analysis and Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with paragraph  X-605(b) of the Regulatory Flexibility Act, 5 U.S.C. Section 601 et seq. (1981).  XJ-x260.` ` IT IS FURTHER ORDERED that Part 22 of the Commission's rules, 47 C.F.R. Section 22.903(f) and Part 64 of the Commission's rules, 47 C.F.R. Section 64.702(d)(3) are REMOVED as set forth in Appendix B hereto.  X-x261.` ` IT IS FURTHER ORDERED that Part 64 of the Commission's rules, 47 C.F.R. Section 64 is AMENDED as set forth in Appendix B hereto, effective 30 days after publication of the text thereof in the Federal Register, unless a notice is published in the Federal Register stating otherwise. The information collections contained within become effective 70 days after publication in the Federal Register, following OMB approval, unless a notice is published in the Federal Register stating otherwise. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMagalie Roman Salas x` `  hhSecretary "!0*%%<<G""  X-    @A-@v  APPENDIX A LIST OF PARTIES  X- SUBMITTING COMMENTS OR EX PARTES T TP Ad Hoc Telecommunications Users Committee (Ad Hoc) AGI Publishing (AGI) AirTouch Communications, Inc. (AirTouch) Alarm Industry Communications Committee (AICC) ALLTEL Corporate Services, Inc. (ALLTEL) American Public Communications Council (APCC) America's Carrier Telecommunications Association (ACTA) Ameritech Corp. (Ameritech) Arch Communications Group, Inc. (Arch) Association for Local Telecommunications Services (ALTS) Association of Directory Publishers (ADP) Association of Telemessaging Services International (ATSI) AT&T Corp. (AT&T) Bell Atlantic Telephone Companies (Bell Atlantic) BellSouth Corporation (BellSouth) Cable & Wireless, Inc. (CWI) California Cable Television Association (CCTA) California Public Utilities Commission (California Commission) Cincinnati Bell Telephone (CBT) Comcast Cellular Communications, Inc. (Comcast) Competition Policy Instititute (CPI) Competitive Telecommunications Association (CompTel) Compuserve, Inc. (Compuserve) Computer Professionals for Social Responsibility (CPSR) Consolidated Communications, Inc. (Consolidated) Consumer Federation of America (CFA) Cox Enterprises, Inc. (Cox) Direct Marketing Associates (DMA) Directory Dividends Equifax, Inc. (Equifax) Excell Agent Services (Excell Agent) Excel Telecommunications, Inc. (Excel) Federal Bureau of Investigation (FBI) Frontier Corporation (Frontier) Anthony Genovesi, New York State Assemblyman GTE Service Corporation (GTE) Information Industry Association (IIA) Information Technology Association of America (ITAA) IntelCom Group (ICG)"B$0*%%<<$"ԌIntermedia Communications, Inc. (Intermedia) LDDS WorldCom Inc. (LDDS Worldcom) MCI Telecommunications Corporation (MCI) MFS Communications Company, Inc. (MFS) MobileMedia Communications, Inc. (MobileMedia) National Association of Regulatory Utility Commissioners (NARUC) National Telecommunications and Information Association (NTIA) National Telephone Cooperative Association and Organization for the Promotion and xAdvancement of Small Telephone Companies (NTCA/OPASTCO) New York Clearinghouse Association, Securities Industry Association, Bankers  X-xClearinghouse, and Ad Hoc Telecommunications Users Committee (NYCA)  X -New York State Department of Public Service (New York Commission)xx  X\ -"<NYNEX Telephone Companies (NYNEX) Pacific Telesis Group (PacTel) Paging Network (PageNet) Pennsylvania Office of Consumer Advocate (PaOCA) SBC Communications, Inc. (SBC) Small Business in Telecommunications, Inc. (SBT) Southern New England Telephone Company (SNET) Sprint Corporation (Sprint) Sunshine Pages (Sunshine) Telecommunications Industry Association (TIA) Telecommunications Resellers Association (TRA) Teleport Communications Group, Inc. (TCG) Public Utility Commission of Texas (Texas Commission) United States Telephone Association (USTA) U S WEST, Inc. (U S WEST) Virgin Islands Telephone Corporation (VITELCO) Washington Utilities and Transportation Commission (Washington Commission) Wireless Technology Research, L.L.C. (WTR) Yellow Pages Publishers Association (YPPA) "0*%%<<?"  X-    @A-B-@Z APPENDIX B FINAL RULESTP  X- For the reasons set out in the preamble, 47 CFR Parts22 and 64 are amended as follows:  X.-1.XxAUTHORITY: 47 U.S.C. 15, 7, 20105, 222.(#  X -  X- PART 22 PUBLIC MOBILE SERVICES ă  X-2.x 22.903 [Remove].  X9 -_ PART 64 MISCELLANEOUS RULES RELATING TO COMMON CARRIERS ĐTP  X -3.XxThe table of contents for Part64 is revised to read as follows:(# * * * * *  Xg- Subpart U Customer Proprietary Network Information   X!-4.x 64.702 [Amended] In  64.702, remove paragraph (d)(3).  X-5.XxSubpartU is added to read as follows:(#  XO- Subpart U Customer Proprietary Network Information   X-  64.2001` ` X Basis and purpose. (#  X-x(a) Basis. These rules are issued pursuant to the Communications Act of 1934, as amended.  X9-x(b) Purpose. The purpose of these rules is to implement section 222 of the Communications Act of 1934, as amended, 47 U.S.C. 222.  X!-  64.2003` ` X Definitions. (# XxTerms used in this subpart have the following meanings:(# "F$0*&&aa$"Ԍ X-x(a) Affiliate. An affiliate is an entity that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another entity.  X-x(b) Customer. A customer of a telecommunications carrier is a person or entity to which the telecommunications carrier is currently providing service.  X2-x(c) Customer proprietary network information (CPNI). Customer proprietary network information (CPNI) is (1) information that relates to the quantity, technical configuration, type, destination, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier, and that is made available to the carrier by the customer solely by virtue of the customercarrier relationship; and (2) information contained in the bills pertaining to telephone exchange service or telephone toll service received by a customer of a carrier. Customer proprietary network information does not include subscriber list information.  X -x(d) Customer premises equipment (CPE). Customer premises equipment (CPE) is equipment employed on the premises of a person (other than a carrier) to originate, route, or terminate telecommunications.  Xo-x(e) Information service. Information service is the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.  X-x(f) Local exchange carrier (LEC). A local exchange carrier (LEC) is any person that is engaged in the provision of telephone exchange service or exchange access. For purposes of this subpart, such term does not include a person insofar as such person is engaged in the provision of commercial mobile service under 47 U.S.C. 332(c).  X-x(g) Subscriber list information (SLI). Subscriber list information (SLI) is any information (1) identifying the listed names of subscribers of a carrier and such subscribers' telephone numbers, addresses, or primary advertising classifications (as such classifications are assigned at the time of the establishment of such service), or any combination of such listed names, numbers, addresses, or classifications; and (2) that the carrier or an affiliate has published, caused to be published, or accepted for publication in any directory format.  X-x(h) Telecommunications carrier. A telecommunications carrier is any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in 47 U.S.C. 226(a)(2)). "R$0*&&aa$"Ԍ X-  64.2005` ` X Use of Customer Proprietary Network Information Without  X-Customer Approval (# x(a) Any telecommunications carrier may use, disclose, or permit access to CPNI for  Xt-the purpose of providing or marketing service offerings among the categories of service (i.e., local, interexchange, and CMRS) already subscribed to by the customer from the same carrier, without customer approval. x` ` (1) If a telecommunications carrier provides different categories of service, and a customer subscribes to more than one category of service offered by the carrier, the carrier is permitted to share CPNI among the carrier's affiliated entities that provide a service offering to the customer. x` ` (2) If a telecommunications carrier provides different categories of service, but a customer does not subscribe to more than one offering by the carrier, the carrier is not permitted to share CPNI among the carrier's affiliated entities. x(b) A telecommunications carrier may not use, disclose, or permit access to CPNI to market to a customer service offerings that are within a category of service to which the customer does not already subscribe to from that carrier, unless the carrier has customer approval to do so, except as described in paragraph (c) of this section. x` ` (1) A telecommunications carrier may not use, disclose, or permit access to CPNI derived from its provision of local service, interexchange service, or CMRS, without customer approval, for the provision of CPE and information services, including call answering, voice mail or messaging, voice storage and retrieval services, fax store and forward, and Internet access services. For example, a carrier may not use its local exchange service CPNI to identify customers for the purpose of marketing to those customers related CPE or voice mail service. x` ` (2) A telecommunications carrier may not use, disclose or permit access to CPNI to identify or track customers that call competing service providers. For example, a local exchange carrier may not use local service CPNI to track all customers that call local service competitors. x` ` (3) A telecommunications carrier may not use, disclose or permit access to a former customer's CPNI to regain the business of the customer who has switched to another service provider. x(c) A telecommunications carrier may use, disclose, or permit access to CPNI, without customer approval, as described in this subparagraph. "g#0*&&aa $"Ԍx` ` (1) A telecommunications carrier may use, disclose, or permit access to CPNI, without customer approval, in its provision of inside wiring installation, maintenance, and repair services. x` ` (2) CMRS providers may use, disclose, or permit access to CPNI for the purpose of conducting research on the health effects of CMRS. x` ` (3) LECs and CMRS providers may use CPNI, without customer approval, to market services formerly known as adjuncttobasic services, such as, but not limited to, speed dialing, computerprovided directory assistance, call monitoring, call tracing, call blocking, call return, repeat dialing, call tracking, call waiting, caller I.D., call forwarding, and certain centrex features.  X -  64.2007` ` X Notice and Approval Required for Use of Customer Proprietary  X -Network Information (# x(a) A telecommunications carrier must obtain customer approval to use, disclose, or permit access to CPNI to market to a customer service to which the customer does not already subscribe to from that carrier. x(b) A telecommunications carrier may obtain approval through written, oral or electronic methods. x(c) A telecommunications carrier relying on oral approval must bear the burden of demonstrating that such approval has been given in compliance with the Commission's rules. x(d) Approval obtained by a telecommunications carrier for the use of CPNI outside of the customer's total service relationship with the carrier must remain in effect until the customer revokes or limits such approval. x(e) A telecommunications carrier must maintain records of notification and approval, whether oral, written or electronic, for at least one year. x(f) Prior to any solicitation for customer approval, a telecommunications carrier must provide a onetime notification to the customer of the customer's right to restrict use of, disclosure of, and access to that customer's CPNI. x` ` (1) A telecommunications carrier may provide notification through oral or written methods. x` ` (2) Customer notification must provide sufficient information to enable the customer to make an informed decision as to whether to permit a carrier to use, disclose or permit access to, the customer's CPNI. "%0*&&aa%"Ԍx` `  (i) The notification must state that the customer has a right, and the carrier a duty, under federal law, to protect the confidentiality of CPNI. x` `  (ii) The notification must specify the types of information that constitute CPNI and the specific entities that will receive the CPNI, describe the purposes for which CPNI will be used, and inform the customer of his or her right to disapprove those uses, and deny or withdraw access to CPNI at any time. x` `  (iii) The notification must advise the customer of the precise steps the customer must take in order to grant or deny access to CPNI, and must clearly state that a denial of approval will not affect the provision of any services to which the customer subscribes. x` `  (iv) The notification must be comprehensible and not be misleading. x` `  (v) If written notification is provided, the notice must be clearly legible, use sufficiently large type, and be placed in an area so as to be readily apparent to a customer. x` `  (vi) If any portion of a notification is translated into another language, then all portions of the notification must be translated into that language. x` `  (vii) A carrier may state in the notification that the customer's approval to use CPNI may enhance the carrier's ability to offer products and services tailored to the customer's needs. A carrier also may state in the notification that it may be compelled to disclose CPNI to any person upon affirmative written request by the customer. x` `  (viii) A carrier may not include in the notification any statement attempting to encourage a customer to freeze third party access to CPNI. x` `  (ix) The notification must state that any approval, or denial of approval for the use of CPNI outside of the service to which the customer already subscribes to from that carrier is valid until the customer affirmatively revokes or limits such approval or denial. x` ` (3) A telecommunications carrier's solicitation for approval must be proximate to the notification of a customer's CPNI rights. x` ` (4) A telecommunications carrier's solicitation for approval, if written, must not be on a document separate from the notification, even if such document is included within the same envelope or package. "B$0*&&aa$"Ԍ X-  64.2009` ` X Safeguards Required for Use of Customer Proprietary Network  X-Information (# x(a) Telecommunications carriers must develop and implement software that indicates within the first few lines of the first screen of a customer's service record the CPNI approval status and reference the customer's existing service subscription. x(b) Telecommunications carriers must train their personnel as to when they are and are not authorized to use CPNI, and carriers must have a express disciplinary process in place. x(c) Telecommunications carriers must maintain an electronic audit mechanism that tracks access to customer accounts, including when a customer's record is opened, by whom, and for what purpose. Carriers must maintain these contact histories for a minimum period of one year. x(d) Telecommunications carriers must establish a supervisory review process regarding carrier compliance with the rules in this subpart for outbound marketing situations and maintain records of carrier compliance for a minimum period of one year. Specifically, sales personnel must obtain supervisory approval of any proposed outbound marketing request. x(e) A telecommunications carrier must have a corporate officer, as an agent of the carrier, sign a compliance certificate on an annual basis that the officer has personal knowledge that the carrier is in compliance with the rules in this subpart. A statement explaining how the carrier is in compliance with the rules in this subpart must accompany the certificate.  XO- ",0*&&aa"  X-  @B-@#XP\  P6QcXP#  STATEMENT OF COMMISSIONER SUSAN NESS  X- DISSENTING IN PART ĐTP  Vt-Re:xTelecommunications Carriers' Use of Customer Proprietary Network Information and  VQ-xOther Customer Information xI agree with most elements of this order but not with the decision to overturn a portion of the Commission's prior ruling in the "NonAccounting Safeguards" order. I believe it is possible to implement Section 222 in a manner that is fully consistent with Section 272. But the approach taken by the majority creates an unnecessary conflict between the two sections and then resolves that conflict in a manner that undermines the structural separation safeguards crafted by Congress. xSection 272 spells out in detail the relationship between a Bell operating company and any structurally separate affiliate that is created to provide interLATA telecommunications services and interLATA information services. The key rules can be summarized succinctly.  X-Under Section 272(a)(1)(A), the interLATA affiliate is required to be "separate of any  X-operating company entity . . . ." Under Section 272(b)(1)&(5), the affiliate is required to  Xi-"operate independently" of the operating company and to conduct all transactions with the  XH-operating company "on an arm's length basis . . . ." Under Section 272(c)(1), the operating  X'-company "may not discriminate" in favor of the affiliate "in the provision or procurement of  X-goods, services, facilities, or information." xThe sole exception to the nondiscrimination requirement is in Section 272(g)(2). It specifies that the operating company may "market and sell" the interLATA services provided  X|-by the interLATA affiliate. |] yO-ԍxBy virtue of Section 272(g)(3), Section 272(g)(1) also is exempt from the nondiscrimination requirement of Section 272(c)(1). But Section 272(g)(1) only permits the interLATA affiliate to market and sell the telephone exchange services of the operating company so long as nonaffiliated may do so as well. Thus, this  yOM-particular paragraph has its own nondiscrimination requirement.#Xx6X@DQX@# This exception addresses a single setting in which the relationship between the operating company and the separate affiliate is free from the nondiscrimination requirement of Section 272(c); it does not alter Section 272(a)&(b)'s  X-requirements for a separate entity which operates independently and on an arm's length basis. Yet, despite the care Congress took to fashion a narrow exception to the general principles of structural separation, the majority's decision today irretrievably blurs the lines between the  X-two entities.p] yO "-ԍxIt is telling that the majority does not read Section 222 as being the comprehensive and exclusive provision pertaining to the use to which a Bell operating company may put one narrow category of CPNI that relating to calls to alarm monitoring service providers. In this context, the majority acknowledges the need to comply with a distinct statutory safeguard: Section 275(d). I find it difficult to understand why Section 222  yO-%-should be construed in a manner that respects Section 275 but ignores Section 272.#Xx6X@DQX@#p "` 0*((aa="ԌxUnder today's decision, the Bell operating company and its interLATA affiliate are treated as separate carriers for purposes of CPNI. Fine so far. But, if the operating company successfully sells the interLATA services of its affiliate to a customer, or even if the separate affiliate independently sells a customer on its long distance services, the order treats both  Xt-carriers as having collapsed into one. Both carriers will be deemed to have a "total service  XS-relationship" with the customer that encompasses local and interLATA service. Both may access the entire range of information available through the customer's account records information about the destination of the customer's calls, their duration, and their time of day.  X-Both may use this information to devise any offer encompassing either or both services. x xThis approach does not square with the statutory scheme in which the Bell operating company and its separate affiliate are deemed to be separate and independent entities. If MCI, AT&T, or any one of a hundred other long distance companies successfully wins the interLATA business of a customer, it does not automatically acquire the right and the  X -opportunity to access the customer's local service information. Yet, under the approach adopted by the majority today, if the structurally separated affiliate of a Bell operating  X -company wins the interLATA business of a customer, it does automatically acquire the right  X-and the opportunity to access the customer's local service information.X+ yO0-ԍxThe operating company and the structurally separated affiliate will apparently share access to a common computer system, at least for certain customers' records. This of course gives rise to issues of discrimination  yO-and cost allocation that can be avoided by maintaining the structural separation Congress specified.#Xx{2 PQcXP#ѩ I don't think this discrepancy is what Congress intended. xConsider another example. Under Section 272(g)(1), the structurally separate affiliate may market the local service offerings of its affiliated operating company, provided that other entities may also do so. So, if a Bell operating company's structurally separated affiliate successfully markets a local service offering of the operating company (say, in selling the customer a second line), the majority's approach would say that the separate affiliate now has the right automatically to access the operating company's entire record on the customer for the purpose of marketing additional services. But if an unaffiliated entity, exercising the same right to sell the same service on behalf of the same operating company, successfully  X6-sells the operating company's local service, it does not acquire the same rights. Again, the result is anomalous. xIt bears emphasis that the issue here concerns solely the rights that the Bell operating companies and their structurally separated affiliates will have without customer approval. Under Section 222(c)(2), those customers who wish to empower any carrier to access any of their private information may make arrangements to that effect. But, absent an affirmative decision by the customer, I read Section 272 as precluding the kind of preferred relationship between a Bell operating company and its structurally separated affiliate that is created by today's decision.