On March 9, 2007, the House Energy and Commerce Committee held a hearing on combating pretexting and H.R. 936, the Prevention of Fraudulent Access to Phone Records Act. The hearing was well-attended by members of the Committee, and included testimony from representatives of the Federal Trade Commission (“FTC”), Federal Communications Commission (“FCC”), Electronic Privacy Information Center (“EPIC”), United States Telecom Association (“USTA”), and CTIA-The Wireless Association, as well as Greenlight Capital, Inc.’s president, who was a victim of pretexting.

H.R. 936 would prohibit fraudulent access to telephone records and restrict the sharing of customer proprietary network information (“CPNI”) by telecommunications carriers. Title II of the bill, and the section creating the most concern, contains language that would require carriers to obtain specific customer consent before sharing of CPNI with affiliates and joint venture partners that provide them with marketing and other services that is otherwise permissible under law. The ambiguities in Title II and the resulting impact on carriers’ marketing activities was the main topic at the hearing.

Speaking on behalf of CTIA, the Honorable Steve Largent (former member of the Committee) stated that CTIA member companies have concerns about the provisions that require consent to share information with affiliates for marketing purposes. Companies that share data with third parties to aid in marketing, billing, and customer service do so in compliance with stringent Federal Communications Commission requirements and through strict contractual requirements to protect consumer information. The restriction imposed by H.R. 936 would be unduly burdensome and would have no benefits for consumer data security. He stated that there is no evidence to suggest that third-party contractors or joint venture partners have misused any CPNI. He advocated an approach focused on enhanced security, rather than introducing new customer consent mechanisms.

Walter McCormick, testifying for USTA, believes the Title II provisions will “neither increase consumer security nor reduce the amount of marketing materials that customers receive.” The result of restrictions in Title II would be an increase in marketing since carriers would be forced to take a generic, rather than targeted, approach to their marketing. He testified that Title II would impede pro-consumer outreach without addressing any identifiable problem of fraudulent access to phone records. Mr. McCormick stated that if, consistent with his understanding, the Committee intends only to impose new restrictions on “detailed customer telephone records,” the bill’s language should be clarified accordingly, so that industry can continue to offer new services and bundled savings as it does under the current rules, while adding new protections for call detail records.