Qwest opts to put record sharing on hold

The company said Monday that it would wait until the Federal Communications Commission issues specific rules regarding whether customers must opt in to such plans before deciding if it would release customer phone data.

"When many of our customers tell us that they're concerned or don't understand what we're doing, it's time to stop the process and make a change," Qwest Chairman Joseph Nacchio said in a statement.

Under increasing pressure to boost revenue, many companies and industries are eyeing data-sharing as a way to bolster their bottom line. However, consumer groups and some lawmakers are pushing back with varying degrees of success as the practice becomes more common.

"We're very pleased," Mikal Condon, a staff attorney with the Electronic Privacy Information Council (EPIC), said of Qwest's decision. "The fact that they were actually listening to consumers is an excellent step." Earlier this month, EPIC had asked Qwest to withdraw its plan.

Qwest first came under fire in December, when it began telling customers it was considering sharing phone records with companies it has "a business relationship with" unless people specifically asked the company not to, or "opted out." Such records can include the types of service a customer subscribes to as well as detailed information such as the numbers dialed and the time calls were placed.

Consumer groups blasted the plan, worrying it would lead to unprecedented violations of customer privacy. For example, by reviewing the records, marketers might be able to discern that a customer called a certain doctor, AIDS hotline or Alcoholics Anonymous branch.

What's more, 39 state attorneys general have criticized the opt-out approach in a filing with the FCC, saying regulators should require companies to make sure customers choose, or "opt in" to, such data-sharing plans.

The controversy also attracted the attention of Sen. Paul Wellstone, D-Minn., who two weeks ago wrote to FCC Commissioner Michael Powell, asking him to demand that companies get permission from consumers before sharing their records. Qwest serves 14 states, including Minnesota.

"The 'opt-out' approach does not allow a consumer fully to consent to the sharing of their personal information," Wellstone wrote in the letter. "The notifications are often confusing, and the mechanisms that are put in place for a consumer to notify a provider that they do not wish to have their information shared are often too difficult or impossible to access."

Some customers reported having trouble reaching Qwest to opt out of the plan, Wellstone added.

On Monday, the Denver-based telecom company also announced it was creating a position of chief privacy officer to help it navigate the tricky legal waters at the intersection of customer concerns and marketers' desires for profits.

Still, Qwest noted that it isn't the only telecom company to propose sharing customers' data without their permission.

Two weeks ago, Michigan Attorney General Jennifer Granholm sent a letter to Ameritech, a subsidiary of SBC Communications, criticizing the company's opt-out plan as vague and confusing to consumers. She also urged Ameritech customers to call a toll-free number created for them to opt out.

"Information about the telephone calls consumers make from their home phone or cell phones would be personal enough," Granholm said in a statement. "But if a consumer has also subscribed to an Internet service offered by one of the SBC/Ameritech affiliates like Prodigy, usage information could conceivably include such sensitive information as Web-surfing and e-mail behavior."

The FCC is still taking comments on the issue of whether to resume the opt-in approach. The requirement was overturned in 1999 after a federal appeals court sided with US West, which later merged with Qwest, saying opt-in policies violated the First Amendment right to advertise products.

Two years ago, the financial industry succeeded getting lawmakers to approve an opt-out approach, despite protests from privacy advocates.