PUC rejects privacy rule rewrite

In what consumer advocates describe as a blow to the public, the state Public Utilities Commission has decided to not update California’s 28-year-old rules dealing with cell phone privacy.

The powerful, five-member regulatory panel, in 3-2 split vote approving a proposal by Commissioner Mark Ferron, rejected the requests of three consumer groups seeking an update of the existing privacy protections that were put into place long before smart phones and widespread digital communications.

A second proposal by Commissioner Catherine Sandoval, which would have initiated a review of the rules, was rejected.

The commission, which acted last week, said there are no existing privacy concerns related to cell phone use and that a review process of any possible existing privacy threats is unnecessary. The commission said, however, that it would continue to track the issue.

Consumer groups that sought the changes included the California Consumer Federation, The Utility Reform Network, or TURN, and the Privacy Rights Clearing House.

“They were voting really on the question of is there even an issue of concern for consumers and three of the commissioners voted that there’s no problem here,” said Richard Holober of the Consumer Federation of California.

The three groups petitioned CPUC last year to revamp the 1986 telecom privacy regulations that they argued do not sufficiently regulate current mobile technology.

Privacy protections subject to a landline do not translate over to cell phone activity and consumer groups have pushed the commission to close this gap.

In 1986 when the Electronic Communications Privacy Act was adopted, about one in 700 Americans owned a mobile phone. The number of operating cell phones today exceeds the country’s population.

Under mobile carriers and app developers can secretly and legally collect, store, and use the personal information of their customers.

In her proposal, Sandavol noted over 140 million customers of Sprint, AT&T and other wireless service providers were tracked by Carrier IQ tracking software embedded in their phones. When customers use smart phones online, Verizon Wireless may sell their web browsing, location and demographic background information to interested businesses.

“They’re being blissfully ignorant about the reality we’re in and it only serves the interests of the phone companies,” Holober said.

California in 2004 was the first state to adopt a consumer bill of rights, but those regulations didn’t outline consumer privacy rights. A change in the panel’s governor appointed composition allowed service providers to successfully lobby for overturning those rules, eight months after their implementation.

Holober expected that eight years later with one Schwarzenegger-era commissioner remaining that there would be a more “sympathetic PUC majority.”

Ferron, PUC President Michael Peevey and Commissioner Carla Peterman approved Ferron’s petition to block a review. Commissioners Mike Florio and Sandoval voted to open up a review process, but were outvoted.