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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of                )
                                )
Implementation of the           )       CC Docket No. 96-115
Telecommunications Act of 1996: )
                                )
Telecommunications Carriers' Use)
of Customer Proprietary Network )
Information and Other           )
Customer Information            )
                                )
                                )


                             ORDER

   Adopted:  May 21, 1998               Released:  May 21, 1998 


By Chief, Common Carrier Bureau


                        TABLE OF CONTENTS

                                                      Paragraph

     I.   INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . .  1

     II.  CLARIFICATION OF MARKETING USES OF CUSTOMER INFORMATION
     RELATED TO CPE OR INFORMATION SERVICES . . . . . . . . . . . .  2

     III. CUSTOMER'S NAME, ADDRESS, AND TELEPHONE NUMBER. . . . . .  8

     IV.  NOTICE AND WRITTEN APPROVAL UNDER THE COMPUTER III CPNI 
     FRAMEWORK. . . . . . . . . . . . . . . . . . . . . . . . . .   10

     V.   SAFEGUARDS. . . . . . . . . . . . . . . . . . . . . . . . 13

     VI.  ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . . 14


I.   INTRODUCTION

     1.   On February 26, 1998, the Commission released a Second Report and Order and
Further Notice of Proposed Rulemaking (Second Report and Order) interpreting and
implementing, among other things, the portions of section 222 of the Communications Act of
1934, as amended, that govern the use and disclosure of, and access to, customer proprietary
network information (CPNI) by telecommunications carriers.  Since the release of the Second
Report and Order, a number of parties have requested that the Commission clarify various issues
pertaining to that order.  In response to these requests, the Common Carrier Bureau issues this
order clarifying the Second Report and Order as follows:  

     (a)  Independently-derived information regarding customer premises equipment (CPE) and
information services is not CPNI and may be used to market CPE and information services to
customers in conjunction with bundled offerings.

     (b)  A customer's name, address, and telephone number are not CPNI.

     (c)  A carrier has met the requirements for notice and approval under section 222 and the
Commission's rules where it has both provided annual notification to, and obtained prior written
authorization from, customers with more than 20 access lines in accordance with the
Commission's former CPNI rules.

     (d)  Although a carrier must ensure that its certification of corporate compliance with the
Commission's CPNI rules is made publicly available, it is not required to file this certification with
the Commission.

     II.  CLARIFICATION OF MARKETING USES OF CUSTOMER INFORMATION
     RELATED TO CPE OR INFORMATION SERVICES

     2.   Section 222(c)(1) establishes the limited circumstances in which carriers can use,
disclose, or permit access to CPNI without first obtaining customer approval.  In interpreting
section 222(c)(1) in the Second Report and Order, the Commission adopted an approach that
allows carriers to use CPNI, without first obtaining customer approval, to market improvements
or enhancements to the package of telecommunications services the carrier already provides to a
particular customer, which it referred to as the "total service approach."  The Commission
determined, however, that carriers may not use CPNI, without first obtaining customer approval,
to market offerings that fall outside the scope of the customer's existing service relationship with
the carrier.  The Commission also concluded that, as required by section 222(c)(1), carriers may
not use CPNI, without first obtaining customer approval, to market non-telecommunications
offerings, including CPE and information services.  More specifically, the Commission concluded
that CPE and information services are not "telecommunications services," and thus do not fall
within the scope of section 222(c)(1)(A).  In addition, the Commission concluded that neither
CPE nor most information services fall within the meaning of "services necessary to, or used in"
the provision of telecommunications service under section 222(c)(1)(B). 
          
     3.   The Commission's discussion, however, did not specifically address a carrier's
ability to use CPNI when its customers obtain their telecommunications service as part of a
bundled package that includes non-telecommunications service offerings, such as CPE or certain
information services.  Although the Commission expressly recognized that commercial mobile
radio services (CMRS) providers are permitted to offer bundled service under the Commission's
rules, including CPE and various information services, it rejected the argument that this historical
treatment required the Commission to interpret either section 222(c)(1)(A) or (B) as permitting
CMRS providers to use CMRS-derived CPNI, without first obtaining customer approval, to
market these non-telecommunications service offerings solely because they are provided to
customers bundled with CMRS.  On the other hand, the Commission noted that its interpretation
of section 222(c)(1) does not prohibit carriers from bundling services that they otherwise are able
to bundle under the Communications Act and the Commission's rules, or from marketing
integrated service offerings.  Moreover, the Commission expressly noted that "customer
information derived from the provision of any non-telecommunications service, such as CPE or
information services, is not covered by section 222(c)(1), and thus may be used to provide or
market any telecommunications service regardless of telecommunications service categories or
customer approval."   

     4.   The Bureau believes that further clarification of carriers' obligations and rights in
the context of bundled offerings will serve to minimize any potential confusion regarding a
carrier's ability to use CPNI and other customer information to market new bundled offerings to
existing customers.  Accordingly, we make clear that, when a customer purchases CPE or
information services from a carrier that are bundled with a telecommunications service, the carrier
subsequently may use any customer information independently derived from the carrier's prior sale
of CPE to the customer or the customer's subscription to a particular information service offered
by the carrier in its marketing of new CPE or a similar information service that is bundled with a
telecommunications service.  Neither CPE nor information services constitute
"telecommunications services" as defined in the Act.  Therefore, any customer information
derived from the carrier's sale of CPE or from the customer's subscription to the carrier's
information service would not be "CPNI" because section 222(f) defines CPNI in terms of
information related to a "telecommunications service."  As a result, in situations where the
bundling of a telecommunications service with CPE, information services, or other non-
telecommunications services is permissible, a carrier may use CPNI to target particular customers
in a manner consistent with the Second Report and Order, and it also may use the customer
information independently derived from the prior sale of the CPE, the customer's subscription to a
particular information service, or the carrier's provision of other non-telecommunications offerings
to market its bundled offering. 

     5.   In an effort to further explain a carrier's obligation in the context of bundled
offerings, we provide an example of how the Commission's rules would apply in the CMRS
context.  A CMRS provider could use CMRS-derived CPNI to target its high usage analog
wireless customers to offer them new digital wireless service plans.  If such an analog customer
also had purchased previously a CMRS handset, or an information service such as voice mail, as
part of a bundled offering from the carrier, the carrier also would have access to information
concerning the customer's purchase of the carrier's CPE and information service that is
independent from the CPNI derived from the provision of the CMRS service.  Consistent with the
total service approach, the carrier could use such customer information to market new digitally-
compatible CPE and new voice mail service in conjunction with the offering of new digital
wireless service in a single contact with the customer, without first obtaining the customer's
approval.
 
     6.   In contrast, where a particular customer has not purchased CPE or information
services from the carrier that is providing its telecommunications services, the carrier would be
subsequently prohibited from using CPNI, without first obtaining customer approval, to market a
bundled offering of CPE or information services with telecommunications services to such a
customer.  In this situation, absent customer approval, the carrier would be using CPNI in
violation of section 222(c)(1) to market CPE or information services to a customer with whom
they had no existing relationship derived from the carrier's sale of CPE or the customer's
subscription to the carrier's information service.  Similarly, the general knowledge that all wireline
customers have a telephone would not permit carriers to use CPNI derived from wireline service
to select those individuals to whom to market the carrier's CPE offerings. 

     7.   We also clarify that, only where CPE or an information service is part of a bundled
offering, including a telecommunications service, and the carrier is the existing CPE or
information service provider, could the carrier use CPNI to market a new bundled offering that
includes new CPE or similar information services.  For example, carriers cannot use CPNI to
select certain high usage customers to whom they also sold telephones, and then market only new
CPE that is not part of a new bundled plan.  Section 222(c)(1)(A) permits the use of CPNI,
without first obtaining customer approval, only "in the provision of the telecommunications
service from which such information is derived."  Therefore, when a carrier has identified a
customer through the use of CPNI, but is not offering a telecommunications service in
conjunction with its marketing of CPE or information services, that carrier would be using CPNI
outside the provision of the service from which it is derived, in violation of section 222 and the
Commission's rules.

III. CUSTOMER'S NAME, ADDRESS, AND TELEPHONE NUMBER

     8.   We clarify that a customer's name, address, and telephone number do not fall
within the definition of CPNI, set forth in section 222(f)(1).  Section 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 carrier-customer 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 list information.

Subscriber list information includes a customer's name, address, and telephone number so long as
they have been published.  Therefore, it is clear that the definition of CPNI does not include a
customer's name, address, and telephone number that have been published, in the manner
described by section 222(f)(3)(B).  The question remains, however, as to whether such
information that has not been published should be considered CPNI. 

     9.   Although the definition of CPNI includes "information contained in the bills
pertaining to telephone exchange service or telephone toll service received by a customer of a
carrier," we do not interpret this language to include every item that appears on a customer's bill. 
Specifically, we do not consider a customer's name, address, and telephone number to be
"information pertaining to telephone exchange service or telephone toll service."  Rather, we
consider this information to be part of a carrier's business record or customer list that identifies
the customer and indicates how that customer can be contacted by the carrier.  Although such
information generally appears on a customer's billing statement, it does not pertain to the
"telephone exchange service or toll service" received by the customer, as specified by the
statutory definition in section 222(f)(1)(B).  If the definition of CPNI included a customer's name,
address, and telephone number, a carrier would be prohibited from using its business records to
contact any of its customers to market any new service that falls outside the scope of its existing
service relationship with those customers.  In fact, under such an interpretation, a carrier would
not even be able to contact a single customer in an effort to obtain permission to use their CPNI
for marketing purposes because the carrier's mere use of its customer list to initiate contact with
its customers would constitute a violation of section 222.  This anomalous result was clearly not
intended by section 222.  Therefore, we clarify that a carrier's use of its customers' name, address,
and telephone number for marketing purposes would not be subject to the CPNI restrictions in
section 222(c)(1) because such information is not CPNI.  Thus, under section 222 and the
Commission's rules, a carrier could contact all of its customers or all of its former customers, for
marketing purposes, by using a customer list that contains each customer's name, address, and
telephone number, so long as it does not use CPNI to select a subset of customers from that list.   

IV.  NOTICE AND WRITTEN APPROVAL UNDER THE COMPUTER III CPNI 
          FRAMEWORK

     10.  Prior to the adoption of the Telecommunications Act of 1996, the framework
established under the Commission's Computer III regime governed the use of CPNI by the BOCs,
AT&T, and GTE to market CPE and enhanced services.  Two important components of this
Computer III framework were:  (1) a carrier's obligation to provide an annual notification of
CPNI rights to multi-line customers regarding enhanced services, as well as a similar notification
requirement regarding CPE that applied only to the BOCs, and (2) a carrier's obligation to
obtain prior written authorization from business customers with more than 20 access lines to use
CPNI to market enhanced services.  We clarify that in circumstances where a carrier has
provided annual notification and received prior written authorization from customers with more
than twenty access lines, the requirements for notice and approval under section 222, and the
associated Commission rules, are satisfied for those customers.  

     11.  In the Second Report and Order, the Commission concluded that the statutory
framework of section 222 contemplated informed customer approval because such notification
and affirmative approval would maximize customers' control over their CPNI when carriers use
CPNI for purposes beyond those specified in sections 222(c)(1)(A) and (B), thus furthering the
objectives of section 222.  As elements of informed customer approval, the Commission
established the following requirements in the Second Report and Order:  (1) a one-time notice to
customers, prior and proximate to any solicitation for approval, informing them of their right to
restrict carrier use of CPNI, the precise steps necessary to grant or deny access to CPNI, the
scope and duration of a carrier's use of CPNI in the event of a grant, and the carrier's duty to
protect the confidentiality of such information and ensure the continuance of service despite a
denial of carrier access to CPNI; and (2) express, affirmative oral, written, or electronic customer
approval.    

     12.  Similarly, the notification obligation established by the Computer III framework
required, among other things, that carriers provide customers with illustrative examples of
enhanced services and CPE, expanded definitions of CPNI and CPE, information about a
customer's right to restrict CPNI use at any time, information about the effective duration of
requests to restrict CPNI, and background information to enable customers to understand why
they were being asked to make decisions about their CPNI.  We determine that these written
annual notifications materially comply with the form and content of the notices required in the
Second Report and Order.  In addition, the Computer III requirement to obtain prior written
authorization constitutes a form of express, affirmative approval, as required by section 222. 
Therefore, we find that carriers that have complied with the Computer III notification and prior
written approval requirement in order to market enhanced services to business customers with
more than 20 access lines are also in compliance with section 222 and the Commission's rules. 
Such carriers may rely on their previous compliance with the Computer III notification and
approval requirements to market enhanced services to business customers with more than 20
access lines without taking any additional steps to notify such customers of their CPNI rights or
to obtain customer approval to use CPNI to market enhanced services to such customers.    

V.   SAFEGUARDS

     13.  As one of several CPNI safeguards, the Commission required in the Second Report
and Order each carrier to certify that it is in compliance with the Commission's CPNI rules.  In
describing a carrier's duty, the Commission stated that each carrier must "submit a certification"
and that the certification "must be made publicly available."  We clarify that the Commission's
use of the word "submit" in the order was not intended to require carriers to file such
certifications with the Commission.  Rather, the order directs carriers to ensure only that these
corporate certifications be made publicly available.  

VI.  ORDERING CLAUSES

     14.  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), and
authority delegated thereunder pursuant to sections 0.91 and 0.291 of the Commission's rules, 47
C.F.R.   0.91, 0.291, this Order is hereby adopted.


                              FEDERAL COMMUNICATIONS COMMISSION



                              A. Richard Metzger, Jr.
                              Chief
                              Common Carrier Bureau