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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** 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 ) ) ) Implementation of the Non-Accounting ) CC Docket No. 96-149 Safeguards of Sections 271 and 272 of the) Communications Act of 1934, as Amended) ) SECOND REPORT AND ORDER AND FURTHER NOTICE OF PROPOSED RULEMAKING Adopted: February 19, 1998 Released: February 26, 1998 Comment Date: March 30, 1998 Reply Comment Date: April 14, 1998 By the Commission: Commissioner Ness approving in part; dissenting in part and issuing a statement. TABLE OF CONTENTS Paragraph I. INTRODUCTION AND EXECUTIVE SUMMARY . . . . . . . . . . . . . 1 II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . 6 III. COMMISSION AUTHORITY . . . . . . . . . . . . . . . . . . . . 11 A. Background . . . . . . . . . . . . . . . . . . . . . . . . . 11 B. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . 14 IV. CARRIER'S RIGHT TO USE CPNI WITHOUT CUSTOMER APPROVAL. . . . 21 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . 21 B. Scope of a Carrier's Right Pursuant to Section 222(c)(1)(A): the "Total Service Approach". . . . . . . . . . . . . . . . . . . . . . 27 1. Background. . . . . . . . . . . . . . . . . . . . 27 2. Discussion. . . . . . . . . . . . . . . . . . . . 31 a. Statutory Language, History, and Structure 32 b. Statutory Principles of Customer Control and Convenience . . . . . . . . . . . . . 53 C. Scope of Carrier's Right Pursuant to Section 222(c)(1)(B). . 68 1. Background. . . . . . . . . . . . . . . . . . . . 68 2. Discussion. . . . . . . . . . . . . . . . . . . . 70 D. Scope of Carrier's Right Pursuant to Section 222(d)(1) . . . 81 1. Background. . . . . . . . . . . . . . . . . . . . 81 2. Discussion. . . . . . . . . . . . . . . . . . . . 82 V. "APPROVAL" UNDER SECTION 222(c)(1) . . . . . . . . . . . . . 86 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . 86 B. Express Versus Notice and Opt-Out. . . . . . . . . . . . . . 88 1. Background. . . . . . . . . . . . . . . . . . . . 88 2. Discussion. . . . . . . . . . . . . . . . . . . . 91 C. Written, Oral and/or Electronic Approval . . . . . . . . . 108 1. Background. . . . . . . . . . . . . . . . . . . 108 2. Discussion. . . . . . . . . . . . . . . . . . . 109 D. Duration, Frequency, and Scope of Approval . . . . . . . . 115 1. Background. . . . . . . . . . . . . . . . . . . 115 2. Discussion. . . . . . . . . . . . . . . . . . . 116 E. Verification of Approval . . . . . . . . . . . . . . . . . 119 1. Background. . . . . . . . . . . . . . . . . . . 119 2. Discussion. . . . . . . . . . . . . . . . . . . 120 F. Informed Approval Through Notification . . . . . . . . . . 124 1. Background. . . . . . . . . . . . . . . . . . . 124 2. Discussion. . . . . . . . . . . . . . . . . . . 127 G. Form and Content of Notification . . . . . . . . . . . . . 130 1. Background. . . . . . . . . . . . . . . . . . . 130 2. Discussion. . . . . . . . . . . . . . . . . . . 132 VI. AGGREGATE CUSTOMER INFORMATION . . . . . . . . . . . . . . .143 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . .143 B. Background . . . . . . . . . . . . . . . . . . . . . . . . .145 C. Discussion . . . . . . . . . . . . . . . . . . . . . . . . .149 VII. SECTION 222 AND OTHER ACT PROVISIONS . . . . . . . . . . . .154 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . .154 B. Section 222 and Section 272. . . . . . . . . . . . . . . . .155 1. Background. . . . . . . . . . . . . . . . . . . .155 2. Discussion. . . . . . . . . . . . . . . . . . . .158 C. Section 222 and Section 274. . . . . . . . . . . . . . . . .170 1. Background. . . . . . . . . . . . . . . . . . . .170 2. Discussion. . . . . . . . . . . . . . . . . . . .173 VIII. COMMISSION'S EXISTING CPNI REGULATIONS . . . . . . . . . . .174 A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . .174 B. Computer III CPNI Framework. . . . . . . . . . . . . . . . .176 1. Background. . . . . . . . . . . . . . . . . . . .176 2. Discussion. . . . . . . . . . . . . . . . . . . .180 C. BOC Cellular CPNI Rule 22.903(f) and Computer II Rule 64.702(d)(3)185 1. Background. . . . . . . . . . . . . . . . . . . .185 2. Discussion. . . . . . . . . . . . . . . . . . . .188 D. Safeguards Under Section 222 . . . . . . . . . . . . . . . .190 1. Background. . . . . . . . . . . . . . . . . . . .190 2. Discussion. . . . . . . . . . . . . . . . . . . .193 IX. FURTHER NOTICE OF PROPOSED RULEMAKING. . . . . . . . . . . .203 A. Customer Right to Restrict Carrier Use of CPNI for Marketing Purposes . . . . . . . . . . . . . . . . . . . . . . . . . .204 B. Protections for Carrier Information and Enforcement Mechanisms206 C. Foreign Storage of, and Access to, Domestic CPNI . . . . . .208 X. PROCEDURAL ISSUES. . . . . . . . . . . . . . . . . . . . . .211 A. Second Report and Order. . . . . . . . . . . . . . . . . . .211 1. Final Regulatory Flexibility Analysis . . . . . .211 2. Paperwork Reduction Act Analysis. . . . . . . . .239 B. Further Notice of Proposed Rulemaking. . . . . . . . . . . .244 1. Ex Parte Presentations. . . . . . . . . . . . . .244 2. Initial Paperwork Reduction Act Analysis. . . . .245 3. Initial Regulatory Flexibility Act Analysis . . .246 4. Comment Filing Procedures . . . . . . . . . . . .253 XI. ORDERING CLAUSES . . . . . . . . . . . . . . . . . . . . . .257 APPENDIX A LIST OF PARTIES APPENDIX B FINAL RULES I. INTRODUCTION AND EXECUTIVE SUMMARY 1. In passing the Telecommunications Act of 1996 (1996 Act), Congress sought to establish a new "pro-competitive, deregulatory national policy framework" 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 1996 Act had the potential to threaten consumer privacy interests. Congress, therefore, enacted section 222 to prevent consumer privacy protections from being inadvertently swept away along with the prior limits on competition. 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. 2. Section 222 sets forth three categories of customer information to which different privacy protections and carrier obligations apply -- individually identifiable CPNI, aggregate customer information, and subscriber list information. 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 to which the customer subscribes and the extent the service is used. Aggregate customer and 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 relates to a group or category of services or customers, from which individual customer identities and characteristics have been removed." Subscriber list information, although consisting of individually identifiable information, is defined in terms of public, not private, information, including the "listed names, numbers, addresses, or classifications . . . that the carrier or an affiliate has published, caused to be published, or accepted for publication in any directory format." 3. In contrast to other provisions of the 1996 Act that seek primarily to "[open] all telecommunications markets to competition," 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 privacy interests with respect to CPNI." Congress' new balance, and privacy concern, are evidenced by the comprehensive statutory design, which expressly recognizes the duty of all carriers to protect customer information, and embodies the principle that customers must be able to control information they view as sensitive and personal from use, disclosure, and access by carriers. Where information is not sensitive, or where the customer so directs, the statute permits the free flow or dissemination of information beyond the existing customer-carrier 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 sensitive information is by definition not at stake, Congress expressly required carriers to provide such information to third parties on nondiscriminatory terms and conditions. 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. 4. In this Second Report and Order, we promulgate regulations to implement the statutory obligations of section 222. We also review our existing regulatory framework 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 Act. More specifically, for the reasons discussed herein, we modify our rules and procedures regarding CPNI and implement section 222 as follows: (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 their carrier. (b) Before carriers may use CPNI to market service outside the customer's existing service relationship, we require that carriers obtain express customer approval. Such express approval may be written, oral, or electronic. In order to ensure that customers are informed of their statutory rights before granting approval, we further require carriers to provide a one-time notification of customers' CPNI rights prior to any solicitation for approval. (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 Congress established in section 222. (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 Companies (BOCs). 5. Finally, in a Further Notice of Proposed Rulemaking (Further Notice) we seek additional comment on three issues involving carrier duties and obligations established under sections 222(a) and (b) of the 1996 Act. In particular, we seek further comment on (a) the customer's right to restrict carrier use of CPNI for all marketing purposes; (b) the appropriate protections for carrier information and additional enforcement mechanisms we may apply; and (c) the foreign storage of, and access to, domestic CPNI. II. BACKGROUND 6. In response to various informal requests for guidance from the telecommunications industry regarding the obligation of carriers under new section 222, the Commission released a Notice of Proposed Rulemaking 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 access to individually identifiable CPNI without obtaining customer approval; (2) the requirements for customer approval; and (3) whether the Commission's existing CPNI requirements should be amended in light of section 222. 7. Prior to the 1996 Act, the Commission had established CPNI requirements applicable to the enhanced services operations of AT&T, the BOCs, and GTE, and the CPE operations of AT&T and the BOCs, in the Computer II, Computer III, GTE ONA, and BOC CPE Relief 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 GTE. The Notice stated that the Commission's existing CPNI requirements were intended 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 services markets. The Notice further stated that the existing CPNI requirements also were intended to protect legitimate customer expectations of confidentiality regarding individually identifiable information. The Commission concluded in the Notice that existing CPNI requirements would remain in effect, pending the outcome of this rulemaking, to the extent that they do not conflict with section 222. 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 pre- existing CPNI framework, pending our action in this proceeding. 8. On August 7, 1996, the Commission released the First Report and Order in the CPNI proceeding. 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 occurrence of calls received by alarm monitoring service providers, pursuant to the ban on such use in section 275(d). 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 entities from accessing CPNI simply because they market alarm monitoring services. The Commission deferred deciding the issue of whether any restrictions on access to CPNI were necessary to effectuate the prohibition contained in section 275(d). 9. On December 24, 1996, the Commission released the Non-Accounting Safeguards Order, which adopted rules and policies governing the BOCs' provision of certain services through section 272 affiliates. In that order, the Commission concluded that the nondiscrimination provisions of section 272(c)(1) govern the BOCs' use of CPNI and that the BOCs must comply with the requirements of both sections 222 and 272(c)(1). The Commission deferred to this proceeding, however, all other issues concerning the interplay between those provisions. On February 7, 1997, the Commission released the Electronic Publishing Order, which adopted policies and rules governing, among other things, the BOCs' provision of electronic publishing under section 274. In that order, the Commission likewise deferred to this proceeding all CPNI-related issues involved in the BOCs' marketing of electronic publishing services. In light of the Commission's determinations in the Non- 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 relating to the subjects previously noticed and their interplay with sections 272 and 274. 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), regarding the BOCs' sharing of CPNI with cellular affiliates, pending the outcome of this proceeding. 10. In this Second Report and Order, we address the scope and meaning of section 222, as well as the issues deferred to this proceeding. We will consider subsequently, in a separate order, the meaning and scope of section 222(e) of the 1996 Act, relating to the disclosure of subscriber list information by local exchange carriers. 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 section 201(b). III. COMMISSION AUTHORITY A. Background 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 of their obligations under section 222. 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 section 222. 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 in the public interest, and sought comment on that tentative conclusion. The Commission 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 CPNI regulation would enhance or impede valid federal interests with respect to CPNI. 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 CPNI with respect to matters falling within the scope of that statutory provision. 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 section 222. Some commenters further maintain that the Commission has authority to adopt rules implementing section 222 that apply both to interstate and intrastate aspects of CPNI. 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 various CPNI requirements, or both. B. Discussion 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 more fully herein, we are persuaded that Congress established a comprehensive new framework in section 222, which balances principles of privacy and competition in connection with the use and disclosure of CPNI and other customer information. 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 ensure a uniform national CPNI policy. It is well-established that an agency has the authority to adopt rules to administer congressionally mandated requirements. Indeed, courts repeatedly have held that the Commission's general rulemaking authority is "expansive" rather than limited. We agree with the petitioning carrier associations, and essentially all other commenters, that our clarification of section 222 will serve to reduce confusion and controversy. 15. We further conclude that our authority to promulgate regulations implementing section 222 extends to both the interstate and intrastate use and protection of CPNI and other customer information in several important respects. 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 CPNI by AT&T, the BOCs, and GTE, through the rules established in the Computer III proceedings. Sections 4(i), 201(b), and 303(r) of the Act authorize the Commission to adopt any rules it deems necessary or appropriate to carry out its responsibilities under the Act, so long as those rules are not otherwise inconsistent with the Act. 16. In Louisiana Pub. Serv. Comm'n v. FCC, 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 1996 Act. 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 impossibility exception. We conclude that, in connection with CPNI regulation, the 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 intrastate aspects. 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 greatly with a carrier's ability to provide service in a cost-effective manner. 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 marketing because it would be impractical to limit marketing to interstate services. On this basis, we find inapplicable the limitation on federal regulation of purely intrastate telecommunications matters in section 2(b) of the Act, as well as Congress' prohibition on implied preemption in section 601(c) of the 1996 Act. 17. Several commenters interpret California III to support their view that state rules would conflict with section 222 if they are more restrictive -- that is, permit less carrier use and disclosure of CPNI -- than the Commission's implementing regulations. These 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 restrictive notice rule, reasoning that such state regulations would negate the Commission's exercise of its lawful authority over interstate telecommunications services. In contrast, other commenters contend that, consistent with California III, the Commission should establish minimum federal standards under section 222 for the use, disclosure, and permission of access to CPNI, yet permit states to exceed those standards. These parties reason that, although federal standards are needed to monitor the use of CPNI, state regulators are best suited to deal with particular problems faced by consumers in their state, and further argue that state requirements that provide additional privacy protections to consumers would not conflict with the Commission's rules. 18. 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 any conflicting state rules on a case-by-case basis. State rules that likely would be vulnerable to preemption would include those permitting greater carrier use of CPNI than 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 information. 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 objectives of Congress. 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. 19. 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 to telephone exchange service or telephone toll service received by a customer of a carrier." Section 222(e) similarly provides that: "[n]otwithstanding subsections (b), (c), and (d), a telecommunications carrier that provides telephone exchange service shall provide subscriber list information gathered in its capacity as a provider of such service on a timely and unbundled basis, under nondiscriminatory and reasonable rates, terms, and conditions . . ." Insofar as telephone exchange service is virtually an exclusively intrastate service, 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 1996 Act precludes our regulation of the intrastate use and protection of CPNI pursuant to section 222. 20. 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. IV. CARRIER'S RIGHT TO USE CPNI WITHOUT CUSTOMER APPROVAL A. Overview 21. Section 222(c)(1) and section 222(d) set forth the circumstances under which a carrier may use, disclose, or permit access to CPNI without customer approval. Specifically, section 222(c)(1) provides that 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 service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories." Section 222(d) provides: [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 customer approves of the use of such information to provide such service. 22. Numerous parties comment on the proper interpretation of section 222(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 marketing plans. Indeed, as competition grows and the number of firms competing for consumer attention increases, CPNI becomes a powerful resource for identifying potential customers and tailoring marketing strategies to maximize customer response. Accordingly, a broad interpretation of the scope of section 222(c)(1) would afford carriers the opportunity to use, disclose, or permit access to CPNI expansively. A narrow interpretation, conversely, would restrict the use carriers can make of CPNI absent customer approval. 23. We conclude that the general framework established under section 222, considered as a whole, carves a limited exception in section 222(c)(1) for carrier use, disclosure, and permission of access to sensitive customer information. Specifically, sections 222(c)(1)(A) and (B), as well as the narrow exceptions in section 222(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 section 222(c)(1)(A) and (B) reflects Congress' judgment that customer approval for carriers to use, disclose, and permit access to CPNI can be inferred in the context of an existing customer-carrier 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. 24. The language also suggests, however, that the carrier's right under section 222(c)(1)(A) and (B) is a limited one, in that the carrier "shall only" use, disclose, or permit access to CPNI "in the provision of" the telecommunications service from which such CPNI is derived or services necessary to, or used in, such telecommunications service. Indeed, insofar as the customer consent in sections 222(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 customer-carrier relationship. 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 integrated service. 25. 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. 26. Also, as explained below, with respect to section 222(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 section 222(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 section 222(c)(1)(B). B. Scope of a Carrier's Right Pursuant to Section 222(c)(1)(A): the "Total Service Approach" 1. Background 27. In the Notice, the Commission tentatively concluded that section 222(c)(1)(A) should be interpreted as "distinguishing among telecommunications services based on traditional service distinctions," specifically, local, interexchange, and CMRS. 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 short-haul toll should be treated as a local telecommunications service when provided by a LEC, and as an interexchange telecommunications service when provided by an interexchange carrier (IXC). 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 interpretation's impact on competitive and customer privacy interests. The Commission also sought comment on the impact of changes in telecommunications technology and regulation and on whether and when technological and market developments may require the Commission to revisit the issue of telecommunications service distinctions. 28. Commenters recognize that the language of section 222(c)(1)(A) is not clear, and propose at least five different interpretations. First, several parties urge us to interpret section 222(c)(1)(A) as limited to each discrete offering or feature of service subscribed to by a customer. 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 to the three traditional service distinctions -- local, interexchange, and CMRS. 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 CPNI to market long distance or CMRS offerings, absent customer approval. 29. 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 categories, but CMRS, like short-haul toll, "floats" between them. 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, a number of parties urge us to interpret section 222(c)(1)(A) as referring only to one broad telecommunications service that includes all of a carrier's telecommunications service offerings. 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. 30. 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 to by the customer from the same carrier. 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 section 222(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 carrier's permitted use of CPNI reflects the level of service subscribed to by the customer from the carrier. 2. Discussion 31. 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 section 222. a. Statutory Language, History, and Structure 32. The statutory language makes clear that Congress did not intend for the implied customer approval to use, disclose, or permit access to CPNI under section 222(c)(1)(A) to extend 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 singular "telecommunications service" must be given meaning. Section 222(c)(1) prohibits a carrier from using CPNI obtained from the provision of "a telecommunications service" for any purpose other than to provide "the telecommunications service from which such information is derived" or services necessary to, or used in, provision of "such telecommunications service." We agree with many commenters that this language plainly indicates that Congress both contemplated the possible existence of more than one carrier service and made a deliberate decision that section 222(c)(1)(A) not extend to all. Indeed, Congress' reference to plural "telecommunications services" in sections 222(a) and 222(d)(1) demonstrates a clear distinction between the singular and plural forms of the term. Under well-established principles of statutory construction, "where Congress has chosen different language in proximate subsections of the same statute," we are "obligated to give that choice effect." Consistent with this, section 222(c)(1)'s explicit restriction of a carrier's "use" of CPNI "in the provision of" service further evidences Congress' intent that carriers' own use of CPNI be limited to the service provided to the particular customer, and not be expanded to all the categories of telecommunications services available from the carrier. 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 of "telecommunications service" found in Title I of the Act, which focuses on the offering of "telecommunications . . . regardless of the facilities used," indicates that Congress did not intend to differentiate among telecommunications technologies or services in section 222(c)(1)(A). We likewise find U S WEST's reliance on the general plural reference included in the definition of "telecommunications" misplaced. Rather, we agree with the California Commission, CompTel, MCI, and TRA that the single category interpretation would render the specific limiting language in section 222(c)(1)(A) meaningless. Approval would be necessary, if at all, only if a carrier wished to use CPNI to market non-telecommunications services. Like Sprint, we conclude that, had Congress intended such a result, the text could have been drafted much more simply by stating that carriers may use CPNI, without customer approval, only for telecommunications-related purposes, instead of the language of section 222(c)(1)(A), which expressly limits carrier use to the "provision of the service from which [the CPNI] is derived." 34. We likewise reject parties' suggestions that we interpret section 222(c)(1)(A) based on prior Commission decisions, including the McCaw orders, various Computer III orders, as well as the Common Carrier Bureau's opinion in BankAmerica v. AT&T, 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 section 222 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 existing CPNI regime. While the Commission previously may have permitted more sharing of information under the rubric of Computer III and within a pre-1996 Act environment that limited carriers' market entry, we conclude that Congress drew a specific and different balance in section 222. To the extent our prior decisions are relevant at all to the interpretation of section 222(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 reasons, we similarly reject parties' reliance on other statutes, particularly the Cable Television Consumer Protection and Competition Act (1992 Cable Act) and the Telephone Consumer Protection Act of 1991 (TCPA), as well as the Commission's implementation of those Acts. Neither of these statutes contains the specific and unique language of section 222 which expressly limits a carrier's "use" of customer information. 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 section 222. 35. On the other hand, we also conclude, contrary to the suggestion of its proponents, that the discrete offering approach is not required by the language of section 222(c)(1)(A). 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 dictate the most narrow possible interpretation (i.e., the discrete offering approach). Nor does the statutory language, however, rule out a more general subscription-based understanding of the phrase "telecommunication service from which such [CPNI] is derived," consistent with 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' reasonable expectations of privacy or competitors' interests. Rather, we believe that the best interpretation of section 222(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 using CPNI in connection with categories of service to which customers do not subscribe. 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 which such information is derived" because it allows the carrier to suggest more beneficial ways of providing the service to which the customer presently subscribes. 36. Our rejection of the discrete category approach, and support for the total service approach, is also informed by our understanding of the relationship between sections 222(c)(1)(A) and (d)(1). Specifically, the Texas Commission explains its discrete offering interpretation of section 222(c)(1)(A) as limiting the carriers' CPNI use to the "initiation, provisioning, billing, etc. of, or necessary to," the discrete feature of service subscribed to by the customer. We believe this view essentially interprets the scope of section 222(c)(1)(A) as being no broader than section 222(d)(1), which provides that carriers may use, disclose, or permit access to CPNI to, among other things, "initiate" and "render" telecommunications services. Although both sections 222(c)(1) and (d) establish exceptions to the general CPNI use and sharing prohibitions, and overlap in certain respects, these provisions must be given independent effect. 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 section 222(d)(1), it would not have needed to create the exception in section 222(c)(1)(A). In contrast, by interpreting section 222(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 section 222(c)(1)(A), commenters that addressed the meaning of section 222(d)(1) uniformly suggest that it does not extend to a carrier's use of CPNI for marketing purposes. 37. The legislative history confirms our view that in section 222 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 1996 Act was to expand markets available to both new and established carriers, the legislative history makes clear that Congress specifically intended section 222 to ensure that customers retained control over CPNI in the face of the powerful carrier incentives to use such CPNI to gain a foothold in new markets. The Conference Report states that, through section 222, Congress sought to "balance both competitive and consumer privacy interests with respect to CPNI." Congress further admonishes that "[i]n new subsection 222(c) the use of CPNI by telecommunications carriers is limited, except as provided by law or with the approval of the customer." 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 intra-company use of their CPNI. This approach would undermine section 222's focus on balancing customer privacy interests, and likewise would potentially harm competition. Carriers already in possession of CPNI could leverage their control of CPNI in one market to perpetuate their dominance as they enter other service markets. In these respects, therefore, 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 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. 38. Thus, contrary to U S WEST's suggestion, we do not believe that, because express service distinctions were eliminated during the Conference Agreement, Congress intended to abandon them. Rather, Congress may well have deleted specific reference to local and long distance services in section 222(c)(1)(A) because they were superfluous. The repeated use of the singular "service" and the restrictive language "the telecommunications service from which such [CPNI] is derived" in section 222(c)(1) serves to draw these same service distinctions. Moreover, although service distinctions are not expressly referenced in the language of section 222(c)(1)(A), they are retained in the statutory definition of CPNI, which describes information contained in the bills pertaining to "telephone exchange service or telephone toll service" In this definition, Congress also describes CPNI in terms of "a telecommunications service subscribed to by any customer," which additionally suggests that Congress understood the scope of section 222(c)(1) to be limited according to the total service subscribed to by a customer. 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 balance of these interests that Congress expressly directed, as explained in the Conference Agreement. 40. We also reject U S WEST's claims, in support of the two category approach, that Congress' failure to mention CMRS in the legislative history suggests that it did not view CMRS as a separate service offering, but rather that CMRS is more appropriately treated as a technology or functionality of both local and long distance telecommunications service. 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 recognized in its Second Annual CMRS Competition Report, although CMRS offerings are increasingly becoming substitutes for each other in the public's perception, and may someday directly compete with wireline service, "wireless services do not yet approach the ubiquity of wireline telephone service." 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, and AirTouch observe, allowing CMRS to "float" between the local and interexchange categories may give incumbent carriers a competitive advantage. 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 section 222 to protect against carriers using CPNI already in their possession to advantage them as they moved into new service markets opened only through the 1996 Act. 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 category provided by the carrier in question." This argument is not supported by the statutory language, and we reject it accordingly. Section 222 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 CPNI protection related to cellular service. 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 service. 42. Finally, we also reject the various arguments advanced by GTE, PacTel, USTA, and U S WEST that our adoption of an interpretation more limited than the single or two category approaches raises Constitutional concern. In particular, they variously claim that such restriction on intra-company sharing of CPNI would: constitute a taking without just compensation; seriously impair carriers' ability to communicate valuable commercial information to their customers in violation of the First Amendment; and violate Equal Protection principles because CPNI rules would discriminate against certain telecommunications service providers to promote competition by another class of providers (e.g., cable providers that can use CPNI with implied consent). 43. We reject the Constitutional takings arguments because, to the extent CPNI is property, we agree that it is better understood as belonging to the customer, not the carrier. Moreover, contrary to the contentions raised by some parties, even assuming carriers have a property interest in CPNI, our interpretation of section 222(c)(1)(A) does not "deny all economically beneficial" use of property, as it must, to establish a successful claim. Under the total service approach, carriers can use CPNI for a variety of marketing purposes which promote the interests of customers and carriers alike. In addition, with customer approval, carriers are free to use CPNI to offer any combination of one-stop shopping. 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 regulation is narrowly drawn. Section 222(c)(1)(A), and our total service approach, promote the substantial governmental interests of protecting the privacy of consumers and promoting fair competition. We thus conclude that these Constitutional claims are without merit. 44. We likewise reject parties' Equal Protection challenges based on section 222'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 legislative purpose. We conclude that Congress' decision to extend the CPNI limitations in section 222 only to telecommunications carriers, and not, for example to cable operators, does not support a Constitutional claim. The information telecommunications carriers obtain from their customers, including who, where and when they call, is considerably more sensitive and 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 section 222, applicable to telecommunications carriers, than in section 551 of the 1992 Cable Act applicable to cable operators, is plainly rational. 45. Non-Telecommunications Offerings. Several carriers argue that certain non- telecommunications offerings, in addition to being covered by section 222(c)(1)(B), also should be included within any service distinctions we adopt pursuant to section 222(c)(1)(A), including inside wiring, customer premises equipment (CPE), and certain information services. Based on the statutory language, however, we conclude that inside wiring, CPE, and information services do not fall within the scope of section 222(c)(1)(A) because they are not "telecommunications services." More specifically, section 222(c)(1)(A) refers expressly to carrier use of CPNI in the provision of a "telecommunications service." In contrast, the word "telecommunications" does not precede the word "services" in section 222(c)(1)(B)'s phrase "services necessary to, or used in." The varying use of the terms "telecommunications service" in section 222(c)(1)(A) and "services" in section 222(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 section 222(c)(1)(A), whereas the use of CPNI for providing non-telecommunications services is controlled by section 222(c)(1)(B). 46. Commission precedent has treated "information services" and "telecommunications services" as separate, non-overlapping categories, so that information services do not constitute "telecommunications" within the meaning of the 1996 Act. 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 section 222(c)(1)(A). 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 section 222(c)(1)(A). 47. 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 section 222(c)(1)(A), CMRS providers should be able to use CMRS-derived CPNI without customer approval to market these offerings when they provide CMRS to a customer. The 1996 Act defines "mobile service" in pertinent part as a "radio communication service carried on between mobile stations or receivers and land stations, and by mobile stations communicating among themselves . . . ." "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 communications) incidental to such transmission." These definitions do not include information services or CPE within the meaning of CMRS. Accordingly, while nothing in section 222(c)(1) prohibits CMRS providers from continuing to bundle various offerings consistent with other provisions of the 1996 Act, including CMRS-specific 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. 48. On the other hand, we also conclude that, to the extent that services formerly described as adjunct-to-basic are offered by CMRS providers, these should be considered either within the provision of CMRS under section 222(c)(1)(A), or as services necessary to, or used in, CMRS under section 222(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 forwarding was classified as an adjunct-to-basic 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 section 222(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 service. In particular, we believe that, integral to a carrier's provision of a 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 hand-held portable wireless telephones, comes within the provision of CMRS service and therefore the meaning of section 222(c)(1)(A). 49. Special Treatment for Certain Carriers. We conclude that Congress did not intend to, and we should not at this time, distinguish among carriers for the purpose of applying section 222(c)(1). Based on the statutory language, it is clear that section 222 applies to all carriers equally and, with few exceptions, does not distinguish among classes of carriers. Accordingly, we reject the argument raised by several parties that we should permit broader CPNI sharing for competitive LECs, but not for incumbent LECs, or that we should limit the total service approach to entities without market power. 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 based upon the size or identity of the carrier. 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 anti-competitive use or disclosure of CPNI. 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. 50. We also decline to forbear from applying section 222(c)(1), or any of our associated rules, to small or competitive carriers, as SBT requests. First, SBT has not explained adequately in its comments how it meets the three statutory criteria for forbearance. 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 may unnecessarily limit small business as competition grows. 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 allows tailored packages. We likewise disagree, therefore, with USTA that small carriers could be competitively disadvantaged in any interpretation of section 222(c)(1)(A) other than the single category approach. Rather, we are persuaded that the total service approach provides all carriers, including small and mid-sized LECs, with flexibility in the marketing of 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. 51. We also agree with a number of parties that there should be no restriction on the sharing of CPNI among a carrier's various telecommunications-related entities that provide different service offerings to the same customer. By its terms, section 222(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 "its provision of the telecommunications service from which such information is derived." 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 section 222(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 relationship. To the extent a carrier chooses to (or must) 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 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. 52. For the reasons described herein, we believe that the sharing of CPNI permitted under the total service approach among affiliated telecommunications entities best balances the goals of section 222 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 customers. For all these reasons, we reject such an alternative interpretation. b. Statutory Principles of Customer Control and Convenience 53. 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 total service approach also best advances the principles of customer control and convenience implicitly embodied in sections 222(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 section 222(c)(1)(A). We agree with the observation of numerous commenters that Congress intended that section 222(c) would protect customers' reasonable expectations of privacy regarding personal and sensitive information, by giving customers control over CPNI use, both by their current carrier and third parties. First, as CPI observes, this principle of customer control is manifested in section 222(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 the customer." 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 customer's right to direct who receives its CPNI and when it may be disclosed. Second, section 222(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 sections 222(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 make of their CPNI, and thereby restrict the dissemination of their personal information. Third, the principle of customer control also is reflected in sections 222(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 -- 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 customer's subscription to service constitutes only a limited form of implied approval. 54. While sections 222(c)(1)(A) and (B) embody the principle that customers wish to maintain control over their sensitive information, those provisions also manifest the principle that customers want convenient service, as some commenters have observed. 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 section 222(c)(1)(B), services necessary to, or used in, such service) within the parameters of the customer-carrier relationship. Indeed, we agree with commenters that Congress recognized through sections 222(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 improve the customer's existing service. Accordingly, as many commenters observe, what the customer expects or understands is included in its telecommunications service represents the scope and limit of its implied approval under section 222(c)(1)(A). 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. 55. Customers do not expect that carriers will need their approval to use CPNI for offerings within the existing total service to which they subscribe. We believe it reasonable to conclude 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 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 and annoyed if that carrier does not and cannot provide complete customer service. 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 offerings, the scope of section 222(c)(1)(A) must likewise change. The total service concept is supported by some advocates of the discrete offering approach as well, who foresee customer movement toward a more comprehensive service offering. 56. 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 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 customer-carrier 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. 57. 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 offerings. Given this environment, we conclude that customers expect and desire, for example, that their local service carrier will make them aware of all local service offerings. 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 customer and tailoring service packages for a customer's existing service needs. On this basis, we reject NYNEX's position that short-haul toll should be included only within the local service category. Rather, we agree with commenters that, insofar as both LECs and IXCs currently provide short-haul toll, it should be part of both local and long-distance service. Also, permitting short-haul toll to "float" between the local and the interexchange offerings should not confer upon any carrier a competitive advantage, contrary to what NYNEX argues. In fact, the intraLATA equal access and short-haul toll markets are competitive in several states. Moreover, LECs are not disadvantaged because they can include their short-haul toll with their local service CPNI for marketing purposes. 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 existing service. 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 section 222, as well as to one of the 1996 Act's general goals of avoiding excessive regulation. 58. 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, become blurred with market and technological advances. 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 categories. In contrast, if customers embrace "one-stop shopping," through market-driven integrated packages of service (e.g., bundled offering of local and long-distance 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 begin purchasing integrated packages, without need for Commission intervention. 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 product, and not be forced somehow to separate wireline CPNI from wireless. 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 artificially forced into a service category. 59. 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) cross- sell 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, call forwarding-variable); (3) market to customers who call particular telephone numbers (e.g., prepare a list of customers who call the cable company to order pay-per-view movies for use in marketing the LEC's own OVS or cable service); and (4) identify potential customers for new services based on the volume of services already used (e.g., market its on-line service to all residential customers with a second line). 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 section 222(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 section 222(c)(1) and, depending on the circumstances, may also constitute an unreasonable practice in violation of section 201(b). 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 discriminatory behavior. 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 assist carriers in better servicing their existing customers. 60. Customers do not expect that carriers will use CPNI to market offerings outside the total service to which they subscribe. We have concluded above that the single category approach is inconsistent with the language of section 222. We also believe that, as a policy matter, it inadequately promotes the goals underlying section 222. 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 entities. 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 CBT. 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 records to offer customers additional services. PacTel claims that the Westin study also indicates that the public is confident that local telephone companies will use personal information responsibly, and will protect the confidentiality of such information. 61. 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 information at issue. 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 explaining the specific types of information that would be accessed. Much CPNI, however, consists of highly personal information, particularly relating to call destination, including the 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 cost-effectively subscribers use their telecommunications services; and subscribers' social, medical, business, client, sales, organizational, and political telephone contacts. 62. 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 expectations. 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 services the customer has before offering new services. 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 destination-related 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 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 privacy in this "information age." 63. 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 pre-1996 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 "one-stop shopping" because such comprehensive service packages did not exist. 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 service providers. 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. 64. Second, even if the survey accurately shows that customers desire "one-stop shopping," and would permit carriers to share information in order to offer improved service, our interpretation of section 222(c)(1) does not foreclose carriers' ability to offer integrated packages nor the beneficial marketing uses to which CPNI can be made. We agree with commenters that it is desirable for carriers to provide integrated telecommunications service packages, and that the 1996 Act contemplates one-stop shopping, as past "product market" distinctions between local and long distance blur. 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 no restriction on the offering of integrated service packages. 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. 65. 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 innovative, integrated services. BellSouth argues that such CPNI sharing is crucial to effective joint marketing, and that treating CMRS as a separate service category for purposes of section 222 thus would thwart the joint marketing relief granted to carriers through section 601(d) of the 1996 Act. As discussed in the CMRS Safeguards Order, we disagree that the joint marketing relief granted by Congress in section 601(d) renders the Commission without power to regulate the nature of the joint marketing. We believe the CPNI restrictions set forth herein are a reasonable exercise of our authority consistent with section 601. 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 customer-carrier 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 "inefficiency" and bar to the offering of integrated service alleged under Computer II and Computer III -- the inability of sales personnel to respond to customer inquiries regarding other telecommunications service offerings -- is explicitly eliminated by section 222(d)(3). Section 222(d)(3) provides that nothing in section 222 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 service." 66. 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 category approach, we disagree that this is a wholly undesirable outcome or contrary to what Congress intended. The 1996 Act 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 an unwarranted competitive advantage in marketing new categories of services. 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 1996 Act's goals of encouraging competition and investment in new technology as well as accelerating the rapid deployment of advanced telecommunications. 67. Finally, we reject the claim put forth by several proponents of the single category approach that narrower interpretations of section 222(c)(1)(A) would result in significant administrative burdens for carriers. 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, given our decisions to permit oral, written, or electronic approval under section 222(c)(1), and to impose use rather than access restrictions, the total service approach addresses any concern that CPNI restrictions will disrupt the customer-carrier dialogue, and the carriers' ability to provide full customer service. C. Scope of Carrier's Right Pursuant to Section 222(c)(1)(B) 1. Background 68. Section 222(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 service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories." In 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 "necessary to, or used in" the provision of such telecommunications service. 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 section 222(c)(1)(B) because they are "services necessary to, or used in, the provision of such telecommunications service," or under section 222(d)(1) because the CPNI is used to "initiate, render, bill and collect for telecommunications services." 69. Commenters focus on whether CPE, information services, or installation, maintenance, and repair services, should be deemed "services necessary to, or used in, the provision of such telecommunications service." 2. Discussion 70. As a threshold matter, given the wide range of views on the interpretation of section 222(c)(1)(B), we reject U S WEST's assertion that we simply craft rules repeating, verbatim, the statutory language. We clarify, however, that we do not attempt here to catalogue every service included within the scope of section 222(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 section 222(c)(1)(B), like section 222(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 conclude in Part IV.B.2 supra, we believe that customers' implied approval in section 222(c)(1)(A) is limited to the total service subscribed to by the customer. We likewise believe that section 222(c)(1)(B) most appropriately is interpreted as recognizing that customers impliedly approve their carrier's use of CPNI in connection with certain non- telecommunications services. This implied approval, however, is expressly limited to those 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-telecommunications services (i.e. those "services" either "necessary to" or "used in"), as well as to those services that comprise the customer's total service offering (i.e. "such [section 222(c)(1)(A)] telecommunications service"). 71. CPE and Certain Information Services. Based on the statutory language we conclude that, contrary to the position advanced by several parties, a carrier may not use, disclose, or permit access to CPNI, without customer approval, for the provision of CPE and most information services because, as other commenters assert, they are not "services necessary to, or used in, the provision of such telecommunications service" under section 222(c)(1)(B). First, with respect to CPE, the exception in section 222(c)(1)(B) is expressly limited to non-telecommunications "services." CPE is by definition customer premises equipment, and as such historically has been categorized and referred to as equipment. We give meaning to the statutory language, and find no basis to extend the exception in section 222(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 section 222(c)(1)(B), and carriers cannot use CPNI derived from their provision of a telecommunications service for purposes in connection with CPE. 72. Second, we conclude that, while the information services set forth in the record (e.g., call answering, voice mail or messaging, voice storage and retrieval services, fax store and forward, and Internet access services) constitute non- telecommunications "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 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 provision of" any telecommunications service. As ITAA notes, telecommunications service is defined under the Act in terms of "transmission," 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, transforming, processing, retrieving, utilizing, or making available information via telecommunications." Indeed, the statute specifically excludes from the definition of information service "any use of any such [information service] capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service." Because information services generally, and in particular those few identified in the record (i.e., call answering, voice mail or messaging, voice storage and retrieval services, fax store and forward, and Internet access services), are provided to consumers independently of their telecommunication service, they neither are used by the carrier nor necessary to the provision of such carrier's service. 73. 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 section 222(c)(1)(B) that encompasses all information services. We are persuaded that section 222(c)(1)(B) covers services like those formerly characterized as "adjunct-to-basic," in contrast to the information services such as call answering, voice mail or messaging, voice storage and retrieval services, fax store and forward, and Internet access services, that the parties identified in the record. As noted supra, before the 1996 Act, the Commission recognized that certain computer processing services, although included within the literal definition of enhanced services, were nevertheless "clearly 'basic' in purpose and use" because they "facilitate use of traditional telephone service." Examples of adjunct-to-basic services include speed dialing, call forwarding, computer-provided directory assistance, call monitoring, caller ID, call tracing, call blocking, call return, repeat dialing, call tracking, and certain centrex features. With respect to these services, the Commission stated that such computer processing applications were "used in conjunction with 'voice' service" and "help telephone companies provide or manage basic telephone services," as opposed to the information conveyed through enhanced services. Although the Commission subsequently recognized these adjunct-to-basic services as being telecommunications services in the Non- Accounting Safeguards Order, their appropriate service classification remained unclear at the time that Congress passed the 1996 Act. Accordingly, we believe the language in section 222(c)(1)(B), "services necessary to, or used in, the provision of such telecommunications service," reaches these adjunct-to-basic services, which are "used in" the carrier's provision of its telecommunications service. On this basis, we agree with those parties arguing that services such as call waiting, caller I.D., call forwarding, SONET, and ISDN would fall within the language of section 222(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 retrieval services, fax store and forward, and Internet access services, would come within its meaning. 74. Our interpretation is supported by Congress' example of the publishing of directories. The publishing of directories, like those services formerly described as adjunct- to-basic, 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 adjunct-to-basic 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 number which is necessary to allow use of the network to place a call to that other subscriber." 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 provision of basic telephone service. In contrast, most information services are not "used in, or necessary to" the provision of the carrier's telecommunications service. 75. As a matter of statutory construction, we find that the language of section 222(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 U S WEST's claim that the absence in section 222 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 CPE and information services without customer approval. We do not believe that this 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 section 222(c)(1)(B) may give an unfair competitive advantage to incumbent carriers in entering new service markets. 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. 76. We also reject suggestions that restrictions on CPNI sharing in the context of CPE and information services would be contrary to customer expectations, as well as detrimental to the goals of customer convenience and one-stop shopping. As ITAA notes, CPNI is not required for one-stop shopping. Our interpretation of section 222(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 for such purposes. 77. 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 permitted more information sharing. PacTel argues that CMRS-related CPE and information services come within the meaning of section 222(c)(1)(B) because the Commission previously had not restricted CMRS carriers' use of CMRS CPNI to market these offerings. While it is true that the Commission previously had allowed CMRS carriers to use CMRS CPNI to market CMRS-related CPE and information services, Congress 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 section 222 which extends to all telecommunications carriers and thus all telecommunications services, and which contains no exception for CMRS-related 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 pre- 1996 Act proceeding, were in the context of an inbound call. Section 222(d)(3) expressly permits use of CPNI upon the approval of the customer in this inbound context, and therefore, would not preclude the one-stop 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 in section 222, which now controls. 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. Section 64.702(e) of the Commission's rules specifies that CPE is separate and distinct from the provision of common carrier communications services. 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. 78. Installation, Maintenance, and Repair Service. We conclude that, pursuant to section 222(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 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, maintenance, and repair for any telecommunications service" under section 222(c)(1)(B). 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 be used to provide installation, maintenance, and repair services for any telecommunications service. Nevertheless, the record supports permitting the provision of inside wiring installation, maintenance, and repair services under section 222(c)(1)(B), and we accordingly limit our discussion of installation, maintenance, and repair services to inside wiring-related services. 79. Specifically, we are persuaded that installation, maintenance, and repair of inside wiring is a service both "necessary to" and "used in" a carrier's provision of wireline telecommunications service. As such, carriers may use, without customer approval, CPNI derived from wireline service for the provision of inside wiring installation, maintenance, and repair services. As U S WEST points out, inside wiring has little purpose beyond physically connecting the telephone transmission path. We also agree with PacTel that the carrier's "provision" of a telecommunications service includes keeping the telecommunications service in working order through installation, maintenance, and repair services. The Commission's decision in the Universal Service Order regarding intra-school and intra-library connections supports our interpretation. In that order, the Commission found that the installation and maintenance of internal connections constitute "additional services" and thus are eligible for universal service support under section 254 of the 1996 Act. 80. We further believe that our conclusion is fully consistent with customer expectation, and thereby furthers the statutory principles of customer control and convenience embodied in section 222. Although inside wiring installation, maintenance, and repair services may be purchased separately from telephone services, they constitute non- telecommunications 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 section 222(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 section 222(c)(1)(B) will not increase any existing competitive advantage. D. Scope of Carrier's Right Pursuant to Section 222(d)(1) 1. Background 81. The Commission observed in the Notice that section 222(d)(1) enables carriers to use, disclose, or permit access to CPNI "to initiate, render, bill, and collect for telecommunications services." After generally acknowledging that section 222 restricts the unapproved use of CPNI for any purpose other than those specified in section 222(c)(1) and the exceptions listed in section 222(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 section 222(d)(1) because they are used "to initiate, render, bill, and collect for telecommunications services" or section 222(c)(1)(B). 2. Discussion 82. In the context of installation, maintenance, and repair of inside wiring, we conclude that section 222(d)(1), as well as section 222(c)(1)(B), permit carrier use of CPNI without customer approval for the provision of such services. We agree with virtually all commenters that section 222(d)(1)'s permission for carriers to use CPNI "to initiate, render, bill, and collect for telecommunications services" includes the actual installation, maintenance, and repair of inside wiring. 83. Our conclusion is consistent with Equifax's concerns that we not interpret sections 222(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 carriers' ability to provide the required information. We agree that section 222(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, or subscription to, such services" includes the use and disclosure of CPNI by carriers to prevent fraud. Sections 222(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 bills or perpetrate a fraud. 84. Contrary to the claims of AT&T and MCI, we further conclude, however, that the term "initiate" in section 222(d)(1) does not require that CPNI be disclosed by carriers when competing carriers have "won" the customer. We agree with GTE that section 222(d)(1) applies only to carriers already possessing the CPNI, within the context of the existing service relationship, and not to carriers seeking access to CPNI. We note, however, that section 222(c)(1) does not prohibit carriers from disclosing CPNI to competing carriers, for example, upon customer "approval." Accordingly, although an incumbent carrier is not required to disclose CPNI pursuant to section 222(d)(1) or section 222(c)(2) absent an affirmative written request, local exchange carriers may need to disclose a customer's service record upon the oral approval of the customer to a competing carrier prior to its commencement of service as part of the LEC's obligations under sections 251(c)(3) and (c)(4). In this way, section 222(c)(1) permits any sharing of customer records necessary for the provisioning of service by a competitive carrier, and addresses the competitive concerns raised by AT&T and MCI. 85. 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 violation of section 201(b). We also do not believe, contrary to the position suggested by AT&T, that section 222(d)(1) permits the former (or soon-to-be former) carrier to use the 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 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 section 222(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 section 222(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 section 222(c)(1)(A). V. "APPROVAL" UNDER SECTION 222(c)(1) A. Overview 86. Under sections 222(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 approval, section 222(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 for purposes beyond the limited exceptions set forth in sections 222(c)(1)(A) and (B). 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 section 222(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 "opt-out" from this proposed use (notice and opt- out). 87. We conclude that the term "approval" in section 222(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 sections 222(c)(1)(A) and (B). Further, in order to ensure that customers can provide informed approval under section 222(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 section 222(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. B. Express Versus Notice and Opt-Out 1. Background 88. The Commission sought comment in the Notice on which methods carriers may use to obtain customer approval consistent with section 222. The Commission recognized that, in the Computer III proceedings, prior to the 1996 Act, it established certain authorization requirements applicable solely to the enhanced services operations of AT&T, the BOCs, and GTE, and to the CPE operations of AT&T and the BOCs. Under these Computer III rules, for example, the BOCs, AT&T, and GTE are required to provide multi- line business customers with written notification of their right to restrict CPNI use. 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 opt-out 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 before using CPNI to market enhanced services. The Commission invited comment in the Notice on whether these Computer III requirements should remain in view of section 222. 89. The Commission also sought comment in the Notice on a number of alternative methods by which carriers may obtain customer approval under section 222(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 to authorize CPNI use. The Commission sought comment on the privacy and competitive implications, as well as the costs and benefits, of requiring carriers to obtain prior written approval before they could use, disclose, or permit access to customer CPNI. 90. Alternatively, the Commission sought comment on whether section 222(c)(1) allows carriers to engage in outbound telemarketing to obtain oral customer approval for CPNI use. The Commission observed that sections 222(c)(2) and (d)(3) give rise to conflicting inferences as to whether approval can be oral. The Commission noted, for example, that section 222(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 section 222(c)(1) suggests that oral approval is permitted under that provision. On the other hand, section 222(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 such information to provide such service." The Commission stated that section 222(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 restricted the carrier's use of CPNI. The Commission sought comment on how section 222(c)(1) should be interpreted in light of these other provisions. 2. Discussion 91. As noted above, while section 222(c)(1) requires customer approval for carrier use of CPNI outside the scope of sections 222(c)(1)(A) and (B), it does not expressly state the form 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 conclude, contrary to the position of a number of parties, that an express approval mechanism is the best means to implement this provision because it will minimize any unwanted or unknowing disclosure of CPNI. 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 generally connotes an informed and deliberate response. An express approval best ensures such a knowing response. In contrast, under an opt-out approach, as even its proponents admit, because customers may not read their CPNI notices, there is no assurance that any implied consent would be truly informed. 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 section 222, and may not understand that they must take affirmative steps to restrict access to sensitive information. 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. 92. 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 section 222(c)(2) means that Congress intended to permit notice and opt-out when it required only "approval" in section 222(c)(1). While we agree that we should give meaning to Congress' use of two different terms in sections 222(c)(1) and (c)(2), we believe that Congress' use of "approval" in section 222(c)(1) can more reasonably be construed to permit oral, in addition to written approval, rather than to require notice and opt-out. Our interpretation is consistent with the suggestion by several parties that Congress intended to recognize the existing customer- carrier relationship through permitting "approval" in section 222(c)(1), which governs the existing carrier's use, disclosure, and permission of access to CPNI, as opposed to requiring an "affirmative written request" as in section 222(c)(2), which governs disclosure to "any party." We are not persuaded, however, that Congress intended for its encouragement of the customer-carrier relationship to translate to support for notice and opt-out within the meaning of section 222(c)(1). Rather, insofar as oral approval promotes customer and carrier convenience, as discussed infra, we believe that Congress sought to facilitate the existing customer-carrier relationship by permitting "approval" that is oral, in addition to written, in both sections 222(c)(1) and (d)(3), but not notice and opt-out as well. In addition, we are not persuaded that use of the term "affirmative" in section 222(c)(2) suggests that the absence of such term in section 222(c)(1) evinces Congressional support for an opt-out method because a common sense interpretation of "approval" suggests a knowing acceptance, which opt-out cannot ensure. We also reject the argument that Congress contemplated that approval in section 222(c)(1) would be notice and opt-out based on an existing business relationship. Because section 222(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 opt-out. The exception in section 222(d)(3), which permits a form of express approval, is applicable only in the context of an existing business relationship. 93. We likewise reject U S WEST's claim that the earliest versions of what became H.R. 1555 requires that we interpret "approval" to permit notice and opt-out. U S 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 section 222(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 legislative history. 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 other stylistic reasons. 94. In contrast, we believe that, although the legislative history offers no specific guidance on the meaning of "approval" in section 222(c)(1), the language in the Conference Report, explaining that section 222 strives to "balance both competitive and consumer privacy interests with regard to CPNI," strongly supports our conclusion that express approval is the better reading of the statutory language. In contrast with notice and opt-out, an express approval requirement best protects both privacy and competitive concerns. We believe that imposing an express approval require