On June 27, 2013, the Federal Communications Commission (FCC) issued a declaratory ruling in which it clarified that the agency’s Customer Proprietary Network Information (CPNI) regulations apply to customer-specific information stored on wireless devices, not just that stored on the carrier’s network. Under the declaratory ruling, when information that meets the statutory definition of CPNI is stored on the customer’s mobile device, and the carrier has both caused such information to be stored on the device and has access to or control over that information, the carrier is responsible for safeguarding such information. Thus, for example, customer-specific data stored on a mobile device, such as information regarding phone numbers called, the location from which the calls were made, and the time, duration of calls, must be protected. In their accompanying statements, Acting Chairwoman Clyburn and Commissioner Rosenworcel were careful to explain that the ruling is limited in scope and does not apply to device manufacturers or third-party app developers. Commissioner Rosenworcel urged the Commission to take note of certain trends that threaten consumer privacy and to take a more proactive role in educating consumers and simplifying privacy policies in conjunction with the Federal Trade Commission.

The declaratory ruling stems from security vulnerabilities discovered in the network diagnostic software deployed by Carrier IQ and used by many wireless carriers. The vulnerabilities permitted others to access sensitive information about end users, including user locations, text messages and keystrokes. The exposure of those vulnerabilities led to Congressional hearings, a Federal Trade Commission settlement, and an FCC inquiry into the privacy and data security practices of mobile wireless service providers, focusing in particular on how such practices affect customer-specific information stored on mobile devices and whether the CPNI rules govern the security and access of such information.

CPNI is customer-specific personal information related to an individual’s use of a telecommunications service. Specifically, Section 222 of the Communications Act defines CPNI as “(A) information that relates to the quantity, technical configuration, type, destination, location, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier, and that is made available to the carrier by the customer solely by virtue of the carrier-customer relationship; and (B) information contained in the bills ....” This includes individual call detail, such as phone numbers called (or numbers from which calls are received), the timing and duration of phone calls, and the locations from which calls are placed or received. (That information could be subject to additional protections if Congress amends the Electronic Communications Privacy Act (ECPA) to require warrants before a carrier discloses caller location information to the government.)

The FCC’s CPNI rules impose limitations on telecommunications carriers’ use and disclosure of a customer’s CPNI. Among other things, carriers must safeguard CPNI and are restricted in their use or disclosure of such information to third parties, and must notify customers of security breaches involving CPNI. For further information on CPNI, please see our previous advisories, including our most recent DWT advisory.

The declaratory ruling does not introduce new rules, but instead only clarifies that current CPNI requirements extend to information fitting the statutory definition of CPNI when stored on a wireless device at a carrier’s direction and to which a carrier has access. Thus, CPNI collected by, or at the direction of, wireless carriers, including information collected via preinstalled apps on a wireless device, whether stored by the carrier on its network or merely “available” to the carrier but residing on the consumer’s device, is now subject to existing CPNI rules. The FCC was clear that any failure to protect CPNI on wireless devices may result in enforcement actions, including forfeitures.

There are important limitations to the ruling. First, the duty to protect and prevent unauthorized disclosure of CPNI on a wireless device does not extend to device manufacturers or third-party developers of mobile operating systems or applications. Second, the ruling applies only to data fitting the definition of CPNI and does not impact other types of personal data collected or stored on mobile devices, such as photos, contacts, and Internet browsing history. The FCC confirmed that carriers are allowed to collect various types of information, including data that assists with network diagnostics and customer support, so long as the use and protection of applicable data complies with the CPNI rules.

In practice, carriers that offer mobile services should promptly update their CPNI procedures and refresh their training programs, but need not make any new filing with the FCC until the next CPNI certification is due on March 3, 2014.