ORDER NO. 97-233

ENTERED JUN 24 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

AR 323

DISPOSITION: AMENDED PERMANENT RULE ADOPTED

On October 15, 1996, the Public Utility Commission of Oregon initiated a proposed rulemaking in Docket AR 323 to remove a conflict between the requirements of the Commission’s current rule OAR 860-035-0090 and provisions of the Federal Telecommunications Act of 1996 (Act). The rule relates to use of individual customer proprietary network information (CPNI).

In December 1996, U S WEST Communications, Inc., (USWC) and GTE Northwest Incorporated (GTE) petitioned the Commission to waive the requirements of OAR 860-035-0090 and also requested that the Commission postpone action in AR 323 until Federal rulemaking (proceeding NPRM No. FCC 96-221) is resolved.

At its January 7, 1997, public meeting, PUC Staff recommended adoption of a temporary amendment to OAR 860-035-0090. Staff also requested at that meeting that the proceeding involving a permanent rule change (AR 323) be delayed.

On January 7, 1997, the Commission issued Order No. 97-006 adopting the temporary amendment to OAR 860-035-0090. The Commission concluded that "failure to promptly take temporary rulemaking action will result in serious prejudice to the public interest and the interest of local exchange carriers (LECs). The temporary rulemaking action will avoid or mitigate these consequences by providing a rule consistent with the 1996 Act." The temporary rule removes OAR 860-035-0090(3), which requires utilities to annually notify customers of their rights to restrict access to CPNI because that notice conflicts with the Act. The temporary rule makes other changes in the rule as well.

At its February 4, 1997, public meeting, the Commission considered a joint request by USWC and GTE that the temporary rule be amended to delete the first sentence of Subsection (2) of the temporary rule, which prohibits "personnel involved in marketing enhanced services" from having access to individual CPNI without prior written authorization from individual customers. The Commission granted the request and issued Order No. 97-044 amending the temporary rule.

Proposed Permanent Rule

On April 10, 1997, a public comment hearing was held in Salem, Oregon, to consider adoption of a permanent rule. The Commission Staff presented a memorandum recommending that the temporary rule, as amended in Order No. 97-044, be adopted as the permanent rule. USWC and GTE appeared at the comment hearing, and, in accordance with the Administrative Law Judge’s schedule, submitted written comments on May 1, 1997, responding to Staff’s proposal. On May 21, 1997, Staff submitted a memorandum responding to the comments filed by USWC and GTE.

ISSUES AND POSITIONS OF THE PARTIES

USWC and GTE take generally consistent positions in this case. They both counsel the Commission not to proceed with adoption of a permanent rule at this time. They note that the FCC order relating to this matter is due to be issued in June 1997. USWC asked that the Commission defer the permanent rulemaking until the Federal proceeding is concluded and provide a period after completion of the Federal docket for additional oral or written comments from interested parties. USWC argues that adoption of a permanent rule prior to the conclusion of the Federal proceeding may "cause consumer confusion if the Federal and State resolutions of the matters surrounding CPNI access and use are materially different." Both companies suggest that, if the Commission feels a necessity for having a rule in place, it should either readopt the temporary rule or adopt a new temporary rule based solely on the Federal Act rather than adopt a permanent rule at this time. If, however, the Commission concludes that it should adopt a permanent rule, the companies provide specific recommendations regarding deletions or modifications of several sections in Staff’s proposed permanent rule. These specific suggestions would mirror the Act. These specific issues are discussed below.

Staff’s response to the comments of USWC and GTE reiterates its view that the temporary rule should be adopted as the permanent rule. However, Staff notes that some of the suggestions made by the companies in their comments would be acceptable to Staff as improvements in the temporary rule.

DISPOSITION

Need for Permanent Rule

We agree with Staff that we should proceed with the adoption of a permanent rule. The temporary rule will expire on July 7, 1997. There is no guarantee as to when the FCC order relating to this matter will be issued. Nor is there any certainty what the order will say or whether it will in fact cover all issues we seek to deal with in our rule. If our permanent rule is in conflict with the FCC resolution of these matters and needs to be changed, we will make the necessary change, either through a modification of the permanent rule or by adoption of a new temporary rule. It will be necessary for us to do that when the FCC order is issued, whether we have a permanent rule in effect or a temporary rule. Even if we had no rule in effect, an undesirable situation, we would still have to promulgate a new rule in accordance with the FCC order. Thus, we gain nothing by deferring the matter.

We reject the suggestions of USWC and GTE that we should readopt the temporary rule, either in its present form or in some modified form, prior to its expiration on July 7, 1997. It is our belief that the temporary rule provisions of the Oregon Administrative Procedures Act are not designed to allow for readoption of a temporary rule. In any event, there is no reason to do so under the circumstances presented here, where we have the time to adopt a permanent rule.

Specific Issues

In its final written comments, Staff agrees that some of the specific suggestions of USWC and GTE may be beneficial changes in Staff’s proposed permanent rule. In other cases, Staff disagrees. We consider each section of the proposed rule below.

Subsection (1). GTE and USWC argue that Subsection (1) of the proposed permanent rule should be deleted because it is basically repeated in Subsection 4. Staff agrees that this deletion may be made without harm because the material in Subsection (1) is also addressed in Subsection (4). We agree and will delete Subsection (1). Other sections of the rule will be renumbered accordingly.

Subsections (2), (3), (4), and (5). Staff and parties agree that these portions of the rule are taken from the Act and are necessary. They will be retained, but renumbered as (1), (2), (3), and (4) to take account of the deletion of Subsection (1).

Subsection (6). GTE requests that the term "subscriber list information" in this Subsection be defined. Staff agrees that a definition would be useful. We adopt Staff’s recommendation that the definition from Section 702 of the Act be used. It will be added to the permanent rule as new Subsection (9).

Subsection (7). This paragraph deals with the release of CPNI to third parties, including affiliates of telecommunications carriers. It is not a new provision except for the substitution of the term "telecommunications carrier" for "LEC." This section prohibits release of a customer’s CPNI to a "third party" unless the customer has authorized such release. It defines an "affiliate" of the telecommunications carrier as a third party.

U S WEST asked that the Commission change the classification of affiliated entities as third parties. It claims that affiliates of USWC are not "considered strangers or third parties by customers." These affiliates, according to USWC, can contribute "to the development of innovative products and services that customers desire to hear about and purchase." The requirement for customer approval will, in USWC’s view, interfere with this beneficial process.

Staff disagrees with USWC. It asks that the status of the affiliate as a third party be retained until the provisions of the Act are clarified by the FCC and perhaps by the courts. It claims that removing the language now would "authorize the carriers to release CPNI to their affiliates, possibly to be required to reverse that situation shortly."

The Commission agrees with Staff’s position that Subsection (7) should be retained. It has been in effect for some time without any demonstrable negative effects. We agree with Staff that maintaining it is the better option until the intent of the Act is made clear. This Subsection will be renumbered as (6).

Subsection (8). This paragraph requires that each "Oregon regulated telecommunications carrier" specifically state in its tariffs the terms and conditions for providing CPNI and Aggregate CPNI. This provision is retained from our prior rule except for the substitution of "Oregon regulated telecommunications carrier" for "LEC." GTE asserts that it is unclear what is meant by "terms and conditions" and that requiring the company to state terms and conditions in its tariffs would be a "burdensome, unnecessary, and specious exercise."

Staff points out that the provision is currently in effect and that it addresses only carriers that have currently filed tariffs with the Commission. In other words, the retention of this paragraph would simply maintain the current status.

The Commission agrees with Staff that this provision would not place any additional burdens on carriers under our jurisdiction. We will retain it. This Subsection is renumbered as (7) in the Appendix.

Subsection (9). Subsection (9) of Staff’s proposed rule provides that the term "telecommunications carrier" means "any provider of telecommunication service as defined in ORS 759.005(2)(g)." GTE asks that the definition of telecommunications carrier should be changed to match the definition in federal law, 47 U.S.C. Sec. 153. Staff disagrees with this position based upon advice of legal counsel that it is not appropriate to define telecommunications carrier as the Act defines that term since the Commission’s jurisdiction does not extend to all of the entities included in the Act. We agree with Staff and decline to change the definition. This Subsection is renumbered as (8) in the Appendix. As noted above, we will add the definition of "subscriber list information" in the Act to new Subsection (9).

Additional Definitions. GTE asks that the permanent rule contain definitions of the following terms as used in the Act: "telecommunications," "telecommunications carrier," "telecommunications service," "carrier," "common carrier," "aggregator," and "CPNI." It argues that these changes in definition would avoid confusion between federal and state application of CPNI rules.

The Commission sees no need at this point to redefine these terms. Some of them, such as "telecommunication," "common carrier," and "aggregator" are not used in this rule. Customer Proprietary Network Information is adequately defined in OAR 860-035-0020, as is Aggregate CPNI. Telecommunications service is defined in ORS 759.005(2)(g). We have already dealt with the terms "telecommunications carrier" and "subscriber list information" in this order. We decline to adopt GTE’s request for additional definitions.

ORDER

IT IS ORDERED that the amendments to OAR 860-035-0090, as set out in Appendix A to this order, are adopted and will become effective upon filing with the Secretary of State. Temporary Rule OAR 860-035-0090, adopted in Order No. 97-006 and amended in Order No. 97-044, is repealed upon the effective date of the permanent rule.

Made, entered, and effective_____________________________.

A person may petition the Commission for the amendment or repeal of a rule pursuant to ORS 183.390. A person may petition the Court of Appeals to determine the validity of a rule pursuant to ORS 183.400.

APPENDIX A

Access to CPNI

860-035-0090 (1) Except as provided by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information (CPNI) by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information 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.

(2) A telecommunications carrier shall disclose customer proprietary network information, upon affirmative written request by the customer, to any person designated by the customer.

(3) A telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service may use, disclose, or permit access to aggregate customer information other than for the purposes described in section (1) of this rule. A local exchange carrier may use, disclose, or permit access to aggregate customer information other than for purposes described in section (1) of this rule only if it provides such aggregate information to other carriers or persons on reasonable and nondiscriminatory terms and conditions upon reasonable request therefore.

(4) Nothing in this section prohibits a telecommunications carrier from using, disclosing, or permitting access to customer proprietary network information obtained from its customers, either directly or indirectly through its agents:

(a) to initiate, render, bill, and collect for telecommunications services;

(b) 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

(c) 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.

(5) Notwithstanding the other requirements of this section, 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, to any person upon request for the purpose of publishing directories in any format.

(6) A telecommunications carrier shall release a customer’s CPNI to a third party only after the customer has authorized the telecommunications carrier to release such CPNI to the third party. A third party is any person other than the customer and the telecommunications carrier. A telecommunications carrier Affiliate is a third party.

(7) Each Oregon regulated telecommunications carrier shall specifically state in its tariffs the terms and conditions for providing CPNI and Aggregate CPNI.

The term "telecommunications carrier" in this rule means any provider of "telecommunications service" as defined in ORS 759.005 (2)(g).

(9) The term "subscriber list information" means:

Identifying the listed names of subscribers of a carrier and such subscribers’ telephone numbers, addresses, or primary advertising classifications (as such classifications are assigned at the time of the establishment of such service), or any combination of such listed names, numbers, addresses, or classifications; and

That the carrier or an affiliate has published, or accepted for publication in any directory format.

Stat. Auth.: ORS 756.060

Stat. Implemented: ORS 183.335, Ch. 759

Hist.: PUC 13-1993, f. & ef. 6-23-93 (Order No. 93-852)