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Verizon Draws Criticism on Data Sharing
International Herald Tribune - October 17, 2007
Verizon Wireless, one of the largest U.S. cellphone carriers, has aroused controversy with a letter it sent to customers recently telling them that it would begin sharing information from their calling records with its "affiliates, agents and parent companies."
Brian Ashby, associate general counsel for Verizon, said the company was seeking to share that information only among Verizon divisions, so it could better sell new products to existing customers.
In the mailing, Verizon gave customers 30 days to "opt out" if they did not want their information shared.
But analysts and consumer advocates suggest that the company may also be interested in gathering information as it prepares to tailor the advertising it displays on cellphone screens, based on individual customer habits and attributes. Mobile advertising is an untapped source of revenue among phone companies looking to expand their businesses.
Concern about the mailing, which spread quickly online and resulted in the company clarifying its position late Monday, points to the privacy challenges facing communications companies as they seek to deliver information and advertising directly to cellphone users.
"It wouldn't surprise me if they are trying to get more information, a customer profile, as they try to expand into other services, like targeted advertising or offering other products to consumers," said Gene Kimmelman, vice president of federal and international affairs at Consumers Union, a nonprofit consumer group in Washington.
Kimmelman said that using phone records for ad delivery would be especially sensitive.
"There is a cultural expectation of complete privacy with the telephone," he said. "Consumers are not thinking about it yet as a broad multimedia mechanism."
Ashby said the information collected would be shared only among Verizon's landline, wireless and Internet subsidiaries, along with the Vodafone Group of Britain, which owns 45 percent of Verizon Wireless.
"The point of this notice is to share information in the corporate family," he said.
According to the customer mailing, Verizon plans to share what is known in the industry as consumer proprietary network information, or CPNI, which includes how many calls a customer makes, the geographical destination of the calls and what services the customer has purchased.
That information cannot be shared without permission under federal and state laws.
Verizon said the information would not include a customer's name, address or phone number, and would be aggregated so that specific records could not be traced back to an individual.
Roger Entner, a senior vice president for communications at IAG Research, said mobile ad targeting could have its benefits.
"If you take the Big Brother fear out of the picture, it helps in making ads more relevant," Entner said.
International Herald Tribune - October 17, 2007
Verizon Wireless, one of the largest U.S. cellphone carriers, has aroused controversy with a letter it sent to customers recently telling them that it would begin sharing information from their calling records with its "affiliates, agents and parent companies."
Brian Ashby, associate general counsel for Verizon, said the company was seeking to share that information only among Verizon divisions, so it could better sell new products to existing customers.
In the mailing, Verizon gave customers 30 days to "opt out" if they did not want their information shared.
But analysts and consumer advocates suggest that the company may also be interested in gathering information as it prepares to tailor the advertising it displays on cellphone screens, based on individual customer habits and attributes. Mobile advertising is an untapped source of revenue among phone companies looking to expand their businesses.
Concern about the mailing, which spread quickly online and resulted in the company clarifying its position late Monday, points to the privacy challenges facing communications companies as they seek to deliver information and advertising directly to cellphone users.
"It wouldn't surprise me if they are trying to get more information, a customer profile, as they try to expand into other services, like targeted advertising or offering other products to consumers," said Gene Kimmelman, vice president of federal and international affairs at Consumers Union, a nonprofit consumer group in Washington.
Kimmelman said that using phone records for ad delivery would be especially sensitive.
"There is a cultural expectation of complete privacy with the telephone," he said. "Consumers are not thinking about it yet as a broad multimedia mechanism."
Ashby said the information collected would be shared only among Verizon's landline, wireless and Internet subsidiaries, along with the Vodafone Group of Britain, which owns 45 percent of Verizon Wireless.
"The point of this notice is to share information in the corporate family," he said.
According to the customer mailing, Verizon plans to share what is known in the industry as consumer proprietary network information, or CPNI, which includes how many calls a customer makes, the geographical destination of the calls and what services the customer has purchased.
That information cannot be shared without permission under federal and state laws.
Verizon said the information would not include a customer's name, address or phone number, and would be aggregated so that specific records could not be traced back to an individual.
Roger Entner, a senior vice president for communications at IAG Research, said mobile ad targeting could have its benefits.
"If you take the Big Brother fear out of the picture, it helps in making ads more relevant," Entner said.
