FCC Imposes Maximum Penalty on LocateCell

The FCC's chairman expresses concern that the penalty will be inadequate to deter data brokers from sharing consumer information.

WASHINGTON—The Federal Communications Commission announced following its meeting July 13 that it would issue a Notice of Apparent Liability for $97,500—the maximum fine the FCC can impose—on LocateCell.com for failure to respond to a subpoena issued by the commission.

According to an FCC statement, LocateCell, apparently operated by First Data Solutions, of Knoxville, Tenn., and 1st Source Information Specialists, of Tamarac, Fla., willfully failed to provide information and documents to the government in relation to the FCCs investigation of privacy rules violations.

The subpoena was in response to alleged actions by LocateCell to provide private and proprietary customer information about cell phone customers to data brokers. The information sought by the government included the methods used by LocateCell to gather this information and distribute it illegally.

Disclosure by third parties of wireless phone information, including phone numbers and calling records, is prohibited by the FCC.

"Responding to Commission subpoenas is not optional," said FCC Chairman Kevin J. Martin. However, Martin indicated worry that the fine will have little effect. "Although we propose the maximum forfeiture against LocateCell for its failure to adequately respond, I fear that the amount we propose—$97,500—is merely a cost of doing business," he said.

/zimages/1/28571.gifThe FCC considers taxing VOIP calls. Click here to read more.

Martin said in his prepared statement that he feels that the FCC needs more ability to force compliance with its rules. He has been asking Congress to increase the size of the fines the commission can impose.

"As I have said previously, it is my hope that, in the future, our statutory maximum will be increased," Martin said in his statement. "If companies such as LocateCell have no incentive to comply with our requests for information, our enforcement processes will be severely compromised."

Other FCC commissioners also expressed concerns. Commissioner Michael J. Copps said it was important that the commissioners remember the bigger picture, which is to protect the privacy of cell phone users. "Data brokers continue to flout the law, invade our privacy and put each of us at risk," he said.

Other commissioners made it clear that the FCC is just getting started in its efforts to protect private information from data brokers. "Todays action is just one part of a broader effort by this Commission to ensure the protection of [CPNI] customer proprietary network information and address concerns that this information may have been improperly made available to third parties in violation of our rules," said Commissioner Robert M. McDowell in his statement.

/zimages/1/28571.gifThe FCC declines to investigate NSA phone logs. Read more here.

"LocateCell is not the only company from which the Commission has sought information," McDowell added. "Our Enforcement Bureau has been actively investigating a number of these data brokers, many of which have advertised the availability of records of wireless subscribers incoming and outgoing telephone calls, as well as certain land-line toll call records, for a fee."

McDowell said he too is concerned about the failure by carriers to certify compliance with FCC rules regarding protection of consumer information. "These investigations will continue," he said.

Similarly, Martin said, "The Commission remains committed to ensuring that consumers personal phone data is kept confidential. … The ability of data brokers, such as LocateCell, to engage in the trafficking of these records is a practice that must be stopped."

The FCC also initiated a proposed rule-making action in regard to wireless medical devices. These devices, which would operate in the 401 to 406MHz band, are implanted in patients or worn on their bodies. Many are low-power devices that operate on low duty cycles. "The use of wireless technologies in implantable and body-worn medical devices is improving and extending patients lives," Martin said in a statement when the action was announced.

/zimages/1/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis on mobile and wireless computing.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...