Feb 28, 2020 - Technology

FCC seeks $200M from top wireless carriers over location data flap

FCC Chairman Ajit Pai. Photo: Alex Wong/Getty Images.

The Federal Communications Commission proposed fines totaling more than $200 million against the nation's biggest wireless carriers for sharing customers' location information with outside parties without proper safeguards, Chairman Ajit Pai said Friday.

Why it matters: The proposed penalties reflect the FCC's assessment that the carriers broke the law by sharing customers' real-time location data, which Motherboard reported made its way to bounty hunters in some cases.

By the numbers: The FCC's proposed fines, which the carriers can challenge before they can be finalized, were not divvied up evenly among the companies. In a press release, the FCC said the fines were calculated based on the length of time the company sold customer location information and the number of companies it sold to.

  • T-Mobile faces the largest fine at more than $91 million, which it plans to dispute. The company said it terminated its location aggregator program in February 2019 after "ensuring that valid and important services were not adversely impacted."
  • AT&T's is roughly $57 million.
  • Verizon faces about $48 million.
  • And Sprint's is about $12 million.
  • AT&T, Verizon and Sprint did not immediately comment.

Between the lines: Proposed penalties from the FCC are the beginning of enforcement, not the end. The commission will have to vote again to finalize the fines after the carriers respond, and it's up to the Justice Department to actually collect the money if the companies don't pay voluntarily.

  • Some proposed fines don't move to the final stages — like the $100 million the FCC sought against AT&T in 2015 over slowing unlimited data customers' download speeds.

Background: The FCC's enforcement bureau began investigating the issue in 2018 after reports that wireless companies were sharing customers' location data with aggregators who then resold access to the information to third parties.

  • Following those initial reports, all four major carriers said they would stop selling access to data brokers.
  • But the FCC said in a press release that carriers still continued to sell subscribers' location information without putting in place reasonable safeguards to obtain customer consent.

What they're saying: "We took decisive actions to protect American consumers, and we are confident in the balance we struck in this case," Pai said at the FCC's press conference Friday.

The other side: The FCC's Democrats objected to how the agency calculated the amount of the fines, which Sen. Ron Wyden (D-Ore.) called "comically inadequate" after news reports that they were coming emerged Thursday.

  • Commissioner Jessica Rosenworcel accused the agency of heavily discounting the amount carriers could potentially owe. "The FCC’s investigation is a day late and a dollar short."
  • Commissioner Geoffrey Starks criticized how the fines were calculated. "We should've had a consumer-based remedy here," Starks said a press conference Friday, adding that the FCC should have looked into how many consumers were affected. "But we didn't investigate that way and so I object."

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FCC to propose fining wireless carriers for location sharing

FCC commissioners, with chairman Ajit Pai at left, testify before a House committee in Dec. 2019. Photo: Chip Somodevilla/Getty Images

The FCC plans to propose fines against wireless carriers totaling roughly $200 million for improperly sharing customers' location information with outside parties, according to people familiar with the matter.

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