Telecoms Fight California|to Guard Their Data

SAN FRANCISCO (CN) — Major telephone companies sued the California Public Utilities Commission in Federal Court, claiming it's trying to make them cough up sensitive information that, if disclosed, could affect their ability to compete.

Verizon Wireless, AT&T, Comcast and others sued the commission on May 5, claiming it's demanding "competitively sensitive data" that could be disclosed to third parties.

The telecoms say the Commission's demand violates Federal Communications Commission rules and the Constitution.

The FCC requires telecom providers to collect and report specific information through its Form 477, which the FCC will not share with "any state public utility commission unless that commission agrees to abide by strict, FCC-prescribed confidentiality rules, even when those federal rules conflict with state law," according to the 20-page request for a restraining order and injunction.

"As the FCC has recognized, much of the disaggregated information contained in the Form 477 submissions to the FCC is highly competitively sensitive," the complaint states. "For example, the information can allow a provider to tailor marketing and network-deployment strategies to quash nascent competition or defend strongholds. It also contains detailed information about its competitors' subscribers, identifying active broadband connections by location, service type (i.e., commercial or residential), speed and facility type, as well as active VoIP subscriptions by location, type of connection and type of last-mile facility. It also contains detailed information about its competitors' wireless spectrum deployment and subscriptions. A provider could use all these data to gain an unfair advantage in the market.

"Accordingly, the plaintiffs invest in, and derive value from, keeping this information confidential."

The commission is demanding the information through discovery requests for its "ratesetting" efforts to evaluate telecommunications competition in California and whether consumers are receiving "just and reasonable prices."

An administrative law judge for the commission determined that the information could be shared with third parties, such as the consumer advocacy group The Utility Reform Network, which says on its website that it seeks to "hold utility corporations accountable by demanding fair rates, cleaner energy and strong consumer protections."

Third parties could include direct competitors, the telecoms say.

They say their requests to address the matter in to the full commission, and to have the administrative law judge reconsider his decision, have been repeatedly denied.

"These unprecedented efforts to force the plaintiffs, their affiliates, and those whose interests they represent to share this competitively sensitive, confidential information with parties not entitled to access it under federal law — parties who either do not possess the same economic incentive to keep it confidential or are competitors of certain plaintiffs and thus have an economic interest in obtaining and using it — pose an unacceptable risk of unauthorized disclosure," according to the complaint.

The plaintiffs say they would be exposed to irreparable harm without the court's intervention.

Their attorney, Martin Fineman with Davis Wright Tremaine in San Francisco, did not immediately return a phone call Monday.

A representative for the commission's press office did not immediately return a phone call Monday.

Plaintiffs Verizon, AT&T, Comcast Phone of California, Cox California Telcom, MCI Communications Services, the California Cable & Telecommunications Association and CTIA — The Wireless Association sued the CPUC, its President Michael Picker, commissioners Mike Florio, Carla Peterman, Liane Randolph, Catherine Sandoval, and Administrative Law Judge Karl Bemesderfer.

They claim the CPUC demands violate the Supremacy Clause and the Fourth Amendment.

They seek a preliminary injunction, temporary restraining order and permanent injunction preventing the CPUC from enforcing any order to disclose the Form 477 data, plus costs and attorneys' fees.

Lead counsel Fineman is assisted by law firms across the country.

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