IP: from Telecom -- A Major Cellular Phone Hazard: The Violable Privacy of Bills

[Dave Farber <farber () cis upenn edu>]

Reply-To: Monty Solomon <monty () roscom COM> 
From: Monty Solomon <monty () roscom COM> 
Subject: A Major Cellular Phone Hazard: The Violable Privacy of Bills 
Date: Wed, 24 Mar 1999 19:19:33 -0500

By RICHARD B. SCHMITT 
Staff Reporter of THE WALL STREET JOURNAL
March 16, 1999
Last fall, when AT&T Corp.'s wireless unit turned over a TV 
journalist's cell-phone records to a defense lawyer in a Denver murder 
case, it was news to the journalist. The telephone company had neither 
sought the reporter's consent nor alerted her to the possibility that 
her records would be disclosed.
The AT&T unit says the no-notice policy is standard operating 
procedure and entirely legal. Yet AT&T's own long-distance unit 
notifies its customers of billing disclosures unless authorities say 
such notification would jeopardize criminal investigations. The 
conflicting policies are being reviewed by AT&T after receiving a 
written complaint from the TV station's owner, McGraw-Hill Cos., but 
they are "grounded in historical and practical reasons," according to 
Gregory Landis, the wireless unit's general counsel.
Every year, the AT&T wireless unit fields roughly 15,000 subpoenas for 
phone records, or five times the volume handled by AT&T's 
long-distance unit. Cell-phone records are in hot demand because, 
unlike standard phone records, they give prosecutors and private 
litigants a glimpse of local calling patterns and a way to trace the 
location of a suspect who may be on the run. That is proving handy in 
cases from drug busts to matrimonial disputes.
While the policy at AT&T's long-distance unit predates the 1984 
breakup of the Bell System, the wireless policy is a carryover from 
the freewheeling McCaw Cellular Communications Inc., which AT&T 
acquired in 1994. Mr. Landis says customers of the wireless unit are 
made aware of the no-notice policy in subscriber agreements; if 
customers ask whether their records have been subpoenaed, he says, the 
company will usually tell them.
Other fast-growing cell companies have similar policies. The problem 
is that consumers tend to overlook any upfront warnings and assume 
that the privacy of their phone records is protected by law.
There has long been a certain disconnect between the law and consumer 
beliefs about phone records. In the late 1970s, the U.S. Supreme Court 
held that consumers don't have an absolute right to control their 
phone records because they essentially amount to business records of 
the phone company, and by using the phone, consumers are implicitly 
consenting to the use of their records in public proceedings.
Eventually, in 1986, Congress passed an electronic-privacy law that 
requires phone companies to be in receipt of a subpoena before turning 
over records, at least to the government. In such cases, if they 
comply with that requirement, the companies are given absolute 
immunity from suits.
Beefing Up Protections
Some states have beefed up consumer protections. California decided 
that consumers should have at least an opportunity to object when 
their records are being pursued in litigation, requiring that notice 
be given in all civil cases, starting in the mid-1980s. More recently, 
some courts have started carving out special protections. Last year, a 
New York court held that a doctor had a right to object to the release 
of his phone records in a medical-malpractice suit, on the theory that 
the release would violate the doctor-patient privilege.
Like AT&T's long-distance unit, some old-line phone companies maintain 
fairly progressive policies, and they have carried them over to their 
home-grown cellular subsidiaries. Bell Atlantic Corp., for instance, 
notifies both its local and cell customers via a form letter, which it 
usually mails within 48 hours of receiving a subpoena for records.
While policies vary, many cell-phone companies apparently have decided 
there is nothing to be gained by going to the expense of notifying 
customers. Federal law, they note, doesn't require such notice. In 
most instances, they argue, people find out that their phone records 
are being pursued in civil cases through court rules that generally 
require the parties seeking them to notify the customer themselves.
Requiring cell-phone companies to backstop such procedures with their 
own notices would simply add an unnecessary expense, entangle them in 
court cases and threaten to "make their principal business litigation 
as opposed to communications," says Albert Gidari, a Seattle lawyer 
who advises a number of wireless concerns.
Other big cell-phone companies, including AirTouch Communications 
Inc., of San Francisco, and Nextel Communications Inc., McLean, Va, 
also say they generally don't notify customers.
"If we told consumers we would let them know and then we didn't notify 
them, because of the volume, that could be a violation of trust," says 
an AirTouch spokesman.
In Denver, the phone flap emerged in the case of a white supremacist 
accused of murder. The defendant had confessed in a jailhouse 
interview with TV journalist Julie Hayden. A public defender for the 
accused sought to exclude the confession, alleging that it had been 
obtained after the reporter was tipped off by investigators, who had 
then conspired with the reporter to illegally extract the confession. 
Last November, the public defender faxed AT&T's wireless unit a 
subpoena for Ms. Hayden's phone records. The company obliged.
Despite court rules, the defense lawyer failed to notify the 
prosecution, much less Ms. Hayden or her employer. The station first 
learned of the subpoena at a hearing last month at which the public 
defender suddenly produced Ms. Hayden's phone records in the process 
of cross-examining a police detective on the case. At that point, 
lawyers for the broadcaster rushed to court and demanded a hearing.
Subsequently, State District Court Judge Federico Alvarez excluded the 
records from evidence. He did so, he said, because the TV station 
wasn't notified, allowing an end run around a state law protecting 
journalists' confidential sources.
'Administrative Convenience'
A. Bruce Jones, a Denver attorney for the TV station, says his clients 
"were taken aback that their records could be obtained that easily." 
He adds that the carrier's actions seemed to be guided by 
"administrative convenience."
In a recent letter to AT&T's wireless unit, McGraw-Hill's general 
counsel, Kenneth Vittor, asked the unit to adopt a more 
customer-friendly notice policy; if nothing else, he said, it would be 
a step in the right direction "simply to give notice" to phone 
subscribers when their records are requested by a third party.
Mr. Landis of AT&T says the company has commissioned an in-depth study 
of its "subpoena compliance" and "customer notification" policies, in 
deference to McGraw-Hill's request and expects to complete it soon. He 
adds: "We certainly place a very high premium on meeting the concerns 
and needs of our customers."
Some experts suggest that consumers make privacy of their phone 
records a bargaining chip in arranging service. Over the years, some 
media companies have attempted to privately negotiate a heads-up from 
carriers in the event their records are subpoenaed, for example.
"It all goes back to the basic contract that flows to any customer," 
says Jane Kirtley, executive director of the Washington-based 
Reporters Committee for Freedom of the Press. "The onus is really on 
[the customer] to find out what the company is prepared to do." Some 
carriers, she adds, are "very proud" of their privacy policies and 
"consider it a selling point."
Yet ordinary consumers don't appear to have much clout in winning 
control over their records. Mr. Gidari, the Seattle lawyer, says some 
companies will agree in advance to withhold records from former 
employees of customers, to avoid misuse of that information. But "that 
is a very rare or limited exception, really intended more for the 
protection of the company that set up the account," he says.
--Nicole Harris contributed to this article.
Copyright 1999 Dow Jones & Company, Inc. All Rights Reserved.