I’m Not Buying the Plausible Deniability Gambit of AT&T Wireless

             AT&T Wireless has appealed the FCC’s $57 million fine for monetizing up to the minute subscriber location data that the company had no legal right to release, absent “opt in authorization from subscribers https://www.law360.com/articles/1835513/attachments/0.  The company’s primary defense relies on the deliberate strategy of ignoring the actual uses of the data by third parties of the two location information aggregators with which it sold the data.

             If even a few of the 300+ million wireless subscribers in the U.S. (see https://www.ctia.org/the-wireless-industry/infographics-library; https://datareportal.com/reports/digital-2024-united-states-of-america) fully understand how extensive their location data has been exploited, the court of public opinion would lash out vigorously against the wireless carriers.  This probably will not happen, because no one, other than the carriers and their information broker customers, will know the total revenues accrued and the extensiveness of the data exploitation.   

            Consider the efficacy of non-disclosure agreements, the lack of full evidence gathering by the FCC and reviewing courts, and attorney client privileges that block disclosure of how extensive the data selling was. AT&T is banking on the premise that because no one will ever know the breadth and value of the location data, no one can refute the company’s assertion that the FCC has overreacted to one minor incident that the company resolved years ago. AT&T wants us to believe that only one bad actor existed, the one identified by reporters of New York Times.  See  https://www.nytimes.com/interactive/2019/12/19/opinion/location-tracking-cell-phone.html.  

            Arguably (in its most expansive context), we should accept AT&T’s premise that everybody else, including the massive number of third-party data location brokers and users, absolutely complied with any and all non-disclosure and anonymization requirements.  

            AT&T deliberately structured its disclosure of subscriber locations in a manner that insulated the company from knowing how the data was used by customers of the “Location-Based Services” the company provided two location information aggregators: LocationSmart and Zumigo.  See https://docs.fcc.gov/public/attachments/FCC-24-40A1.pdf. In legal terms, AT&T had direct, “privity of contract” with only two commercial ventures.  AT&T had every reason to insulate itself from knowing what its direct contractors did with the data, how much money they made, and how many location disclosure deals the two ventures cut with third parties.  

            No one should buy AT&T’s plausible deniability rationale that it’s possible that the thousands of the information aggregator clients did nothing wrong.

About That Universal Service “Tax”

            Universal service opponents like to claim in real courts, and the court of public opinion, that the surcharge imposed by carriers represents an unlawful tax.

             Consumers’ Research, the advocacy group seeking to have universal service funding deemed unconstitutional, wants several courts to endorse its view that the “revenues raised for the Universal Service Fund pursuant to 47 U.S.C. § 254 are taxes and therefore Congress’s standardless delegation to the FCC of authority to raise and spend nearly unlimited taxes violates Article I, section 8 of the U.S. Constitution.” https://storage.courtlistener.com/recap/gov.uscourts.ca5.215996/gov.uscourts.ca5.215996.1.1.pdf?ref=broadbandbreakfast.com at p. 4.

             When asked whether universal service funding constitutes a tax, former FCC Commissioner Harold Furchtgott-Roth stated:  “I think the way it’s structured now it’s unambiguously a tax. It’s -- the people who pay in — and the statute’s very clear.” https://fedsoc.org/events/consumers-research-v-fcc-and-the-legality-of-the-universal-service-fund-contribution-regime.

             Several advocacy groups preach the gospel that Congress has no legal authority to create a universal service funding mechanism and in turn the FCC has no basis to establish policies and rules, nor can it delegate administrative responsibilities to the Universal Service Administrative Co.

             If, somehow, they never learned the distinction between a tax and a legislatively mandated charge, that carriers pass through in its entirety to subscribers, consider what a wireless reseller discloses in its terms of service:

             Surcharges

When imposed, unless prohibited by applicable law or agreement, you agree to pay all surcharges (“Surcharges”), which may include, but are not limited to: Federal Universal Service; various regulatory charges; Kroger Wireless administrative charges; gross receipts charges and certain other taxes imposed upon Kroger Wireless; or charges for the costs that we incur and pass along to you. Surcharges are not taxes, and we are not required to assess them by law. They are charges we choose to collect from you, are part of our rates, and are kept by us in whole or in part. The number and type of Surcharges will be provided and may vary depending upon the location of the transaction or the primary account address of the payment method or Device and can change over time. We determine the rate for these charges, and these amounts are subject to change as are the components used to calculate these amounts. https://www.krogerwireless.com/support/terms-and-conditions

             When creating contracts and tariffs, wireless service providers must play it straight.  Elsewhere it’s caveat emptor.