ARCHIVED -  Telecom Decision CRTC 95-14

Telecom Decision

Ottawa, 27 June 1995

Telecom Decision CRTC 95-14

WHITE DIRECTORY - APPLICATION TO REVIEW AND VARY DECISION 95-3

(Majority Decision)

I BACKGROUND

In Provision of Directory Database Information and Real-Time Access to Directory Assistance Databases, Telecom Decision CRTC 95-3, 8 March 1995 (Decision 95-3), the Commission ordered AGT Limited, BC TEL, Bell Canada (Bell), The Island Telephone Company Limited, Maritime Tel & Tel Limited, The New Brunswick Telephone Company Limited and Newfoundland Telephone Company Limited (the telephone companies), among other things, to issue general tariffs making non-confidential residential and business listing information available in machine-readable form, unbundled on an exchange level basis.

To address subscriber privacy concerns arising from the provision of such information in machine-readable form to third parties, the Commission also required the telephone companies to establish, at least 30 days before the availability of the information, a 1-800 toll-free number to which customers could direct enquiries and through which they could request that their information be removed (de-listed), at no charge, from listing information that is sold or rented. The Commission also required the telephone companies to send billing inserts to their customers informing them of the provision of non-confidential listing information to third parties and of the means available to have their information excluded.

On 28 March 1995, White Directory of Canada, Inc. (White Directory) filed an application, pursuant to section 62 of the Telecommunications Act (the Act), requesting that the Commission review and vary that part of Decision 95-3 relating to the mechanism enabling subscribers to have their names, addresses and numbers removed from listing information made available to third parties. In particular, White Directory requested that the de-listing mechanism not be applied to independent telephone directory publishers who use non-confidential listing information solely to compile, produce, publish and distribute telephone directories, on condition that the listing information not be resold, rented or otherwise disposed of to any other third party.

On 3 April 1995, White Directory requested, pursuant to sections 55 and 61 of the Act, that the Commission grant a stay of Decision 95-3. Specifically, White Directory requested that the Commission direct the telephone companies not to release directory listing information under the new listing service, issue billing inserts, or establish the 1-800 inquiry line until after the Commission had made a determination on its review and vary application.

By letter dated 4 April 1995, the Commission established a procedure for the filing of comment and reply with regard to White Directory's applications.

The Commission received comments from the following: the Association of Directory Publishers (ADP), The Brockville Recorder and Times Limited (Brockville Recorder), Canadian Daily Newspaper Association (CDNA), The Director of Investigation and Research, Bureau of Competition Policy (the Director), Directory Advertising Consultants Limited (DAC Group), Fédération Nationale des Associations de Consommateurs du Québec (FNACQ), Koocanusa Publications Inc. (Koocanusa), Information and Privacy Commissioner for the Province of Ontario (Ontario Privacy Commissioner), Metrowide Communications, NDAP-TMP Worldwide (NDAP-TMP), Privacy Commissioner of Canada, Smart Talk Network (STN), Southam Inc. (Southam) and Stentor Resource Centre Inc. (Stentor), on behalf of the telephone companies. White Directory filed a reply.

By letter dated 25 April 1995, the Commission granted a stay of Decision 95-3 with respect to the implementation of the de-listing mechanism by the telephone companies. The Commission directed that the telephone companies not issue billing inserts or establish the 1-800 inquiry number until it had dealt with White Directory's review and vary application. Further, the Commission directed that the telephone companies not release directory listing information under the new listing information service.

The criteria by which the Commission determines whether or not to review and vary its telecommunications decisions (see Telecom Decision CRTC 79-1, 2 February 1979) require that, in order for the Commission to exercise its powers under section 62 of the Act, the applicant demonstrate, on a prima facie basis, the existence of one or more of the following:

(1) an error in law or in fact;

(2) a fundamental change in circumstances or facts since the decision;

(3) a failure to consider a basic principle raised in the original proceeding; and

(4) a new principle that has arisen as a result of the decision.

In addition, notwithstanding the lack of prima facie evidence that any of the above criteria have been met, it is open to the Commission to determine that there is substantial doubt as to the correctness of its original decision and that reappraisal is accordingly warranted. This is not so much a fifth criterion, however, as it is a statement of the residual discretion that exists within section 62 of the Act.

II WHITE DIRECTORY'S APPLICATION

In its application, White Directory sought to vary the definition of "third parties" to which the de-listing mechanism applies so that the definition would not extend to the use of non-confidential listing information by independent telephone directory publishers solely to compile, produce, publish and distribute competitive directories. Further, White Directory proposed that provisions be included in the tariffs specifying that the information not be resold, rented or otherwise disposed of to any third party, and that a breach of this condition was grounds for suspension or termination of future access to listing information.

In support of its application, White Directory submitted that it is reasonable to expect that 5% to 10% of subscribers would make use of the de-listing mechanism. White Directory submitted that, unless its application is granted, independent publishers would be at an overwhelming and insurmountable competitive disadvantage because they would not have access to complete non-confidential listing information, whereas the incumbent telephone companies would have unrestricted access to complete information. White Directory also submitted that it would not be economically viable to publish a directory based on incomplete listing information. White Directory argued further that telephone companies would have an incentive to encourage subscribers to use the de-listing mechanism so as to put competing directory publishers at a disadvantage. In support of its position, White Directory filed an affidavit by its president attesting (among other things) to the practice of telephone companies of making disparaging claims to advertisers regarding the incomplete nature of their competitors' listings.

White Directory further submitted that, in order to ensure that their directories were complete, independent publishers would have to continue to rely on the printed directories of the telephone companies, which are not up to date, to re-capture de-listed information, and would generate unsolicited calls to subscribers to verify such information. White Directory argued that, as a result, the benefits Decision 95-3 sought to achieve by removing barriers to competition would be lost, and independent publishers would remain at a disadvantage.

In addition, White Directory argued that the de-listing mechanism would result in a situation of undue preference in favour of the telephone companies, to the extent that it would provide subscribers the opportunity to "de-list" for free in respect of independent directories, while they must pay a fee to obtain a non-published number from a telephone company.

White Directory argued that its proposed variation of Decision 95-3 would have no negative impact on subscriber privacy, in that subscribers who do not obtain a non-published number expect that their names and numbers will be published in directories. White Directory also submitted that subscriber privacy would not be enhanced by the de-listing mechanism. White Directory stated that, in Decision 95-3, the Commission recognized that (1) subscribers' published names and addresses are non-confidential in nature, (2) such information is widely available from the telephone companies and other sources, and (3) subscriber privacy is not significantly enhanced by the non-availability of non-confidential residential information in machine-readable form.

White Directory stated that its proposal would create a necessary distinction between the use of non-confidential listing information for publication in a directory and the use of such information to make unsolicited calls for the purposes of telemarketing. White Directory also was of the view that a billing insert could not adequately explain to consumers the difference between the use of listing information for telemarketing purposes and its use for purposes of directory publishing.

III POSITIONS OF INTERVENERS

The Director, ADP, Brockville Recorder, CDNA, DAC Group, Koocanusa, NDAP-TMP, the Privacy Commissioner of Canada, STN and Southam supported White Directory's application. These parties agreed with White Directory that Decision 95-3 gives the telephone companies' directory publishers an unfair advantage by applying the de-listing requirements only to the listing information made available to third parties, in particular, independent directory publishers. They argued that the lack of access to complete listing information by independent directory publishers would inhibit competition in directory publishing.

CDNA submitted that the de-listing mechanism established in Decision 95-3 would likely cause 1% to 5% of subscribers to exclude their listing information, while Southam submitted that up to 50% of subscribers would use the de-listing mechanism to avoid unwanted telephone solicitations. The Director agreed with White Directory that viable directories cannot be compiled based on incomplete information, and that to refuse to vary Decision 95-3 would perpetuate the undue preference accorded to the telephone companies' publishers.

Parties in support of White Directory's application agreed with White Directory that any privacy issues can be overcome by the conditions proposed by White Directory prohibiting resale. The Director and the Privacy Commissioner of Canada suggested that, if a de-listing mechanism is to apply to directory publishers, it should apply equally to the directories published by the telephone companies. Parties supporting the application also agreed that White Directory's proposal to subject independent publishers to a resale prohibition was sufficient protection against having the listing information accessed by telemarketers.

The Privacy Commissioner of Canada stated that the privacy provisions in Decision 95-3 went beyond the concerns it raised in its submission in the proceeding leading to that Decision, to support the principle of subscriber ownership and control over their personal information.

Stentor, Ontario Privacy Commissioner and FNACQ were opposed to White Directory's application. Stentor argued that White Directory's application is based solely on the ground that there is substantial doubt as to the correctness of the Decision. Moreover, in Stentor's view, the application merely establishes that White Directory disagrees with the Commission's conclusions regarding the appropriate privacy safeguards. Stentor further submitted that parties had ample opportunity during the proceeding leading to Decision 95-3 to raise concerns such as those expressed by White Directory.

Stentor argued that the variance proposed by White Directory is contrary to the fundamental philosophy of Decision 95-3 and to the balance struck therein between the needs of directory publishers and customers' right to privacy. Stentor stated that the Commission sought to achieve that balance by ensuring that subscribers are informed of the secondary uses of their information and that they have the right to opt out of such uses.

FNACQ argued that privacy principles require that consumers be afforded the right to ensure that their personal information is not used in any way that has not been authorized expressly by the consumer. The Ontario Privacy Commissioner also argued that fair information practices require that subscribers be informed of, and consent to, all uses of their personal information by parties other than the telephone company. FNACQ, the Ontario Privacy Commissioner and Stentor argued that, when a subscriber allows a telephone company to publish listing information, the subscriber's consent cannot be assumed to extend to the publication or other use of that information by third parties. FNACQ and the Ontario Privacy Commissioner also submitted that the use of personal information by third parties for the purpose of publishing directories should not be distinguished from its use for telemarketing purposes, as both may result in the use of information without the knowledge and consent of the subscriber. FNACQ argued that, although the non-confidential listing information is already in the public domain, the availability of this information in machine-readable form may increase the type and uses of the listing information, thus exacerbating privacy concerns by reducing, if not removing, the ultimate control by subscribers over their personal information.

FNACQ submitted that, if the application is granted, only those publishing free directories in paper format with the listings in alphabetical order should have access to the complete listings, subject as well to White Directory's proposed conditions with respect to resale.

With regard to White Directory's argument regarding competitive equity, FNACQ and Stentor noted that independent directory publishers have several advantages, such as the ability to publish at different times of the year or to publish only in those markets where they will receive the greatest return on investment.

Stentor also stated that it would be virtually impossible for the telephone companies or the Commission to implement, monitor and administer rules that established a distinction between independent directory publishers and telemarketers or that prohibited resale by the independent directory publishers.

IV WHITE DIRECTORY'S REPLY

In its reply, White Directory argued that for the Commission to find an undue preference in favour of incumbent publishers over competitive entrants and then sustain a mechanism that permanently entrenches that very preference would be an error of law, as it would be inconsistent with section 27 of the Act prohibiting undue preference and with section 47, which requires that the Commission exercise its powers and perform its duties with a view to implementing the Canadian telecommunications policy objectives set out in section 7.

White Directory argued that the names of most of the subscribers who "opted out" would still appear in independent directories because competitor directories would either "top up" the incomplete listings based on the published telephone company directory, or would not use the listing service at all, relying only on the published telephone company directory.

White Directory argued further that the provision of subscriber information to independent directory publishers would not be inconsistent with the Privacy Act. Among other things, White Directory stated that the use of non-confidential listing information to produce a competing directory is consistent with the purpose for which the information is given by the subscriber, i.e., telephone directory and directory assistance purposes. Finally, White Directory argued that Stentor's position that it would be virtually impossible to enforce a non-resale provision is contrary to the evidence of the telephone companies in the proceeding leading to Decision 95-3. White Directory added that usage restrictions have been relied on by Bell's affiliate, Tele-Direct (Publications) Inc., for a number of years without apparent difficulties.

With respect to the issue of unfair competition, White Directory disputed the argument of FNACQ and Stentor that White Directory would have other competitive advantages, as that argument assumes that an incomplete directory is marketable at all. In this context, White Directory argued that, in a submission dated 15 March 1995 filed pursuant to Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994, Stentor had stated that telephone company directories must be complete in order to satisfy customer expectations.

In conclusion, White Directory argued that the de-listing mechanism is overly broad in that, although it is designed to protect subscribers against telemarketers in particular, the impact is most severe for independent publishers.

V CONCLUSIONS

In the Commission's view, the arguments presented in White Directory's application all relate to the balance struck in Decision 95-3 between concerns related to subscriber privacy, and the appropriate measures for protecting that privacy, and the benefits to be derived from facilitating competition in the provision of directory services.

In this context, the Commission acknowledges that the de-listing mechanism could have a negative impact on the ability of independent directory publishers to compete in the market, thus diminishing to some extent the public benefits that might otherwise be expected to result from competition. The Commission also acknowledges the potential for the telephone companies to point to the possible incompleteness of the listings of their competitors to disparage directory products other than their own.

However, in assessing the public interest broadly defined, the Commission is of the view that the potential adverse impact of the de-listing mechanism on competition and its associated benefits must be weighed against the interests of subscribers to know of, and exercise some control over, the use of personal information provided to the telephone companies. In this case, the Commission considers that the privacy principles established by Industry Canada (formerly the Department of Communications) provide an appropriate general framework by which to assess those interests. According to those principles, among other things, (1) subscribers should be informed of the implications for their personal privacy of the use of telecommunications services, (2) subscribers should be able to maintain their current level of privacy at no additional charge, and (3) personal information should be collected, used and disclosed only with express consent, except where clearly in the public interest or as required by law. The Commission considers that the de-listing mechanism, including both the 1-800 number and the billing insert required by Decision 95-3, are necessary to ensure that subscribers are informed of the potential uses of their listing information and have the opportunity to exclude their information from any lists at no charge, consistent with the principles cited above.

The Commission does not agree with White Directory's position that the consent given by subscribers to having their listing information published in the telephone company's directory can be assumed to extend to the publication of that information in other directories, particularly in directories of a specialized nature. Residential listing information can be used, for example, to compile directories of limited geographic coverage or to produce niche directories using other personal information. Such directories, by providing easy access to information specific to individual subscribers, including neighbourhood, profession or lifestyle or consumer preferences, can raise privacy concerns beyond those raised by the publication of subscriber listing information in the telephone company directories. In the Commission's view, the production of such specialized directories is facilitated by the availability of listing information in machine-readable form.

Further, the Commission considers that, if Decision 95-3 were varied as requested by White Directory, many subscribers would have no knowledge that personal information, given to the telephone companies as providers of telephone service, might be made available in machine-readable form to parties not involved in the publication of the telephone companies' directories; nor could they exercise control over the telephone company's provision of such information without paying the additional charges for a non-published number. The Commission considers that subscribers wishing to limit the provision of their listing information should not have to forego being listed in their telephone company's directory and to incur additional costs as a result of the telephone company's provision of residential listing information in machine-readable form.

The Commission also considers that White Directory's proposed variance of Decision 95-3 would require a method of distinguishing between third parties who are eligible, as independent directory publishers, to receive a complete listing and those parties who are not eligible. Implementation of such a distinction would require considerable administration and monitoring by both the telephone companies and the Commission, and the Commission considers that it could not, in fact, be enforced.

The Commission remains convinced of the importance of ensuring that subscribers have the information and the means available to enable them to deny their consent to the telephone company's provision of listing information in machine-readable form to third parties. The Commission remains of the view that the public interest in affording subscribers control over the use to which this type of information may be put outweighs the public interest in the benefits that could be derived, as a result of increased competition, from requiring the direct release by the telephone companies of complete non-confidential listing information in machine-readable form. Thus, the Commission maintains its view that any preference or advantage accorded by the telephone companies to their directory publishers in providing them exclusively with comprehensive subscriber listing information, to be used in publishing the telephone companies' directories, is not undue or unreasonable. The Commission notes that information used by the telephone companies' directory publishers for other purposes is, consistent with past decisions, subject to the de-listing mechanism.

In light of the above, the Commission finds that it did not err in law as alleged by White Directory. The Commission also finds that White Directory has failed to meet any of the other applicable criteria, or to establish that there is substantial doubt as to the correctness of the original decision. Accordingly, White Directory's application is denied.

As noted earlier, a stay was granted on 25 April 1995 with respect to the implementation of the de-listing mechanism by the telephone companies. In its letter of 25 April 1995, the Commission stated that it would establish any necessary modifications to the timeframes set out in Decision 95-3, as modified by letter dated 6 April 1995. In light of the Commission's decision to deny White Directory's application, the Commission directs Bell to make the new listing information service available by 28 August 1995. The other telephone companies who have received requests for the listing information are to make the service available within 120 days of the first customer request received, or by 28 August 1995, whichever is latest. In addition, telephone companies who have already received requests are directed to send the billing inserts to all customers required pursuant to Decision 95-3 forthwith, and to establish the 1-800 enquiry service at least 30 days prior to the availability of the information, in order to ensure that sufficient time is provided for subscribers to choose to remove their information from that to be provided pursuant to the tariff. Telephone companies who have not yet received requests are to proceed in accordance with Decision 95-3. The remaining directions in Decision 95-3 regarding the filing of proposed final rates and accompanying economic studies remain as set out therein. The Commission notes that, in Decision 95-3, it found conditions prohibiting resale acceptable on an interim basis, stating that parties could address the issue further when the telephone companies file final proposed rates for the service.

The Commission notes that several parties, including the Director, suggested that non-published number service be made available free of charge so that subscribers could opt out of the telephone companies' directories using the same mechanism as for independent directories. The Commission agrees with those parties who were of the view that this proposal raises issues that were beyond the scope of this proceeding.

Allan J. Darling
Secretary General

DISSENT OF VICE-CHAIRMAN FERNAND BÉLISLE, ACTING VICE-CHAIRMAN DAVID COLVILLE AND COMMISSIONER PETER SENCHUK

We respectfully disagree with our five colleagues for the following reasons.

While we agree with our colleagues that the privacy of personal information is an important issue in this case and that the Commission should follow the guidelines set by the Government of Canada and international agreements to which Canada is a signatory, we disagree with their conclusions in this case and in particular with the application of those guidelines in this instance.

We would have agreed to reappraise our original decision on the grounds that there is substantial doubt as to the correctness of Decision 95-3.

We agree with White Directory's position that the delisting mechanism should not be applied to independent telephone directory publishers who use non-confidential listing information solely to compile, produce, publish and distribute telephone directories, on condition that the listing information not be resold, rented or otherwise disposed of to any other third party.

We believe that the privacy guidelines provide that personal information should not be used other than for the purpose for which its release was originally intended. In the case of a telephone directory it is our view that if an individual releases their name to a company for the purpose of being published in a telephone directory it does not matter whether it is for one directory or several directories, the purpose is the same, i.e. a telephone directory.

Further, to the extent the Commission has determined that competition in directories is in the public interest, competitive parity requires, to the extent it is reasonable, we should ensure that all directory publishers have access to comparable lists of names. To the extent telephone subscribers would eliminate their names from the lists made available to non-telco publishers, the directories of those publishers would have less value and in our view would be less competitive than those of the telephone companies' publishers. The fact the telephone companies charge a fee to subscribers to discourage them from delisting appears to confirm the view that the greater the number of subscribers who choose to delist from a directory the less value that directory has.

We accept there is some concern that this personal information may be used for purposes other than that for which it was intended such as telemarketing. However, we agree with White Directory that any breach of the condition that the information only be used for the purpose of publishing telephone directories would be grounds for suspension or termination of future access to listing information.

In conclusion, for competitive parity reasons which we believe are not inconsistent with privacy principles, we would grant White Directory's application to vary.

(Commissioner Yves Dupras also dissenting)