Regulation of CPNI collected by telecom companies will limit their ability to share and use information. There can be no benefits from these proposals if the FCC is correct in its assessment that there is no consumer harm from use of CPNI data by outside contractors or partners. On the other hand, there will be substantial costs.
First, companies may do some restructuring or reduce the level of outsourcing in order to comply with these regulations. There are costs to in-sourcing. Moreover, since we can assume companies are now organized to do things as efficiently as they know how, any reorganization would be costly. In addition, some companies are restricted in their organization because they are remnants of the old AT&T and so are still restricted by the antitrust agreement that broke up the company. Thus, any attempts at restructuring would have asymmetric implications for different companies.
The other approach to complying with the regulations is to simply use less information. This would also be costly. Consumers benefit from the existence of new plans offered by the providers, from receiving information about these plans, from receiving other marketing information tailored to their needs, and from not receiving information they find irrelevant. CPNI data are used for all these purposes. If the data could not be so used, consumers would lose these benefits.
Attachments
Thomas Lenard is Senior Fellow and President Emeritus at the Technology Policy Institute. Lenard is the author or coauthor of numerous books and articles on telecommunications, electricity, antitrust, privacy, e-commerce and other regulatory issues. His publications include Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated?; The Digital Economy Fact Book; Privacy and the Commercial Use of Personal Information; Competition, Innovation and the Microsoft Monopoly: Antitrust in the Digital Marketplace; and Deregulating Electricity: The Federal Role.
Before joining the Technology Policy Institute, Lenard was acting president, senior vice president for research and senior fellow at The Progress & Freedom Foundation. He has served in senior economics positions at the Office of Management and Budget, the Federal Trade Commission and the Council on Wage and Price Stability, and was a member of the economics faculty at the University of California, Davis. He is a past president and chairman of the board of the National Economists Club.
Lenard is a graduate of the University of Wisconsin and holds a PhD in economics from Brown University. He can be reached at [email protected]
Paul Rubin is senior fellow at the Technology Policy Institute. Dr. Rubin has written or edited seven books, and published over one hundred articles and chapters on economics, law, and regulation in journals including the American Economic Review, the Journal of Political Economy, the Quarterly Journal of Economics, the Journal of Legal Studies, the Journal of Law and Economics, and the Yale Journal on Regulation. He has contributed to the Wall Street Journal, the New York Times and other newspapers and magazines.
Dr. Rubin is also Dobbs Professor of Economics and Law at Emory University in Atlanta and editor in chief of Managerial and Decision Economics. He previously served as senior staff economist at President Reagan's Council of Economic Advisers, chief economist at the U.S. Consumer Product Safety Commission, director of advertising economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School. Dr. Rubin is a graduate of the University of Cincinnati and holds a PhD from Purdue University.
