FCC to look into firms' use of customer data

By Peter Kaplan

WASHINGTON (Reuters) - Staff at the Federal Communications Commission are expected to recommend that it review rules on how phone and cable companies can use customer information as they try to take business from each other, an FCC official said on Friday.

The FCC enforcement bureau will recommend that the commission reject a complaint by cable operators charging that Verizon Communications Inc violated the agency's customer privacy rules by using customer information to prevent them from switching their phone service to cable, an agency official said, on condition of anonymity.

Beyond that, the enforcement bureau is expected to recommend that the FCC address more broadly the issue of "customer retention activities" by both phone companies and cable operators to make sure the rules apply equally to both, the official said.

"It is important that we do everything we can to maximize consumer choice and reduce rates." FCC Chairman Kevin Martin said in a statement on Friday. "In today's competitive telecommunications market we must make sure that there is a level playing field for all companies to compete."

Both Verizon and phone industry leader AT&T Inc offer high-speed Internet and video services that compete with cable, while cable providers sell phone services.

Comcast Corp and Time Warner Cable Inc, among others, had complained to the FCC in February that Verizon was improperly using its customers' information in order to stop them from switching their phone service.

In a recommendation expected on Friday, the enforcement bureau will say the FCC should turn down that complaint and look further into whether customer retention efforts on all sides are pro- or anti-competitive.

Comcast responded in a statement by saying: "We are evaluating our legal options at the federal level and will continue to pursue our complaints with state public utility commissions."