Sold Out By Your Phone
Sydney Morning Herald
Wednesday January 29, 1992
A COUPLE planning to refurnish their home telephones a store to find out whether it stocks a particular make of lounge suite. It doesn't, but the call hasn't been a waste - at least, not for the store.
For while the couple doesn't know it, their phone number and the nature of their call has been recorded, and sold to a marketing firm.
Over the next year, the unsuspecting couple receives a wad of junk mail, a series of telephone calls, and even a doorknock or two from people trying to sell them home improvement products.
It doesn't happen in Australia - yet. But it is happening increasingly in the United States, and the technology which permits it - caller line identification ("caller ID") - is expected to be widely available this year.
This system allows people who receive phone calls to identify who is calling them since the caller's number is automatically displayed when the phone rings. It is just one of a number of advances in telecommunications technology which has privacy groups and other citizens' rights lobbyists worried.
Their worries are magnified because when Telecom starts competing with the new telecommunications carrier Optus Communications - a market Telecom now has all to itself - most of its operations will no longer fall under the umbrella of the Privacy Act.
The act does not cover the "commercially competitive" activities of the government agencies it monitors. Nor will the Privacy Act have any jurisdiction over the new carrier, Optus, because it is a private firm.
This means there will be no mechanism for public scrutiny or customer redress in the event of abuse of privacy by the companies which have direct lines into almost every Australian home.
The Privacy Commissioner, Mr Kevin O'Connor, says: "The communication of data held on subscribers to third parties like the police and direct marketing firms is controlled at the moment by the Privacy Act. Those controls would not exist. People would not have rights to complain, and I would not have powers of audit in respect of those practices."
And, says Ms Jacqueline Morgan, an executive member of the Privacy Committee of NSW: "It means there doesn't tend to be public exposure and public debate about the introduction of new technologies before they are implemented." The only debate over implementation would be a commercial one, about whether or not they were profitable.
The possible combination of caller ID technology with telemarketing techniques as described in the example above is a particular concern. So is the advent of auto-calling equipment, where a machine dials telephone numbers in random sequences and plays a recorded advertising message.
The Telecommunications Act, as well as the conditions of the carrier licence, make it illegal for Telecom to pass information about its subscribers to third parties, and will prevent Optus Communications from doing so, too. And Mr Michael Pickering, Telecom's manager of policy, says the company does not and will not provide information about its subscribers for marketing purposes. He says Telecom has learned from the overseas experience that privacy is a "major issue", and Telecom is "going to establish our own privacy policies based on the sorts of principles contained in the Federal Privacy Act".
But Professor Bill Melody, director of the information technology think-tank Circit, in Melbourne, remains uneasy. In the US, he says, telephone companies have been "very aggressive at capturing this information, selling it and asserting that it is their information and they should be allowed to sell it and make money on it.
"Telecom Australia has not been pushing that line here, to its credit."But, he says, "There are two ways of interpreting that - that they are socially conscious, or that they are slow marketers." The fact that telemarketing is predicted to be a major growth industry of the 1990s exacerbates his fears.
Ms Edwina Deakin, policy adviser for the Consumers' Telecommunications Network (CTN), a lobby group on consumer issues relating to telecommunications, says even the best intentions of an organisation are no guarantee. "You only have to look at some of the recent evidence before the Independent Commission Against Corruption to see that even if the corporation policy won't (permit the selling of information), certain individuals will use and have in the past used that sort of confidential information in a manner that is compromising."
Ms Deakin is also worried that a lot of the conditions attached to the carriers' licences are being "bargained away to ensure that the second carrier happens".
"We have been concerned that there are not enough consumer protection measures in there generally, and privacy is among the conditions that are weak."
For example, CTN has complained that the definition of who should have access to the phone networks was "very loose, about 'people who had security concerns'". Ms Deakin says this could mean groups such as debt collectors would be entitled to confidential subscriber information.
In any case, the Privacy Act, the carrier's licence conditions and the Telecommunications Act are all powerless over how outside parties use the telephone system. The existing legal structure has no control over situations such as that involving the furniture store in which, thanks to caller ID, a company on-sells information from an inquiry it receives. And even if both Telecom and Optus prove to be entirely respectful of their customers' privacy, there is nothing to stop other firms from manipulating the subscriber data which is publicly available through the telephone book.
FOR example, Ms Deakin points out that the Electronic White Pages, a computer disc listing of subscriber informa tion available from Telecom, can be modified so that it can be read "backwards", meaning that working from a telephone number (perhaps obtained through caller ID), the subscriber's name and address can be traced. Alternatively, starting with a street address, it is possible to collate the names and phone numbers of all the people living in it.
In response to such concerns, Austel, the Federal regulatory body for the telecommunications industry, is holding a public inquiry into the privacy issues raised by new technology. It is expected to make recommendations about privacy policies for the two communications carriers.
It may recommend that they provide the option of a call "blocking" facility on caller ID (so the caller can prevent his number being transmitted to the recipient on a call-by-call basis), or that all subscribers be given the choice of using the new technology rather than being "signed up"automatically.
The Austel inquiry may also recommend changes to the Telecommunications Act. But Austel will have no jurisdiction over third-party uses of publicly available subscriber information, beyond perhaps recommending codes of practice.
Legal enforcement of any restrictions would require either an extension of the Privacy Act, or the introduction of a separate Telecommunications Privacy Act. This would set the precedent of imposing privacy laws on a private company, with the Australian law applicable only to government agencies, and would depend on their political acceptance. A repeat of the New Zealand experience, where a bill before the Parliament proposing legal authority on privacy matters over the entire public and private sector has generated political furore, is likely.
Meanwhile, says Mr O'Connor: "Our market seems to be trending more towards the American direction. You have an uneven application of standards in the US systems, with carriers confined to various regions in the country. Some are under rules on things like caller ID, and others are not."
Ms Morgan says: "It's a huge area to be unregulated. It's quite a worry, to say the least."
© 1992 Sydney Morning Herald