Federal Communications Commission law enforcement has ordered the country's top mobile operators to pay more than $200 million in fines for allegedly mishandling sensitive location data. AT&T, T-Mobile among companies facing hundreds of millions of dollars in fines, though likely to fight decision.
Cellphone carriers facing roughly millions in fines
The Federal Communications Commission is seeking hundreds of millions of dollars in fines from the country’s top cellphone carriers after officials found the companies failed to safeguard information about customers’ real-time locations.
The penalties remained in limbo until August, when Rosenworcel moved to enforce them.
Some privacy advocates criticized the FCC's actions as being overdue.
FCC Chairwoman Jessica Rosenworcel, a Democrat, in August circulated four forfeiture orders penalizing AT&T Inc., Sprint, T-Mobile US Inc. and Verizon Communications Inc. for allegedly mishandling access to the real-time whereabouts of their subscribers.
Cell phone companies need to know the coordinates of their subscribers to direct calls and data to the right place. This gives them a more consistent view of customer movements than app developers who use global positioning systems, Wi-Fi and other data sources that users can disable via smartphone settings. Wireless carriers also sell anonymous location data to marketers.
The U.S. telecom regulator currently has four commissioners—two Democrats and two Republicans—and needs at least three votes to move forward with fines it proposed years ago on the biggest wireless-service providers. The FCC can’t issue the orders without approval from at least three commissioners.
The FCC first outlined the penalties for cellphone carriers in early 2020.
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The commission investigated mobile operators after public reports that data brokers with access to subscribers' real-time locations were sharing this information with dozens of third-party companies allegedly mishandling the data.
Cellphone carriers facing roughly $200 million in fines. The FCC said the proposed penalty amounts reflect the length of time each carrier shared information without appropriate safeguards and the number of entities that had access to the data.
The FCC has not offered any settlements to the carriers, one person said. This could prompt some carriers to fight the allegations against them through the commission's administrative process.
T-Mobile said that it would contest the regulators’ findings.
AT&T shares were down 4.1%. Calling the telecom's gains over the past few months a "dramatic bounce," analyst Craig Moffett said he thinks AT&T is now overvalued. He sees rival Verizon as the better pick of the two, though he believes T-Mobile is the best of the three main U.S. carriers.
The telecommunications industry is not known for its staggering growth, but according to specialists, T-Mobile should see a significant acceleration in free cash flow next year. That's because 2022 should mark the peak of T-Mobile's integration spending after the 2020 acquisition of Sprint.
This merger gave T-Mobile an advantage in the mid-range 5G band, catapulting T-Mobile's network ahead of its rivals. This is a contrast to the 4G era, in which T-Mobile was a network straggler.
AT&T still has massive debt on its balance sheet, finished third quarter with debt of $134 billion and goodwill of $93 billion.
Verizon's business during this period is simpler and unchanged as it did not make the same major changes as AT&T. But these companies are now easier to compare, and each focuses primarily on Internet and phone plans. Keep in mind that AT&T and Verizon are not fast-growing tech companies; they are mature companies.
Source: wsj.com
