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Privacy Flap Engulfs AT&T-BellSouth Hearing

Posted on: Saturday, 24 June 2006, 00:00 CDT

By Marilyn Geewax, The Atlanta Journal-Constitution

Jun. 23--WASHINGTON-- A Senate hearing Thursday intended to explore the consumer impact of a proposed AT&T-BellSouth merger instead turned into a contentious face-off over phone privacy.

Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) asked AT&T Inc. Chairman and Chief Executive Ed Whitacre whether his company had turned over phone records to any law enforcement agency. The question stemmed from his concerns about a report last month in the newspaper USA Today involving the National Security Agency's use of phone records.

"The privacy of our customers is utmost [in importance] and we follow the law," Whitacre replied.

The senator repeatedly asked for a fuller explanation, but Whitacre only said again and again that "we follow the law."

Specter, appearing increasingly impatient, said, "I think that answer is contemptuous of this committee."

Suggesting more hearings would follow, he told Whitacre, "you and I will talk about this further."

BellSouth Chairman Duane Ackerman offered Specter a more direct response, repeating his company's position that it has no evidence that any phone records were turned over.

"NSA did not ask BellSouth for information," he said. "They have not asked and we have not provided" customers' records.

USA Today reported May 10 that in the aftermath of the Sept. 11, 2001, terrorist attacks, NSA collected phone records on tens of millions of U.S. customers of AT&T, BellSouth and Verizon Communications Inc. The story suggested NSA was searching for calling patterns that could identify terrorists.

BellSouth has requested a correction or clarification of the story. USA Today has said it is reviewing its report.

The American Civil Liberties Union this month asked the Federal Communications Commission to withhold approval of AT&T's proposed $67 billion purchase of BellSouth until it reviews whether the phone companies had violated any privacy laws.

FCC Chairman Kevin Martin said his agency can't investigate because NSA activities are classified.

Earlier this month, Specter reached a deal with Vice President Dick Cheney to head off a possible confrontation between the Senate and the administration over the issue.

Cheney, a key player in overseeing NSA surveillance efforts, promised the White House would consider supporting Specter's legislation to place a domestic surveillance program under the watch of the Foreign Intelligence Surveillance Court, a special federal court.

For his part, Specter agreed to indefinitely postpone subpoenas or public hearings into the issue.

But Thursday, with the phone executives present, he said he couldn't resist "raising an issue which is very much on my mind and on the minds of many people."

Sen. Patrick Leahy of Vermont, the top-ranking Democrat on the committee, also used Thursday's antitrust subcommittee hearing as an opportunity to bring up privacy concerns.

Leahy asked about news reports that AT&T is changing the privacy policy for its Internet and television customers to specify that account information is a business record belonging to the company.

The policy will say that the information can be disclosed to government and law enforcement, or to protect the company's "legitimate business interests."

Whitacre said the change was simply to make the policy "easier to read and understand."

Leahy was skeptical about the merger, suggesting it concentrates too much information and market power into too few hands. "You wonder where it ends," he said.

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Copyright (c) 2006, The Atlanta Journal-Constitution

Distributed by Knight Ridder/Tribune Business News.

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T, BLS, GCI,

Source: The Atlanta Journal and Constitution

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