FEDERAL COMMUNICATIONS COMMISSION 
WASHINGTON 
OFFICE OF 
THE CHAIRMAN 
The Honorable Bill Nelson 
United States Senate 
716 Senate Hart Office Building 
Washington, D.C. 20510 
Dear Senator Nelson: 
December 10,2014 
Thank you for your letter regarding our recent action proposing a $10 million fine against 
TerraCom and YourTel for failing to protect adequately the confidentiality of their customers' 
proprietary information. Your views on this issue are very important, and I appreciate your 
support and recognition of our continued efforts to protect the personal information of American 
consumers. 
The companies in question collected sensitive information from low-income consumers 
to establish their eligibility for the Lifeline program. This collection is consistent with our rules. 
Rather than safeguarding this information as promised in their privacy policies, however. the 
companies outsourced this responsibility to a vendor that collected and stored the information on 
unprotected Internet servers. In other words, the most sensitive, personal information of up to 
305,000 Americans was available to anyone with a search engine. This is simply unacceptable. 
Your letter urges that the Commission should use all available authority against 
companies that willfully fail to protect sensitive and personal information of consumers. 
wholeheartedly agree. As this episode demonstrates, consumers entrust their most personal. 
confidential, and sensitive information to our communications networks and service providers 
every day. The Commission has a responsibility to ensure that those service providers and 
network operators take reasonable steps to honor that pubhc trust, and to protect consumers from 
harm caused by violations of the Communications Act. Section 222 ofthe Communications Act 
imposes a duty on carriers to protect the confidentiality of proprietary information. Moreover, 
failure to take reasonable steps to secure consumer information is a clear breach of a carrier's 
duty to protect the confidentiality of the proprietary information they collect and constitutes an 
"unjust and unreasonable practice" in violation of ection 201 (b) of the Act. 
You also expressed concern that the proposed fine does not provide an appropriate 
deterrent effect. We take this concern very seriously. The protection of consumers' personal 
mformation is a fundamental obligation of all telecommunications carriers, and, in this case, the 
evidence shows that TerraCom and YourTel have not taken these obligations seriously. 
In accordance with the guidance of Section 1.80 of the FCC's rules, we look to a number 
of factors when we calculate a forfeiture, including the nature, circumstances, extent and gravity 
Page 2- The llonorable Bill Nelson 
of the violation, as well as the violator's degree of culpability, history of prior offenses, and the 
ability to pay. Weighing the facts before us and taking into account the extent and gravity of the 
circumstances, we proposed a forfeiture of $10 million, though we could propose even higher 
forfeitures in the future if we determine that doing so is appropriate and would better protect the 
interests of consumers and deter future violations of the Act. We will continue to analyze and 
implement the most efficient and effective ways to ensure compliance with our rules and 
regulations regarding the protection of American consumers' personally identifiable information. 
As the nation's expert agency on communications networks, the Commission cannot ­
and will not - stand idly by when a service provider's lax data security practices expose the 
personal information of hundreds of thousands of the most vulnerable Americans to identity theft 
and fraud. 1 assure you that the Commission will exercise its full authority against companies 
that fail to meet their statutory requirements of safeguarding the personal information of 
consumers. 
I appreciate your interest in this matter. Please let me know if I can be of any further 
assistance. 
Sincerely, 
I 
@ fieelcr