Category Archives: Gigi Sohn

FCC Proposes to Fine Wireless Carriers $200M for Selling Customer Location Data

The U.S. Federal Communications Commission (FCC) today proposed fines of more than $200 million against the nation’s four largest wireless carriers for selling access to their customers’ location information without taking adequate precautions to prevent unauthorized access to that data. While the fines would be among the largest the FCC has ever levied, critics say the penalties don’t go far enough to deter wireless carriers from continuing to sell customer location data.

The FCC proposed fining T-Mobile $91 million; AT&T faces more than $57 million in fines; Verizon is looking at more than $48 million in penalties; and the FCC said Sprint should pay more than $12 million.

An FCC statement (PDF) said “the size of the proposed fines for the four wireless carriers differs based on the length of time each carrier apparently continued to sell access to its customer location information without reasonable safeguards and the number of entities to which each carrier continued to sell such access.”

The fines are only “proposed” at this point because the carriers still have an opportunity to respond to the commission and contest the figures. The Wall Street Journal first reported earlier this week that the FCC was considering the fines.

The commission said it took action in response to a May 2018 story broken by The New York Times, which exposed how a company called Securus Technologies had been selling location data on customers of virtually any major mobile provider to law enforcement officials.

That same month, KrebsOnSecurity broke the news that LocationSmart — a data aggregation firm working with the major wireless carriers — had a free, unsecured demo of its service online that anyone could abuse to find the near-exact location of virtually any mobile phone in North America.

In response, the carriers promised to “wind down” location data sharing agreements with third-party companies. But in 2019, Joseph Cox at Vice.com showed that little had changed, detailing how he was able to locate a test phone after paying $300 to a bounty hunter who simply bought the data through a little-known third-party service.

Gigi Sohn is a fellow at the Georgetown Law Institute for Technology Law and Policy and a former senior adviser to former FCC Chair Tom Wheeler in 2015. Sohn said this debacle underscores the importance of having strong consumer privacy protections.

“The importance of having rules that protect consumers before they are harmed cannot be overstated,” Sohn said. “In 2016, the Wheeler FCC adopted rules that would have prevented most mobile phone users from suffering this gross violation of privacy and security. But [FCC] Chairman Pai and his friends in Congress eliminated those rules, because allegedly the burden on mobile wireless providers and their fixed broadband brethren would be too great. Clearly, they did not think for one minute about the harm that could befall consumers in the absence of strong privacy protections.”

Sen. Ron Wyden (D-Ore.), a longtime critic of the FCC’s inaction on wireless location data sharing, likewise called for more string consumer privacy laws, calling the proposed punishment “comically inadequate fines that won’t stop phone companies from abusing Americans’ privacy the next time they can make a quick buck.”

“Time and again, from Facebook to Equifax, massive companies take reckless disregard for Americans’ personal information, knowing they can write off comparatively tiny fines as the cost of doing business,” Wyden said in a written statement. “The only way to truly protect Americans’ personal information is to pass strong privacy legislation like my Mind Your Own Business Act [PDF] to put teeth into privacy laws and hold CEOs personally responsible for lying about protecting Americans’ privacy.”

Who Owns Your Wireless Service? Crooks Do.

Incessantly annoying and fraudulent robocalls. Corrupt wireless company employees taking hundreds of thousands of dollars in bribes to unlock and hijack mobile phone service. Wireless providers selling real-time customer location data, despite repeated promises to the contrary. A noticeable uptick in SIM-swapping attacks that lead to multi-million dollar cyberheists.

If you are somehow under the impression that you — the customer — are in control over the security, privacy and integrity of your mobile phone service, think again. And you’d be forgiven if you assumed the major wireless carriers or federal regulators had their hands firmly on the wheel.

No, a series of recent court cases and unfortunate developments highlight the sad reality that the wireless industry today has all but ceded control over this vital national resource to cybercriminals, scammers, corrupt employees and plain old corporate greed.

On Tuesday, Google announced that an unceasing deluge of automated robocalls had doomed a feature of its Google Voice service that sends transcripts of voicemails via text message.

Google said “certain carriers” are blocking the delivery of these messages because all too often the transcripts resulted from unsolicited robocalls, and that as a result the feature would be discontinued by Aug. 9. This is especially rich given that one big reason people use Google Voice in the first place is to screen unwanted communications from robocalls, mainly because the major wireless carriers have shown themselves incapable or else unwilling to do much to stem the tide of robocalls targeting their customers.

AT&T in particular has had a rough month. In July, the Electronic Frontier Foundation (EFF) filed a class action lawsuit on behalf of AT&T customers in California to stop the telecom giant and two data location aggregators from allowing numerous entities — including bounty hunters, car dealerships, landlords and stalkers — to access wireless customers’ real-time locations without authorization.

And on Monday, the U.S. Justice Department revealed that a Pakistani man was arrested and extradited to the United States to face charges of bribing numerous AT&T call-center employees to install malicious software and unauthorized hardware as part of a scheme to fraudulently unlock cell phones.

Ars Technica reports the scam resulted in millions of phones being removed from AT&T service and/or payment plans, and that the accused allegedly paid insiders hundreds of thousands of dollars to assist in the process.

We should all probably be thankful that the defendant in this case wasn’t using his considerable access to aid criminals who specialize in conducting unauthorized SIM swaps, an extraordinarily invasive form of fraud in which scammers bribe or trick employees at mobile phone stores into seizing control of the target’s phone number and diverting all texts and phone calls to the attacker’s mobile device.

Late last month, a federal judge in New York rejected a request by AT&T to dismiss a $224 million lawsuit over a SIM-swapping incident that led to $24 million in stolen cryptocurrency.

The defendant in that case, 21-year-old Manhattan resident Nicholas Truglia, is alleged to have stolen more than $80 million from victims of SIM swapping, but he is only one of many individuals involved in this incredibly easy, increasingly common and lucrative scheme. The plaintiff in that case alleges that he was SIM-swapped on two different occasions, both allegedly involving crooked or else clueless employees at AT&T wireless stores.

And let’s not forget about all the times various hackers figured out ways to remotely use a carrier’s own internal systems for looking up personal and account information on wireless subscribers.

So what the fresh hell is going on here? And is there any hope that lawmakers or regulators will do anything about these persistent problems? Gigi Sohn, a distinguished fellow at the Georgetown Institute for Technology Law and Policy, said the answer — at least in this administration — is probably a big “no.”

“The takeaway here is the complete and total abdication of any oversight of the mobile wireless industry,” Sohn told KrebsOnSecurity. “Our enforcement agencies aren’t doing anything on these topics right now, and we have a complete and total breakdown of oversight of these incredibly powerful and important companies.”

Aaron Mackey, a staff attorney at the EFF, said that on the location data-sharing issue, federal law already bars the wireless carriers from sharing this with third parties without the expressed consent of consumers.

“What we’ve seen is the Federal Communications Commission (FCC) is well aware of this ongoing behavior about location data sales,” Mackey said. “The FCC has said it’s under investigation, but there has been no public action taken yet and this has been going on for more than a year. The major wireless carriers are not only violating federal law, but they’re also putting people in harm’s way. There are countless stories of folks being able to pretend to be law enforcement and gaining access to information they can use to assault and harass people based on the carriers making location data available to a host of third parties.”

On the issue of illegal SIM swaps, Wired recently ran a column pointing to a solution that many carriers in Africa have implemented which makes it much more difficult for SIM swap thieves to ply their craft.

“The carrier would set up a system to let the bank query phone records for any recent SIM swaps associated with a bank account before they carried out a money transfer,” wrote Wired’s Andy Greenberg in April. “If a SIM swap had occurred in, say, the last two or three days, the transfer would be blocked. Because SIM swap victims can typically see within minutes that their phone has been disabled, that window of time let them report the crime before fraudsters could take advantage.”

So far, there is zero indication that the U.S.-based mobile carriers are paying any attention.

In terms of combating the deluge of robocalls, Sohn says we already have a workable approach to arresting these nuisance calls: It’s an authentication procedure known as “SHAKEN/STIR,” and it is premised on the idea that every phone has a certificate of authenticity attached to it that can be used to validate if the call is indeed originating from the number it appears to be calling from.

Under a SHAKEN/STIR regime, anyone who is spoofing their number (and most of these robocalls are spoofed to appear as though they come from a number that is in the same prefix as yours) gets automatically blocked.

Unfortunately, Sohn said, the FCC has allowed the wireless carriers to adopt this approach voluntarily. And — shocker — most of them haven’t, or else they are charging a premium for it.

“The FCC could make the carriers provide robocall apps for free to customers, but they’re not,” Sohn said. “The carriers instead are turning around and charging customers extra for this service. There was a fairly strong anti-robocalls bill that passed the House, but it’s now stuck in the legislative graveyard that is the Senate.”

What about the prospects of any kind of major overhaul to the privacy laws in this country that might give consumers more say over who can access their private data and what recourse they may have when companies entrusted with that information screw up?

Sohn said there are few signs that anyone in Congress is seriously championing consumer privacy as a major legislative issue. Most of the nascent efforts to bring privacy laws in the United States into the 21st Century she said are interminably bogged down on two sticky issues: Federal preemption of stronger state laws, and the ability of consumers to bring a private right of civil action in the courts against companies that violate those provisions.

“It’s way past time we had a federal privacy bill,” Sohn said. “Companies like Facebook and others are practically begging for some type of regulatory framework on consumer privacy, yet this congress can’t manage to put something together. To me it’s incredible we don’t even have a discussion draft yet. There’s not even a bill that’s being discussed and debated. That is really pitiful, and the closer we get to elections, the less likely it becomes because nobody wants to do anything that upsets their corporate contributions. And, frankly, that’s shameful.”

Why Is Your Location Data No Longer Private?

The past month has seen one blockbuster revelation after another about how our mobile phone and broadband providers have been leaking highly sensitive customer information, including real-time location data and customer account details. In the wake of these consumer privacy debacles, many are left wondering who’s responsible for policing these industries? How exactly did we get to this point? What prospects are there for changes to address this national privacy crisis at the legislative and regulatory levels? These are some of the questions we’ll explore in this article.

In 2015, the Federal Communications Commission under the Obama Administration reclassified broadband Internet companies as telecommunications providers, which gave the agency authority to regulate broadband providers the same way as telephone companies.

The FCC also came up with so-called “net neutrality” rules designed to prohibit Internet providers from blocking or slowing down traffic, or from offering “fast lane” access to companies willing to pay extra for certain content or for higher quality service.

In mid-2016, the FCC adopted new privacy rules for all Internet providers that would have required providers to seek opt-in permission from customers before collecting, storing, sharing and selling anything that might be considered sensitive — including Web browsing, application usage and location information, as well as financial and health data.

But the Obama administration’s new FCC privacy rules didn’t become final until December 2016, a month after then President-elect Trump was welcomed into office by a Republican controlled House and Senate.

Congress still had 90 legislative days (when lawmakers are physically in session) to pass a resolution killing the privacy regulations, and on March 23, 2017 the Senate voted 50-48 to repeal them. Approval of the repeal in the House passed quickly thereafter, and President Trump officially signed it on April 3, 2017.

In an op-ed published in The Washington Post, Ajit Pai — a former Verizon lawyer and President Trump’s pick to lead the FCC — said “despite hyperventilating headlines, Internet service providers have never planned to sell your individual browsing history to third parties.”

FCC Commissioner Ajit Pai.

“That’s simply not how online advertising works,” Pai wrote. “And doing so would violate ISPs’ privacy promises. Second, Congress’s decision last week didn’t remove existing privacy protections; it simply cleared the way for us to work together to reinstate a rational and effective system for protecting consumer privacy.”

Sen. Bill Nelson (D-Fla.) came to a different conclusion, predicting that the repeal of the FCC privacy rules would allow broadband providers to collect and sell a “gold mine of data” about customers.

“Your mobile broadband provider knows how you move about your day through information about your geolocation and internet activity through your mobile device,” Nelson said. The Senate resolution “will take consumers out of this driver’s seat and place the collection and use of their information behind a veil of secrecy.”

Meanwhile, pressure was building on the now Republican-controlled FCC to repeal the previous administration’s net neutrality rules. The major ISPs and mobile providers claimed the new regulations put them at a disadvantage relative to competitors that were not regulated by the FCC, such as Amazon, Apple, Facebook and Google.

On Dec. 14, 2017, FCC Chairman Pai joined two other Republic FCC commissioners in a 3-2 vote to dismantle the net neutrality regulations.

As The New York Times observed after the net neutrality repeal, “the commission’s chairman, Ajit Pai, vigorously defended the repeal before the vote. He said the rollback of the rules would eventually benefit consumers because broadband providers like AT&T and Comcast could offer them a wider variety of service options.”

“We are helping consumers and promoting competition,” Mr. Pai said. “Broadband providers will have more incentive to build networks, especially to underserved areas.”

MORE OR LESS CHOICE?

Some might argue we’ve seen reduced competition and more industry consolidation since the FCC repealed the rules. Major broadband and mobile provider AT&T and cable/entertainment giant Time Warner are now fighting the Justice Department in a bid to merge. Two of the four-largest mobile telecom and broadband providers — T-Mobile and Sprint — have announced plans for a $26 billion merger.

The FCC privacy rules from 2016 that were overturned by Congress sought to give consumers more choice about how their data was to be used, stored and shared. But consumers now have less “choice” than ever about how their mobile provider shares their data and with whom. Worse, the mobile and broadband providers themselves are failing to secure their own customers’ data.

This month, it emerged that the major mobile providers have been giving commercial third-parties the ability to instantly look up the precise location of any mobile subscriber in real time. KrebsOnSecurity broke the news that one of these third parties — LocationSmartleaked this ability for years to anyone via a buggy component on its Web site.

LocationSmart’s demo page featured a buggy component which allowed anyone to look up anyone else’s mobile device location, in real time, and without consent.

We also learned that another California company — Securus Technologies — was selling real-time location lookups to a number of state and local law enforcement agencies, and that accounts for dozens of those law enforcement officers were obtained by hackers.  Securus, it turned out, was ultimately getting its data from LocationSmart.

This week, researchers discovered that a bug in T-Mobile’s Web site let anyone access the personal account details of any customer with just their cell phone number, including full name, address, account number and some cases tax ID numbers.

Not to be outdone, Comcast was revealed to have exposed sensitive information on customers through a buggy component of its Web site that could be tricked into displaying the home address where the company’s wireless router is located, as well as the router’s Wi-Fi name and password.

It’s not clear how FCC Chairman Pai intends to “reinstate a rational and effective system for protecting consumer privacy,” as he pledged after voting last year to overturn the 2015 privacy rules. The FCC reportedly has taken at least tentative steps to open an inquiry into the LocationSmart debacle, although Sen. Ron Wyden (D-Ore.) has called on Chairman Pai to recuse himself on the inquiry because Pai once represented Securus as an attorney. (Wyden also had some choice words for the wireless companies).

The major wireless carriers all say they do not share customer location data without customer consent or in response to a court order or subpoena. Consent. All of these carriers pointed me to their privacy policies. It could be the carriers believe these policies clearly explain that simply by using their wireless device customers have opted-in to having their real-time location data sold or given to third-party companies.

Michelle De Mooy, director of the privacy and data project at the Center for Democracy & Technology (CDT), said if the mobile giants are burying that disclosure in privacy policy legalese, that’s just not good enough.

“Even if they say, ‘Our privacy policy says we can do this,’ it violates peoples’ reasonable expectations of when and why their location data is being collected and how that’s going to be used. It’s not okay to simply point to your privacy policies and expect that to be enough.”

CHECKING THE FTC’S RECORD

When the FCC’s repeal of the net neutrality rules takes effect on June 11, 2018, broadband providers will once again be regulated by the Federal Trade Commission (FTC). That power was briefly shared with FCC when the agency under the Obama administration passed its net neutrality rules with the assumption that it could regulate broadband providers like telecommunications companies.

When it comes to investigating companies for privacy and security violations, the FTC’s primary weapon is The FTC Act, which “prohibits unfair and deceptive acts or practices in or affecting commerce.” According to the FTC Act, a “misrepresentation or omission is deceptive if it is material and is likely to mislead consumers acting reasonably under the circumstances.” It also finds that an act or practice “is unfair if it causes, or is likely to cause, substantial injury that is not reasonably avoidable by consumers, and not outweighed by countervailing benefits to consumers or competition.”

It’s difficult to think of a bigger violation of those principles than the current practice by the major mobile providers of sharing real-time location data on customers with third parties, without any opportunity for customers to opt-in or opt-out of such sharing.

But it’s unclear whether the FTC would take take any action against such activity, or indeed if it has any precedent to do so. The agency had the ability to go after mobile broadband providers for privacy and security violations between 2002 and 2015, and so KrebsOnSecurity asked the commission to share how many times during that period that it took enforcement actions against broadband providers.

The list I got back from them wasn’t exactly privacy or security focused. The FTC cited a case in 2003 in which it sued AOL and CompuServe over unfair billing practices. In 2009, it helped to take down 3FN, a small, shady ISP that was based in the United States but run by Russians and hosting a stupendous amount of malware, scams and illegal content (i.e. child pornography).

In 2014, the FTC alleged that AT&T Mobility deceptively advertised “unlimited” data while throttling mobile customers who used certain amounts of data (this case is still pending but a recent appeals court decision cleared the way for the FTC to continue its lawsuit).

In 2015, TracFone, the largest prepaid mobile provider in the United States, agreed to pay $40 million to the FTC for consumer refunds to settle charges that it deceived millions of consumers with regard to its “unlimited” data service.

The FTC also cited a scolding letter (PDF) that it sent to Verizon over issues related to the security of its customer routers. No action was taken by the FTC in that case.

How eager the FTC will be to police privacy practices of broadband providers may come down to the priorities of the agency’s new leaders. The Trump administration just tapped Andrew Smith as head of the FTC’s consumer protection office. Smith is a lawyer who used to represent many of the companies that the agency is already investigating.

Smith will need to recuse himself from multiple ongoing investigations his office would normally lead, including data breaches at Equifax and Facebook, thanks to his previous work on behalf of the companies. According to The Hill, Smith testified in October before the Senate Banking Committee on behalf of the credit reporting industry as the panel investigated an Equifax data breach that compromised more than 145 million people.

Gigi Sohn, a fellow at the Georgetown Law Institute for Technology Law and Policy and a former senior adviser to former FCC Chair Tom Wheeler in 2015, said the FTC doesn’t have a strong record on broadband privacy enforcement.

Sohn said the FTC’s legal framework does not require affirmative opt-in consent for browsing history and app usage, and that a provider would only have to let you opt-out — something that consumers rarely do and which companies routinely make it hard to do. More importantly, she said, while the FCC’s rules would have protected consumers before they were harmed, the FTC can only act after harm has already occurred.

“We passed privacy rules for broadband and mobile providers that would have required them to seek customer opt-in for anything that was considered sensitive,” Sohn said of her work at the FCC under the Obama administration. “The carrier had to give you clear and consistent opportunities to opt out. It was very broad, but the definition we set for personal information was far broader than what even the FTC considered sensitive.”

REPEALING THE REPEAL OF NET NEUTRALITY

So the carriers are already reneging on their promise to customers that they won’t share location data without customer consent or a court order. But where does that leave us on net neutrality? The answer is that the major wireless carriers are already doing what was expressly prohibited under the FCC’s net neutrality rules: Favoring their own content over competitors, and letting companies gain more favorable access by paying more.

Around the time of the FCC’s repeal of the net neutrality rules last year, The Wall Street Journal prognosticated about what might happen with the regulations out of the way. To do this, it looked at some of the offerings the mobile carriers pitched before the rules were drawn up.

“One example of how things could work is the mobile wireless market, where some providers already have used pricing tactics to favor certain websites and services over others,” wrote John D. McKinnon and Ryan Knutson for The Journal:

The 2015 Obama-era rules didn’t explicitly prohibit these tactics, which generally allow customers to access certain websites without having it count against their monthly data cap. Wireless carriers, which often subject their users to strict data limits, were aggressive in experimenting with such plans, also known as “zero rating.”

Deals began emerging several years ago for inexpensive plans that offer unlimited high-speed access to popular services such as Facebook or Twitter, but limited or even restricted access to the rest of the internet.

T-Mobile US Inc. in late 2013 announced that its GoSmart Mobile brand had “become the first wireless provider…to offer free access to Facebook and Facebook Messenger for all of its wireless customers, even those without monthly data service.” The GoSmart Mobile plans started at $25 a month for “unlimited talk” with no other data service. T-Mobile has since transferred the GoSmart brand to another wireless firm.

In 2014, Virgin Mobile USA, a unit of Sprint Corp. , offered a wireless plan that cost $12, but users were only allowed to access one website: either Facebook, Twitter, Instagram or Pinterest. If they wanted all four, it was $10 more a month. Another $5 and they could access any online music streaming service.

Big internet providers also used zero-rating plans to favor their own content. AT&T Inc. gave paying customers unlimited usage of its own online video service DirecTV Now, while other video sites counted against monthly data caps. Verizon Communications Inc. did the same for its mobile video app, called go90.”

AT&T Mobility offers a zero-rating plan called “Sponsored Data” that allows content providers to pay up front to have streaming of that content allowed without counting against the provider’s monthly data caps.

Sohn said the FCC under the Obama administration initiated an investigation into AT&T’s Sponsored Data plan and Verizon for its go90 service, but that the inquiry was abandoned by the current FCC leadership.

There are some prospects for a Congressional repeal of this administration’s gutting of the FCC’s net neutrality rules. On May 16, the Senate approved a resolution nullifying the FCC’s rollback of the net neutrality rules. But the measure faces an uphill battle in the House.

“Right now we’re probably 30 to 40 members short of being able to bring a vote in the House,” Sohn said. “About 20 Democrats haven’t gotten on board, and we have no Republicans so far. But I think that’s going to change. If Congress repeals the net neutrality repeal, the next step would be to craft stronger rules [either at the FCC or Congress]. We have until the end of this Congress to get it done.”

The CDT’s De Mooy gives the effort to repeal the repeal of net neutrality rules slim chances of passage this year. But she said the prospects for revisiting net neutrality and consumer privacy in the next Congress look good, particularly if Democrats pick up additional seats in the House.

“It seems to be something the Democrats are taking up more now,” Demooy said. “So much depends on what happens in November. But that’s true of so many tech policy issues.”

SHOCK AND YAWN

When I first saw a Carnegie Mellon University researcher show me last week that he could look up the near-exact location of any mobile number in the United States, I sincerely believed the public would be amazed and horrified at the idea that mobile providers are sharing this real-time data with third party companies, and at the fact that those third parties in turn weren’t doing anything to prevent the abuse of their own systems.

Instead, after a brief round of coverage in several publications, the story fell out of the news cycle. A story this week in Slate.com lamented how little coverage the mainstream press has given to the LocationSmart scandal, and marvels at how much more shocked people were over the Cambridge Analytic scandal with Facebook.

“Privacy abuses and slip-ups by major tech companies have become so numerous, and the prospect of containing them seems so hopeless, that the public and much of the media have become nearly numb to them,” writes Will Oremus for Slate. “My data was hacked? So it goes. It may have been used in unauthorized ways by unspecified parties? C’est la vie.”

Oremus argues that what the LocationSmart scandal lacks is not import, nor the potential for serious harm, “but a link to some divisive political issue or societal outrage sufficient enough to generate visceral anger from people who aren’t privacy wonks.”

If you’ve read this far (bless you), don’t let breach fatigue and incessant media exposure of how little privacy we have harden into resignation. Yes, the prospects of any public debate about consumer privacy protections in the United States at the legislative level seem dim in a high-stakes mid-term election year. But supporters of net neutrality ideals can start getting involved by tweeting, calling and emailing the House lawmakers listed in red at BattleForTheNet.com.

While you’re at it, tell your lawmakers what you think about mobile providers giving or selling third-parties real-time access to customer location information, and let them know that this is no longer okay.

This is the second article in a two-part series. The first is here: Mobile Giants, Please Don’t Share the Where.