Law Limits Cable’s Use of Customer Information
Few industries collect more intricate data about a person’s media consumption than cable operators — and few are as highly regulated.
Cable operators, as the conduit by which most of us access entertainment and internet, are privy to reams of customer information ranging from what shows an individual watches, what room in their house they watch it in, the websites they surf and the credit cards they use.
But the industry and the government, perhaps anticipating the onslaught of privacy issues collecting that information could bring, have put in place safeguards to ensure that data is protected.
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The Cable Act of 1996 severely limits what a cable operator can do with the data it obtains. According to Section 661 of the act, a cable operator can use personally identifiable data only to deliver service to that person. It can share that information with a third party only with the prior written consent of the customer, or to comply with a court order.
While that would seem to hamstring operators, they have been able to use the data they glean from customer habits mainly to improve service — like being able to detect and rectify service problems in specific areas of their networks — and to offer additional services. As one operator put it, if they notice a customer isn’t taking phone service from the cable company, or may be downloading content that would warrant a faster internet speed, they can contact that customer directly.
Cable operators have also gone the extra mile. Many, such as Comcast, Cox Communications and Charter Communications, have pledged to never sell personal customer information to third parties. But even with those restrictions, operators can still do a lot with the data.
Most operators are reluctant to talk about how they use the information.
In an email message, Cox spokesman Todd Smith said the cable company, like others, uses personalized data to improve the customer experience.
“We know that when customers interact with us they want it to be efficient and respectful of them and their time,” Smith said in the email message. “We leverage data from interactions to enhance our ongoing efforts to improve the experience. We are specifically doing a lot of work right now to map several what we’re calling Customer Journeys (everything from marketing and order process, to install and promotion rolloffs/renewals). The quality of information we gather during these processes helps us better serve existing and new customers in the future.”
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At Canoe Ventures, the advanced advertising consortium that includes Comcast, Cox and Charter, head of business development, sales and marketing Chris Pizzurro said that while the uses of customer data are many, so are the restrictions.
For example, Pizzurro said MSOs regularly extract household IDs and device IDs from settops and broadband routers, “so the cable operator knows what is going on in your home; making sure the system is running the way it should.”
The operator can also use that information to market its own products and services to customers. But for Canoe, the restraints are tight. Pizzurro said that Canoe can only use customer information like household IDs and device IDs for troubleshooting purposes.
“It’s all very specific and geared toward our service assurance product,” Pizzurro said. “We can’t go out willy-nilly and use it for targeting purposes or other advanced ads things.”
Canoe Ventures, which originally was formed as an interactive advertising vehicle for cable operators, abandoned that tack about five years ago and has mainly concentrated on dynamic ad insertion of video-on-demand streams. That business has picked up considerably in the last half-decade. Pizzurro said five years ago, reaching 1 million ads viewed in a month would be a Holy Grail moment for the company. Today, 1 billion monthly ad views are commonplace.
“We’ve grown 20% quarter over quarter over the last five years,” Pizzurro said. “With all the data that’s flying through the system, we’ve managed to be good stewards and shepherds without incident.”
Pivotal Research Group analyst Brian Wieser said if any new regulation comes out of the Facebook hearings, it will likely be focused on the social-media platform and would probably benefit Google the most. The cable industry would have little to worry about, he added.
“If the entire industry is forced to implement it, you will probably see a deceleration in growth for the overall industry,” Wieser said. “My guess is that Facebook and Google will probably take share. There are going to be some smaller players who won’t justify being in business.”
SIDEBAR | CPNI 101 | by John Eggerton
Cable operators, in the provision of their traditional video service, have long had fairly strict rules about what they can and can’t do with the personal information they collect from subscribers (Customer Propriety Network Information, or CPNI).
According to the Federal Trade Commission, they must provide reasonable access to personal records they retain and provide an opportunity to correct any errors. They also may not disclose any of that information to a third party without “written permission” from their customers.
There are different, but similarly strict, rules regarding voice-over-internet protocol phone service information.
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