## Facts

- The Telecommunications Act of 1996, 47 U.S.C. § 222, imposed duties on telecommunications carriers to protect the confidentiality of customer proprietary network information (CPNI), including call-related usage data.
- The FCC adopted rules requiring customer affirmative consent (an opt-in regime) before a carrier could use or disclose CPNI for certain marketing of additional services.
- U.S. West used CPNI to market telecommunications services to its existing customers; the parties treated this activity as lawful, nonmisleading commercial speech.
- U.S. West petitioned for review, arguing the opt-in requirement restricted its marketing speech and was not justified by adequate evidence of privacy harms or by a sufficiently tailored regulatory approach.
- The FCC defended the rules as serving customer privacy and related competitive goals and as a permissible regulation of commercial speech.

## Issues

1. Whether the FCC’s opt-in restriction on carriers’ use of CPNI for marketing violates the First Amendment protection for commercial speech.
2. Whether the FCC’s opt-in regime satisfies the Central Hudson test by directly and materially advancing a substantial governmental interest and being no more extensive than necessary.

## Decision

- The court granted the petition for review and vacated the challenged portions of the FCC’s CPNI rules.
- Applying Central Hudson, the court held the FCC failed to show the opt-in restriction directly and materially advanced the asserted privacy interests on the record presented.
- The court further held the opt-in regime was more extensive than necessary given the availability of less speech-restrictive approaches (including opt-out mechanisms and narrower use restrictions).
- The court rejected the contention that § 222’s statutory policy choices could sustain rules that, as implemented, violated the First Amendment.
- Judge Briscoe dissented, concluding that privacy interests and the legislative and administrative record justified the opt-in approach under Central Hudson.

## Legal Principles

- Restrictions on lawful, nonmisleading commercial speech are evaluated under Central Hudson’s intermediate scrutiny framework.
- The government must demonstrate with evidence that a commercial speech restriction directly and materially advances a substantial governmental interest; speculative harms are insufficient.
- A commercial speech regulation must be reasonably fitted to the governmental interest and not more extensive than necessary; less speech-restrictive alternatives can show overbreadth.
- Statutory authorization to regulate does not override constitutional limits; agency rules implementing federal statutes remain subject to First Amendment scrutiny.

## Conclusion

The Tenth Circuit held that the FCC’s opt-in CPNI marketing restrictions unconstitutionally burdened protected commercial speech because the FCC did not adequately demonstrate material advancement of privacy interests and adopted an unnecessarily broad limitation when less restrictive options were available.


U.S. West, Inc. v. F.C.C., 182 F.3d 1224 (10th Cir. 1999)