Last year, a New York Times article pointed out that some cell phone carriers charge law enforcement agencies to obtain certain tracking services, and that the services can be “big business” for the carriers. The article prompted Massachusetts Congressman Ed Markey to send a letter (link opens PDF) requesting information from AT&T Inc. (NYSE:T) on whether it was profiting from law enforcement requests for information. Letters were also sent to T MOBILE US INC (NYSE:TMUS), Verizon Communications Inc. (NYSE:VZ), Sprint Nextel Corporation (NYSE:S) and others.
AT&T responded (link opens PDF) to Markey’s letter saying that the company “does not market the provision of its customers’ phone usage information to law enforcement. Rather AT&T responds to lawful requests from law for information and in some circumstances, we are compensated for the process of collecting and providing that data to law enforcement personnel.”
AT&T Inc. (NYSE:T) also said in the letter that it employees about 100 people 24 hours a day and seven days a week to respond to law enforcement requests. From a business standpoint, it could be argued that the company was simply trying to recoup its costs — about which the company said, “[W]e believe we fall short of our actual costs.”
The letters to AT&T Inc. (NYSE:T) and other companies show the fine line that some tech and telecom companies walk when handling requests from law enforcement and government agencies. But at the end of the day, these companies aren’t in the business of intruding on customer privacy.
Caught in the middle
The vast majority of the time, companies like AT&T Inc. (NYSE:T), Google, and Verizon Communications Inc. (NYSE:VZ) are caught in the middle of something they were never designed to do: extend the arm of the law. These companies exist to sell ads, data plans, cell service and other offerings to willing customers. The fact that local and federal agencies step in and muddy the waters is unfortunate for both customers and the businesses.
It’s yet to be seen if the recent NSA request will hurt Verizon’s stock or its overall business. But investors can be sure that, at least most of the time, companies don’t want the government intervening because it hurts their business and their customers. In the end, hopefully the government will realize that hurting its citizens is a bad way to conduct business as well.
The article Blame the NSA, but Don’t Blame Tech and Telecom Companies originally appeared on Fool.com.
Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google.
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