How Much Money Does Your Cellphone Company Make From Selling Your Data to Police?

Future Tense
The Citizen's Guide to the Future
July 19 2012 3:41 PM

How Much Money Does Your Cellphone Company Make From Selling Your Data to Police?

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Sprint, T-Mobile and other wireless carriers won't say how much money they make from tracking their customers for police. But we can guess.

Vydrin / Shutterstock

The nation’s wireless carriers spend a surprising amount of time and energy sharing their customers’ private data with police and the FBI. As we noted earlier this month, those companies fielded upwards of 1.3 million such requests in 2011 alone, dedicating hundreds of full-time employees to telling authorities what their customers were up to. And when asked by U.S. Rep. Ed Markey to disclose the extent of these surveillance programs, some of the companies said they are so busy handing out their users’ data that they don’t have time to keep track of how often they do it.

How can these companies afford all the time it takes to comply with these requests? (The numbers show that wireless companies grant a vast majority of the requests, even when there’s no warrant.) They can afford it, it seems, because the law enforcement agencies pay them. Your tax dollars at work!

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Every wireless company insists that the fees it charges for handing over your information are just enough to cover expenses. But most of them—including Sprint, the company that gets by far the most requests for customer data—have refused to hand over actual figures.

First, due credit to the two companies that did own up to how much they’re getting in exchange for their customers’ data. U.S. Cellular, a minnow in the market, reported in its response to Markey that it had complied with 18,079 requests in 2011, earning more than $460,000 in compensation. Industry giant AT&T, meanwhile, revealed that it took in $8.2 million—a nearly 35 percent increase from the year before—on a total of 181,100 requests. (It complied with more than 99 percent of them.)

Verizon wouldn’t give hard numbers, but it at least offered a range, reporting that it had been “reimbursed approximately three to five million dollars in each of the last five years” for the data it shared with authorities. That was in exchange for about 260,000 requests.

T-Mobile was the least forthcoming of all, refusing to disclose both the number of requests it received and the amount of money it collected. The company’s response letter asserts that “the fees attributable to the costs are considered confidential and proprietary information.”

And then there’s Sprint, which revealed that it had received a staggering 500,000 subpoenas for user data in 2011, plus another 325,982 requests for wiretaps or location information over the past five years. The company did not say how many of these it accepted or how much total money it received, though it did provide a detailed breakdown of the rates it charges for various types of surveillance.

When we called Sprint to ask for more information on its surveillance revenues, spokeswoman Stephanie Vinge Walsh declined to elaborate and warned us against attempting an estimate. “Any calculation made based on the numbers reported would not be accurate,” she said cryptically.

Be that as it may, we’ll risk an educated guess. Taking Sprint’s 500,000 subpoenas from 2011 and adding one-fifth of the 325,000 wiretap and location requests it reported over a five-year period, we estimated that it got 565,000 total requests last year. That’s more than three times as many as AT&T. Sprint’s fee schedule differs from AT&T’s, but appears roughly comparable. So assuming that Sprint received the same amount of compensation, on average, per request, it would have brought in some $26 million from law enforcement agencies in 2011. If, on the other hand, Sprint’s average fees were closer to those of Verizon, it would have taken in a more modest $10 to $15 million. That’s a tiny sum when you compare it to Sprint’s total revenues of almost $34 billion in 2011. But it’s still a significant chunk of cash.

Sprint and the other carriers that responded to Rep. Markey all said they neither sought profit from their surveillance services nor actively marketed them to law enforcement agencies. And while privacy advocates might have liked to see these companies push back a little more on some of the broader requests, like those that sought the personal information of every customer in the vicinity of a particular cell tower at a given time, it’s understandable that their default policy would be to comply with law enforcement subpoenas. It would be nice, however, if they were as eager to be transparent about their surveillance activities as they are to conduct them.

Future Tense is a partnership of SlateNew America, and Arizona State University.

David Sydiongco is a Future Tense intern.

Will Oremus is Slate's senior technology writer.