Editor’s Note: AT&T’s $13 million settlement with the Federal Communications Commission (FCC) following a significant data breach in January 2023 highlights the ongoing cybersecurity challenges faced by telecommunications giants. This breach, which exposed the personal data of 8.9 million customers due to lapses in vendor oversight and data governance, serves as a stark reminder of the critical importance of robust security practices. For professionals in cybersecurity, information governance, and eDiscovery, this case emphasizes the need for strict adherence to data protection agreements, comprehensive vendor management, and effective risk mitigation strategies. The settlement sets a precedent for greater accountability, underscoring the FCC’s commitment to enforcing data protection standards in an increasingly vulnerable digital landscape.


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Industry News – Cybersecurity Beat

AT&T’s $13 Million FCC Settlement Highlights Persistent Data Security Challenges

ComplexDiscovery Staff

AT&T has reached a $13 million settlement with the Federal Communications Commission (FCC) following a data breach in January 2023 that exposed the personal information of 8.9 million customers. The data was stored in the cloud by a third-party vendor, which AT&T failed to ensure adhered to data deletion policies. This vendor retained customer data long after it should have been deleted, leading to the breach, according to the FCC. Loyaan A. Egal, the FCC’s Enforcement Bureau Chief, stated that communications service providers must minimize attack surfaces and secure entry points to protect sensitive data.

The settlement mandates improvements in AT&T’s data governance and supply chain security practices, requiring the telecom giant to protect, properly dispose of, and limit access to customer data. Despite not compromising AT&T’s systems, the vendor’s failure to delete the data as required by contract resulted in the leak, which included phone line counts and bill information but not credit card numbers, Social Security numbers, or passwords. An AT&T spokesperson emphasized that customer data protection remains a top priority and highlighted plans to enhance internal data management and vendor requirements.

The January 2023 breach is part of a troubling pattern for AT&T, which has faced multiple security incidents over the years. Notably, the company had to reset the passcodes of 73 million customers earlier this year after their encrypted passwords were leaked online. In another incident, virtually all customer phone and text records were compromised through a breach of the Snowflake platform. Telecommunications companies, holding vast amounts of personal data, remain prime targets for cyberattacks, as evidenced by AT&T’s repeated breaches and other similar incidents within the industry.

The FCC’s investigation concluded that AT&T neglected to ensure its third-party vendor complied with data protection agreements, leaving customer data vulnerable. The stolen data included information that should have been purged years prior, reflecting inadequate oversight and enforcement of contractual obligations. As part of the settlement, AT&T agreed to conduct annual compliance audits and implement a comprehensive information security program to better safeguard customer data.

In addition to the financial penalty, AT&T must engage in stringent oversight of its vendor ecosystem, including tracking shared information, enforcing data disposal requirements, and monitoring vendors’ data protection policies. AT&T’s commitment to these measures aims to prevent future breaches and restore customer trust. However, the persistent issues suggest a need for continuous improvement and vigilance in data security practices.

This settlement underscores the broader challenges facing the telecommunications industry, which saw over 300 million accounts breached globally in 2023, with the majority involving cloud-stored data. The frequency and scale of these breaches illustrate the urgent need for robust security measures and regulatory compliance to protect customer information and maintain data integrity.

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