[Federal Register Volume 64, Number 30 (Tuesday, February 16, 1999)]
[Proposed Rules]
[Pages 7763-7770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3658]
Federal Register / Vol. 64, No. 30 / Tuesday, February 16, 1999 /
Proposed Rules
[[Page 7763]]
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CC Docket 94-129; FCC 98-334]
Implementation of the Subscriber Carrier Selection Changes
Provisions of the Telecommunications Act of 1996; Unauthorized Changes
of Consumers' Long Distance Carriers
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In the Further Notice of Proposed Rulemaking (FNPRM) portion
of the Second Report and Order (Order), we seek comment on several
proposals to further strengthen our slamming rules, including a
proposal to require unauthorized carriers to remit to authorized
carriers certain amounts in addition to the amount paid by slammed
subscribers, as well as proposals for preventing the confusion and
slamming that results from resellers using the same carrier
identification codes (CICs) as their facilities-based carriers.
DATES: Comments on proposed rules 47 CFR 64.1100, 64.1170 and 64.1195,
which are contained in the FNPRM, and proposed information collections
are due on or before March 18, 1999. Reply comments are due on or
before April 2, 1999. Written comments by OMB on the proposed
information collections are due on or before April 19, 1999. Comments
may be filed using the Commission's Electronic Comment Filing System
(ECFS) or by filing paper copies.
ADDRESSES: Comments and reply comments must be sent to the Commission's
Secretary, Magalie Roman Salas, Office of the Secretary, Federal
Communications Commission, 445 12th St., S.W., TWA-325, Washington,
D.C. 20554. In addition to filing comments with the Secretary, a copy
of any comments on the information collections contained herein should
be submitted to Judy Boley, Federal Communications Commission, Room 1-
C804, 445 12th Strteet, SW, Washington, DC 20554, or via the Internet
to jboley@fcc.gov, and to Timothy Fain, OMB Desk Officer, 10236 NEOB,
725-17th Street, N.W., Washington, DC 20503 or via the Internet to
fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Kimberly Parker, Enforcement Division,
Common Carrier Bureau (202) 418-7393. For additional information
concerning the information collections contained in this NPRM contact
Judy Boley at 202-418-0214, or via the Internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's FNPRM
in CC Docket No. 94-129 [FCC 98-334], adopted on December 17, 1998 and
released on December 23, 1998. The full text of the FNPRM is available
for inspection and copying during normal business hours in the FCC
Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C. The
complete text of this decision may also be purchased from the
Commission's duplicating contractor, International Transcription
Services, 1231 20th Street, N.W., Washington, D.C.
Paperwork Reduction Act: This NPRM contains a proposed information
collection. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collections
contained in this NPRM, as required by the Paperwork Reduction Act of
1995, Public Law 104-13. Public and agency comments are due at the same
time as other comments on this NPRM; OMB notification of action is due
April 19, 1999. Comments should address: (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
burden estimates; (c) ways to enhance the quality, utility, and clarity
of the information collected; and (d) ways to minimize the burden of
the collection of information on the respondents, including the use of
automated collection techniques or other forms of information
technology.
OMB Approval Number: 3060-0787.
Title: Implementation of the Subscriber Carrier Selection Changes
Provisions of the Telecommunications Act of 1996; Policies and Rules
Concerning Unauthorized Changes of Consumers' Long Distance Carriers,
CC Docket No. 94-129.
Form No.: N/A.
Type of Review: Revised collections.
Respondents: Business or other for-profit.
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Estimated time
Annual proposed collections Respondents per response Total burden
(hours)
----------------------------------------------------------------------------------------------------------------
1. Carrier Liability............................................ 1,800 2 3,600
2. Registration................................................. 1,800 2 3,600
3. Reporting.................................................... 1,800 2 3,600
----------------------------------------------------------------------------------------------------------------
Total Annual Burden: 10,800 hours.
Estimated costs per respondent: N/A.
Needs and Uses: The information will enable the Commission to
further deter slamming and track carriers.
Summary of Further Notice of Proposed Rulemaking
I. Background
1. The rules proposed in the FNPRM are aimed at eliminating
slamming by attacking the problem on several fronts, including keeping
profits out of the pockets of slamming carriers, imposing more rigorous
verification procedures, and broadening the scope of our rules to
encompass all carriers. We seek additional comment on several issues
that either were not raised sufficiently in the Order or that require
additional comment for resolution.
II. Discussion
A. Recovery of Additional Amounts From Unauthorized Carriers
2. We seek comment on whether the following proposals discussed
below are within our jurisdiction and consistent with Congress' intent
embodied in section 258 of the Act. Where a subscriber has paid charges
to the unauthorized carrier, we propose that the authorized carrier
collect from the unauthorized carrier double the amount of charges paid
by the subscriber during the first 30 days after the unauthorized
change. Where the subscriber has not paid charges to the unauthorized
carrier, we propose to permit the authorized carrier to collect from
the unauthorized carrier the amount that would have been billed to the
subscriber during the first 30 days after the unauthorized change.
Alternatively, we seek comment on whether the authorized carrier's
recovery under this proposal should
[[Page 7764]]
equal the amount that the authorized carrier would have billed the
subscriber during that 30-day time period absent the unauthorized
change. We note that the rules adopted in the Order require that any
charges imposed by the unauthorized carrier after the 30-day absolution
period be paid by the subscriber to the authorized carrier at the
authorized carrier's rates.
3. We tentatively conclude that the Commission has the authority to
permit these additional payments by slamming carriers, based on the
language of section 258, which provides that ``the remedies provided by
this section are in addition to any other remedies available by law.''
The Commission has additional authority under section 201(b) to
``prescribe such rules and regulations as may be necessary in the
public interest to carry out the provisions of [the] Act,'' as well as
under section 4(i) to ``perform any and all acts, make such rules and
regulations, and issue such orders, not inconsistent with [the] Act, as
may be necessary in the execution of its functions.'' We tentatively
conclude that permitting an authorized carrier to collect the above-
described amounts from the unauthorized carrier would help to deter
slamming by making slamming so unprofitable that carriers will cease
practicing it. We seek comment on these tentative conclusions.
B. Resellers and CICs
4. Misunderstandings may arise due to the use of CICs, which are
used by LECs to identify different IXCs. Because CICs are issued by the
North American Numbering Plan Administrator (NANPA) to facilities-based
IXCs only, switchless resellers do not have their own CICs, but rather
use the CICs of their underlying facilities-based carriers. The fact
that resellers do not have their own CICs results in two slamming-
related problems: (1) the ``soft slam;'' and (2) the misidentification
of a reseller as the underlying carrier.
5. A ``soft slam'' occurs when a subscriber is changed, without
authorization, to a carrier that uses the same CIC as his or her
authorized carrier. When a subscriber changes from a facilities-based
IXC to a reseller of that facilities-based IXC's services, or in any
situation in which a subscriber changes to another carrier that has the
same CIC as the previous carrier, the execution of the change is
performed by the facilities-based IXC, not the LEC. The soft slam is
therefore particularly problematic because it bypasses the LEC and
enables a slamming reseller to bypass a subscriber's preferred carrier
freeze protection. Preferred carrier freeze protection, where the LEC
will change a subscriber's carrier only after it receives express
written or oral consent from that subscriber to lift the freeze, will
not be triggered by a soft slam. Further complications arise because
the name of the facilities-based carrier may continue to appear on the
subscriber's bill, giving the subscriber no indication that his or her
preferred carrier has been changed.
6. We seek comment on the issue of whether switchless resellers
should be required to have their own CICs or some other identifier that
would distinguish them from the underlying facilities-based carriers
and allow the consumer to ensure that slamming has not occurred. We
seek comment on three options: (1) require each reseller to obtain a
CIC; (2) require the creation for each reseller of a ``pseudo-CIC,''
that is, digits that would be appended to the underlying carrier's own
CIC for identification of the reseller; or (3) require underlying
facilities-based carriers to modify their systems to prevent
unauthorized changes from occurring if a subscriber has a freeze on the
account and to allow identification of resellers on the consumer's
bill. We also seek comment on other benefits, unrelated to slamming,
that may result from adoption of any of these options. See the full
text of the FNPRM for a more detailed discussion on CICs.
i. Jurisdiction
7. We tentatively conclude that Commission regulations requiring
resellers to be identified on their subscribers' monthly bills would be
consistent with our authority under sections 201(b) and 4(i). The
Commission has authority under section 201(b) to ``prescribe such rules
and regulations as may be necessary in the public interest to carry out
the provisions of [the] Act,'' as well as under section 4(i) to
``perform any and all acts, make such rules and regulations, and issue
such orders, not inconsistent with [the] Act, as may be necessary in
the execution of its functions.'' Moreover, we tentatively conclude
that the plain language of section 251(e)(1) gives the Commission
authority to promulgate regulations of the type proposed below for
changing the North American Numbering Plan (NANP). We also tentatively
conclude that the Commission's authority to change the NANP includes
changes to such documents as the CIC Assignment Guidelines as might be
required by the Commission in this proceeding. We request comments on
these tentative conclusions.
ii. Option 1: Require Resellers to Obtain Individual CICs
8. As our first option, we seek comment on requiring each reseller
to obtain an individual CIC and on any changes to the NANP that would
be required to make such a requirement effective. First, we request
comment on whether we should make the purchase of translations access
by resellers mandatory in order to deter slamming. We also ask
commenting parties to address how effective this option would be in
allowing consumers and carriers to detect slamming. Further, we seek
comment on whether this option has advantages because it does not
require facilities-based carriers to modify their existing billing and
collection systems and will not cause a CIC shortage now that the
Commission has ended the transition period to four-digit CICs. We
request comment on the CIC Ad Hoc Working Group's recommendation to
allow resellers to purchase translations access instead of Feature
Group D trunk access.
9. We request further comment on this option's impact on the
``competitively neutral'' requirements of section 251(e)(2), in lieu of
the fact that translations access is currently bundled together with
Feature Group D trunk access. Specifically, should resellers pay the
full Feature Group D trunk access rates for translations access in
order to ``level the playing field'' with facilities-based carriers?
How long of a transition period should we require? Should resellers be
required to adhere to the same CIC Assignment Guidelines as facilities-
based carriers? What will be the effect on CIC conservation if the
Commission requires all resellers to obtain CICs? Commenting parties
are encouraged to include empirical information with their comments.
iii. Option 2: Require the Use of ``Pseudo-CICs'' for Resellers
10. We seek comment on use of the pseudo-CIC to prevent switchless
resellers from circumventing a subscriber's preferred carrier freeze
protection through soft slams. We also request comment on the liability
of the pseudo-CIC option as a method to identify particular resellers
of a facilities-based carrier's services so that consumers can detect
slamming if it occurs. We request comment on recovering the cost of
implementing the pseudo-CIC option, which would be borne primarily by
ILECs and other carriers or entities that provide billing and
collection services to resellers. We request further comment on the
need to standardize pseudo-CIC assignments,
[[Page 7765]]
particularly in cases where a reseller resells services from multiple
facilities-based carriers. Should a single pseudo-CIC suffix be used by
all facilities-based carriers to identify the same reseller, so that
the 0001 suffix applies to reseller ``A'' regardless of the facilities-
based carrier's CIC? Should the NANPA be required to administrate
pseudo-CICs, to ensure uniformity? Finally, we request comment on the
impact of pseudo-CIC implementation on section 251(e)(2)'s requirement
for competitive neutrality, when determining the cost of its
administration.
iv. Option 3: Require Facilities-Based Carriers To Modify Their Systems
11. We seek comment on requiring a facilities-based carrier to
modify its system to enable it to execute preferred carrier freeze
protection only for subscribers who are presubscribed to the services
of either the facilities-based carrier or one of its switchless
resellers. We propose that LECs be required to provide to each
facilities-based IXC certain freeze information about subscribers of
the facilities-based carrier or subscribers of any of the facilities-
based carriers' resellers. We seek comment on this proposal. We also
seek comment on how frequently the facilities-based IXC would need to
receive information from the LEC in order to prevent soft slams, as
well as undue delays in legitimate carrier changes. We seek comment on
the burden this proposal would impose on both facilities-based IXCs and
LECs.
12. We also seek comment on whether facilities-based carriers
should be required to modify their billing records to allow
identification of resellers on the consumer's bill, whether such bill
is issued from the reseller, the LEC, or a billing agent. We also seek
comment on whether, if the subscriber's carrier has been changed but
the CIC remains the same, such subscriber's bill should include
information on how to contact the underlying facilities-based carrier
if the subscriber believes that an unauthorized change has occurred. We
seek comment on whether facilities-based carriers possess the
information needed to distinguish resellers of their services on
subscribers' monthly telephone bills. We ask for comment on the cost
and effort associated with placing on consumers' bills information
based on the reseller usage information already maintained by
facilities-based carriers. Specifically, how expensive and difficult
would it be for facilities-based carriers to modify their existing
billing records to provide the means to identify on the subscribers'
monthly bills the specific resellers responsible for the service?
Finally, we request comment on the impact of this proposed option on
section 251(e)(2)'s requirement for competitive neutrality, when
determining the cost of its administration.
13. We also seek comment on any other proposals that would help to
distinguish the identities of resellers from their facilities-based
carriers, both for purposes of identification on subscriber bills and
to prevent soft slams. We seek comment on additional CIC proposals, as
well as on methods that would not involve CICs, if such proposals would
attain both goals of properly identifying resellers and preventing
switchless resellers from slamming subscribers.
14. We also seek comment on other benefits unrelated to slamming
remedies that may result from the adoption of any of these options. For
example, we ask commenters to describe how the enhanced identification
of resellers may allow more efficient billing or routing of calls. In
addition, we seek comment on whether such identification would promote
competition by giving greater emphasis to the identity of resellers
that provide service.
C. Independent Third Party Verification
15. We tentatively conclude that we should revise our rules for
independent third party verification. NAAG suggests in its comments
that independent third party verification should be separated
completely from the sales transaction, so that a carrier would not be
permitted to conduct a three-way call to connect the subscriber to the
third party verifier. NAAG argues that a verification call initiated by
the carrier is not truly independent because the subscriber would
remain under the influence of the carrier's telemarketer during the
verification. We seek comment on whether, if a telemarketing carrier is
present during the third party verification, such verification can be
considered ``independent.''
16. We seek comment on the use of automated third party
verification systems, as opposed to ``live'' operator verifiers. We
seek comment on whether automated third party verification systems
would comply with our rules concerning independent third party
verification, as well as with the intent behind our rules to produce
evidence independent of the telemarketing carrier that a subscriber
wishes to change his or her carrier. We also note that one commenter,
VoiceLog, offers an additional system called a ``live-scripted''
version. We seek comment on whether such a ``live-scripted'' automated
verification system would be at odds with our rules because it permits
the carrier itself, who is not an independent party located in a
separate physical location, to solicit the subscriber's confirmation.
We also seek comment on the advantages and disadvantages of using
automated third party verification and live operator third party
verification.
17. We seek comment on the content of the third party verification
itself. For example, should the independent third party verifier be
required or permitted to provide certain information in addition to
confirming a subscriber's carrier change request? We also seek comment
on whether independent third party verifiers should be permitted to
dispense information on preferred carrier freeze procedures. We seek
comment on any benefits that might be gained from permitting or
requiring third party verifiers to provide additional information. We
also seek comment on whether such a requirement would compromise the
independent nature of the verification, or on whether such a
requirement is necessary. Finally, we seek comment on any other
proposals that would improve the quality of the third party
verification.
D. Carrier Changes Using the Internet
18. As stated in the Order, all carrier changes must be confirmed
in accordance with one of the three verification methods in our rules:
written LOA, electronic authorization, or independent third party
verification. We seek comment on whether a carrier change submitted
over the Internet could be considered a valid LOA under our
verification rules. We seek comment on the extent to which current
carrier change requests submitted over the Internet contain all the
required elements of a valid LOA in accordance with our rules. We have
particular concerns about how an Internet sign-up system satisfies the
signature requirement, which is one of the most important
identification requirements of the written LOA. The electronic forms
that we have seen generally contain a section called the ``electronic
signature'' that serves as a substitute for the consumer's written
signature. Some electronic signatures consist of the consumer typing
his or her name into the box. Other electronic signatures consist of
the consumer submitting the form electronically to the carrier. We
tentatively conclude that electronic signatures used in Internet
submissions of carrier changes would not comply with the signature
requirement for LOAs. We believe that the electronic signature fails to
identify the ``signer'' as
[[Page 7766]]
the actual individual whose name has been ``signed'' to the Internet
form. We also believe that the electronic signature fails to identify
the ``signer'' as an individual who is actually authorized to make
telecommunications decisions. For example, there appear to be few
safeguards to prevent someone from simply typing another person's name
into the field for the electronic signature. There would be no telltale
variations in handwriting to distinguish one electronic signature from
another. We seek comment on these tentative conclusions, and seek
comment generally on how carriers are dealing with the above-identified
problems or how our rules should be modified to account for these
differences.
19. We also seek comment on what additional information would
provide sufficient consumer protection from an unscrupulous carrier.
For example, some carriers will accept carrier changes using the
Internet if subscribers submit their credit card numbers for billing
purposes. We seek comment on whether obtaining a subscriber's credit
card number would provide sufficient proof that a subscriber authorized
a carrier change and that the submitting person is actually the
subscriber. We seek comment on the extent to which a subscriber would
be protected by the consumer protection aspects that accompany the use
of credit cards. We also seek comment on whether carrier changes
submitted over the Internet should require a subscriber to include
certain personal information, such as social security number or
mother's maiden name, to ensure that only the subscriber may change his
or her own carrier. We seek comment on whether requiring the submission
of these types of information would be sufficient to prevent slamming
using the Internet, without jeopardizing the subscriber's privacy and
other interests.
20. To the extent that a carrier change using the Internet is not a
valid LOA, then at a minimum, a carrier using such a method of
solicitation must verify in accordance with our rules. That is, the
carrier must either obtain a valid written LOA, or confirm the sale
with electronic authorization or independent third party verification.
We seek comment on whether additional methods of verification might be
particularly appropriate for use by carriers who solicit subscribers
over the Internet.
21. We also have general concerns about the content of the
solicitation using the Internet. For example, some IXC webpages state
that in changing to that IXC's long distance service, the consumer also
agrees to change to the IXC's intraLATA toll service where applicable.
These carriers do not give consumers the option of choosing only
interLATA service by that carrier, but instead require the consumer to
accept both interLATA and intraLATA toll service from that IXC. We
tentatively conclude that such statements would be in violation of our
rule that requires LOAs to contain separate statements regarding
choices of interLATA and intraLATA toll service. We seek comment on
this tentative conclusion and on any other problems that may result
from carrier use of the Internet to change subscribers' carriers.
22. Finally, we seek comment on the extent to which subscribers may
use the Internet to request or lift preferred carrier freezes. We have
the same general above-mentioned concerns about whether this method
would identify the submitting party as the actual subscriber whose
service would be affected by the imposition or lifting of the preferred
carrier freeze. We also seek comment on the verification procedures
that should apply. Should subscribers requesting preferred carrier
freezes over the Internet verify their requests in the same manner as
requests given directly by telephone to a LEC? LECs should, at a
minimum, provide subscribers with the option to lift freezes using
either a written LOA or a three-way call, but that they may offer
additional options. Could LECs provide a simple and secure method for
subscribers to impose and lift their freezes using the Internet? We
seek comment on any other uses of the Internet that would promote
efficiency and convenience for both carriers and consumers in changing
telecommunications carriers and other related activities.
E. Definition of ``Subscriber''
23. Section 258 of the Act and our implementing rules require that
the carrier obtain authorization from a subscriber before making a
switch. Neither the Act nor our rules define the term ``subscriber''
for this purpose. We seek comment on how a subscriber should be
defined, in light of our goals of consumer protection and promotion of
competition. SBC suggests that the term ``subscriber'' should include
``any person, firm, partnership, corporation, or lawful entity that is
authorized to order telecommunications services supplied by a
telecommunications services provider,'' so that carriers could obtain
authorization from whomever at the business or residence is authorized
to make the purchasing decision. In the 1995 Report and Order, we
determined that the only individual qualified to authorize a change in
carrier selection is the ``telephone line subscriber,'' although we did
not specifically define the term. We believe that allowing the named
party on the bill to designate additional persons in the household to
make telecommunications decisions could promote competition because
carriers would be able to solicit more than one person in a household.
We also believe that consumers would find such an arrangement
convenient because it would allow more than one person to make
telecommunications decisions, while still giving the named party
control over which members of the household may make changes to
telecommunications service. A spouse named on the bill could therefore
designate the other spouse as being authorized to make decisions
regarding telecommunications service, although their minor children
would not be authorized to make such decisions.
24. On the other hand, we are concerned that adoption of such a
proposal could lead to an increase in slamming. It is unclear, for
example, how a marketing carrier would know if the person who has
authorized a carrier change is in fact authorized to order
telecommunications services. We are concerned that a slamming carrier
could simply submit changes requested by unauthorized persons and claim
that it thought that those persons were authorized. Furthermore, such a
proposal presumably would require executing carriers to not only
maintain lists of persons other than the named party who are authorized
to make telecommunications decisions, but also to check each carrier
change request against these lists to determine if the person who
authorized the carrier change is also authorized to make decisions. We
believe that this could be an unreasonable burden on the executing
carrier.
25. We also seek comment on the current practices of carriers with
regard to which members of a household are permitted to make changes to
telecommunications service. Carriers who submit proposals should
include an explanation of how their present systems operate and the
advantages and disadvantages of their proposals, as opposed to their
current procedures. We seek comment on this and other proposals to
define the term ``subscriber'' in order to maximize consumer
protection, provide consumer convenience, and promote competition in
telecommunications services.
F. Submission of Reports by Carriers
26. We seek comment on whether we should require each carrier to
submit to the Commission a report on the number
[[Page 7767]]
of complaints of unauthorized changes in telecommunications providers
that are submitted to the carrier by its subscribers. This concept is
based on a provision in the Senate's anti-slamming bill. Early warning
about slamming carriers will enable the Commission to take
investigative action, where warranted, to stop slamming as soon as
possible. We seek comment on the potential benefits of this reporting
requirement and on whether such benefits outweigh the burdens on
carriers. If the Commission were to adopt a reporting requirement, we
seek comment on the frequency of filing such a report.
G. Registration Requirement
27. We seek comment on whether the Commission should impose a
registration requirement on carriers who wish to provide interstate
telecommunications service. Such a registration requirement could help
to prevent entry into the telecommunications marketplace by entities
that are either unqualified or that have the intent to commit fraud. We
propose that any telecommunications carrier that provides or seeks to
provide interstate telecommunications service should register with the
Commission. We seek comment on the information that the registration
should contain. We propose that the registration should contain, at a
minimum, the carrier's business name(s); the names and addresses of all
officers and principals; verification that such officers and principals
have no prior history of committing fraud; and verification of the
financial viability of the carrier. To the extent that the Commission
already possesses some of this information, we seek comment on whether
the Commission should consolidate the collection of the above-described
information with other existing collection mechanisms, in order to
lessen the burden on carriers. We tentatively propose that this
registration requirement apply not just to new entrants but to all
entities that offer telecommunications services. We also seek comment
on the Commission's jurisdiction to require carriers to file a
registration in order to provide interstate telecommunications service.
28. We tentatively conclude that the Commission should revoke or
suspend, after appropriate notice and opportunity to respond, the
operating authority of those carriers that fail to file a registration
or that provide false or misleading information in their registration.
Many states have authority to revoke carriers' operating licenses with
regard to the provision of intrastate services. These states'
revocation powers are limited to prohibiting carriers from operating
within one state, which permits unscrupulous carriers to move to a
different state to offer service. The revocation power proposed herein
would enable the Commission to prevent an unscrupulous interstate
interexchange carrier from operating nationwide. We seek comment on
whether such penalty is appropriate in these situations, as well as in
situations where the Commission finds that the provision of
telecommunications service by a particular carrier would be contrary to
the public interest. We also tentatively conclude that a carrier has an
affirmative duty to ascertain whether another carrier has filed a
registration with the Commission prior to offering service to that
carrier. This would further check the ability of unscrupulous carriers
to enter the marketplace. If we were to adopt this requirement, we
would certainly facilitate the ability of a carrier to check the
registration status of another carrier. We seek comment on what penalty
the Commission should impose on carriers that fail to determine the
registration status of other carriers before providing them with
service. We believe that the penalty should not be as severe as the
penalty to be imposed on carriers that fail to file valid
registrations. We tentatively conclude that these penalties will
protect consumers by ensuring that unqualified and unscrupulous
carriers do not profit from the provision of telecommunications
services. We seek comment on whether the consumer benefits of these
proposals would outweigh the burden on carriers of filing
registrations. We seek comment on these proposals and on other
proposals that would prevent carriers that have a history of fraud or
are otherwise unqualified from providing telecommunications services.
H. Third Party Administrator for Preferred Carrier Changes and
Preferred Carrier Freezes
29. We seek further comment on the implementation by the industry
of a comprehensive system in which an independent third party would
administer carrier changes, verification, and preferred carrier
freezes, as well as the dispute resolution functions mentioned above.
In the Further Notice and Order, the Commission sought comment on the
use of an independent third party to execute carrier changes neutrally
in order to reduce carrier change disputes that might arise if ILECs
continue to execute changes. Many commenters responded in support of an
independent third party administrator for carrier changes and even
verification because such a party would have incentive to administer
carrier changes in a neutral and accurate manner. Although we agree
that many of the commenters' contentions have merit, we conclude that
the record before us is not fully developed to support the creation of
a new and independent agent to handle execution functions at this time.
Therefore we seek further comment on the development and implementation
of a third party administrator for these functions. We note that any
industry-supported neutral party must administer carrier change
functions in accordance with the Commission's rules and seek comment on
how to ensure that the industry's implementation of such a neutral
third party for these functions would be consistent with the
Commission's rules, policies, and practices.
30. An independent third party with broader responsibilities, such
as administration of carrier changes, verification, and preferred
carrier freezes, may be useful in addressing concerns raised by the
commenters about potential anticompetitive practices in this area.
Although we have concluded that the ability of the LECs to act
anticompetitively while executing carrier changes is limited, we find
that the concept of an independent third party for administration of
carrier changes and preferred carrier freezes is potentially viable.
Most of the commenters who support such a system, however, are not
specific about how such a system might work, nor do they offer concrete
proposals for funding such an administrative scheme. These comments
fail to provide sufficient detail about the actual implementation and
funding for a third party administrator system necessary for the
Commission to mandate at this time. Furthermore, the commenters were
unable to come to a consensus as to the actual duties of the
independent third party administrator. Several carriers state that the
third party administrator would need electronic interconnections with
every carrier to be able to receive and process carrier changes and
preferred carrier freezes. On the other hand, TRA suggests that the
third party administrator should only monitor compliance and document
execution of carrier changes and preferred carrier freezes, but that it
should not actually execute carrier changes and preferred carrier
freezes. We seek comment on concrete suggestions for the implementation
of a third party administrator that are workable and cost-effective.
Proposals for such third
[[Page 7768]]
party administration should include specific and detailed information
regarding the cost of setting up such a system.
III. Conclusion
31. In the Further Notice of Proposed Rulemaking, we seek comment
on several proposals to further strengthen our slamming rules,
including a proposal to require unauthorized carriers to remit to
authorized carriers certain amounts in addition to the amount paid by
slammed subscribers, as well as proposals for preventing the confusion
and slamming that results from resellers using the same CICs as their
facilities-based carriers.
IV. Procedural Matters
I. Initial Regulatory Flexibility Analysis
32. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared this present Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on small
entities by the policies and rules proposed in the Order and FNPRM.
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the FNPRM provided below in the Comment Filing
Procedures section. The Commission will send a copy of the Order and
FNPRM, including this IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration. In addition, the Order and FNRPM and
IRFA (or summaries thereof) will be published in the Federal Register.
i. Need for, and Objectives, of Proposed Rules.
33. The Commission, in its efforts to protect consumers from
unauthorized switching of preferred carriers, and to implement
provisions of the Telecommunications Act of 1996 pertaining to illegal
changes in subscriber carrier selections, is issuing this Further
Notice of Proposed Rulemaking. Under the Act and the proposed rules, a
small entity that violates the Commission's carrier change verification
rules may be liable to an authorized carrier for double the amount of
charges paid to the slamming entity by a slammed subscriber or for the
amount for which the slammed subscriber was absolved. Small entities
may be affected by the proposals for modifying the independent third
party verification process; verifying carrier changes made on the
Internet; adopting a definition of ``subscriber;'' requiring carriers
to submit to the Commission a report on the number of slamming
complaints received by them; imposing a registration requirement; and
modifications of the CIC process.
ii. Legal Basis
34. The Order and FNPRM are adopted pursuant to sections 1, 4(i),
4(j), 201-205, 258, and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 154(j), 201-205, 258, 303(r).
iii. Description and Estimates of the Number of Small Entities to Which
Rules Will Apply
35. In the FRFA, associated with the Order, we have provided a
detailed description of small entities (See Federal Register Summary of
Order).1 Those entities include wireline carriers, local
exchange carriers, small incumbent local exchange carriers,
interexchange carriers, competitive access providers, resellers, and
wireless carriers. We hereby incorporate those detailed descriptions by
reference.
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\1\ Published in the Rules section of this issue.
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iv. Summary of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
36. Liability. The proposed rules would permit authorized carriers
to recover from unauthorized carriers double the amount of charges paid
by slammed subscribers, or the amount for which the subscriber was
absolved. This would enable authorized carriers to provide a refund or
credit to slammed subscribers while keeping the amount they would have
received in the absence of an unauthorized change. This could affect
small entities that engage in slamming.
37. Resellers and CICs. The Commission proposes to require
switchless resellers to obtain their own CICs, to obtain pseudo-CICs,
or to have the facilities-based reseller modify its billing systems.
These proposals are intended to address the confusion that occurs
because switchless resellers have the same CIC as their underlying
facilities-based carriers. These proposals would probably impose
additional costs on switchless resellers, most of whom are small
entities.
38. Independent Third Party Verification. Although specific rules
are not proposed to modify the independent third party verification
process, which could be used by small carriers, the Commission seeks
comment on the definition of an independent third party verifier and on
the content of the independent third party verification.
39. Internet Carrier Changes. Although specific rules are not
proposed, the Commission seeks comment on the extent to which the
electronically-submitted Internet form could be considered a valid LOA
in accordance with the verification procedures. The Commission also
seeks comment on other procedures that might be appropriate to verify
Internet carrier changes. This is in response to the need for standards
among the widely varying Internet solicitation and verification
practices being utilized by carriers, including small entities.
40. Definition of ``Subscriber.'' Although no specific proposals
were made, the Commission seeks comment on how the term ``subscriber''
should be defined, which may affect the marketing practices of small
entities.
41. Carrier Reports. The proposed rules would also require each
carrier to submit to the Commission a report on the number of slamming
complaints that are submitted to that carrier by subscribers. Small
carriers would not be exempt from filing this report. This would enable
the Commission to learn about slamming entities as quickly as possible.
42. Registration Requirement. This rule proposes to require all
interstate carriers to register with the Commission. The Commission
seeks comment on requiring the registration to contain the carrier's
business name(s); the names and addresses of all officers and
principals; verification that such officers and principals have no
prior history of committing fraud; and verification of the financial
viability of the carrier. The Commission also proposes to revoke or
suspend the operating authority of any carriers who fail to register or
who provide false or misleading information in their registration. This
would apply to all carriers, including small entities. The proposals
are designed to prevent entry into the telecommunications marketplace
by entities that are either unqualified or have the intent to commit
fraud.
43. Third Party Administrator for Preferred Carrier Changes and
Preferred Carrier Freezes. Although specific rules are not proposed,
the Commission seeks comment on the implementation of a comprehensive
system in which an independent third party would administer carrier
changes, preferred carrier freezes, and verification. Several
commenters support the use of an independent administrator, but failed
to provide sufficient detail on the scope of its functions, how such a
system would work, and how it would be funded.
[[Page 7769]]
v. Steps Taken To Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered
44. Liability Proposal. Permitting authorized carriers to recover
the additional amounts proposed from slamming carriers will make
slamming unprofitable for carriers. If the carrier provides proof that
it did not violate the Commission's rules, then it is not required to
pay any penalty. All carriers, including small carriers, will benefit
by the reduction in slamming that will result from the implementation
of our proposals.
45. Carrier Reports. In order to reduce the burden on carriers, we
seek comment on requiring the report to be filed only when complaints
reach a threshold level, rather than requiring the report to be filed
on a regular basis. We believe that the resulting investigations into
slamming will reduce slamming and be beneficial to all carriers,
including those carriers that are small entities.
46. Registration Requirement. The registration requirement proposal
is not overly burdensome. This requirement should only burden carriers
who have a history of fraud, in order to keep them from offering
telecommunications services. As such, the proposal is narrowly tailored
to impose only minimal burdens on other carriers.
47. Resellers and CICs. The Commission offers several options to
resolve the problems with identification between switchless resellers
and their facilities-based carriers. They range in expense and burden
on carriers, so small carriers will have the opportunity to endorse the
option that best suits their needs.
48. We invite parties commenting on this regulatory analysis to
provide information as to the number of small businesses that would be
affected by our proposed regulations and identify alternatives that
would reduce the burden on these entities while still ensuring that
consumers' telecommunications carrier selections are not changed
without their authorization. Furthermore, in the event of a dispute
between carriers under our liability provisions, the carriers involved
in such disputes must pursue private settlement negotiations prior to
filing a formal complaint with the Commission. As we stated in the IRFA
of the FNPRM, we believe that the adoption of such a dispute mechanism
will lessen the economic impact of a dispute on small entities.
vi. Federal Rules That May Overlap, Duplicate, or Conflict With the
Proposed Rules
49. None.
J. Initial Paperwork Reduction Act of 1995 Analysis.
50. The Further Notice of Proposed Rulemaking portion of the Order
contains either a proposed or modified information collection. As part
of its continuing effort to reduce paperwork burdens, we invite the
general public and the Office of Management and Budget (OMB) to comment
on the information collections contained in the Further Notice of
Proposed Rulemaking portion of the Order, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. Public and agency comments
are due at the same time as other comments on the Further Notice of
Proposed Rulemaking; OMB comments are due April 19, 1999. Comments
should address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
K. Ex Parte Presentations
51. This matter shall be treated as a ``permit-but-disclose''
proceeding in accordance with the Commission's ex parte rules. Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentations must contain summaries of the substance
of the presentations and not merely a listing of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required.
L. Comment Filing Procedures
52. Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested
parties may file comments on or before March 18, 1999, and reply
comments on or before April 2, 1999. Comments may be filed using the
Commission's Electronic Comment Filing System (ECFS) or by filing paper
copies.
53. Comments filed through the ECFS can be sent as an electronic
file via the Internet to http://www.fcc.gov/e-file/ecfs.html>.
Generally, only one copy of an electronic submission must be filed. If
multiple docket or rulemaking numbers appear in the caption of this
proceeding, however, commenters must transmit one electronic copy of
the comments to each docket or rulemaking number referenced in the
caption. In completing the transmittal screen, commenters should
include their full name, Postal Service mailing address, and the
applicable docket or rulemaking number. Parties may also submit an
electronic comment by Internet e-mail. To get filing instructions for
e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and
should include the following words in the body of the message, ``get
form jboley@fcc.gov and
to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W.,
Washington, DC 20503 or via the Internet to fain__t@al.eop.gov.
V. Conclusion
57. In the FNPRM, we seek comment on several proposals to further
strengthen our slamming rules, including a proposal to require
unauthorized carriers to remit to authorized carriers certain amounts
in addition to the amount paid by slammed subscribers, as well as
proposals for preventing the confusion and slamming that results from
resellers using the same CICs as their facilities-based carriers.
VI. Ordering Clauses
58. It is ordered that a further notice of proposed rulemaking is
issued.
59. It is further ordered that the Chief of the Common Carrier
Bureau is delegated authority to require the submission of additional
information, make further inquiries, and modify the dates and
procedures if necessary to provide for a fuller record and a more
efficient proceeding.
List of Subjects in 47 CFR Part 64
Communications common carriers, Consumer protection,
Telecommunications.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-3658 Filed 2-12-99; 8:45 am]
BILLING CODE 6712-01-P
