[Federal Register: April 18, 2003 (Volume 68, Number 75)]
[Proposed Rules]
[Page 19176-19180]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ap03-21]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CC Docket No. 94-129, FCC 03-42]
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
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Commission seeks comment on whether to
revise, clarify, or adopt any additional rules in order to more
effectively carry out Congress' directives in the Communications Act to
combat unauthorized changes in a subscriber's telecommunications
providers (also known as ``slamming''). In order to maximize the
accuracy and efficiency for consumers, carriers, and the Commission,
additional minimum requirements for third party verification may be
necessary. It is the Commission's experience that additional
requirements may address issues that the Commission has seen repeatedly
in our enforcement of the slamming rules. Therefore, we seek comment on
whether third party verifiers should state the date during the taped
verification process. We also seek comment on whether the verifier
should be required to make additional statements and whether these
additional statements would serve to lessen or heighten customer
confusion.
DATES: Comments are due June 2, 2003 and reply comments are due June
17, 2003. Written comments by the public on the proposed information
collections are due June 2, 2003. Written comments must be submitted by
the Office of Management and Budget (OMB) on the proposed information
collection on or before June 17, 2003.
ADDRESSES: Parties who choose to file comment by paper must file an
original and four copies to the Commission's Secretary, Marlene H.
Dortch, Office of the Secretary, Federal Communications
[[Page 19177]]
Commission, 445 12th Street, SW, Room TW-A325, Washington, DC 20554.
Comments may also be filed using the Commission's Electronic Filing
System, which can be accessed via the Internet at www.fcc.gov/e-file/ecfs.html.
In addition to filing comments with the Secretary, a copy of
any comments on the information collections contained herein should be
submitted to Les Smith, Federal Communications Commission, Room 1-A804,
445 12th Street, SW., Washington, DC 20554, or via the Internet to
Leslie.Smith@fcc.gov.
FOR FURTHER INFORMATION CONTACT: Nancy Stevenson at 202-418-2512,
Consumer & Governmental Affairs Bureau. For additional information
concerning the information collection(s) contained in this document,
contact Les Smith at 202-418-0217 or via the Internet at
Leslie.Smith@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Further Notice of Proposed Rulemaking (NPRM) in CC Docket No. 94-129,
FCC 03-42, released March 17, 2003, that is contained in the Third
Order on Reconsideration. This NPRM contains proposed information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA). It
will be submitted to the Office of Management and Budget (OMB) for
review under the PRA. OMB, the general public, and other Federal
agencies are invited to comment on the proposed information
collection(s) contained in this proceeding. The full text of this
document is available on the Commission's Web site Electronic Comment
Filing System and for public inspection during regular business hours
in the FCC Reference Center, Room CY-A257, 445 12th Street, SW.,
Washington, DC 20554.
Paperwork Reduction Act: This NPRM contains proposed information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA). It
will be submitted to the Office of Management and Budget (OMB) for
review under the PRA. OMB, the general public, and other Federal
agencies are invited to comment of the proposed information
collection(s) contained in this proceeding. Public and agency comments
are due at the same time as other comments on this NPRM; OMB
notification of action is due 60 days from date of publication of this
NPRM in the Federal Register. 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 collection techniques or other forms of information
technology.
OMB Control 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.
Form Number: N/A.
Type of Review: New collection.
Number of Respondents: 1772.
Estimated Time Per Response: .010 hours.
Frequency of Response: On occasion.
Total Annual Burden: 17.72 hours.
Total Annual Costs: $163.91.
Needs and Uses: Based on the Commission's experience the need for
additional minimum requirements for third party verifications may be
necessary in order to maximize their accuracy and efficiency for
consumers, carriers, and the Commission.
Synopsis of NPRM
1. Background. As noted, in the Third Report and Order, the
Commission declined to mandate specific language to be used in third
party verification calls. However, in order to eliminate uncertainty as
to what constitutes necessary and acceptable practices, the Commission
adopted minimum content requirements for third party verification. The
Commission stated that minimum requirements for such calls would
provide useful guidance to the third party verifiers and carriers
without locking carriers into using a set script. In addition, the
Commission stated that the requirements would also permit more
streamlined enforcement by helping the Commission to determine the
adequacy of steps taken by independent third parties in the
verification process. Accordingly, the Commission concluded that
scripts for third party verifications should elicit, at a minimum, the
identity of the subscriber; confirmation that the person on the call is
authorized to make the carrier change; confirmation that the person on
the call wants to make the change; the names of the carriers affected
by the change; the telephone numbers to be switched; and the types of
service involved (i.e., local, in-state toll, out-of-state toll, or
international service). The Commission noted that these content
requirements do not differ in substance from the rules regarding LOAs.
2. In addition, the Commission found that the third party
verification must be conducted in the same language that was used in
the underlying sales transaction, and that the entire third party
verification transaction must be recorded. The Commission also
reiterated that, consistent with its rules regarding verifications
generally, submitting carriers must maintain and preserve the
recordings for a minimum period of two years after obtaining such
verification. The Commission observed that, if a slamming dispute
arises, a recorded verification will help determine whether the
subscriber was simply seeking information or was in fact agreeing to
change carriers and, if so, which service(s) the subscriber had agreed
to change.
3. Discussion. Based on our experience since the effective date of
the Third Report and Order, we seek comment on the need for additional
minimum requirements for third party verification calls in order to
maximize their accuracy and efficiency for consumers, carriers, and the
Commission. These additional possible requirements address issues we
have seen repeatedly in our enforcement of the slamming liability
rules. First, we seek comment on whether third party verifiers should
state the date during the taped verification process. Through our
slamming enforcement efforts, we have become aware of situations in
which, for example, a carrier may have obtained a valid authorization
for a past carrier change, but the customer has since switched away
from the carrier and now alleges that he or she was switched back to
that carrier without authorization. Without a clearly articulated date
on the verification tapes, the carrier could use the former
verification tape to defend itself against the subsequent unauthorized
change.
4. Next, we seek comment on whether the verifier should explicitly
state that, if the customer has additional questions for the carrier's
sales representative regarding the carrier change after verification
has begun, the verification will be terminated, and further
verification proceedings will not be carried out until after the
customer has finished speaking with the sales representative. We note
that, according to our rules, final verification cannot be obtained
until after the carrier's sales representative has ceased speaking to
the customer. Accordingly, we seek comment as to whether such a
requirement would lessen possible customer confusion in situations in
which a verification is terminated because the customer seeks further
discussions with the carrier's sales agent. We also seek comment on
whether the verifier should convey to the customer that the carrier
change can
[[Page 19178]]
be effectuated without any further contact with the customer once the
verification has been completed in full. We have found that customers
may not realize that a carrier cannot in most cases ``undo'' a PIC
change after it has been submitted, even if the subscriber quickly
requests cancellation of the change order.
5. We seek comment on whether verifiers should be required to make
clear to a customer that he or she is not verifying an intention to
retain existing service, but is in fact asking for a carrier change. We
have observed instances in which, for example, carriers seeking to
obtain customer authorization for a carrier change merely inform
customers that they are consenting to an ``upgrade'' of the customers'
service or to bill consolidation. We also note that it can be difficult
to ascertain whether a subscriber has fully and knowingly provided an
answer to each question posed by a third party verifier if some
questions are presented as a group rather than individually.
Accordingly, commenters should address whether each piece of
information that a third party verifier must gather under our rules
should be the subject of a separate and distinct third party verifier
inquiry and subscriber response. Finally, we seek comment on whether,
when verifying an interLATA service change, the verifier should specify
that interLATA service encompasses both international and state-to-
state calls, and whether a verifier should define the terms ``intraLATA
toll'' and ``interLATA toll'' service. We have observed that carriers
sometimes use differing terms for these services; for example, a
carrier might refer to intraLATA service as ``short haul long distance,
local toll, local long distance, or long distance calls within your
state.'' Accordingly, we have received numerous complaints from
consumers that assert they unknowingly gave up the flat rate for
intraLATA service they paid to their LEC when consenting to a carrier
change for different services.
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act (RFA), as amended,
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 this Third Order on
Reconsideration and Second Further Notice of Proposed Rulemaking
(Second Further NPRM). Written public comments are requested on this
IRFA. Comments must be identified as responses to the Second Further
NPRM. The Commission will send a copy of the Notice, including this
IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration. See 5 U.S.C. 603(a). In addition, the Notice and the
IRFA (or summaries thereof) will be published in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
2. Section 258 prohibits any telecommunications carrier from
submitting or executing an unauthorized change in a subscriber's
selection of a provider of telephone exchange service or telephone toll
service. This practice, known as ``slamming,'' distorts the
telecommunications market by enabling companies that engage in
fraudulent activity to increase their customer and revenue bases at the
expense of consumers and law-abiding companies. In this Order, we
address certain issues raised in petitions for reconsideration of the
Second Report and Order and Further Notice of Proposed Rulemaking, the
First Order on Reconsideration, and the Third Report and Order. This
Order also contains a Second Further Notice of Proposed Rulemaking, in
which we propose several modifications to our carrier change rules.
Specifically, we seek comment on rule modifications with respect to
third party verifications.
B. Legal Basis
3. The Second Further Notice is adopted pursuant to Sections 1,
4(i), 4(j) of the Communications Act of 1934, as amended, 47 U.S.C.151,
154(i), 154(j), and Sec. 1.429 of the Commission's Rules, 47 CFR
1.429.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
4.The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under section 3 of the
Small Business Act. Under the Small business Act, a ``small business
concern'' is one that: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(SBA). A small organization is generally ``any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field.'' Nationwide, as of 1992, there were
approximately 275,801 small organizations.
5. The definition of ``small governmental jurisdiction'' is one
with populations of fewer than 50,000. There are approximately 85,006
governmental entities in the nation. This number includes such entities
as states, counties, cities, utility districts and school districts.
There are no figures available on what portion of this number has
populations of fewer than 50,000. However, this number includes 38,978
counties, cities and towns, and of those, 37,556, or ninety-six
percent, have populations of fewer than 50,000. The Census Bureau
estimates that this ratio is approximately accurate for all government
entities. Thus, of the 85,006 governmental entities, we estimate that
ninety-six percent, or about 81,600, are small entities that may be
affected by our rules.
6. We have included small incumbent LECs in this RFA analysis. As
noted above, a ``small business'' under the RFA is one that, inter
alia, meets the pertinent small business size standard (e.g., a
wireline telecommunications business having 1,500 or fewer employees),
and ``is not dominant in its field of operation.'' The SBA's Office of
Advocacy contends that, for RFA purposes, small incumbent LECs are not
dominant in their field of operation because any such dominance is not
``national'' in scope. We have therefore included small incumbent LECs
in this RFA analysis, although we emphasize that this RFA action has no
effect on the Commission's analyses and determinations in other, non-
RFA contexts.
7. Incumbent Local Exchange Carriers. Neither the Commission nor
the SBA has developed a specific small business size standard for
providers of incumbent local exchange services. The closest applicable
size standard under the SBA rules is for Wired Telecommunications
Carriers. Under that standard, such a business is small if it has 1,500
or fewer employees. According to the FCC's Telephone Trends Report
data, 1,329 incumbent local exchange carriers reported that they were
engaged in the provision of local exchange services. Of these 1,329
carriers, an estimated 1,024 have 1,500 or fewer employees and 305 have
more than 1,500 employees. Consequently, we estimate that the majority
of providers of local exchange service are small entitles that may be
affected by the rules and policies adopted herein.
8. Competitive Local Exchange Carriers. Neither the Commission nor
[[Page 19179]]
the SBA has developed a specific small business size standard for
providers of competitive local exchange services. The closest
applicable size standard under the SBA rules is for Wired
Telecommunications Carriers. Under that standard, such a business is
small if it has 1,500 or fewer employees. According to the FCC's
Telephone Trends Report data, 532 companies reported that they were
engaged in the provision of either competitive access provider services
or competitive local exchange carrier services. Of these 532 companies,
an estimated 411 have 1,500 or fewer employees and 121 have more than
1,500 employees. Consequently, the Commission estimates that the
majority of providers of competitive local exchange service are small
entities that may be affected by the rules.
9. Competitive Access Providers. Neither the Commission nor the SBA
has developed a specific size standard for competitive access providers
(CAPS). The closest applicable standard under the SBA rules is for
Wired Telecommunications Carriers. Under that standard, such a business
is small if it has 1,500 or fewer employees. According to the FCC's
Telephone Trends Report data, 532 CAPs or competitive local exchange
carriers and 55 other local exchange carriers reported that they were
engaged in the provision of either competitive access provider services
or competitive local exchange carrier services. Of these 532
competitive access providers and competitive local exchange carriers,
an estimated 411 have 1,500 or fewer employees and 121 have more than
1,500 employees. Of the 55 other local exchange carriers, an estimated
53 have 1,500 or fewer employees and 2 have more than 1,500 employees.
Consequently, the Commission estimates that the majority of small
entity CAPS and the majority of other local exchange carriers may be
affected by the rules.
10. Local Resellers. The SBA has developed a specific size standard
for small businesses within the category of Telecommunications
Resellers. Under that standard, such a business is small if it has
1,500 or fewer employees. According to the FCC's Telephone Trends
Report data, 134 companies reported that they were engaged in the
provision of local resale services. Of these 134 companies, an
estimated 131 have 1,500 or fewer employees and 3 have more than 1,500
employees. Consequently, the Commission estimates that the majority of
local resellers may be affected by the rules.
11. Toll Resellers. The SBA has developed a specific size standard
for small businesses within the category of Telecommunications
Resellers. Under that SBA definition, such a business is small if it
has 1,500 or fewer employees. According to the FCC's Telephone Trends
Report data, 576 companies reported that they were engaged in the
provision of toll resale services. Of these 576 companies, an estimated
538 have 1,500 or fewer employees and 38 have more than 1,500
employees. Consequently, the Commission estimates that a majority of
toll resellers may be affected by the rules.
12. Interexchange Carriers. Neither the Commission nor the SBA has
developed a specific size standard for small entities specifically
applicable to providers of interexchange services. The closest
applicable size standard under the SBA rules is for Wired
Telecommunications Carriers. Under that standard, such a business is
small if it has 1,500 or fewer employees. According to the FCC's
Telephone Trends Report data, 229 carriers reported that their primary
telecommunications service activity was the provision of interexchange
services. Of these 229 carriers, an estimated 181 have 1,500 or fewer
employees and 48 have more than 1,500 employees. Consequently, we
estimate that a majority of IXCs may be affected by the rules.
13. Operator Service Providers. Neither the Commission nor the SBA
has developed a specific size standard for small entities specifically
applicable to operator service providers. The closest applicable size
standard under the SBA rules is for Wired Telecommunications Carriers.
Under that standard, such a business is small if it has 1,500 or fewer
employees. According to the FCC's Telephone Trends Report data, 22
companies reported that they were engaged in the provision of operator
services. Of these 22 companies, an estimated 20 have 1,500 or fewer
employees and two have more than 1,500 employees. Consequently, the
Commission estimates that a majority of local resellers may be affected
by the rules.
14. Prepaid Calling Card Providers. The SBA has developed a size
standard for small businesses within the category of Telecommunications
Resellers. Under that size standard, such a business is small if it has
1,500 or fewer employees. According to the FCC's Telephone Trends
Report data, 32 companies reported that they were engaged in the
provision of prepaid calling cards. Of these 32 companies, an estimated
31 have 1,500 or fewer employees and one has more than 1,500 employees.
Consequently, the Commission estimates that a majority of prepaid
calling providers may be affected by the rules.
15. Other Toll Carriers. Neither the Commission nor the SBA has
developed a specific size standard for small entities specifically
applicable to ``Other Toll Carriers.'' This category includes toll
carriers that do not fall within the categories of interexchange
carriers, operator service providers, prepaid calling card providers,
satellite service carriers, or toll resellers. The closest applicable
size standard under the SBA rules is for Wired Telecommunications
Carriers. Under that standard, such a business is small if it has 1,500
or fewer employees. According to the FCC's Telephone Trends Report
data, 42 carriers reported that they were engaged in the provision of
``Other Toll Services.'' Of these 42 carriers, an estimated 37 have
1,500 or fewer employees and five have more than 1,500 employees.
Consequently, the Commission estimates that a majority of ``Other Toll
Carriers'' may be affected by the rules.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
16. As noted, we have sought comment on the need for additional
minimum requirements for third party verification calls in order to
maximize their accuracy and efficiency for consumers, carriers, and the
Commission. These additional possible requirements address issues we
have seen repeatedly in our enforcement of the slamming liability
rules. We do not believe that adoption of any or all of the proposals
would create the need for any additional professional skills beyond
those already employed to comply with the current third party
verification rules.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
17. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
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18. Third Party Verification. The Commission is considering
additional requirements which would address issues we have seen in the
enforcement of our slamming rules, and we therefore seek comment on the
need for additional minimum requirements for third party verification
calls and of the impact of any additional requirements on small
entities. We especially seek information addressing the possible
financial impact on smaller carriers.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
19. None.
List of Subjects in 47 CFR Part 64
Telephone.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 03-9119 Filed 4-17-03; 8:45 am]
BILLING CODE 6712-01-P