[Federal Register: October 15, 2004 (Volume 69, Number 199)]
[Proposed Rules]
[Page 61184-61193]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15oc04-14]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CC Docket No. 98-170; CG Docket No; 04-244; FCC 04-162]
Policies and Rules Governing Interstate Pay-Per-Call and Other
Information Services Pursuant to the Telecommunications Act of 1996;
Truth-in-Billing and Billing Format
AGENCY: Federal Communications Commission.
ACTION: Proposed rules.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission seeks comment on how best to
protect consumers and foster legitimate businesses that offer audiotext
information services, including those that use 900 numbers and toll-
free numbers.
DATES: Comments are due on or before November 15, 2004 and reply
comments are due on or before November 29, 2004. Written comments on
the Paperwork Reduction Act (PRA) proposed information collection
requirements must be submitted by the public, Office of Management and
Budget (OMB), and other interested parties on or before December 14,
2004.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554. In addition to filing comments with the
Secretary, a copy of any comments on the Paperwork Reduction Act (PRA)
information collection requirements contained herein should be
submitted to Judith B. Herman, Federal Communications Commission, Room
1-C804, 445 12th Street, SW., Washington, DC 20554, or via the Internet
to Judith-B.Herman@fcc.gov, and to Kristy L. LaLonde, OMB Desk Officer,
Room 10234 NEOB, 725 17th Street, NW., Washington, DC 20503, via the
Internet to Kristy--L. LaLonde@omb.eop.gov, or via fax at 202-395-5167.
FOR FURTHER INFORMATION CONTACT: Ruth Yodaiken, of the Consumer &
Government Affairs Bureau at (202) 418-2512 (voice), or e-mail
ruth.yodaiken@fcc.gov. For additional information concerning the PRA
information collection requirements contained in this document, contact
Judith B. Herman at (202) 418-0214, or via the Internet at
Judith-B.Herman@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), adopted July 1, 2004, and released July
16, 2004. This Notice of Proposed Rulemaking (NPRM), Policies and Rules
Governing Interstate Pay-Per-Call and Other Information Services, and
Toll-free Number Usage; Truth-in-Billing and Billing Format, CC Docket
No. 98-170, CG Docket No. 04-244; FCC 04-162, contains proposed
information collection requirements. It will be submitted to the Office
of Management and Budget (OMB) for review under the Paperwork Reduction
Act (PRA). OMB, the general public, and other federal agencies are
invited to comment on the proposed information collection(s) contained
in these proceedings. On July 16, 2004, the Commission also released a
Memorandum Opinion and Order (MO&O), Policies and Rules Governing
Interstate Pay-Per-Call and Other Information Services Pursuant to the
Telecommunications Act of 1996; Policies and Rules Implementing the
Telephone Disclosure and Dispute Resolution Act, Florida Public Service
Commission Petition to Initiate Rulemaking to Adopt Additional
Safeguards; Application for Review of Advisory Ruling Regarding
Directly Dialed Calls to International Information Services, CC Docket
Nos. 96-146 and 98-170, RM-8783, ENF-95-20; FCC 04-162. 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. To request materials in accessible formats for
people with disabilities (Braille, large print, electronic files, audio
format), send an e-mail to fcc504@fcc.gov, or call the Consumer &
Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432
(TTY). This NPRM can also be downloaded in Word and Portable Document
Format (PDF) at http://www.fcc.gov/cgb/policy/paypercall.html.
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.
[[Page 61185]]
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 .'' A sample form and directions will be sent
in reply. Parties who choose to file by paper must file an original and
four copies of each filing. If more than one docket or rulemaking
number appears in the caption of this proceeding, commenters must
submit two additional copies for each additional docket or rulemaking
number. Parties who choose to file comments on billing issues, please
reference both CG Docket No. 04-244 and CC Docket No. 98-170. Parties
who choose to file comments on any other aspect of Policies and Rules
Governing Interstate Pay-Per-Call and Other Information Services, and
Toll-free Number Usage, should reference only CG Docket No. 04-244.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Services
mail (although we continue to experience delays in receiving U.S.
Postal Service mail). The Commission's contractor, Natek, Inc., will
receive hand-delivered or messenger-delivered paper filings for the
Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110,
Washington, DC 20002. The filing hours at this location are 8 a.m. to 7
p.m. All hand deliveries must be held together with rubber bands or
fasteners. Any envelopes must be disposed of before entering the
building. Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail,
Express Mail, and Priority Mail should be addressed to 445 12th Street,
SW., Washington, DC 20554. All filings must be addressed to the
Commission's Secretary, Marlene H. Dortch, Office of the Secretary,
Federal Communications Commission, 445 12th Street, SW., Room TW-B204,
Washington, DC 20554. Parties who choose to file paper comments also
should send four paper copies of their filings to Kelli Farmer, Federal
Communications Commission, Room 4-C734, 445 12th Street, SW.,
Washington, DC 20554.
One copy of each filing must be sent to the Commission's copy
contractor, Best Copy and Printing, Inc. (BCPI), by mail at Portals II,
445 12th Street, SW., Room CY-B402, Washington, DC 20554; by e-mail at
FCC@bcpiweb.com; by facsimile at (202) 488-5563; or by telephone at
(202) 488-5300.
Initial Paperwork Reduction Act of 1995 Analysis
This document contains proposed information collection
requirements. 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
requirements contained in this document, as required by the Paperwork
Reduction Act (PRA) of 1995, Public Law 104-13. Public and agency
comments are due December 14, 2004. 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. In addition, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4), we seek specific comment on how we might further
reduce the information collection burden for small business concerns
with fewer than 25 employees.
OMB Control Number: 3060-0748.
Title: Section 64.1504, Disclosure Requirements For Information
Services Provided Through Toll-Free Numbers.
Form Number: N/A.
Type of Review: Revision of currently approved collection.
Respondents: Business or other for-profit entities.
Number of Respondents: 6,500.
Estimated Time per Response: 2-5 hours.
Frequency of Responses: Occasionally; third party disclosure.
Total Annual Burden: 13,000-32,500 hours approximately.
Total Annual Cost: None.
Privacy Act Impact Assessement: No impact(s).
Needs and Uses: The item proposes to reexamine FCC rules in this
area to ensure that consumer protections are adequate and are not being
circumvented. The item seeks comment on a number of issues relating
consumer protections and the state of the existing 900-number regime,
toll-free numbers, and audiotext information services accessed through
dialing methods other than 900 numbers. The Commission seeks comment on
whether to revise certain recordkeeping requirements to allow
recordings of customer's oral verification as evidence that charges
should not be forgiven. We ask if we need to modify our existing rules
to comport with the E-Sign Act which should ease any existing burdens.
The item proposes to clarify that all audiotext information services,
must either have presubscription agreements or use charge cards for
billing. We note that parties are already required to garner
authorization for such calls. These measures are aimed at preventing
circumvention of our rules. We believe that any additional
recordkeeping burden as a result of these rules would be minimal for
most businesses. We estimate that this requirement will account for an
additional 7 hours of recordkeeping burden per company, or an
additional 10,500 hours.
OMB Control Number: 3060-0752
Title: Section 64.1510, Billing Disclosure Requirements for Pay-
Per-Call and Other Information Services.
Form No.: N/A
Type of Review: Revision of currently approved collection.
Respondents: Business or other for-profit entities.
Number of Respondents: 1,946.
Estimated Time per Response: 10 hours.
Frequency of Response: Annual reporting requirement; Third party
disclosure.
Total Annual Burden: 19,460 hours.
Total Annual Costs: None.
Privacy Act Impact Assessments: No impact(s).
Needs and Uses: The item proposes to reexamine FCC rules in this
area to ensure that consumer disclosures are adequate. The item also
seeks comment on a proposal to change the display of toll-free numbers
on telephone bills to clearly indicate the parties charging for
information services obtained through toll-free numbers.
Synopsis
1. Toll-free Numbers
The Commission's rules, which implement the statute virtually
verbatim, have detailed criteria that must be met in the limited
circumstances under which calls
[[Page 61186]]
involving toll-free numbers can be used for purchases of goods and
services, including audiotext information services. Our rules and the
statute already require common carriers, including small carriers, to
use contracts or tariffs to prohibit their customers from using 800
numbers in ways that are thought to leave consumers without the benefit
of protections against fraud. For example, carriers must prohibit the
use of 800 numbers, or any other numbers advertised or widely
understood to be toll-free, in a way that the calling party is charged
for information, with limited exception. There are exceptions for
charges where there are presubscription agreements or use of certain
credit and charge cards. The only way to have information charges that
appear on a consumer's phone bill is through a presubscription
agreement which in most cases must be in writing, include specific
disclosures, and use personal identification numbers for access to the
service. However, despite these protections, the Commission continues
to receive complaints in this area. In the first six months of 2004,
the Commission received close to 5,000 complaints that referenced toll-
free numbers. We are interested in finding out why, with these
protections, there are still complaints in this area. For example, are
there many problems for consumers when charge cards are used for
payment? (See 47 U.S.C. 228(c)(9); 47 CFR 64.1504(c)(2).) Do more
problems occur, for example, when the written agreement does not
require the use of a personal identification number? See 47 U.S.C.
228(c)(8)(C) and (D); 47 CFR 64.1504(f)(1) We seek comment on possible
solutions.
a. Protection for Line Subscribers as Well as Callers
Section 228 and our rules governing toll-free calls explicitly
protect ``the calling party'' from being charged for information
conveyed during the call unless meeting the criteria discussed above.
(See 47 U.S.C. 228(c)(7)(C) and (c)(8)-(9); See also 47 CFR 64.1504.)
In the 1996 Order & NPRM, the Commission discussed the possibility of
extending the toll-free number protections that apply to the ``calling
party,'' so that they also apply to the ``subscriber to the originating
line.'' (1996 Order & NPRM, 11 FCC Rcd at 14753, para. 44. The calling
party could be someone other than the subscriber, for example, a
visitor to the subscriber's home.) We believe this proposal is still
valid today. For directly-dialed toll calls placed without a calling
card, it is the subscriber--not necessarily the calling party--who is
assessed charges for calls placed over that line. It would not seem
appropriate for an individual calling a toll-free number to be
protected from incurring charges without extending the same protection
to the individual or entity billed for the calls. We seek comment on
whether we should amend Sec. 64.1504 of our rules explicitly to
protect the subscriber as well from the practices that Congress has
chosen to prohibit. Would such an amendment help to protect small
businesses from calls made by employees?
b. Use of Number Identification for Billing Through Toll-Free Numbers
Section 228(c)(7)(A) of the 1996 Act prohibits ``the calling party
being assessed, by virtue of completing the call [to a toll-free
number], a charge for the call.'' (47 U.S.C. 228(c)(7).) In the 1996
Order & NPRM, the Commission adopted a rule that mirrors that portion
of the Sec. 228 and also prohibits such conduct. (47 CFR 64.1504(c).)
In order to assess charges for directly dialed toll calls, common
carriers identify the telephone line used to originate a toll call and
assess charges to the subscriber to that line. The Commission generally
has held telephone subscribers responsible for toll charges resulting
from unauthorized use of their telephone lines. However, in the past,
the Commission has received complaints that parties were using such
information to bill callers for services from calls made to toll-free
numbers. In the 1996 Order & NPRM, the Commission also tentatively
concluded that a carrier's billing of calls dialed to 800 or other
toll-free numbers on the basis of one such technology, Automatic Number
Identification (ANI), amounted to assessing charges on the basis of
completion of the call, and therefore violated section 228(c)(7)(A) of
the Act, unless the call involved use of telecommunications devices for
the deaf. (The term ``ANI'' refers to the delivery of the calling
party's billing number by a local exchange carrier to any
interconnecting carrier for billing or routing purposes, and to the
subsequent delivery to end users. See 47 CFR 64.1600(b). See also 1996
Order & NPRM, 11 FCC Rcd at 14754, para. 45. Telecommunications devices
for the deaf utilize ANI to identify the telephone subscriber to be
billed. The Commission also made a tentative conclusion that ANI-based
billing also violates 201(b) in the 1996 Order & NPRM. See 1996 Order &
NPRM, 11 FCC Rcd at 14754, para. 45; See also 47 U.S.C. 228(c)(7), 47
CFR 64.1504(c), and 47 U.S.C. 201(b). Section 201(b) requires that all
charges and practices for and in connection with any common carrier
communications services be just and reasonable) At that time,
commenters generally agreed that a carrier's billing of toll-free calls
on the basis of ANI violated the statute. In the interests of
collecting a more complete record to include newer technology, we now
seek comment on whether we should specifically prohibit billing calls
dialed to 800 or other toll-free numbers on the basis of not just ANI,
but equivalent information, automatically provided calling number
identification. (See, e.g., 47 CFR 64.1600(d) (charge number--conveying
similar information in a System 7 environment).)
2. Audiotext Information Services, Including Pay-Per-Call Services
a. Consumer Protection in General
The Commission's rules governing pay-per-call services are meant to
be a framework of consumer protections for these audiotext information
services. The rules require, first, that consumers are given
appropriate information, such as pricing, so they can make informed
decisions about services. (The Commission rules require carriers
themselves to disclose information, and/or to require disclosure
through contract or tariff. See 47 CFR 64.1502, 1504, and 1509. The
rules require compliance with Titles II and III of TDDRA, and the FTC's
implementing rules. See 16 CFR 308.5 (FTC's rules relating to pay-per-
call).) Second, consumers are meant to be able to choose to block
unwanted access to the pay-per-call services, for free or at a
reasonable cost. (47 U.S.C. 228(c)(5). See also 47 CFR 64.1508.) And
third, consumers are supposed to be protected from losing local or
long-distance services for nonpayment of charges for pay-per-call
services. (47 U.S.C. 228(c)(4). See also 47 CFR 64.1507.) However, we
are concerned that as audiotext information services have migrated
increasingly outside the pay-per-call setting, consumers, including
small business consumers, have lost some of these basic protections.
Consumer disclosure requirements for audiotext information services
only apply to services over 900 numbers, and, as above, some calls over
toll-free numbers. Similarly, alternative dialing routes circumvent
subscriber blocking, allowing even children to obtain access to
audiotext information services. Additionally, consumers' calls are
sometimes rerouted without their authorization through specialized
long-distance carriers designed to accumulate high rates for what are
advertised as free information services. Under those conditions,
consumers can end up being
[[Page 61187]]
disconnected for what are essentially services that arguably should be
covered by pay-per-call protections. In this rulemaking we explore
several of these areas, and seek comment on the best way to address
concerns of consumers, without hindering legitimate businesses,
including small and new businesses. One such example of an item outside
the standard pay-per-call application is a phenomena known informally
as ``modem hijacking.'' The Commission has received complaints about
local calls which are redirected without the caller's authorization
through software programs, which disconnects Internet users' calls and
dial international numbers often through carriers other than those
chosen by subscribers for their long-distance calls. Sometimes there is
no way to disconnect the call other than to unplug the telephone line.
Furthermore, the placement of a call to an international telephone
number in situations like this does not necessarily mean it connects
through the country to which it is assigned.
Although the FTC has addressed some cases in this area, we seek
comment on whether additional actions are needed from the FCC. (See,
e.g., FTC v. BTV Industries, Rik Covell, Adam Lewis, National
Communications Team, Inc., LO/AD Communications Corp., and Nicholas
Loader, CV-S-02-0437-LHR-PAL, Complaint, and Temporary Restraining
Order (D Nev. 2002) (alleging defendant sent e-mail messages claiming
that consumers had won a prize, and when consumers responded, routing
the calls to an adult Internet site via a 900-number modem connection
generating high per-minute rates). In that case, the FTC alleged that
the defendant's practices were deceptive and misleading by, among other
things, leading consumers to believe that the connection to the web
site was toll-free. See, also, FTC v. Verity Int'l, Ltd., 194 F.Supp.2d
270, 276 (S.D.N.Y. 2002) (FCC supported the FTC action in a friend of
the court brief).) We invite commenters to offer specific proposals
consistent with our section 228 authority. We have on a case-by-case
basis looked at some parameters of using 201(b) to review certain
relationships between carriers and information providers in chat-line
cases. (See, e.g., Beehive v. AT&T, 17 FCC Rcd 11641 (2002); AT&T Corp.
v. Jefferson Telephone Co., Memorandum Opinion and Order, 16 FCC Rcd
16130 (2001) (Jefferson).) We seek comment on the broader policy of
what factors and concerns we should take into account in making
decisions regarding the broad practices and conduct in this general
area, including whether we should consider revoking carriers' section
214 certification for such conduct. (See 47 U.S.C. 214.) We seek
comment on whether consumers should be given protections to allow call
disconnection.
b. The 900 Number Regime
Section 228 also requires the Commission to identify procedures
that common carriers and pay-per-call providers, including small
carriers and providers, can use to protect against nonpayment of
legitimate charges. (47 U.S.C. 228(b)(4).) Pay-per-call providers have
recently commented that audiotext information service providers have
moved outside the 900 number regime because it has become a difficult
environment in which to operate. In addition, AT&T Corp. noted that
pay-per-call providers may avoid federal regulation by using revenue
sharing agreements and instant credit to mask services that otherwise
would be regulated as pay-per-call.
The use of 900 numbers has dropped dramatically in the past five
years. For example, the number of assigned 900 numbers, which peaked in
1999 with 447 distinct 900 NXX codes, had dropped to 206 by the end of
2002. Many of those numbers are not actually used by end users. Many
carriers decline to provide transport or bill for 900 numbers. Further,
some pay-per-call providers claimed that carriers forgive disputed pay-
per-call charges repeatedly for the same subscribers without
instituting 900 number blocking in those cases. One participant
expressed concern that the health of the 900 number rules, if
applicable, is crucial to market and consumer confidence. Clearly the
Commission does not want to direct pay-per-call providers to a system
that does not function. We seek comment on what steps can be taken to
ensure the 900 number regime functions properly.
One commenter noted that a practice used in the United Kingdom
requiring pay-per-call providers to record the customer's voice greatly
reduced disputes over charges. We seek comment on whether it would be
appropriate to allow carriers to accept recordings of customer's oral
verification that they understand and agree to the charges as evidence
that charges should not be forgiven. We seek comment from pay-per-call
providers on whether such items would be necessary.
c. Presubscription or Comparable Arrangement
As noted previously, the Commission requires services meeting the
pay-per-call definition to be accessed only through 900 numbers, and
the only ways that audiotext information services fall outside the pay-
per-call definition, and therefore the requirement that they be offered
only over 900 numbers, are (1) by being directory services as described
in the statute, or (2) to have charges assessed only after there is a
``presubscription or comparable agreement.'' (47 U.S.C. 228(i) and
(b)(5).) In the 1996 Order & NPRM, the Commission sought comment on
refining the definition of presubscription and comparable agreement so
that it is clear what criteria must be met for all audiotext
information services other than directory services to be offered over
numbers outside of the 900 prefixes, including those services using
toll-free numbers. Rather than having the Commission designate all
prefixes as pay-per-call prefixes to ensure protection for consumers,
the Commission proposed to make clear that to operate outside of 900
numbers, all audiotext information services (other than directory
services) must either have presubscription agreements executed in
writing or, alternatively, require that payments be made through direct
remittance, prepaid account, or debit, credit, charge or calling card.
For example, this proposal would apply such protections to 500 numbers,
700 numbers, plain old telephone service and international numbers when
used to provide audiotext information services.
We again seek comment on the usefulness and practicality of such a
proposal. In particular, we ask whether this proposal would be adequate
to balance the need to protect consumers, but allow businesses to
develop. In particular, how would this proposal effect small
businesses? Are small businesses already keeping such records? In
addition, we seek comment on whether there is still a need for such
changes in this area given developments in electronic commerce and
related laws, and the now-common use of third-party verifications in
telephone transactions.
We also seek comment on whether we need to modify our existing and
proposed rules given our obligations under the Electronic Signatures in
Global and National Commerce Act (E-Sign Act). (Electronic Signatures
in Global and National Commerce Act, S. 761, 106th Cong., 2d Sess.
(signed into law June 30, 2000).) Under the E-Sign Act, a contract or
business transaction cannot be denied validity or enforceability solely
because the contract or transaction is not in writing, so long as the
contract or transaction is a properly authenticated electronic
[[Page 61188]]
record or has been affirmed by an electronic signature. The E-Sign Act
provides a specific framework for the use of electronic records and
signatures and places limits on the interpretation authority of federal
and state regulatory agencies with regard to this framework. We seek
comment on how we might best adjust our current and proposed
requirements for presubscription or comparable agreements to best
comply with the E-Sign Act.
3. Billing
Section 228 and our rules already mandate certain billing practices
for pay-per-call services and 800 numbers billed via the telephone
bill. (See 47 U.S.C. 228(c)(8)(B) and (d)(4); See also 47 CFR 64.1504,
1509 and 1510.) Telephone billing of subscribers for any pay-per-call
services must already display any such charges ``in a part of the
subscriber's bill that is identified as not being related to local and
long distance telephone charges,'' and, at a minimum, describe the type
of service, the amount of the charge, and the date, time, and duration
of the call. There must also be a clearly-identified toll-free number
established for customers to call with any questions. 47 U.S.C.
228(d)(4); See also 47 CFR 64.1509(b) and 47 CFR 64.1510(2). For toll-
free numbers used to bill items on a telephone bill, the number called
must be listed clearly with a disclaimer in prominent type that neither
local nor long distance service could be disconnected for ``failure to
pay disputed charges for information services.'' In addition, the
Commission has developed rules and guidelines in the Truth-in-Billing
proceeding to ensure that all telephone billing is readily discernable
to consumers. (See 47 CFR 64.2400-2401; see also Truth-in-Billing and
Billing Format, CC Docket No. 98-170, First Report and Order and
Further Notice of Proposed Rule Making, 14 FCC Rcd 7492 (1999) (Truth-
in-Billing Order)). In general, charges must be accompanied by ``a
brief, clear, non-misleading, plain language description of the service
or services rendered'' that allows consumers to ``accurately assess
that the services for which they are billed correspond to those that
they requested and received,'' and that the costs ``conform to their
understanding of the prices charged.'' (47 CFR 64.2401(b). See also
Truth-in-Billing Order.) The Truth-in-Billing Order requires that
telephone bills highlight changes in or additions of new providers, but
non-recurring pay-per-call services are specifically exempt from that
requirement. (Truth-in-Billing and Billing Format, Order on
Reconsideration, 15 FCC Rcd 6023, at 6025, para. 5 (2000) (Truth-in-
Billing Reconsideration.))
We seek comment on whether our existing rules governing billing
specifically for pay-per-call services and those for charges billed
through toll-free numbers, in combination with our Truth-in-Billing
rules and guidelines, are sufficient to address any current billing
concerns. (We note that the Commission's billing rules specifically do
not preempt states from adopting or enforcing their own consistent
rules. 47 CFR 64.2400(b). For example, Florida has adopted a rule
specifically aimed at pay-per-call problems. See Policies and Rules
Implementing the Telephone Disclosure and Dispute Resolution Act,
Florida Public Service Commission Notice of Withdrawal of Petition to
Initiate Rulemaking, filed January 26, 2004.) We seek comment
specifically on whether we should adopt a rule stating that charges for
presubscribed audiotext information services accessed through toll-free
numbers must be displayed separately from local and long-distance
telephone service. How would such a rule affect small carriers?
4. Revenue-Sharing Arrangements
The definition of pay-per-call services found in Sec. 228 rests on
the requirement that such calls are only those calls to audiotext
information services for which the caller pays a per-call or per-time-
interval charge greater than or in addition to the ``charge for
transmission of the call.'' Some businesses have used revenue-sharing
arrangements to offer for-profit audiotext information services without
pay-per-call regulation. The classic scenario is when an audiotext
information service provider does not charge callers for the service
outright, but instead receives a commission from a common carrier for
the telephone traffic, which might be charged at a high rate.
In the 1996 Order & NPRM, the Commission sought to address these
types of evasions of consumer protections. The Commission tentatively
concluded that certain revenue-sharing arrangements were in reality
charging for more than just transmission of the call, even if the
caller was not billed separately for the audiotext information service.
(1996 Order & NPRM at 14756 para. 48. The Commission based its
tentative conclusion on its authority under Sec. 154(i), and addressed
circumvention of section 228 through the language related to the cost
of transmission.) Specifically, the Commission tentatively concluded
that any form of remuneration between a carrier and audiotext
information services provider constituted per se evidence that the
charge levied actually exceeds the charge for the transmission.
Accordingly, under this tentative conclusion, interstate services
provided through such an arrangement would fit within the pay-per-call
definition and, thus, be required to be offered exclusively through 900
numbers. The 1996 Order & NPRM also notes a staff letter which
discussed several hypothetical scenarios in which revenue-sharing
arrangements were used essentially to mask audiotext information
services from pay-per-call regulation. In the Marlowe Letter, the
staff's opinion was that such scenarios would violate both sectiion 228
and section 201(b). (Letter from John Muleta, Chief of the Common
Carrier Enforcement Bureau at that time, to Ronald Marlowe, 10 FCC Rcd
10945, DA 95-1905 (September 1, 1995) (Marlowe Letter). See 47 U.S.C.
201(b). Section 201(b) requires all charges and practices for and in
connection with any common carrier communications services be just and
reasonable.)
In 2001, the Commission determined that the existence of a revenue-
sharing arrangement between a common carrier and a chat-line service
alone did not demonstrate that a carrier's conduct was unjust and
unreasonable under section 201(b). (Jefferson., 16 FCC Rcd at 16136,
para. 13. (2001) (overruling Marlowe to the extent that it was not
consistent with the conclusions in the Order). See also Beehive;
Jefferson; AT&T Corp. v. Frontier Communications of Mt. Pulaski, Inc.,
17 FCC Rcd 4041 (2002) (follows Jefferson), AT&T v. Atlas Telephone Co.
and Total Telecommunications Services, Inc., 16 FCC Rcd 5726 (2001),
aff'd in part and remanded sub nom, AT&T Corp. v. F.C.C., 317 F.3d 227
(DC Cir. 2003); dismissed, Atlas Telephone Co. v. AT&T Corp., File No.
E-97-03, Order, 18 FCC Rcd 11533.) Although the Commission noted in
Jefferson that it was not addressing the application of section 228 to
such a situation, the decision calls into question our basis for our
prior tentative conclusion in the 1996 Order & NPRM. (Jefferson, 16 FCC
Rcd at 16133 n.18.) Thus, we no longer reach that tentative conclusion
here. Instead, we invite commenters, including small carriers and small
audiotext information service providers, to address the issue of
revenue-sharing arrangements in light of the Jefferson decision.
Parties should discuss whether it is possible or appropriate to find
that any revenue-sharing arrangements do not comply with section 228
even if such arrangements would not violate 201(b).
[[Page 61189]]
5. New and Evolving Services
a. Definition of Exempted Directory Services
Section 228 exempts ``directory services'' from the definition of
pay-per-call. In the TDDRA R&O implementing section 228, commenters
asked the Commission to interpret the definition of ``directory
services'' to include only ``basic'' directory services. The Commission
noted that a common carrier also operating as a provider of audiotext
information services ``cannot shield its information services from pay-
per-call regulation by offering them through a directory services
number.'' In 2003, some commenters stated that ambiguities in this area
persist. They asked that the Commission ``clarify'' that enhanced
directory services were exempt from pay-per-call.
Examples of such services mentioned in the comments to CC Docket
No. 96-146 include such things as a service that allows subscribers to
access directory listings by category, and then obtain additional
information about the listing, upload personal contacts into a private
database, and use a live operator to access their own personal data.
Another service allows wireless subscribers to store personal address
books on a network server and have voice-activated access to data with
news, receive wake-up calls and get travel information ``at no
additional charge.'' Another proposed service would add more content
such as information about the weather, and have partnerships with
businesses to allow for such connections as transferring customers to
places for ticket purchases.
In other proceedings, the Commission has already been presented
with questions about the offering of directory services that are more
than ``traditional'' operator provision of local telephone numbering.
In the N11 numbering proceeding, some commenters had argued that Local
Exchange Carrier (LEC) use of the 411 number should be restricted to
the provision of ``traditional'' directory services, meaning operator
provision of local telephone numbers. (The Use of N11 Code and Other
Abbreviated Dialing Arrangements, CC Docket No. 92-105, First Report
and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 5572,
5600, para. 48 (N11 First Report and Order).) The Commission declined
to do so at that time, and instead concluded that a LEC could offer
enhanced services using a 411 code, or any other N11 code, only if that
LEC offered access to the code on a reasonable, nondiscriminatory basis
to competing enhanced services providers. In January 2002, the
Commission released a Notice of Proposed Rulemaking in a related
proceeding specifically asking whether allowing enhanced directory
assistance to be available through presubscribed 411 would be
consistent with Commission rules regarding pay-per-call and related
services. (Provision of Directory Listing Information Under the
Communications Act of 1934, as Amended, CC Docket No. 99-273; The Use
of N11 Codes and Other Abbreviated Dialing Arrangements, CC Docket No.
92-105; Administration of the North American Numbering Plan, CC Docket
No. 92-237, Notice of Proposed Rulemaking, 17 FCC Rcd 1164, 1183, para.
37 (FCC 01-384) (N11 NPRM).) We seek comment on the narrow question of
how to further define ``directory services'' that are specifically
exempt from the consumer protections of pay-per-call, regardless of
whether any presubscription or comparable agreement exists.
b. Data Services
At least two commenters in 2003, claimed that data services are
exempt from regulation under section 228 and another has suggested that
uncertainty in this area might fluster development of nascent
industries. However, section 228 has several provisions that allude to
data services being pay-per-call services. First, section 228(f)(3)
required the Commission to review the ``extension of regulation under
[section 228] with respect to persons that provide, for a per-call
charge, data services that are not pay-per-call services.'' In the
First TDDRA Order, the Commission noted that the statutory definition
of pay-per-call includes ``data information services,'' but it did not
find a need to warrant extension of regulation of section 228 outside
pay-per-call data services. In addition, section 228(c)(8) provides an
exception to the criteria for written agreements for ``any purchase of
goods or of services that are not information services.'' We seek
comment on whether further clarification is needed on this topic of
what data services fit within the pay-per-call definition. We seek
specific comments on items that might be of significant concern for
consumers and for developing businesses, including small businesses.
Initial Regulatory Flexibility Analysis (IRFA)
Initial Regulatory Flexibility Analysis (IRFA), as required by the
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission
has prepared this present Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant economic impact on a substantial
number of small entities by the policies and rules proposed in this
Notice of Proposed Rulemaking and Memorandum Opinion and Order (NPRM).
(See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by
the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), Public Law Number. 104-121, Title II, 110 Statute 857
(1996).) Written public comments are requested on this IRFA. Comments
must be identified as responses to the IRFA and must be filed by the
deadline for comments on the NPRM provided above in the Comment Filing
Procedures section paragraph 45. The Commission will send a copy of the
NPRM, including this IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration (SBA). In addition, the NPRM and IRFA (or
summaries thereof) will be published in the Federal Register.
Need for, and Objectives of, the Proposed Rules
The Commission has rules to afford consumers protection from
deceptive practices associated with the provision of audiotext
information services, and the use of toll-free numbers. In 1996, the
Commission issued a Notice of Proposed Rulemaking (NPRM) proposing
rules which were intended to address potential circumvention of the
regulations. Later, in March of 2003, the Commission issued a Public
Notice seeking to refresh the record in the proceeding. In this NPRM,
the Commission initiates a new proceeding to review the effectiveness
of our rules governing pay-per-call services, related audiotext
information services, and toll-free numbers. The Commission seeks
comment on the state of the 900-number regime regulating pay-per-call
services, the effectiveness of consumer protections relating to toll-
free numbers, and to those audiotext information services accessed
through dialing methods other than 900 numbers. We are interested in
learning the extent to which consumer protections have been
circumvented, and what steps we might take to protect consumers,
including small business consumers, from such practices. In addition,
we seek comment on changes in technology that warrant re-examination
and clarification of these rules.
Legal Basis
The legal basis for any action that may be taken pursuant to this
NPRM is contained in sections 1-4, 201(b), 228, and 303(r) of the
Communications Act
[[Page 61190]]
of 1934, as amended, 47 U.S.C. 151-154, 201(b), 228, and 303(r).
Description and Estimate of the Number of Small Entities To Which the
Proposed Rules Will Apply
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 and policies, 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 the
Small Business Act. A ``small business concern'' is one which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
SBA.
Small entities potentially affected by the policies and rules
proposed herein include organizations, governmental jurisdictions,
providers of audiotext information services, and providers of
telecommunications and other services, including both wired and
wireless services, such as operator service providers, prepaid calling
card providers, and other toll carriers.
Small Businesses. Nationwide, there are approximately 22.4 million
small businesses, according to SBA data.
Small Organizations. A small organization is generally ``any not-
for-profit enterprise which is independently owned and operated and is
not dominant in its field.'' Nationwide, there are approximately 1.6
million small organizations. Small Governmental Jurisdictions. The term
``small governmental jurisdiction'' is defined as ``governments of
cities, counties, towns, townships, villages, school districts, or
special districts, with a population of less than fifty thousand.'' As
of 1997, there were approximately 87,453 government jurisdictions in
the United States. This number includes 39,044 county governments,
municipalities, and townships, of which 37,546 have populations of
fewer than 50,000 and 1,498 have populations of 50,000 or more. Thus,
we estimate the number of small governmental jurisdictions overall to
be up to 85,955.
Providers of audiotext information services. While the Commission's
rules directly apply to common carriers that transmit and bill
subscribers for information services, other companies actually
providing the information services might be indirectly affected. For
example, audiotext information service providers that have used toll-
free numbers to provide information services will be affected by the
proposed limitations involving the use of toll-free numbers and
mandatory written presubscription. These companies may experience an
adverse economic impact in that they will have to change the manner in
which they provide services to secure billing.
The Commission has only limited unverifiable information to predict
either the total number of audiotext information service providers, or
the percentage of providers that qualify as small entities. Audiotext
Information Service providers are not subject to federal licensing or
reporting requirements. In 1996, staff had been able to obtain from
industry sources only an informal estimate that the total number of
these entities operating, which at that time was noted as probably
somewhere between 10,000 and 20,000 total operating entities. Although
the Commission asked for comment as to the number of small businesses
that would have been affected by regulations proposed in this area in
1996, the Commission received no data in comments. Even assuming that
this rough estimate is correct, we cannot, with certainty identify what
portion of such providers might be providing services in a manner that
would subject them to the proposed regulations governing toll-free
numbers and presubscription agreements, or predict what portion of all
such providers are small businesses. We invite parties commenting on
this IRFA to provide information as to the number of small businesses
that would be affected by our proposed regulations and to identify
alternatives that would reduce the burden on these entities while still
ensuring that consumers are protected adequately.
All Other Information Services. ``This industry comprises
establishments primarily engaged in providing other information
services (except new syndicates and libraries and archives).'' We note
that, in our Notice, we have described activities such as email, online
gaming, web browsing, video conferencing, instant messaging, and other,
similar Internet Protocol-enabled services. The SBA has developed a
small business size standard for this category; that size standard is
$6 million or less in average annual receipts. According to United
States Bureau of the Census (the Census Bureau) data for 1997, there
were 195 firms in this category that operated for the entire year. Of
these, 172 had annual receipts of under $5 million, and an additional
nine firms had receipts of between $5 million and $9,999,999.
Consequently, we estimate that the majority of these firms are small
entities that may be affected by our action.
Providers of Telecommunications and Other Services. We have
included small incumbent local exchange carriers (LECs) in this present
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 telephone communications 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 Commission analyses and determinations
in other, non-RFA contexts.
Total Number of Telephone Companies Affected. The Census Bureau
reports that, at the end of 1997, there were 6,239 firms engaged in
providing telephone services, as defined therein. This number contains
a variety of different categories of carriers, including local exchange
carriers, interexchange carriers, competitive access providers, mobile
service carriers, operator service providers, pay telephone operators,
personal communications service (PCS) providers, covered small mobile
radio (SMR) providers, and resellers. It seems certain that some of
those 6,239 telephone service firms may not qualify as small entities
because they are not ``independently owned and operated.'' For example,
a PCS provider that is affiliated with an interexchange carrier having
more than 1,500 employees would not meet the definition of a small
business. It seems reasonable to conclude, therefore, that 6,239 or
fewer telephone service firms are small entity telephone service firms
that may be affected by the policies and rules proposed in this NPRM.
Wired Telecommunications Carriers. The SBA has developed a small
business size standard for Wired Telecommunications Carriers, which
consists of all such companies having 1,500 or fewer employees.
According to Census Bureau data for 1997, there were 2,225 firms in
this category, total, that operated for the entire year. Of this total,
2,201 firms had employment of 999 or fewer employees, and an additional
24 firms had employment of 1,000 employees or more. Thus, under this
size standard,
[[Page 61191]]
the great majority of firms can be considered small.
Incumbent LECs. Neither the Commission nor the SBA has developed a
small business size standard specifically for incumbent LECs. The
appropriate size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. According to Commission
data, 1,337 carriers have reported that they are engaged in the
provision of incumbent local exchange services. Of these 1,337
carriers, an estimated 1,032 have 1,500 or fewer employees and 305 have
more than 1,500 employees. Consequently, the Commission estimates that
most providers of incumbent local exchange service are small businesses
that may be affected by our proposed policies and actions.
Competitive LECs, Competitive Access Providers (CAPs), and ``Other
Local Service Providers.'' Neither the Commission nor the SBA has
developed a small business size standard specifically for these service
providers. The appropriate size standard under SBA rules is for the
category Wired Telecommunications Carriers. Under that size standard,
such a business is small if it has 1,500 or fewer employees. According
to Commission data, 609 carriers have reported that they are engaged in
the provision of either competitive access provider services or
competitive local exchange carrier services. Of these 609 carriers, an
estimated 458 have 1,500 or fewer employees and 151 have more than
1,500 employees. In addition, 35 carriers have reported that they are
``Other Local Service Providers.'' Of the 35, an estimated 34 have
1,500 or fewer employees and one has more than 1,500 employees.
Consequently, the Commission estimates that most providers of
competitive local exchange service, competitive access providers, and
``Other Local Service Providers'' are small entities that may be
affected by our proposed policies and actions.
Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 133 carriers have reported
that they are engaged in the provision of local resale services. Of
these, an estimated 127 have 1,500 or fewer employees and six have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of local resellers are small entities that may be affected by
our proposed policies and actions.
Interexchange Carriers. Neither the Commission nor the SBA has
developed a small business size standard specifically for providers of
interexchange services. The appropriate size standard under SBA rules
is for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 261 carriers have reported that they are
engaged in the provision of interexchange service. Of these, an
estimated 223 have 1,500 or fewer employees and 38 have more than 1,500
employees. Consequently, the Commission estimates that the majority of
interexchange carriers are small entities that may be affected by our
proposed policies and actions.
Operator Service Provider (OSP). Neither the Commission nor the SBA
has developed a small business size standard specifically for operator
service providers. The appropriate size standard under SBA rules is for
the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 23 carriers have reported that they are
engaged in the provision of operator services. Of these, an estimated
22 have 1,500 or fewer employees and one has more than 1,500 employees.
Consequently, the Commission estimates that the majority of OSPs are
small entities that may be affected by our proposed policies and
actions.
Prepaid Calling Card Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for prepaid
calling card providers. The appropriate size standard under SBA rules
is for the category Telecommunications Resellers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 37 carriers have reported that they are
engaged in the provision of prepaid calling cards. Of these, an
estimated 36 have 1,500 or fewer employees and one has more than 1,500
employees. Consequently, the Commission estimates that the majority of
prepaid calling card providers are small entities that may be affected
by our proposed policies and actions.
Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to ``Other Toll Carriers.'' This category includes toll carriers that
do not fall within the categories of interexchange carriers, OSPs,
prepaid calling card providers, satellite service carriers, or toll
resellers. The closest applicable size standard under SBA rules is for
Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees. According to
Commission's data, 42 companies reported that their primary
telecommunications service activity was the provision of payphone
services. Of these 42 companies, an estimated 37 have 1,500 or fewer
employees and five have more than 1,500 employees. Consequently, the
Commission estimates that most ``Other Toll Carriers'' are small
entities that may be affected by our proposed policies and actions.
Wireless Service Providers. The SBA has developed a small business
size standard for wireless firms within the two broad economic census
categories of Paging and Cellular and Other Wireless
Telecommunications. Under both SBA categories, a wireless business is
small if it has 1,500 or fewer employees. For the census category of
Paging, Census Bureau data for 1997, show that there were 1,320 firms
in this category, total, that operated for the entire year. Of this
total, 1,303 firms had employment of 999 or fewer employees, and an
additional 17 firms had employment of 1,000 employees or more. Thus,
under this category and associated small business size standard, the
great majority of firms can be considered small. For the census
category Cellular and Other Wireless Telecommunications, Census Bureau
data for 1997, show that there were 977 firms in this category, total,
that operated for the entire year.
Of this total, 965 firms had employment of 999 or fewer employees,
and an additional 12 firms had employment of 1,000 employees or more.
Thus, under this second category and size standard, the great majority
of firms can, again, be considered small. Narrowband Personal
Communications Services. The Commission held an auction for Narrowband
PCS licenses that commenced on July 25, 1994, and closed on July 29,
1994. A second auction commenced on October 26, 1994, and closed on
November 8, 1994. For purposes of the first two Narrowband PCS
auctions, ``small businesses'' were entities with average gross
revenues for the prior three calendar years of $40 million or less.
Through these auctions, the Commission awarded a total of 41 licenses,
11 of which were obtained by four small businesses. To ensure
meaningful participation by small business entities in future auctions,
the
[[Page 61192]]
Commission adopted a two-tiered small business size standard in the
Narrowband PCS Second Report and Order. A ``small business'' is an
entity that, together with affiliates and controlling interests, has
average gross revenues for the three preceding years of not more than
$40 million. A ``very small business'' is an entity that, together with
affiliates and controlling interests, has average gross revenues for
the three preceding years of not more than $15 million. The SBA has
approved these small business size standards. A third auction commenced
on October 3, 2001 and closed on October 16, 2001. Here, five bidders
won 317 (Metropolitan Trading Areas and nationwide) licenses. Three of
these claimed status as a small or very small entity and won 311
licenses.
Common Carrier Paging. The SBA has developed a small business size
standard for wireless firms within the broad economic census categories
of Cellular and Other Wireless Telecommunications. Under this SBA
category, a wireless business is small if it has 1,500 or fewer
employees. For the census category of Paging, Census Bureau data for
1997, show that there were 1,320 firms in this category, total, that
operated for the entire year. Of this total, 1,303 firms had employment
of 999 or fewer employees, and an additional 17 firms had employment of
1,000 employees or more. Thus, under this category and associated small
business size standard, the great majority of firms can be considered
small.
In the Paging Second Report and Order, the Commission adopted a
size standard for ``small businesses'' for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. A small business is an entity that, together with
its affiliates and controlling principals, has average gross revenues
not exceeding $15 million for the preceding three years. The SBA has
approved this definition. An auction of Metropolitan Economic Area
(MEA) licenses commenced on February 24, 2000, and closed on March 2,
2000. Of the 2,499 licenses auctioned, 985 were sold. Fifty-seven
companies claiming small business status won 440 licenses. An auction
of MEA and Economic Area (EA) licenses commenced on October 30, 2001,
and closed on December 5, 2001. Of the 15,514 licenses auctioned, 5,323
were sold. One hundred thirty-two companies claiming small business
status purchased 3,724 licenses. A third auction, consisting of 8,874
licenses in each of 175 EAs and 1,328 licenses in all but three of the
51 MEAs commenced on May 13, 2003, and closed on May 28, 2003. Seventy-
seven bidders claiming small or very small business status won 2,093
licenses. Currently, there are approximately 74,000 Common Carrier
Paging licenses. According to the most recent Trends in Telephone
Service, 608 private and common carriers reported that they were
engaged in the provision of either paging or ``other mobile'' services.
Of these, we estimate that 589 are small, under the SBA-approved small
business size standard. We estimate that the majority of common carrier
paging providers would qualify as small entities under the SBA
definition.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
There are several compliance requirements addressed in this item.
One, carriers are responsible for assuring that toll-free numbers, when
they appear on a telephone bill, must appear in a separate section of
the bill in order to make it easier for consumers to understand charges
that stem from calls to toll-free numbers. Carriers are already
required to separate out a variety of calls, e.g. local versus long
distance; therefore, we do not expect this compliance requirement to be
particularly burdensome for carriers, even small carriers.
This is not a new requirement, just a clarification of an existing
one. Two, in order to operate outside 900 numbers, all audiotext
information services--not only those using toll-free numbers--must be
provided pursuant to a written (or the electronic equivalent)
presubscription agreement or made through payments involving direct
remittance, prepaid account, or debit, credit, charge, or calling
cards. These proposed policies and rules are designed to clarify the
existing requirement that the presubscription or comparable agreement
be in writing or make use of one of the payment methods discussed
above. As such, any proposed policy or rule changes do not constitute
an additional compliance burden.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternative Considered
The RFA requires an agency to describe any significant,
specifically small business, 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 and
reporting requirements under the rule for such 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 such small
entities.'' Commenters, in 2003, noted that audiotext service providers
found the 900 number regime has become a difficult environment in which
to operate a business. Some businesses complained that charges for
audiotext information services were dropped from carriers' bills. In
order to address this concern we are considering allowing carriers to
accept recordings of customer oral verifications as evidence that
charges through 900 numbers should not be removed from the telephone
bill. These verifications would indicate that the customer understood
and agreed to the 900 number charges. We expect this alternative to
assist small businesses, both carriers and audiotext information
service providers, by facilitating billing on a telephone bill as
opposed to a credit card or other such means. We note in the primary
item that disputes over such charges were greatly reduced once oral
verification was implemented in another country.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
Federal Trade Commission (FTC) regulations pursuant to the
Telephone Disclosure and Dispute Resolution Act (TDDRA), prescribe
federal standards governing some audiotext information service
providers and all entities, including common carriers, which bill and
collect for interstate information services. The FTC has noted that the
expansion of the definition of covered services under its governing
statutes from Titles II and III of TDDRA, does not have any effect upon
the main definition of pay-per-call services under Title I of TDDRA,
codified as section 228. The FTC initiated a proceeding in this area in
1998, but at this time it has not issued final conclusions.
Ordering Clauses
Accordingly, pursuant to the authority contained in sections 1-4,
201(b), 228 and 303(r) of the Communications Act of 1934, as amended,
47 U.S.C. 151-154, 201(b), 228 and 303(r); and 47 CFR 64.1501-1515 of
the Commission's rules, this Notice of Proposed Rulemaking is adopted.
The Commission's Consumer & Governmental Affairs Bureau, Reference
[[Page 61193]]
Information Center, shall send a copy of this Notice of Proposed
Rulemaking, including the Initial Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 04-23192 Filed 10-14-04; 8:45 am]
BILLING CODE 6712-01-P