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FEDERAL COMMUNICATIONS COMMISSION
Federal Communications Commission
CFR Citation: 47 CFR Part 64
Docket ID: [CC Docket No. 94-129; FCC 07-222]
NOTICE: RULES
ACTION: Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996:
DOCUMENT ACTION: Final rule.
SUBJECT CATEGORY: 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; LEC Coalition Application for Review Regarding Carrier Change Rules
DATES: Effective February 4, 2008.
DOCUMENT SUMMARY: In this document, the Commission denies an Application for Review filed by a coalition of local exchange carriers (``LEC Petitioners'') regarding the Commission's carrier change verification rules. Specifically, the Commission affirms that it is not permissible for an executing carrier to block a carrier change submission by a submitting carrier, based on the executing carrier's own finding that the customer's information does not match exactly the information in the executing carrier's records.
SUMMARY: Policies and Rules Concerning Unauthorized Changes of Consumers Long Distance Carriers—; LEC Coalition Application for Review Regarding Carrier Change Rules,
SUPPLEMENTAL INFORMATION
On July 8, 2005, an application for review was filed by a coalition of local exchange carriers against the Commission's Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996, declaratory ruling, DA 051618, published at 71 FR 2895 (January 18, 2006). This is a summary of the Commission's document FCC 07222, adopted December 18, 2007, released January 4, 2008, denying the application for review. Copies of document FCC 07222 and any subsequently filed documents in this matter will be available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CYA257, Washington, DC 20554. Document FCC 07222 and any subsequently filed documents in this matter may also be purchased from the Commission's duplicating contractor at Portals II, 445 12th Street, SW., Room CYB402, Washington, DC 20554. Customers may contact the Commission's duplicating contractor at their Web site: http://www.bcpiweb.com or call 18003783160. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at (202) 4180530 (voice) or (202) 4180432 (TTY). Document FCC 07222 can also be downloaded in Word and Portable Document Format (PDF) at: http://www.fcc.gov/cgb/policy .Paperwork Reduction Act of 1995 Analysis
The document does not contain new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 10413. In addition, it does not contain any new or modified ``information collection burden for small business concerns with fewer than 25 employees,'' pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107198. See 47 U.S.C. 3506(c)(4).
Synopsis
Section 64.1120(a)(2) of the Commission's rules provides that ``[a]n executing carrier shall not verify the submission of a change in the subscriber's selection of a telecommunications service received from a submitting carrier.'' The Commission affirms that it is not permissible for an executing carrier to block a carrier change submission by a submitting carrier, based on the executing carrier's own finding that the customer's information does not match exactly the information in the executing carrier's records. The Commission expressed concern that executing carriers could use the verification process as a means to delay or deny carrier change requests in order to benefit themselves or their affiliates. While the Commission agreed that allowing executing carriers to reverify carrier change requests could, under certain circumstances, help deter slamming, it ultimately concluded that the anticompetitive effects of reverification outweighed the potential benefits.
The LEC Petitioners contend that the Bureau mischaracterized their argument. Rather, according to the LEC Petitioners, under general principles of agency law, an executing carrier simply has a much more limited obligation to its subscribers not to make changes to subscriber accounts without prior indication from the subscriber that the submitting carrier request was so authorized. The LEC Petitioners liken their actions to that of a clerk at a liquor store that asks a customer for identification as a condition of purchase.
The Commission disagrees with LEC Petitioners and finds there is no material distinction between rejecting a carrier change request because of a determination that the customer is not authorized, and rejecting a change request because the LEC has determined that customer information does not match the LEC's records. As the Bureau emphasized in its declaratory ruling, and as commenters reiterate here, the Commission has already clearly defined the roles of the submitting and executing carrier in a carrier change request. Specifically, in the course of verifying the subscriber's intention to change long distance service, a submitting carrier's independent, thirdparty verifier is required to elicit confirmation that the person contacted is authorized to make the change (that is, either the party or an agent of the party identified on the account). As to executing carriers, the Commission's rules simply require ``prompt execution of changes verified by a submitting carrier.'' As stated in the declaratory ruling, the mere fact that the name(s) contained in the executing carrier's LEC account information may differ from that of the contact person listed on the submitting carrier's change request does not necessarily indicate a lack of authority or agency on the part of the person requesting the IXC change. The Commission finds credible, and LEC Petitioners do not dispute, that ``customers often authorize a spouse, a roommate, or other associate to act on their behalf,'' or may use a different name for billing purposes, and this information may not reside in the LEC's files. The Commission does not believe the LEC Petitioners' liquor store analogy is applicable to the actions at issue here. In the LEC Petitioners' purported analogy, the customer is directly requesting a product sold by that store. Here, an executing carrier seeks to block a transaction that has already occurred between a customer and another carrier.
The LEC Petitioners also argue that the Bureau erred when it failed to consider their arguments in light of AT&T v. FCC. In that decision, the court found that the Commission could not require submitting carriers to obtain actual authorization from a subscriber for a carrier change. Instead, the court found that Section 258 of the Act provides that carriers must comply only with ``such verification procedures as the Commission shall prescribe (emphasis added).'' The court added that requiring actual authorization was tantamount to holding submitting carriers to a strict liability standard, but that no such standard was contained in section 258 of the Act. The LEC Petitioners point to the court's statement that the customer's local exchange carrier ``might be able to verify the subscriber's identity by consulting its own customer records,'' to support their proposition that they should not have to presume that any name submitted in connection with a carrier change order is authorized by the subscriber. The Commission disagrees. In AT&T v. FCC, the court reviewed the Commission's enforcement action imposing forfeiture against AT&T for slamming. That decision concerned only the obligations of a submitting carrier; it did not address the rights or obligations of LECs. The specific language cited by the LEC Petitioners occurs in the context of the court's explanation of why the Commission exceeded its statutory authority in creating an ``actual authorization from the subscriber'' requirement and enforcing it against AT&T.
The Bureau cited several examples (provided by the LEC Petitioners)
of situations in which a LEC could, under the Commission's rules,
legitimately reject a submitting carrier's change request, such as when
a customer is already subscribed to the submitting carrier, when a
customer has a PIC freeze in place, or when PIC changes are not
permitted (e.g., certain college dormitory rooms). The LEC Petitioners [[Page 6446]]
argue that rejection of a carrier change for the reasons at issue here
cannot be disallowed if it is in fact permissible for a LEC to utilize
its records when processing a carrier change request, as in the
examples described above. The Commission disagrees. The Commission
reiterates that carriers may access account information in the course
of effectuating carrier changes, and we do not believe that, under the
limited circumstances described above, an executing carrier's return of
a carrier change to the submitting carrier constitutes reverification
in violation of the Commission's rules. The Commission's objection to
the LEC actions at issue here is not related to their consulting
account information per se during the course of executing a carrier
change. Rather, it violates Commission rules for executing carriers to
make an independent determination with respect to the ability of a
person to authorize a carrier change based on such information.
Executing carriers have means (other than reverification) of protecting their customers that do not interfere with competition or undermine consumer choice. Executing carriers can, for example, alert customers to preferred carrier changes, such as by highlighting changes to customers' accounts in customer billings, and can offer a preferred carrier freeze option to customers who are concerned about slamming. However, as the Commission expressed in the past, reverification by executing carriers could function as a de facto preferred carrier freeze in situations where a subscriber has not requested such a freeze. The Commission emphasized that the imposition of a preferred carrier freeze must be authorized by the consumer to minimize any anticompetitive effects and to maintain flexibility for consumers. While preferred carrier freezes can provide consumers with extra protection from slamming, freezes by their very nature impose additional burdens on subscribers, and as such should only be enacted as a result of consumer choice. In the declaratory ruling, the Bureau reiterated this concern with respect to the LEC Petitioners' actions. The LEC actions at issue here serve to restrict consumer control by eliminating the consumer's ability to designate someone (such as a spouse) as authorized to change telecommunications service without first contacting the local carrier, thereby increasing the ability of the executing carrier to act in an anticompetitive manner. Endorsement of the LEC Petitioners' policies would result in inconvenience and delays for customers. The Commission continues to believe that the actions of the LEC Petitioners can, and do, result in de facto preferred carrier freezes where the customer has not requested such a freeze.
Finally, the Commission notes that IUB and NASUCA commented in support of the LEC Petitioners. While the Commission declines to grant the LEC Petitioners' request to reverse the Bureau's finding in the declaratory ruling, the Commission recognizes that state authorities may have verification requirements for matters within their jurisdiction that are stricter than those of the Commission. As the Commission recognized in the Third Report and Order, FCC 00255, published at 66 FR 12877 (March 1, 2001), states have valuable insight into the slamming problems experienced by consumers in their respective locales. Accordingly, the Commission declined to require that ``states * * * limit their verification requirements so that they are no more stringent than those promulgated by this Commission.'' As was noted in the declaratory ruling, the Commission's decision here concerns the question of permissible actions by private companies, not actions by a state regulatory agency.
Congressional Review Act
The Commission will not send a copy of document FCC 07222 pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because no new rules were adopted in the document.
Ordering Clauses
Pursuant to the authority contained in sections 1, 2, 4(i), and 258 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), and 258, and sections 1.115 and 64.1120(a)(2) of the Commission's rules, 47 CFR 1.115 and 64.1120(a)(2), document FCC 07222 is adopted.
Pursuant to the authority contained in sections 1, 2, 4(i), and 258
of the Communications Act, of 1934, as amended, 47 U.S.C. 151, 152,
154(i), and 258, and sections 1.115 and 64.1120(a)(2) of the
Commission's rules, 47 CFR 1.115 and 64.1120(a)(2), the LEC Petitioners' Application for Review is denied.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E81980 Filed 2108; 8:45 am]
BILLING CODE 671201P
FOR FURTHER INFORMATION CONTACT Nancy Stevenson, Consumer & Governmental Affairs Bureau at (202)
[[Page 6445]]
4187039 (voice), or email Nancy.Stevenson@fcc.gov.
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