[Congressional Record Volume 143, Number 104 (Tuesday, July 22, 1997)]
[Senate]
[Pages S7867-S7868]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CAMPBELL:
  S. 1051. A bill to amend the Communications Act of 1934 to enhance 
protections against unauthorized changes of telephone service 
subscribers from one telecommunications carrier to another, and for 
other purposes; to the Committee on Commerce, Science, and 
Transportation.


             the interstate slamming prevention act of 1997

  Mr. CAMPBELL. Mr. President, today I am introducing legislation that 
will address a significant consumer issue--the unauthorized change of 
telecommunications subscribers from one carrier to another, otherwise 
known as slamming.
  Consumers have the right to choose their primary long distance 
company and to change companies whenever they wish. Sometimes a 
consumer's telecommunications company is changed without the consumer's 
knowledge or consent, a practice known as slamming. As competition 
among telecommunications carriers has increased, so has the number of 
complaints arising from unauthorized or unknowingly authorized changes 
of consumers' telecommunications carriers.
  To give an idea of the scope of the problem, the Federal 
Communications Commission [FCC] reports that it received over 1,700 
complaints during fiscal year 1993. By 1995, that number had escalated 
to over 38,000 consumer telephone complaints and over 25,000 written 
complaints. In fact, the FCC says slamming complaints are their fastest 
growing category of consumer complaint, and my home State of Colorado 
ranks among the top five States in 1996 slamming complaints per million 
customers.
  The FCC reports that a slammed consumer may lose important service 
features, get lower quality service, or be charged higher rates for his 
or her telephone calls. Slamming also distorts the telecommunications 
competitive market by rewarding companies that engage in deceptive and 
misleading marketing prices. The Telecommunications Act of 1996 
includes provisions designed to reduce slamming, and it charges the FCC 
to adopt rules to implement these provisions.
  The bill I am introducing today will give teeth to the Commission's 
efforts to curb slamming. I firmly believe that enforcement, 
streamlined processing of slamming complaints, and consumer education 
will help stem the tide of unauthorized carrier changes.
  My bill, the Interstate Slamming Prevention Act of 1997, imposes a 
deadline of April 30, 1998 for the completion of the FCC's rulemaking 
on slamming.
  Currently, the Telecommunications Act does not define a deadline for 
action, and one is needed to ensure that consumers are protected as 
soon as possible from companies that engage in deceptive marketing 
practices. Nine months is sufficient time for the FCC to build a full 
record, solicit input from all interested parties, and put forth new 
antislamming rules.

  My legislation directs the FCC, in its rulemaking, to develop rules 
and regulations regarding penalties and liabilities--including 
substantial fines or forfeitures under section 503 of the 
Communications Act--for the unauthorized switching of a customer's 
preferred telecommunications carrier.
  It also directs the FCC to consider whether telecommunications 
carriers should be required to set up toll-free numbers dedicated to 
reporting unauthorized long distance carrier switches, with the 
obligation for a customer service representative to answer incoming 
calls within 2 minutes.
  I support such a toll-free number with call answering standards. 
Requiring consumers to pay for a call to report a slamming incident or 
having them endure a long wait before speaking to a customer service 
representative, would pose real barriers to accurate reporting.
  My legislation further directs the Commission to consider a process 
that would secure facts and statistical data from telecommunications 
carriers related to the number of consumer complaints they receive 
regarding slamming.
  By October 31, 1998, the bill directs the FCC to report to Congress 
the identities of those telecommunications carriers that represent the 
10 top slammers for 1997--based on the ratio of annual customer 
complaints regarding unauthorized carrier changes to the total number 
of customers served by such carriers.
  It is my hope that such a list will serve as an effective deterrent 
to companies contemplating deceptive marketing campaigns. Negative 
publicity could be the best defense in the fight against slamming.
  This report also should identify whether telecommunications carriers 
have been assessed fines or forfeitures by the Commission--including 
the amount of the fine or forfeiture, and whether the assessment was 
the result of a full prosecution or pursuant to a consent decree.
  After the first report in October 1998, the bill requires an annual 
report be submitted by the FCC to Congress each April 30.
  Before Congress takes more dramatic action in this regard, my bill 
would look to the FCC for its recommendations on the following issues: 
Whether consumers should be provided a private cause of action, with 
minimum statutory penalties, relating to unauthorized slamming; whether 
the FCC's current fine and forfeiture authority is sufficient to 
meaningfully address and curb actions of telecommunications carriers 
that engage in slamming; and what penalties should be applied to 
telecommunications carriers which switch a customer's preferred 
telecommunications carrier without a customer's authorization either 
willfully and knowingly or by means of a forged document?

  It is simply unfair for unsuspecting consumers, especially senior 
citizens, who in good faith select a long distance carrier only to have 
their long distance phone service changed without their knowledge. 
Slamming is unfair and against the law. My bill will help protect 
consumers from this unfair practice.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  Mr. President, I urge my colleagues to support this bill.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1051

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Interstate Slamming 
     Prevention Act of 1997''.

     SEC. 2. ENHANCEMENT OF PROTECTIONS.

       (a) Liability for Additional charges.--Subsection (b) of 
     section 258 of the Communications Act of 1934 (47 U.S.C. 258) 
     is amended--

[[Page S7868]]

       (1) by striking ``(b) Liability for Charges.--Any 
     telecommunications carrier'' in the first sentence and 
     inserting the following:
       ``(b) Liability for Charges.--
       ``(1) Charges collected after violation.--Any 
     telecommunications carrier''; and
       (2) by striking the second sentence and inserting the 
     following:
       ``(2) Fees for changing back.--Any telecommunications 
     carrier described in paragraph (1) shall also be liable to 
     the carrier previously selected by the subscriber concerned 
     for any fees associated with changing the subscriber back to 
     the carrier previously selected, in accordance with such 
     procedures as the Commission may prescribe.
       ``(3) Relation to other authority.--The remedies provided 
     by this subsection are in addition to any other remedies 
     available by law.''.
       (b) Additional Penalties.--Such section 258 is further 
     amended by adding at the end the following:
       ``(c) Additional Penalties.--Any telecommunications carrier 
     that violates the verification procedures described in 
     subsection (a) shall be subject to such additional fines and 
     penalties, including a forfeiture penalty under section 
     503(b)(1)(B) of this Act, as the Commission shall 
     prescribe.''.
       (c) Additional Protections.--Such section 258 is further 
     amended by adding at the end the following:
       ``(d) Additional Protections.--In order to provide 
     subscribers with additional protections against changes in 
     providers of telephone exchange service or telephone toll 
     service in violation of the verification procedures described 
     in subsection (a), the Commission may prescribe the 
     following:
       ``(1) A requirement that telecommunications carriers 
     establish toll-free telephone numbers in order to permit 
     subscribers to register complaints regarding the execution of 
     such changes in service, including the requirement that calls 
     to such numbers be answered in not more than two minutes.
       ``(2) A requirement that telecommunications carriers 
     provide the Commission such information relating to the 
     complaints made to such carriers regarding such changes in 
     service as the Commission considers appropriate.''.
       (d) Deadline for Rulemaking.--The Federal Communications 
     Commission shall prescribe the regulations required by 
     section 258 of the Communications Act of 1934, as amended by 
     this section, not later than April 30, 1998.
       (e) Reports to Congress.--
       (1) Initial report.--Not later than October 31, 1998, the 
     Commission shall submit to Congress a report on unauthorized 
     changes of subscribers' selections of providers of telephone 
     exchange service or telephone toll service. The report shall 
     include the following:
       (A) A list of the ten telecommunications carriers that, 
     during the one-year period ending on the date of the report, 
     were subject to the highest number of complaints of having 
     executed unauthorized changes of subscribers from their 
     selected providers of telephone exchange service or telephone 
     toll service when compared with the total number of 
     subscribers served by such carriers.
       (B) The telecommunications carriers, if any, assessed fines 
     or penalties under section 258(c) of the Communications Act 
     of 1934, as added by subsection (c) of this section, during 
     that period, including the amount of each fine or penalty, 
     and whether the fine or penalty was assessed as a result of a 
     court judgment or an order of the Commission or was secured 
     pursuant to a consent decree.
       (C) Whether or not subscribers should be authorized to 
     bring a private cause of action against telecommunications 
     carriers that change subscriber selections of providers of 
     telephone exchange service or telephone toll service in 
     violation of the procedures prescribed under section 258(a) 
     of the Communications Act of 1934 and, if so, the 
     advisability of establishing minimum statutory penalties for 
     violations addressed by such causes of action.
       (D) Whether or not the fines and penalties imposed by the 
     Commission under section 258(c) of the Communications Act of 
     1934, as so added, are sufficient to deter telecommunications 
     carriers from changing subscriber selections of providers of 
     telephone exchange service or telephone toll service in 
     violation of such procedures.
       (2) Update.--Not later than one year after the date on 
     which the Commission submits the report required by paragraph 
     (1), and each year thereafter, the Commission shall submit to 
     Congress an update of the previous report under this 
     subsection which sets forth the information specified in 
     subparagraphs (A) and (B) of that paragraph for one-year 
     period preceding the date of the report concerned.
                                 ______