[Congressional Record Volume 144, Number 144 (Monday, October 12, 1998)]
[House]
[Pages H10606-H10615]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TELECOMMUNICATIONS COMPETITION AND CONSUMER PROTECTION ACT OF 1998
Mr. BLILEY. Madam Speaker, I move to suspend the rules and pass the
(H.R. 3888) to amend the Communications Act of 1934 to improve the
protection of consumers against ``slamming'' by telecommunications
carriers, and for other purposes, as amended.
The Clerk read as follows:
H.R. 3888
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 ``Telecommunications
Competition and Consumer Protection Act of 1998''.
TITLE I--SLAMMING
SEC. 101. IMPROVED PROTECTION FOR CONSUMERS.
(a) Consumer Protection Practices.--Section 258 of the
Communications Act of 1934 (47 U.S.C. 258) is amended to read
as follows:
``SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER SELECTIONS OF
CARRIERS.
``(a) Alternative Modes of Regulation.--
``(1) Industry/commission code.--Within 180 days after the
date of enactment of the Telecommunications Competition and
Consumer Protection Act of 1998, the Commission, after
consulting with the Federal Trade Commission and
representatives of telecommunications carriers providing
telephone toll service and telephone exchange service, State
commissions, and consumers, and considering any proposals
developed by such representatives, shall prescribe, after
notice and public comment and in accordance with subsection
(b), a Code of Subscriber Protection Practices (hereinafter
in this section referred as the `Code') governing changes in
a subscriber's selection of a provider of telephone exchange
service or telephone toll service.
``(2) Obligation to comply.--No telecommunications carrier
(including a reseller of telecommunications services) shall
submit or execute a change in a subscriber's selection of a
provider of telephone exchange service or telephone toll
service except in accordance with--
``(A) the Code, if such carrier elects to comply with the
Code in accordance with subsection (b)(2); or
``(B) the requirements of subsection (c), if--
``(i) the carrier does not elect to comply with the Code
under subsection (b)(2); or
``(ii) such election is revoked or withdrawn.
``(b) Minimum Provisions of the Code.--
``(1) Subscriber protection practices.--The Code required
by subsection (a)(1) shall include provisions addressing the
following:
``(A) In general.--A telecommunications carrier (including
a reseller of telecommunications services) electing to comply
with the Code shall submit or execute a change in a
subscriber's selection of a provider of telephone exchange
service or telephone toll service only in accordance with the
provisions of the Code.
``(B) Negative option.--A telecommunications carrier shall
not use negative option marketing.
``(C) Verification.--A telecommunications carrier that
submits the change to an executing carrier, or that is both a
submitting and an executing carrier, shall verify the
subscriber's selection of the carrier in accordance with
procedures specified in the Code.
``(D) Unfair and deceptive acts and practices.--No
telecommunications carrier, nor any person acting on behalf
of any such carrier, shall engage in any unfair or deceptive
acts or practices in connection with the solicitation of a
change in a subscriber's selection of a telecommunications
carrier.
``(E) Notification and rights.--A telecommunications
carrier shall provide timely and accurate notification to the
subscriber in accordance with procedures specified in the
Code.
``(F) Slamming liability and remedies.--
``(i) Required reimbursement and credit.--A
telecommunications carrier that has improperly changed the
subscriber's selection of a telecommunications carrier
without authorization, shall at a minimum--
``(I) reimburse the subscriber for the fees associated with
switching the subscriber back to their original carrier; and
``(II) provide a credit for any telecommunications charges
incurred by the subscriber during the period, not to exceed
30 days, while that subscriber was improperly presubscribed.
``(ii) Procedures.--The Code shall prescribe procedures by
which--
``(I) a subscriber may make an allegation of a violation
under clause (i);
``(II) the telecommunications carrier may rebut such
allegation;
``(III) the subscriber may, without undue delay, burden, or
expense, challenge the rebuttal; and
``(IV) resolve any administrative review of such an
allegation within 75 days after receipt of an appeal.
``(G) Recordkeeping.--A telecommunications carrier shall
make and maintain a record of the verification process and
shall provide a copy to the subscriber immediately upon
request.
``(H) Quality control.--A telecommunications carrier shall
institute a quality control program to prevent inadvertent
changes in a subscriber's selection of a carrier.
``(I) Independent audits.--A telecommunications carrier
shall provide the Commission with an independent audit
regarding its compliance with the Code at intervals
prescribed by the Code. The Commission may require a
telecommunications carrier to provide an independent audit on
a more frequent basis if there is evidence that such
telecommunications carrier is violating the Code.
``(2) Election by carriers.--Each telecommunications
carrier electing to comply with the Code shall file with the
Commission within 20 days after the adoption of the Code, or
within 20 days after commencing operations as a
telecommunications carrier, a statement electing the Code to
govern such carrier's submission or execution of a change in
a customer's selection of a provider of telephone exchange
service or telephone toll service. Such election by a carrier
may not be revoked or withdrawn unless the Commission finds
that there is good cause therefor, including a determination
that the carrier has failed to adhere in good faith to the
applicable provisions of the Code, and that the revocation or
withdrawal is in the public interest. Any telecommunications
carrier that fails to elect to comply with the Code shall be
deemed to have elected to be governed by the subsection (c)
and the Commission's regulations thereunder.
``(c) Regulations of Carriers Not Complying With Code.--
``(1) In general.--A telecommunications carrier (including
a reseller of telecommunications services) that has not
elected to comply with the Code under subsection (b), or as
to which the election has been withdrawn or revoked, shall
not submit or execute a change in a subscriber's selection of
a provider of telephone exchange service or telephone toll
service except in accordance with this subsection and such
verification procedures as the Commission shall prescribe.
``(2) Verification.--
``(A) In general.--In order to verify a subscriber's
selection of a telephone exchange service or telephone toll
service provider under this subsection, the
telecommunications carrier submitting the change to an
executing carrier shall, at a minimum, require the
subscriber--
``(i) to affirm that the subscriber is authorized to select
the provider of that service for the telephone number in
question;
``(ii) to acknowledge the type of service to be changed as
a result of the selection;
``(iii) to affirm the subscriber's intent to select the
provider as the provider of that service;
``(iv) to acknowledge that the selection of the provider
will result in a change in providers of that service; and
``(v) to provide such other information as the Commission
considers appropriate for the protection of the subscriber.
``(B) Additional requirements.--The procedures prescribed
by the Commission to verify a subscriber's selection of a
provider shall--
``(i) preclude the use of negative option marketing;
``(ii) provide for a complete copy of verification of a
change in telephone exchange service or telephone toll
service provider in oral, written, or electronic form;
``(iii) require the retention of such verification in such
manner and form and for such time as the Commission considers
appropriate;
``(iv) mandate that verification occur in the same language
as that in which the change was solicited; and
``(v) provide for verification to be made available to a
subscriber on request.
``(C) Notice to subscriber.--Whenever a telecommunication
carrier submits a change in a subscriber's selection of a
provider of telephone exchange service or telephone toll
service, such telecommunications carrier shall clearly notify
the subscriber in writing, not more than 15 days after the
change is submitted to the executing carrier--
``(i) of the subscriber's new carrier; and
``(ii) that the subscriber may request information
regarding the date on which the change was agreed to and the
name of the individual who authorized the change.
``(3) Liability for violations.--
``(A) Notification of change.--The first bill issued after
the effective date of a change in a subscriber's provider of
telephone exchange service or telephone toll service by the
executing carrier for such change shall--
``(i) prominently disclose the change in provider and the
effective date of such change;
``(ii) contain the name and toll-free number of any
telecommunications carrier for such new service; and
[[Page H10607]]
``(iii) direct the subscriber to contact the executing
carrier if the subscriber believes that such change was not
authorized and that the change was made in violation of this
subsection, and contain the toll-free number by which to make
such contact.
``(B) Automatic switch-back of service and credit to
consumer of charges.--
``(i) Obligations of executing carrier.--If a subscriber of
telephone exchange service or telephone toll service makes an
allegation, orally or in writing, to the executing carrier
that a violation of this subsection has occurred with respect
to such subscriber--
``(I) the executing carrier shall, without charge to the
subscriber, execute an immediate change in the provider of
the telephone service that is the subject of the allegation
to restore the previous provider of such service for the
subscriber;
``(II) the executing carrier shall provide an immediate
credit to the subscriber's account for any charges for
executing the original change of service provider;
``(III) if the executing carrier conducts billing for the
carrier that is the subject of the allegation, the executing
carrier shall provide an immediate credit to the subscriber's
account for such service, in an amount equal to any charges
for the telephone service that is the subject of the
allegation incurred during the period--
``(aa) beginning upon the date of the change of service
that is the subject of the allegation; and
``(bb) ending on the earlier of the date that the
subscriber is restored to the previous provider, or 30 days
after the date the bill described in subparagraph (A) is
issued; and
``(IV) the executing carrier shall recover the costs of
executing the change in provider to restore the previous
provider, and any credits provided under subclause (II) and
(III), by recourse to the provider that is the subject of the
allegation.
``(ii) Obligations of carriers not billing through
executing carriers.--If a subscriber of telephone exchange
service or telephone toll service transmits, orally or in
writing, to any carrier that does not use an executing
carrier to conduct billing an allegation that a violation of
this subsection has occurred with respect to such subscriber,
the carrier shall provide an immediate credit to the
subscriber's account for such service, and the subscriber
shall, except as provided in subparagraph (C)(iii), be
discharged from liability, for an amount equal to any charges
for the telephone service that is the subject of the
allegation incurred during the period--
``(I) beginning upon the date of the change of service that
is the subject of the allegation; and
``(II) ending on the earlier of the date that the
subscriber is restored to the previous provider, or 30 days
after the date the bill described in paragraph (1) is issued.
``(iii) Time limitation.--This subparagraph shall apply
only to allegations made by subscribers before the expiration
of the 1-year period that begins on the issuance of the bill
described in subparagraph (A).
``(C) Procedure for carrier remedy.--
``(i) In general.--The Commission shall, by rule, establish
a procedure for rendering determinations with respect to
violations of this subsection. Such procedure shall permit
such determinations to be made upon the filing of (I) a
complaint by a telecommunications carrier that was providing
telephone exchange service or telephone toll service to a
subscriber before the occurrence of an alleged violation, and
seeking damages under clause (ii), or (II) a complaint by a
telecommunications carrier that was providing services after
the alleged violation, and seeking a reinstatement of charges
under clause (iii). Either such complaint shall be filed not
later than 6 months after the date on which any subscriber
whose allegation is included in the complaint submitted an
allegation of the violation to the executing carrier under
subparagraph (B)(ii). Either such complaint may seek
determinations under this paragraph with respect to multiple
alleged violations in accordance with such procedures as the
Commission shall establish in the rules prescribed under this
subparagraph.
``(ii) Determination of violation and remedies.--In a
proceeding under this subparagraph, if the Commission
determines that a violation of this subsection has occurred,
other than an inadvertent or unintentional violation, the
Commission shall award damages--
``(I) to the telecommunications carrier filing the
complaint, in an amount equal to the sum of (aa) the gross
amount of charges that the carrier would have received from
the subscriber during the violation, and (bb) $500 per
violation; and
``(II) to the subscriber that was subjected to the
violation, in the amount of $500.
``(iii) Determination of no violation.--If the Commission
determines that a violation of this subsection has not
occurred, the Commission shall order that any credit provided
to the subscriber under subparagraph (B)(ii) be reversed, or
that the carrier may resubmit a bill for the amount of the
credit to the subscriber notwithstanding any discharge under
subparagraph (B)(ii).
``(iv) Speedy resolution of complaints.--The procedure
established under this subparagraph shall provide for a
determination of each complaint filed under the procedure not
later than 6 months after filing.
``(D) Maintenance of information.--
``(i) In general.--The Commission shall, by rule, require
each executing carrier to maintain information regarding each
alleged violation of this subsection of which the carrier has
been notified.
``(ii) Contents.--The information required to be maintained
pursuant to this paragraph shall include, for each alleged
violation of this subsection, the effective date of the
change of service involved in the alleged violation, the name
of the provider of the service to which the change was made,
the name, address, and telephone number of the subscriber who
was subject to the alleged violation, and the amount of any
credit provided under subparagraph (B)(ii).
``(iii) Form.--The Commission shall prescribe one or more
computer data formats for the maintenance of information
under this paragraph, which shall be designed to facilitate
submission and compilation pursuant to this subparagraph.
``(iv) Monthly reports.--Each executing carrier shall, on
not less than a monthly basis, submit the information
maintained pursuant to this subparagraph to the Commission.
``(v) Access to information.--The Commission shall make the
information submitted pursuant to clause (iv) available upon
request to any telecommunications carrier. Any
telecommunications carrier obtaining access to such
information shall use such information exclusively for the
purposes of investigating, filing, or resolving complaints
under this section.
``(4) Civil penalties.--Unless the Commission determines
that there are mitigating circumstances, violation of this
subsection is punishable by a forfeiture of not less than
$40,000 for the first offense, and not less than $150,000 for
each subsequent offense.
``(5) Recovery of forfeitures.--The Commission may take
such action as may be necessary--
``(A) to collect any forfeitures it imposes under this
subsection; and
``(B) on behalf of any subscriber, to collect any damages
awarded the subscriber under this subsection.
``(d) Application to Wireless.--This section does not apply
to a provider of commercial mobile service.
``(e) Commission Requirements.--
``(1) Semiannual reports.--Every 6 months, the Commission
shall compile and publish a report ranking telecommunications
carriers by the percentage of verified complaints, excluding
those generated by the carrier's unaffiliated resellers,
compared to the number of the carrier's changes in a
subscriber's selection of a provider of telephone exchange
service and telephone toll service.
``(2) Investigation.--If a telecommunications carrier is
listed among the 5 worst performers based upon the percentage
of verified complaints, excluding those generated by the
carrier's unaffiliated resellers, compared to its number of
carrier selection changes in the semiannual reports 3 times
in succession, the Commission shall investigate the carrier's
practices regarding subscribers' selections of providers of
telephone exchange service and telephone toll service. If the
Commission finds that the carrier is misrepresenting
adherence to the Code or is willfully and repeatedly changing
subscribers' selections of providers, it shall find such
carrier to be in violation of this section and shall fine the
carrier up to $1,000,000.
``(3) Code review.--Every 2 years, the Commission shall
review the Code to ensure its requirements adequately protect
subscribers from improper changes in a subscriber's selection
of a provider of telephone exchange service and telephone
toll service.
``(f) Actions by States.--
``(1) In general.--Whenever an attorney general of any
State has reason to believe that the interests of the
residents of that State have been or are being threatened or
adversely affected because any person has violated the Code
or subsection (c), or any rule or regulation prescribed by
the Commission under subsection (c), the State may bring a
civil action on behalf of its residents in an appropriate
district court of the United States to enjoin such violation,
to enforce compliance with such Code, subsection, rule, or
regulation, to obtain damages on behalf of their residents,
or to obtain such further and other relief as the court may
deem appropriate.
``(2) Notice.--The State shall serve prior written notice
of any civil action under paragraph (1) upon the Commission
and provide the Commission with a copy of its complaint,
except that if it is not feasible for the State to provide
such prior notice, the State shall serve such notice
immediately upon instituting such action. Upon receiving a
notice respecting a civil action, the Commission shall have
the right (A) to intervene in such action, (B) upon so
intervening, to be heard on all matters arising therein, and
(C) to file petitions for appeal.
``(3) Venue.--Any civil action brought under this section
in a district court of the United States may be brought in
the district wherein the defendant is found or is an
inhabitant or transacts business or wherein the violation
occurred or is occurring, and process in such cases may be
served in any district in which the defendant is an
inhabitant or wherever the defendant may be found.
``(4) Investigatory powers.--For purposes of bringing any
civil action under this section, nothing in this Act shall
prevent the attorney general from exercising the powers
conferred on the attorney general by the laws of such State
to conduct investigations or to administer oaths or
affirmations or to compel the attendance of witnesses or the
[[Page H10608]]
production of documentary and other evidence.
``(5) Effect on state court proceedings.--Nothing contained
in this subsection shall prohibit an authorized State
official from proceeding in State court on the basis of an
alleged violation of any general civil or criminal statute of
such State.
``(6) Limitation.--Whenever the Commission has instituted a
civil action for violation of this section or any rule or
regulation thereunder, no State may, during the pendency of
such action instituted by the Commission, subsequently
institute a civil action against any defendant named in the
Commission's complaint for violation of any rule as alleged
in the Commission's complaint.
``(7) Actions by other state officials.--In addition to
actions brought by an attorney general of a State under
paragraph (1), such an action may be brought by officers of
such State who are authorized by the State to bring actions
in such State for protection of consumers.
``(g) State Law Not Preempted.--
``(1) In general.--Nothing in this section or in the
regulations prescribed under this section shall preempt any
State law that imposes requirements, regulations, damages,
costs, or penalties on changes in a subscriber's selection of
a provider of telephone exchange service or telephone toll
service that--
``(A) are less restrictive than those imposed under this
section; or
``(B) are not inconsistent with those imposed under this
section, and were enacted prior to the date of enactment of
the Telecommunications Competition and Consumer Protection
Act of 1998.
``(2) Effect on state court proceedings.--Except as
provided in subsection (f)(6), nothing contained in this
section shall be construed to prohibit an authorized State
official from proceeding in State court on the basis of an
alleged violation of any general civil or criminal statute of
such State or any specific civil or criminal statute of such
State not preempted by this section.
``(h) Rules of Construction.--
``(1) Change includes initial selection.--For purposes of
this section, the initiation of telephone toll service to a
subscriber by a telecommunications carrier shall be treated
as achange in selection of a provider of telephone toll
service.
``(2) Action by unaffiliated reseller not imputed to
carrier.--No telecommunications carrier may be found in
violation of this section solely on the basis of a violation
of this section by an unaffiliated reseller of that carrier's
services or facilities.
``(i) Definitions.--For purposes of this section:
``(1) Subscriber.--The term `subscriber' means the person
named on the billing statement or account, or any other
person authorized to make changes in the providers of
telephone exchange service or telephone toll service.
``(2) Executing carrier.--The term `executing carrier'
means, with respect to any change in the provider of local
exchange service or telephone toll service, the local
exchange carrier that executed such change.
``(3) Attorney general.--The term `attorney general' means
the chief legal officer of a State.''.
(b) NTIA Study of Third-Party Administration.--Within 180
days of enactment of this Act, the National
Telecommunications and Information Administration shall
report to the Committee on Commerce of the House of
Representatives and the Committee on Commerce, Science, and
Transportation of the Senate on the feasibility and
desirability of establishing a neutral third-party
administration system to prevent illegal changes in telephone
subscriber carrier selections. The study shall include--
(1) an analysis of the cost of establishing a single
national or several independent databases or clearinghouses
to verify and submit changes in carrier selections;
(2) the additional cost to carriers, per change in carrier
selection, to fund the ongoing operation of any or all such
independent databases or clearinghouses; and
(3) the advantages and disadvantages of utilizing
independent databases or clearinghouses for verifying and
submitting carrier selection changes.
TITLE II--SPAMMING
SEC. 201. SENSE OF THE CONGRESS.
It is the sense of the Congress that--
(1) in order to avoid interference with the rapid
development and expansion of commerce over the Internet, the
Congress should decline to enact regulatory legislation with
respect to unfair or intrusive practices on the Internet that
the private sector can, given a sufficient opportunity, deter
or prevent; and
(2) it is the responsibility of the private sector to use
that opportunity promptly to adopt, implement, and enforce
measures to deter and prevent the improper use of unsolicited
commercial electronic mail.
TITLE III--GWCS AUCTION DEADLINE
SEC. 301. ELIMINATION OF ARBITRARY AUCTION DEADLINE.
Section 309(j)(9) of the Communications Act of 1934 (47
U.S.C. 309(j)(9)) is amended by striking ``, not later than 5
years after the date of enactment of this subsection,''.
TITLE IV--REINSTATEMENT OF CERTAIN APPLICANTS
SEC. 401. REINSTATEMENT OF APPLICANTS AS TENTATIVE SELECTEES.
(a) In General.--Notwithstanding the order of the Federal
Communications Commission in the proceeding described in
subsection (b), the Commission shall--
(1) reinstate each applicant as a tentative selectee under
the covered rural service area licensing proceeding; and
(2) permit each applicant to amend its application, to the
extent necessary to update factual information and to comply
with the rules of the Commission, at any time before the
Commission's final licensing action in the covered rural
service area licensing proceeding.
(b) Exemption From Petitions to Deny.--For purposes of the
amended applications filed pursuant to section 501(a)(2), the
provisions of section 309(d)(1) of the Communications Act of
1934 (47 U.S.C. 309(d)(1)) shall not apply.
(c) Proceeding.--The proceeding described in this
subsection is the proceeding of the Commission In re
Applications of Cellwave Telephone Services L.P, Futurewave
General Partners L.P., and Great Western Cellular Partners, 7
FCC Rcd No. 19 (1992).
SEC. 402. CONTINUATION OF LICENSE PROCEEDING; FEE ASSESSMENT.
(a) Award of Licenses.--The Commission shall award licenses
under the covered rural service area licensing proceeding
within 90 days after the date of the enactment of this title.
(b) Service Requirements.--The Commission shall provide
that, as a condition of an applicant receiving a license
pursuant to the covered rural service area licensing
proceeding, the applicant shall provide cellular
radiotelephone service to subscribers in accordance with
sections 22.946 and 22.947 of the Commission's rules (47 CFR
22.946, 22.947); except that the time period applicable under
section 22.947 of the Commission's rules (or any successor
rule) to the applicants identified in subparagraphs (A) and
(B) of section 404(1) shall be 3 years rather than 5 years
and the waiver authority of the Commission shall apply to
such 3-year period.
(c) Calculation of License Fee.--
(1) Fee required.--The Commission shall establish a fee for
each of the licenses under the covered rural service area
licensing proceeding. In determining the amount of the fee,
the Commission shall consider--
(A) the average price paid per person served in the
Commission's Cellular Unserved Auction (Auction No. 12); and
(B) the settlement payments required to be paid by the
permittees pursuant to the consent decree set forth in the
Commission's order, In re the Tellesis Partners (7 FCC Rcd
3168 (1992)), multiplying such payments by two.
(2) Notice of fee.--Within 30 days after the date an
applicant files the amended application permitted by section
501(a)(2), the Commission shall notify each applicant of the
fee established for the license associated with its
application.
(d) Payment for Licenses.--No later than May 31, 2000, each
applicant shall pay to the Commission the fee established
pursuant to subsection (c) of this section for the license
granted under subsection (a).
(e) Auction Authority.--If, after the amendment of an
application pursuant to section 401(a)(2) of this title, the
Commission finds that the applicant is ineligible for grant
of a license to provide cellular radiotelephone services for
a rural service area or the applicant does not meet the
requirements under subsection (b) of this section, the
Commission shall grant the license for which the applicant is
the tentative selectee (pursuant to section 401(a)(1)) by
competitive bidding pursuant to section 309(j) of the
Communications Act of 1934 (47 U.S.C. 309(j)).
SEC. 403. PROHIBITION OF TRANSFER.
During the 5-year period that begins on the date that an
applicant is granted any license pursuant to section 401, the
Commission may not authorize the transfer or assignment of
that license under section 310 of the Communications Act of
1934 (47 U.S.C. 310). Nothing in this title may be construed
to prohibit any applicant granted a license pursuant to
section 401 from contracting with other licensees to improve
cellular telephone service.
SEC. 404. DEFINITIONS.
For the purposes of this title, the following definitions
shall apply:
(1) Applicant.--The term ``applicant'' means--
(A) Great Western Cellular Partners, a California general
partnership chosen by the Commission as tentative selectee
for RSA #492 on May 4, 1989;
(B) Monroe Telephone Services L.P., a Delaware limited
partnership chosen by the Commission as tentative selectee
for RSA #370 on August 24, 1989 (formerly Cellwave Telephone
Services L.P.); and
(C) FutureWave General Partners L.P., a Delaware limited
partnership chosen by the Commission as tentative selectee
for RSA #615 on May 25, 1990.
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) Covered rural service area licensing proceeding.--The
term ``covered rural service area licensing proceeding''
means the proceeding of the Commission for the grant of
cellular radiotelephone licenses for rural service areas #492
(Minnesota 11), #370 (Florida 11), and #615 (Pennsylvania 4).
(4) Tentative selectee.--The term ``tentative selectee''
means a party that has been selected by the Commission under
a licensing proceeding for grant of a license, but has not
yet been granted the license because the
[[Page H10609]]
Commission has not yet determined whether the party is
qualified under the Commission's rules for grant of the
license.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Bliley) and the gentleman from Michigan (Mr. Dingell)
each will control 20 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Bliley).
General Leave
Mr. BLILEY. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on the bill now under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. BLILEY. Madam Speaker, I yield myself 5 minutes.
Madam Speaker, I rise in strong support of H.R. 3888 and against the
scourge of ``slamming.'' The practice of slamming will only increase as
competition expands into the local telephone and short-haul telephone
markets. While I want competition to develop, slamming should not.
Indeed, my wife and I were slammed, so I like to think that I bring a
little first-hand knowledge to the issue.
In the Telecommunications Act of 1996, we gave the FCC significant
authority to eliminate slamming, but for some reason they have decided
not to use it. Accordingly, we find it necessary to again address the
issue of slamming legislatively. But this time we have removed a
significant portion of the flexibility given to the FCC. In its place,
we have spelled out a twofold approach to eliminate slamming.
In the first instance, we allow carriers to self-regulate. The
carriers have said that they want to eliminate slamming, and we will
see if they can live up to their word.
For those carriers that cannot, they will be subject to the heavy
hand of FCC regulation. We anticipate that carriers will see the light
and stop slamming on their own. In fact, I very recently received a
letter from many of the carriers from the telecommunications industry
endorsing this legislation. By giving the industry an opportunity to
lead on this issue, we are trying to avoid imposing the kind of
regulation that would raise the cost of doing business and serve as a
barrier to entry for entrepreneurs.
At the same time, we have provided for significant penalties for
those companies that choose to violate the law. We have also achieved a
balance between the need to give companies the ability to standardize
their business practices and keep their costs low and the need to allow
State officials to enforce State statutes against consumer fraud.
Let me also point out that the manager's amendment to H.R. 3888 that
we are considering today does not include provisions that would resolve
the C-block P-C-S auction debacle.
The version reported by the committee included provisions that would
have brought an end to the thickening legal and regulatory quagmire
that the C-block has become. Unfortunately, though, CBO and OMB allege
that the committee's C-block provisions are too costly. This is
misguided, as well as shortsighted.
At this rate, the government will end up with very little to show for
all of its efforts in trying to resolve the C-block debacle. The
taxpayers will be lucky if they get 10 cents on the dollar. Meanwhile,
scarce and valuable spectrum sits on the shelf, collecting dust rather
than promoting competition for mobile services.
It is a bit like that advertisement from Fram oil filters where the
fellow says, ``You can pay me now, or you can pay me later.'' We ought
to be facing the inevitable in recycling the C-block mess today, but we
are not, and that is regrettable indeed. Mark my words, Congress at
some point will have to step in and resolve this mess, and then the
cost will be substantially higher than the CBO and OMB allege that it
is today.
In closing, Madam Speaker, I want to thank the hard work of our
telecommunications chair, the gentleman from Louisiana (Mr. Tauzin).
Lastly, let me thank my good friends, the gentleman from Michigan
(Mr. Dingell), the ranking member of the committee, and the gentleman
from Massachusetts (Mr. Markey), the ranking member of the
subcommittee, for their valuable input.
While I would have preferred this legislation to include provisions
to resolve the C-block matter, it is still a good bill, and it deserves
the support of the Members of the House.
Mr. Speaker, the Manager's Amendment to H.R. 3888, which the House is
considering today, includes several changes to the version of the bill
reported by the Commerce Committee. I therefore would like to
supplement the legislative history contained in the Committee's report
so as to reflect the changes in the Manager's Amendment.
slamming
I am pleased that, as amended by the Commerce Committee, H.R. 3888
takes a nonregulatory and less bureaucratic approach than the earlier
Subcommittee-approved version of this bill. As a consequence, there are
associated cost benefits for smaller, entrepreneurial companies. In
adopting the Code of Subscriber Protection Practices provisions of H.R.
3888, we seek to provide a two-pronged approach to encourage carriers
to adopt pro-consumer practices.
Carriers can accede to the high level of oversight and cooperation
required under the Code, including record keeping requirements,
instituting a quality control program for inadvertent slamming, and
importantly, submitting to independent audits. These carriers are
accountable for any questionable behavior, they must refund charges
found to be improper, and they may lose their Code status for failure
to adhere in good faith to applicable provisions of the Code. Carriers
that lose their Code status may be subject to penalties in accordance
with the non-Code regulations. The penalties would apply equally to
those companies that have either not elected the Code, or who have
elected the Code, then lost their Code status. Thus, by adopting the
Code provisions of H.R. 3888, Congress intended adherence to the Code
to represent a ``safe harbor'' with regard to the fines and punishments
reserved for non-Code carriers. Accordingly, the FCC, as it prescribes
the Code, is not authorized to impose penalties (beyond reimbursement)
on carriers who elect and abide by the Code.
H.R. 3888 further demonstrates Congress' intention that, where a
consumer is improperly switched to a new carrier without authorization,
the consumer may be reimbursed for fees associated with being switched
back to the original carrier and be credited for telecommunications
charges incurred for up to 30 days while the consumer was improperly
subscribed. The legislation directs that the Code shall prescribe a
method for a consumer to make an allegation of a violation, for the
carrier to rebut the allegation, and for the consumer to challenge the
rebuttal. Thus, a consumer will not receive a credit where the carrier
has, by providing proof of verification, successfully rebutted the
allegation that the consumer was switched improperly.
The legislation also directs, in cases involving slamming allegations
against non-Code carriers, that the local exchange carrier
automatically switch consumers back to their previously authorized
carrier. The Manager's Amendment now clarifies that the previously
authorized carrier is the one that is ``reflected in the records of the
executing carrier.'' It is possible that the local exchange carrier's
records may not reflect the consumer's true choice of carriers, if that
choice was a long distance reseller. Thus, a question arises as to how
consumers will be assured they are switched back to their carrier of
choice. The Committee intends that an executing carrier will restore a
subscriber to the originally authorized carrier, as specified by the
subscriber, with a minimum of disruption. The Committee recognizes that
there may be difficulty in identifying the subscriber's originally
authorized carrier, particularly when the originally authorized carrier
is a switchless reseller. For this reason, the Committee intends that
the FCC address this issue as it promulgates rules implementing this
legislation.
Finally, one of the important compromises we have made in crafting
the Manager's Amendment deals with the applicability of existing State
law. This provision protects both Federal and State prerogratives. We
are mindful of the appropriate prerogatives of State legislatures and
State regulatory agencies in this area. At the same time, Congress
would be abdicating its responsibilities if it did not ensure that a
national framework was in place to guard against balkanization of
appropriate policy to protect consumers and to safeguard competition.
Consumers will not be protected from nefarious ``slamming'' practices
unless we can assure them that a consistent national remedy is in
place. Similarly, we cannot guard against excessive costs in the
provision of telecommunications services unless we adopt this consensus
legislative formula for balancing respective Federal and State
interests.
C-Block
As I stated earlier, the Manager's Amendment to H.R. 3888 does not
include provisions to address the growing C-block debacle. This
[[Page H10610]]
is unfortunate, given that the country now faces a deteriorating
spectrum managements crisis.
Five years ago Congress passed legislation, subsequently signed into
law as part of the Omnibus Budget Reconciliation Act of 1993, that
fundamentally changed how spectrum was to be licensed in this country.
Congress recognized the shortcomings of both the comparative hearing
process, which was too lengthy and inefficient, and the lottery
process, which was inequitable and short-changed the American people,
when they were applied in certain instances of licensing.
Congress determined that, in certain very specific instances, where
mutually exclusive applications were filed for a license, a system of
competitive bidding would be a better solution. Congress found that an
auction is faster than a comparative hearing, puts the license
presumably in the hands of the person who values it the most, and it
recoups for the public ``a portion of the value of the public spectrum
resource made available for commercial use.''
The goal of the 1993 spectrum law is wholly consistent with the
bedrock principle that is at the very foundation of the Communications
Act. That goal is to get licenses in the hands of entities as quickly
and efficiently as possible so that they in turn, are able to deliver
services to very core of the 1993 law. That is how Congress and the FCC
best serve the public interest. And, on balance, the Commission had
done a creditable job of instituting the competitive bidding process.
As part of the spectrum law, Congress also intended to create a more
competitive landscape in the wireless market by ``avoiding excessive
concentration of licenses and by disseminating licenses among a wide
variety of applicants.'' The FCC responded to that statutory mandate
with the creation of an ``entrepreneurs' block'' (the so-called ``C
block'') of licenses that would be made available to small businesses,
and would not be available to the incumbents. The auction for those
license closed in May 1996.
Since that time, the C block has turned into a nightmare. The
Commission's post-auction behavior undermined the goal of the statute--
to get licenses in the hands of licensees as quickly and efficiently as
possible so that service to the public is forthcoming expeditiously.
The statute explicitly contemplates that the end of the auction and
subsequent evaluation of the qualifications of a high bidder to hold a
spectrum license must be conducted as contemporaneously as possible. By
creating an unreasonable and inexplicable delay between these two
events for some of the largest bidders with biggest footprints, the FCC
exposed these two events for some of the largest bidders with biggest
footprints, the FCC exposed these bidders to the risk that market
forces might alter the assumptions on which bids were made in ways no
one could have anticipated. These bidders were powerless during the
unexpected and unjustifiable licensing process that followed the close
of the auction and totally exposed to the vagaries of the commercial
marketplace.
Many other C-block licensees were, in some measure, waiting for
resolution of the licensing process for the largest bidders to develop
strategic alliances and to put their own business plans in place. Thus,
the Commission's failure to act in a timely and responsible fashion in
licensing certain C-block licensees effectively cut the legs out from
under the entire C-block. Consequently, less than 10 percent of the C-
block licenses are in productive use for American consumers; the rest
are in bankruptcy, returned to the FCC, or otherwise still on the
sideline. A 10 percent success rate five years after the law was passed
is unacceptable.
What is particularly vexing, however, is that, since early 1997, the
Commerce Committee has repeatedly reminded the FCC about the importance
of deploying spectrum-based services as rapidly as possible. We have
devoted significant time and energy offering restructuring solutions
that, had they been adopted, might have avoided the mess the C-block
has become.
At a recent hearing on the C-block matter before the Commerce
Committee, it was clear that the Commission is unable or unwilling to
take the steps necessary to resolve these bankruptcy matters as
expeditiously as possible in fulfillment of its statutory obligation to
help bring service to the public. It is now time for Congress to step
in and solve the problem as best it can: the fairest way to all parties
is to simply unwind the C-block auction, like any commercial
transaction gone wrong, and re-do the deal. That is precisely what H.R.
3888, as reported by the Commerce Committee, would have done--it would
have put licensees and those who bid for licenses as close to back to
where they were before the auction took place.
To the degree there was concern about the budget impact of this
proposal, I would point out that it has been difficult to gauge the
real budgetary impact of Congressional action. I have serious questions
about the cost estimates provided by both CBO and OMB, given the
uncertainty surrounding the C-block re-auction, the bankruptcies and
related litigation. Neither CBO nor OMB has been able to provide firm
data to back up this estimate.
Rather than focusing these fictional accounting estimates, instead,
we should recognize that this could have been an opportunity for a real
solution to the C-block dilemma. The public policy goal of bringing
service to the public is best served by mandating a rescission of the
C-block auction and to have all the licenses, including those that are
currently in bankruptcy and default, available to be re-auctioned as
quickly as possible.
Instead, by not acting today, Congress will proling this debacle. I
can assure you that our inaction will only lead to more bankruptcies as
more and more C-block licensees who today are still technically
``solvent'' but in reality are teetering on the edge of bankruptcy.
Best estimates are that, with these additional bankruptcies, licensees
serving 85% or more of the population will be ``under water.''
So Congress should be on notice: one inaction will result in more
lawsuits against the government, and thus more taxpayer dollars being
spent on costly bankruptcy litigation. Indeed, just last week, a
federal appeals court in New Orleans upheld a judgment against the FCC
in favor of the third largest C-block licensee, General Wireless Inc.
The court reduced the licensee's debt to 16 cents on the dollar. More
judgments like this are sure to follow, and all the while the public/
taxpayer is denied competitive new wireless service while the FCC
pursues this absurd course of costly, pointless litigation.
Congress should step in and stop this folly now. Instead, we're going
to follow the lead of CBO and OMB, whose ledger sheets tell us that a
rescission is too costly. I look forward to seeing what their ledger
sheets have to say in several months, after more court rulings like the
Fifth Circuit's. My guess is that Congress will say that H.R. 3888, as
reported by the Committee, would have been a bargain, had we only
accepted the offer.
Rural Cellular Service
Title IV of the Manager's Amendment to H.R. 3888 better serves the
public interest by guaranteeing that the taxpayer will benefit
directly. In exchange for removing certain service obligations which
exceeded the requirements imposed upon other cellular licensees, the
Commission will establish a fee for each of the licenses based on
average auction prices for similar markets and prior settlement
agreements reached with similarly situated RSA licensees. This
provision will ensure that the applicants that are the subject of Title
IV of H.R. 3888 are treated in the same manner as other similarly
situated RSA licensees who also entered into a settlement agreement
with the Commission and made appropriate payments to the U.S. Treasury.
Hon. Thomas J. Bliley, Jr.,
Chairman, House Committee on Commerce,
Washington, DC, October 10, 1998.
Re: H.R. 3888, the Telecommunications Competition and
Consumer Protection Act of 1998
Dear Chairman Bliley: We wish to express our support for
H.R. 3888, the Telecommunications Competition and Consumer
Protection Act of 1998. Consumers need action now to protect
them against the continued problem of slamming. We believe
that this anti-slamming legislation provides a market-based
incentive for industry to address the slamming problem by
self-regulation, backed up by increased FCC regulation for
companies that elect not to participate in an industry-driven
Code of Subscriber Protection Practices.
We commend you and your colleagues for your bi-partisan
efforts in addressing this important issue. The statutory
changes set forth in H.R. 3888, together with tough
enforcement by the FCC, should serve to rid the industry of
the scourge of slamming.
Sincerely,
American carriers Telecommunications Association (ACTA)
AT&T Corp.
Bell Atlantic
BellSouth
Cable & Wireless
Competitive Telecommunications Association (CompTel)
Excel Communications
Frontier Corp.
GTE Corp.
MCI Worldcom
Telecommunications Resellers Association (TRA)
US West
Madam Speaker, I reserve the balance of my time.
Mr. DINGELL. Madam Speaker, I yield myself 5 minutes.
Madam Speaker, I want to commend and thank my colleagues on the
committee for the work that they have done. The gentleman from Virginia
(Mr. Bliley) the chairman of the committee; the gentleman from
Louisiana (Mr. Tauzin), the chairman of the subcommittee, and their
staffs. I also want to commend my good friend, the gentleman from
Massachusetts (Mr. Markey), for having worked closely with me.
[[Page H10611]]
We have put together a good piece of legislation, and I commend my
colleagues whom I have mentioned by name and many others that I have
not for their valuable participation in this matter.
{time} 1630
I rise in strong support of H.R. 3888, the Telecommunications
Competition and Consumer Protection Act of 1988. This legislation is
finally going to put an end to the outrageous illegal and insidious
practice of slamming innocent consumers.
No longer can Americans innocent of any wrongdoing be swindled by
companies who intentionally switch a customer's long distance service
without the permission of that customer. For years customers have been
at the mercy of slammers. They have been victimized repeatedly, with
little or no recourse. Often they have been billed by carriers at
exorbitant rates, and then they must face the further frustration of
having a dozen phone calls made to get their services switched back in
the face of recalcitrant behaviors by people guilty of serious
wrongdoing. Rarely, if ever, have consumers seen a dime of the money
that was swindled from them under this iniquitous practice.
This bill will now put consumers in the driver's seat. If a consumer
believes he or she has been the victim of slamming, then the burden
will shift to the carrier to prove that a switch in service was
authorized. Otherwise, the consumer will be entitled to a credit for
charges incurred. This is a fair approach, and it makes the playing
field level and even. It is my belief it will have a strong and
effective effect on the iniquitous practice of slamming.
The bill before us is bipartisan. It uses a novel two-pronged
approach to the problem. It provides telecommunications companies with
an alternative to traditional regulation. The industry, in conjunction
with consumer groups and State regulators, will have the opportunity to
develop its own ``Code of Subscriber Protection Practices.''
This code is designed to reward good actors with less regulation.
However, if companies choose not to adopt the code, or to act in bad
faith, they will be subject to a higher and more appropriate regulatory
burden. Thus, members of the industry are free to choose their own
destiny. Consumers will be the winners, in any event.
I want to make a note that there were some provisions which were
dropped which I deeply regret. The ``carrier freeze'' provision would
have protected consumers' ability to instruct their local telephone
company that no changes could be made in their selection of long-
distance provider without their express permission.
This seems to me eminently sensible, and is regrettably missing from
this bill. The provision would have been the most effective way to
prevent slamming by simply empowering consumers to protect themselves
without undue government regulation. I am hopeful that next year this
will be addressed.
Finally, I note that I regret that the amendment does not include the
text of Title III of H.R. 3888, which concerned the C-block PCS
licensees. I would note that our chairman has made a comment which I
fully endorse. He has identified the budget problem that is confronted
by the committee, and has wisely determined, with his regret and mine,
to strip that provision from the bill.
Regrettably, I concur in that decision. I would like to say, however,
that CBO's cost estimate of $600 million is the purest of fiction. It
is like Peter and the wolf, or perhaps like Peter Pan. The fact is that
licensees representing 70 percent of the U.S. population are in
bankruptcy. Most of the remaining people in this particular category
are teetering on the edge of the bankruptcy that is sure to follow.
It is unlikely that the Federal Government will see most of the
revenues that CBO and OMB are projecting. The result is going to be a
significant loss to the taxpayers, and something that the Congress will
have to address with great vigor during the forthcoming Congress. I
would point out that one particular bankruptcy judge has estimated that
in certain bankruptcies of this kind, the Federal Government is going
to see less than 16 cents on the dollar.
I would hope the Commission is going to reevaluate its policies
regarding the C-block, and recognize that its primary goal should be
expediting the delivery of service to the public. If the Commissioners
do not do so, I am satisfied that we will be back here again next year
cleaning up the mess that the Commission is consistently making, and
ending the needless litigation and delays that plague the public.
Madam Speaker, this is an excellent bill. I urge my colleagues to
vote for it affirmatively and get it passed, so we may proceed to
protect the American public and the American consumers.
Madam Speaker, I reserve the balance of my time.
Mr. BLILEY. Madam Speaker, I yield such time as he may consume to the
gentleman from Louisiana (Mr. Tauzin), the chairman of the
subcommittee.
Mr. TAUZIN. Madam Speaker, let me first thank the gentleman from
Virginia (Chairman Bliley) and his staff for all the excellent work on
this bill, and my cosponsor, the gentleman from Michigan (Mr. Dingell)
for his excellent efforts, and his, as always, great cooperation, as we
work toward passage of this anti-slamming legislation.
Again, I would also like to commend and thank my good friend, the
gentleman from Massachusetts (Mr. Markey), the ranking minority member,
for his excellent cooperation and support of this legislation.
The gentleman from Michigan (Mr. Dingell) and I are here together to
offer H.R. 3888, entitled the Telecommunications Competition and
Consumer Protection Act of 1998. Why is it called the Consumer
Protection Act? Because it is designed to protect consumers against
this awful practice where telephone companies switch your service
without your permission, often in some fraudulent fashion.
Frankly, we are disappointed that we are here again today having to
legislate for the second time on this subject. We thought we gave the
Commission 2 years ago enough authority and enough direction to
eliminate this practice.
For those who have not heard about it, the volumes of complaints that
have come in to the FCC now total some 20,000 just in 1997 alone. It
involves this practice where the long distance local or advanced
service provider in communications switches the consumer without ever
even informing the consumer. Obviously, when you get your telephone
bill and find out, if you notice it, you are being served by a
different company that you never authorized, and you have just been
slammed.
In May of this past year the Senate passed an anti-slamming bill
offered by Senator McCain by a vote of 99 to nothing. This should tell
us something about how the House and Senate feel about this practice.
To me, slamming is very similar to theft. I echo the frustration of the
gentleman from Virginia (Chairman Bliley) that the FCC has failed so
far to implement provisions pursuant to the slamming provision that we
included in the 1996 telecommunications bill.
Today, after a long, arduous process, we are finally considering a
bill aimed at eliminating this awful practice. It reflects changes
adopted in both the subcommittee and the full committee. We believe the
bill strikes the right balance, it imposes strong anti-slamming
provisions, without burdening the industry with costly regulation, or
confusing an already wronged and perhaps sometimes confused consumer
with a burdensome dispute process.
In short, the way we finally crafted the bill, with great, again,
cooperation and support by the chairman and his staff, and the
gentleman from Michigan (Mr. Dingell) and his subcommittee, the ranking
minority member, offers a less regulatory approach to solving the very
same problem.
It adopts a bifurcated process to the problem. It literally gives
telecommunications companies two options. They can either police
themselves properly through a voluntary code of subscriber protection
practices, a code of conduct, if you will, or if they choose not to,
the carrier suffers the consequence of very tough FCC regulation
mandated by this bill.
I trust that most, if not all, the carriers will choose to operate
under their own code of conduct. The code will prevent slamming, and
ensure that consumers are made whole if they have been slammed. If a
carrier chooses not
[[Page H10612]]
to participate or otherwise fails to live up to these codes, then it is
subject automatically to the regulatory and legal penalties of the FCC,
as contained in our subcommittee version of the bill.
Although some might argue that this is somewhat of a watered-down
version, let me make it clear, this gives the industry a single chance
to voluntarily police themselves without the specific pro-consumer
guidelines and government participation. But if they fail, then these
regulations will go into effect.
In addition, the bill preserves the role for the States to prevent
slamming. States have taken an active role to eliminate slamming, and
the bill preserves the States' discretion to pursue slammers whenever
appropriate. In fact we grandfather the more stringent provisions of
eight of our States who have in fact enacted anti-slamming legislation.
The gentleman from Michigan (Mr. Dingell) and I have titled our bill
the Telecommunications Competition and Consumer Protection Act of 1998.
It is because the amendment is about more than just slamming. Indeed,
there are a number of timely consumer and competition-related issues
that require the House's urgent attention.
For example, this legislation directs the private sector to help
Congress find a solution to the problem of slamming, and also spamming.
Spam, as many know, is bulk unsolicited e-mail. It is a nuisance to
consumers and a threat to our telecommunications and information
infrastructure. Why? Because spam clogs up the e-mail systems, and in
fact can clog up one's personal e-mail box.
Still, we have to recognize that Congress does not have the perfect
solution to this problem. Hence, it is the sense of Congress that the
private sector must address this issue, and the bill asks the private
sector to help us achieve the right solution. It respects free speech,
and also respects consumers' rights not to be spammed.
Our bill also addresses a critical spectrum management issue, the
FCC's refusal for the last 10 years to issue permanent cellular
licenses to three underserved rural areas of America. It is time to
issue those permanent licenses so that rural consumers in those areas
can have the same benefits from the investment in infrastructure,
improved services, and competition that has been available in many
other parts of America.
Finally, this legislation will end up addressing a problem of illegal
CB radio operators who are transmitting signals significantly above
legal levels. We are working on the final language of that. We
understand that the Senate bill contains provisions which, when we get
to conference, we hope to properly resolve.
The bill in the end would, we hope, make it permissible for local law
enforcement officers to help us stop the illegal transmission of these
signals that interfere with telephone calls and television reception.
Hopefully we can resolve this with the Senate as we go forward.
The bill offered by myself and the gentleman from Michigan (Mr.
Dingell) simply says, enough, already. It is time for Congress to take
action, to weigh in, to stop slamming, to help prevent spamming, and to
make sure these rural customers get service, just like other parts of
America. It is a good bill. It is bipartisan, pro-consumer, and we urge
the House, indeed, to approve this bill.
Let me make one final comment, Madam Speaker. That is to join my
friend, the gentleman from Michigan (Mr. Dingell) and the chairman of
our committee, the gentleman from Virginia (Mr. Bliley) in regrettably
noting that we had to drop the C-block reforms that our committee
adopted. We have dropped them because we simply cannot, we think,
include them and get final support of this bill.
Unfortunately, because we are dropping them, the C-block mess will go
on just a little longer. For consumers out there who do not know what a
C-block is, a C-block was a section of spectrum that was auctioned off
for wireless services in America for which now we find ourselves in
bankruptcy disputes.
Many of these companies are returning the spectrum unused, with all
of these potential wireless services being denied consumers, and the
government having to settle for as little as 10 cents on the dollar of
the auction fees. It begs for a solution. In our bill we provided a
solution, only to learn that it is too late in the session for us to
get agreement with the other side in that solution.
However, I want to make a pledge to this House and to the members of
the general public out there who have watched this mess develop. We
will, at the first chance next year, embark upon a solution of the C-
block mess to get the spectrum out so Americans could have the benefit
of it, and to make sure that the American taxpayer is properly
protected in this mess that has been allowed to go on for too long.
It is time for America to realize revenues from the deployment of
this spectrum, and for consumers to realize the benefits of the use of
this spectrum. Our committee, under the leadership of the gentleman
from Virginia (Chairman Bliley) and the ranking minority member, the
gentleman from Michigan (Mr. Dingell), are determined to make sure we
get a resolution of this matter as soon as we can in the next Congress.
Madam Speaker, again I want to thank the gentleman from Virginia (Mr.
Bliley), and as I said, his great staff, for making this bill possible.
It is the hope that before we wrap this session we will make it very
clear that spamming will be hopefully resolved in the marketplace, and
slamming will soon be illegal, and that folks who live in rural areas
will soon get the service the FCC has denied them for 10 years now.
Mr. DINGELL. Madam Speaker, I yield 2 minutes to the distinguished
gentleman from Texas (Mr. Green).
(Mr. GREEN asked and was given permission to revise and extend his
remarks.)
Mr. GREEN. Madam Speaker, I thank my good friend and colleague, the
gentleman from Michigan (Mr. Dingell) for yielding me time and allowing
me to speak on this bill.
Madam Speaker, I rise in support of H.R. 3888, the Anti-Slamming
Amendments Act. As a member of the Subcommittee on Telecommunications,
Trade, and Consumer Protection, Madam Speaker, I am glad this bill will
hopefully be passed and the Senate will consider it.
Slamming is a deceptive practice of switching the consumer's long-
distance service, either unknowingly or unwillingly. As a victim of
slamming this last summer in my own household, like most of us, I asked
my grown children, I said, who changed our long-distance carrier? Of
course, they denied it. The carrier we were changed to was one who I
would never use at all, Madam Speaker, because they have terrible labor
relations, particularly in the Hispanic community.
We received lots of calls in our district on the need to fight
slamming, and today I believe we have a partial solution in front of
us.
{time} 1645
It could have been much stronger, and I think the gentleman from
Louisiana (Mr. Tauzin), chairman of the subcommittee, pointed that out.
Any time we pass legislation, we have to compromise. But, hopefully,
this is a step in the right direction.
H.R. 3888 does two things. First, consumers are automatically
switched back to their original carriers and are provided a credit for
no more than 30 days worth of charges. Second, this bill weeds out the
companies that continue to deceptively slam consumers by making them
pay to switch back consumers, by providing a credit for charges, and by
paying a $500 fine to both the slammed consumer and the original
carrier. And the FCC may impose another $1,000 fine on the slamming
company.
Again, this goes a partial way. Hopefully, if this does not work we
will come back next session to see if we need to beef it up again. H.R.
3888 protects the consumer and makes switching back to their original
carrier easier and imposes no financial burden to them, although when I
had to switch back I did not have any financial burden either.
This legislation has wide support among consumer groups and the
telecommunications industry and the administration, and the anti-
slamming amendment also grandfathers all existing State anti-slamming
laws, such as we have in my home district in Texas.
[[Page H10613]]
Finally, we could have also done more on the anti-spamming,
unsolicited e-mail advertisements. And as a cosponsor of an original
bill on anti-spamming, I had hoped to go much further, and this is an
issue that the next Congress should address.
Madam Speaker, I rise in support of this legislation, and I urge my
colleagues to support it.
Mr. BLILEY. Madam Speaker, I yield 3 minutes to the gentleman from
Florida (Mr. Stearns).
Mr. STEARNS. Madam Speaker, it has been a long process on this bill
to refine it and make it acceptable to industry. And for many, like
myself, in our State of Florida they have been very successful in
stopping slamming. There has been millions of dollars collected in
fees. So while an original cosponsor of this bill, I did not want to
create an overly regulatory, burdensome bill to address slamming,
because I felt in my State we had made a strong effort to combat it.
Congress has already attempted to address the problem of slamming
through the Telecommunications Act by codifying a new section in the
Communications Act to close the abusive loophole that was created by
the breakup of AT&T in 1984. This new section in the act gave the FCC
the power, gave the power to the FCC to issue new regulations to
prevent slamming.
Unfortunately, the FCC did not act in the direction that Congress had
given it, and there was frustration on the part of many of the members
on the Subcommittee on Telecommunications, Trade, and Consumer
Protection because they had not moved forward.
It appeared the problem of slamming grew worse instead of better
after the passage of the act. It was reported that the number of
slamming complaints to the FCC rose to approximately 20,000 in 1997.
Madam Speaker, this is a 56 percent increase over 1996. So, from 1996
to 1997, there was a 56 percent increase. The situation looked like it
was getting worse.
So, Congress had only one option: to create legislation to end this
fraudulent, abusive practice. Under the leadership of the gentleman
from Louisiana (Chairman Tauzin), the gentleman from Virginia (Chairman
Bliley), and the gentleman from Michigan (Mr. Dingell), the ranking
member, who have worked diligently to work out an ideal compromise,
this legislation will allow the FCC and industry to develop a working
code for companies to adhere to proper business practices in soliciting
new customers.
The focus now will be to allow the industry to develop industry-wide
standards that would dramatically decrease the instances of slamming.
If a long-distance company refuses to adhere to adopting these
standards, they will face extremely stiff penalties for every instance
of slamming.
This legislation also promotes the idea of instituting a third-party
verification. The bill would require the National Telecommunications
and Information Administration to study the feasibility and
desirability of establishing a neutral third-party entity to administer
changes to subscribers' carrier selections.
Third-party verification will be the best solution because it would
allow for a nonregulatory, nonburdensome approach to guide long-
distance providers in acquiring new customers.
I think the leadership, the chairman of the committee, the chairman
of the subcommittee, and the ranking member have worked very well
together to solve this problem. I am hoping it is an ideal compromise
which the industry will, of course, support.
Madam Speaker, I urge my colleagues to support this compromise and
will ask the FCC and the industry to develop regulations that will not
constrict the States' abilities to regulate the conduct of long-
distance carriers.
Mr. DINGELL. Madam Speaker, I yield 3 minutes to the distinguished
gentleman from Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. Madam Speaker, I thank the gentleman from Michigan
(Mr. Dingell) for yielding me this time.
Madam Speaker, I strongly support H.R. 3888 today. I have had my
personal experience, as a number of people have, in terms of being
slammed. I find that I am not unique. The distinguished gentleman from
Virginia (Mr. Bliley), chairman of the Committee on Commerce and the
head of the ``Congressional Bow Tie Caucus,'' has similarly been
treated, I understand, by the industry.
So I am pleased today with the legislation that is coming forward.
But I am concerned that there is one provision that we saw in the
Senate that is not included, which I hope that before we are through
the legislative process that there will be an opportunity to include.
That is the truth in billing provision that was amended into the Senate
bill unanimously.
It is very similar to legislation that I have introduced in the
House, H.R. 4018, that has over 50 cosponsors. Truth in billing would
require that the telephone carriers provide accurate information to
customers about both the increases and reductions in consumer charges
resulting from regulatory action.
There has been a great deal that has happened as a result of
telecommunications deregulation, but I cite just one example: the
confusion surrounding the e-rate that speaks to the need for more
complete billing information.
Consumers did not understand that the new line items were for all of
universal service, including rural telephone service which has been in
place for some 60 years. Nor did they understand that the cost to
current phone companies had already been reduced by, we think,
approximately $3 billion, which is far more than we were talking about
with the e-rate, which would have provided access to the Internet for
our schools and libraries.
Madam Speaker, I hope that we will be able, as I say, to refer to the
provisions of H.R. 4018, the truth in billing, because the FCC does
have, although it has initiated rulemaking for truth in billing, it is
a step in the right direction. But it is important that the FCC's
action be grounded in specific legislative authorization.
I would fear that we not be silent on giving consumers clarity on
their phone bill. This Congress has much to be pleased with the
progress that has been made. I think giving full disclosure about
increases and decreases in the phone rates that are charged by the
phone companies will give consumers the information they need to
adequately make their assessments.
Madam Speaker, I hope that the House will accept any Senate
amendments to include truth in billing.
As one who had my long distance carrier switched without my
knowledge, I strongly support efforts to end this unscrupulous
practice.
I want to take a minute to talk about a consumer protection that the
Senate included in its anti-slamming bill, that is not in the bill
before us today, specifically truth in billing.
Truth in billing requires that telephone carriers provide information
about both increases and reductions in consumer charges resulting from
regulatory actions--this is absolutely critical if consumers are to
have a clear understanding of how deregulation of the
telecommunications marketplace affects their pocketbook.
The recent controversy over line item charges associated with the E-
Rate is a perfect example of the confusion that can be caused by
incomplete billing information.
Consumers did not understand that most of the new line items were for
programs which have been in place for 60 years to provide service to
rural areas.
Nor did they understand that costs to phone companies had already
been reduced by more than they were being asked to pay the e-rate.
My legislation to provide for some truth in billing currently has 50
cosponsors.
Some might say that this legislation is unnecessary, since the FCC
has initiated a rulemaking on truth in billing. I am hopeful that their
process will be successful. However, I think this critical proceeding
must be grounded in specific legislative authorization.
Congress cannot be silent on giving consumers clarity about their
phone bills. Should this bill come back from the Senate with this
language, I urge my colleagues to accept it.
Mr. BLILEY. Madam Speaker, I reserve the balance of my time.
Mr. DINGELL. Madam Speaker, I yield 2 minutes to the gentleman from
Oregon (Mr. DeFazio).
[[Page H10614]]
Mr. DeFAZIO. Madam Speaker, I thank the distinguished gentleman from
Michigan (Mr. Dingell) for yielding the time to me.
Madam Speaker, I am pleased that the committee has taken action in
the area of consumer telephone slamming. I introduced the first bill on
this subject on July 9, 1997, with the gentlewoman from Colorado (Ms.
DeGette), the gentleman from New Jersey (Mr. Franks), the gentleman
from Massachusetts (Mr. Frank), the gentleman from Connecticut (Mr.
Shays), the gentleman from Oregon (Mr. Blumenauer), and the gentleman
from Oregon (Mr. Smith). It was a bipartisan approach to a problem
created by a little too much deregulation.
Now a number of people listed on my bill were here and voted for the
telecommunications deregulation. I did not. I was one of 16. I foresaw
many of these anti-consumer problems coming from totally unfettered
deregulation, and I am pleased to see that the committee recognizes
that either the industry has to adopt a strict code to stop slamming
people for profit, or there will be new rules in place to take the
profit out of that activity.
Madam Speaker, I think the committee could have gone a bit further. I
know the industry objects strongly to having written authorization. I
do not believe that would impede the commerce in this industry and
believe it would make even one more step toward fully protecting
consumers. So we may find that steps taken are not totally adequate,
but this is progress.
Sometimes when huge industries get deregulated, consumers get
shafted. They have been shafted now for 2 years by unscrupulous members
of the industry who are slamming them for profit. This bill will go a
long way toward closing that door on the unscrupulous operators. I
congratulate the committee on taking the first steps in this area.
Mr. DINGELL. Madam Speaker, I yield back the balance of my time.
Mr. BLILEY. Madam Speaker, I would just say in closing to the
gentleman from Oregon (Mr. DeFazio), who just spoke, that if this does
not work, we will be back with additional legislation.
Mr. MARKEY. Madam Speaker, this legislation deals with the issue of
slamming and it attempts to combat the unauthorized switching of a
consumer's telephone carrier of choice. I want to thank Chairman Bliley
and Chairman Tauzin, along with Mr. Dingell, for their leadership in
bringing this bill to the floor.
This legislation will provide consumers with additional protections
in an effort to thwart the problem of slamming while and giving further
incentives to the industry. Hopefully these additional provisions will
bring unauthorized carrier switches down to a minimum.
In addition, the bill offered to the House today ensures that these
additional consumer protections are implemented in a way that is
streamlined from a regulatory perspective and that treats carriers in a
competitively neutral way. There's no question that every carrier and
every industry segment is looking for its proper fair advantage to be
built into the rules. I believe that the amendment that will be offered
today wisely keeps intra-industry squabbles on the sidelines and
focuses on the job at hand which is to address slamming in a way that
protects the public in a competitively neutral way.
Finally, I want to thank Chairman Tauzin for including in this bill a
provision that I had in my slamming legislation which tasks the NTIA in
the Commerce Department with the job of conducting an analysis into
third-party verification administration. My feeling is that at the root
of the problem with slamming is that the carriers have a financial
stake in making unauthorized switches or freezing their customers from
switching to others. I believe that ultimately, the long-term solution
to this problem is to take away the authority to authorize switches or
freezes from those who have a clear financial incentive to authorize
such action. The NTIA is asked to explore the feasibility of an
independent administrator or a series of independent regional verifying
agents to authorize switches and validate switches before consumers
have their telephone company changed.
One example of why we may need to go to the implementation of a third
party administrator or administrators can be seen by the recent use of
something referred to as a ``PIC freeze.'' A PIC freeze is styled as a
pro-consumer service offered by local phone companies to their
customers whereby the local phone company promises not to change or
modify the customer's service without direct instruction from the
customer. While this may be quite appealing to some consumers, there is
also significant competitive percussions that flow from such a service
offering. The local phone companies might also utilize the PIC freeze
device to lock up their own customers and impede competition by making
it much more difficult for competitors to obtain and effectively and
efficiently switch customers.
There has to be a balance. A PIC freeze device aggressively employed
by local telephone monopolies could become a significant impediment to
competition in local, intraLATA toll, and ultimately long distance.
telecommunications markets. This would obviously thwart the longtime
goal of the Congress to introduce widespread and effective competition
in all telecommunications markets as rapidly as possible. I wonder
where long distance competion would be today if AT&T had vigorously
employed offering ``PIC freezes'' to customer in the immediate
aftermath of the breakup of Ma Bell. I suspect that the introduction of
competition, and thus lower prices for consumers, would have been
significantly retarded if such action had been undertaken.
It's my view that a competitively neutral administrator or
administrators could help solve these difficult consumer protection and
competition issues. I look forward to NTIA's analysis of these issues.
I'd also like to comment briefly on a provision that was dropped from
this bill as it arrives on the floor. In the House Commerce Committee,
Chairman Tauzin offered and the Committee unanimously adopted an
additional provision to address policy issues that urgently need to be
dealt with in the so-called ``C-Block'' or ``entrepreneurial block'' of
the broadband PCS service. The recent hearing that the
Telecommunications Subcommittee had on the C-block issue was very
insightful. Virtually an entire class of FCC licensees is either in
bankruptcy, returning its licenses, returning half of its spectrum, or
on the verge of bankruptcy.
The C-block provision that the Commerce Committee approved at the
Full Committee markup remained true to the fundamental goals of both
the 1993 spectrum auction law and the 1996 Telecommunications Act--both
were designed to expedite the delivery of telecommunications services
to the public and to create new competitive opportunities in the
telecommunications industry for small and entrepreneurial businesses.
In previous sessions, Members of the Commerce Committee, and indeed
the House as a whole, enthusiastically endorsed the licensing of small
businesses. As a result, the ``C-Block'' in the broadband Personal
Communications Services (PCS) auctions was created. This action was
taken by the FCC for the express purpose of achieving these two key
congressional policy objectives. Along the way, however, a number of
adverse events conspired to thwart congressional intent to create more
competition and innovation and lower prices for consumers.
First, the ``budgeteers'' discovered the airwaves. Believing that
they had stumbled upon some magical fiscal alchemy that allowed them to
literally create billions of dollars out of thin air, those intimately
involved with the budget process both here on the Hill and over at OMB
set spectrum policy on its head. Taking what was designed to be an
efficient and expedited manner of licensing new services, they warped
it and turned the FCC into a giant governmental auction house. They
then flooded the auction with more and more spectrum to sell. In
addition, judicial and regulatory delays encountered in fashioning the
rules for small business licensees, as well as dramatic, unpredictable
and quite negative changes in the final markets' receptivity to
financing these businesses also put the goals of the Commerce Committee
at serious risk.
The result today is that a very large percentage of C-Block spectrum
lies fallow. This does neither the taxpayer, nor the taxpayer-consumer
any good at all. Consumers are daily paying more for wireless service
across the country because these new competitors are not in the
marketplace competing for their business. Job creation is also put on
hold as dozens of licenses for choice markets languish in bankruptcy
court.
Unfortunately, the bill before us today does not contain the C-block
provision because of the adverse ``scoring'' it was to receive from the
Congressional Budget Office (CBO) and OMB in the Administration. The
particular rules of budget scoring here on the Hill at CBO prevent us
from facing reality. The reality is that these licenses are going to
languish in bankruptcy and the Congressional policy of rapidly
introducing lower prices, innovation, creating jobs and choices for
consumers, through new competition will be seriously undermined. OMB,
for its part, continues to live in a fiscal fantasy land with respect
to how much money these licenses will raise for the Treasury. Rather
than admitting its gross error in utilizing phony frequency money to
balance the budget or, of late, to increase the surplus, OMB compounds
the error by resisting bipartisan legislation to put sound
telecommunications policy back on track. This is unfortunate. It's an
anti-consumer, anti-taxpayer, anti-
[[Page H10615]]
worker stance. The result will be a public policy morass.
I hope that we can return to this subject next year and hopefully
return integrity to telecommunications policy by cleaning up the
problems created by placing auction revenue, above all other values, as
our highest public policy goal.
Again, I want to commend Chairman Bliley, Chairman Tauzin, Mr.
Dingell, and our other colleagues for their work on this measure and
urge the House to support it.
Mr. BLILEY. Madam Speaker, I urge the adoption of the bill, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mrs. Emerson). The question is on the motion
offered by the gentleman from Virginia (Mr. Bliley) that the House
suspend the rules and pass the bill, H.R. 3888, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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