[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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