[Senate Report 105-183]
[From the U.S. Government Publishing Office]
Calendar No. 356
105th Congress Report
SENATE
2d Session 105-183
_______________________________________________________________________
CONSUMER ANTI-SLAMMING ACT
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1618
May 5, 1998.--Ordered to be printed
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fifth congress
second session
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington WENDELL H. FORD, Kentucky
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA SNOWE, Maine JOHN F. KERRY, Massachusetts
JOHN ASHCROFT, Missouri JOHN B. BREAUX, Louisiana
BILL FRIST, Tennessee RICHARD H. BRYAN, Nevada
SPENCER ABRAHAM, Michigan BYRON L. DORGAN, North Dakota
SAM BROWNBACK, Kansas RON WYDEN, Oregon
John Raidt, Staff Director
Mark Buse, Policy Director
Ivan A. Schlager, Democratic Chief Counsel and Staff Director
James S. W. Drewry, Democratic General Counsel
105th Congress Report
SENATE
2d Session 105-183
_______________________________________________________________________
CONSUMER ANTI-SLAMMING ACT
_______
May 5, 1998.--Ordered to be printed
_______________________________________________________________________
Mr. McCain, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 1618]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1618), a Bill To amend the
Communications Act of 1934 to improve the protection of
consumers against ``slamming'' by telecommunications carriers,
and for other purposes, reports favorably thereon with
amendments and recommends that the bill (as amended) do pass.
purpose of the bill
The purpose of the bill is to provide additional protection
for consumers against the unauthorized changing of their
provider of telephone exchange service or telephone toll
service.
background and needs
``Slamming'' is the unauthorized changing of a consumer's
provider of telephone exchange service or telephone toll
service. It is a problem that affects thousands of consumers
across the country, and one that is expected to grow if
stringent anti-slamming measures are not developed.
Consumers who are slammed often receive lower-quality service
or are charged higher rates by their new carrier. Sometimes
consumers are not even aware that they have been slammed until
after they see their bills. Once they discover the problem,
they often have no choice but to go through the aggravation of
getting their service switched back to their original carrier
and having their bills adjusted. During this process, many
consumers find it difficult to secure compensation for any
additional damages they may have suffered as a result of the
slamming.
There are many ways in which a carrier can slam a consumer.
Some long distance companies misrepresent themselves by
claiming that they are calling on behalf of another company or
are working with the local telephone company to consolidate
local and long distance phone bills. Other companies use false
third-party verification or negative option packages, with
deceptive telemarketing practices, as a way to obtain
authorization for carrier changes. Still others just claim
falsely that they received the consumer's verbal consent for
the switch.
The Federal Communications Commission (FCC) first established
safeguards to deter slamming when equal access was implemented
in 1985. Equal access allowed consumers to select their
preferred provider of long distance service and required local
telephone companies to program their network switches to
automatically route long distance calls from consumers' homes
or businesses to their carrier of choice. The FCC's initial
slamming rules required long distance carriers to take steps to
obtain signed Letters of Agency (LOA) from consumers before
initiating a carrier change.
As the long distance market grew more competitive, additional
slamming rules were needed. In 1992, in response to a petition
by AT&T and MCI, the Commission adopted procedures for
verifying carrier-initiated telemarketing calls.
Notwithstanding this verification requirement, slamming
problems persisted. Responding to continuing consumer
complaints, the Commission instituted a rulemaking and adopted
rules to deter misleading LOAs in 1995.
Despite these measures, aggressive long distance
telemarketers continue to mislead consumers by, for example,
obtaining a consumer's signature to accept a check, card or
promotional item and then using the signature to have their
long distance service changed.
In its Fall 1996 Common Carrier Scorecard, the FCC said that
more than one-third of the written complaints submitted to the
FCC's Consumer Protection Branch in 1995 related to slamming.
This problem is continuing to grow at a troubling rate.
Slamming complaints are the fastest-growing category of
complaints reported to the FCC, having more than tripled in
number since 1994. In 1997, 44,000 consumers wrote slamming
complaints to the FCC. This is a 175 percent increase from the
16,000 complaints received in 1996.
The scope of the slamming problem is even broader than
indicated by the number of complaints filed at the FCC.
According to the National Association of State Utility Consumer
Advocates, slamming is now the largest single consumer
complaint received by many state consumer advocates, and as
many as one million consumers are switched annually to a
different provider without their knowledge or consent.
With the enactment of the Telecommunications Act of 1996,
which added a new section 258 to the Communications Act of
1934, the FCC is again reexamining its rules. Section 258
includes provisions to reduce slamming. Among other things, it
provides that no telecommunications carrier shall submit or
execute a change in a consumer's selection of a provider of
telephone exchange service or telephone toll service except in
accordance with the FCC's verification procedures.
The law also provides that any telecommunications carrier
that violates the FCC's verification procedures and that
collects charges for telephone exchange service or telephone
toll service from a consumer shall be liable to the consumer's
original preferred carrier for an amount equal to all charges
paid by the consumer to the unauthorized carrier. The FCC is
now in the process of adopting rules to implement these
provisions.
Notwithstanding this succession of regulatory and statutory
attempts to deter slamming, it remains a serious and growing
problem. One reason is that it is often difficult to prove that
a provider switched a consumer to its service without the
consumer's consent. Without this evidence, slammers often go
unpunished. Another reason is that the majority of consumers
who have been fraudulently denied the services of their chosen
carrier do not turn to the FCC for assistance because the
Commission's processes are confusing and the available
sanctions inadequate.
S. 1618 is a bill designed to provide more effective ways to
stop slamming. This legislation establishes stringent anti-
slamming safeguards, as well as additional remedies and fines,
that will discourage carriers from engaging in this practice.
It prescribes definitive procedures for companies to follow in
making carrier changes, provides alternative ways for consumers
to obtain redress for having been slammed, and gives federal
and nonfederal authorities the power to impose tough sanctions,
including high fines and compensatory and punitive damages.
These measures, in addition to those that the FCC and/or the
states may develop, will ensure that consumers are afforded
adequate protection against slamming.
legislative history
On August 12, 1997, the Subcommittee on Communications held a
hearing on slamming in Billings, Montana. Witnesses at the
hearing included federal and state government representatives,
federal and state trade associations, industry representatives,
and consumers whose long distance carriers were switched
without consent.
On October 14, 1997, the Subcommittee on Communications held
a hearing on slamming in Denver, Colorado. Witnesses at this
hearing included federal and state government representatives,
industry representatives, a Colorado telecommunications trade
association, and consumers whose long distance carriers were
switched without consent.
Senator John McCain, the Chairman of the Committee on
Commerce, Science, and Transportation, introduced S. 1618 on
February 9, 1998. The bill's cosponsors are Senators Hollings,
Frist, Snowe, Reed, Bryan, Dorgan, Johnson, Harkin, Kerry,
Inouye, Abraham, Baucus, Smith, Gorton, Lott, and Bob Smith.
Other slamming bills introduced in the 105th Congress are:
H.R. 2112, introduced by Representative Franks on July 8, 1997;
H.R. 2120, introduced by Representative DeFazio on July 9,
1997; H.R. 3050, introduced by Representative Dingell on
September 13, 1997; S. 1051, introduced by Senator Campbell on
July 22, 1997; S. 1137, introduced by Senator Durbin on July
31, 1997; S. 1410, introduced by Senator Reed on September 7,
1997; and S. 1740, introduced by Senator Collins on March 10,
1998.
MARCH 12, 1998 EXECUTIVE SESSION
In open executive session on March 12, 1998, after adopting
amendments offered by the Chairman, the Committee, by a voice
vote, ordered S. 1618 reported.
estimated costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 7, 1998.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1618, a bill to
amend the Communications Act of 1934 to improve the protection
of consumers against ``slamming'' by telecommunications
carriers, and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Kim Cawley
(for federal costs), Alyssa Trzeszkowski (for revenues), and
Jean Wooster (for the private-sector impact).
Sincerely,
June E. O'Neill, Director.
Enclosure.
congressional budget office cost estimate
S. 1618--A bill to amend the Communications Act of 1934 to improve the
protection of consumers against ``slamming'' by
telecommunications carriers, and for other purposes
Summary: S. 1618 would amend the Communications Act of 1934
to prohibit telecommunications carriers or service resellers
from submitting or executing changes in a subscriber's
selection of a provider of telephone exchange or toll service
except in accordance with procedures prescribed by the Federal
Communications Commission (FCC). Under this bill, consumers
would have the right to file a complaint with the FCC if
concerns regarding an unauthorized change in providers cannot
be resolved by the carrier or service reseller within 120 days.
The commission would be required to follow simplified
procedures in reviewing these cases, and to issue an order
resolving the complaint within 150 days. If violations are
identified, the commission would be authorized to award damages
to the customer of $500 or more and to impose additional
penalties on carriers or service resellers. The bill also would
direct the FCC to issue various rules and reports related to
industry practices and implementation of the bill.
CBO estimates that the net budgetary impact of implementing
this bill would not be significant. Because the bill would
establish new penalties that could affect receipts, pay-as-you-
go procedures would apply. S. 1618 contains no
intergovernmental mandates as defined in the Unfunded Mandates
Reform Act of 1995 (UMRA) and would not affect the budgets of
state, local, or tribal governments. S. 1618 would impose new
private-sector mandates, but CBO estimates the costs would fall
below the statutory threshold.
Estimated cost to the Federal Government: CBO estimates
that the FCC would spend about $6 million annually to implement
this bill, assuming appropriation of the necessary amounts.
Because the commission is authorized under current law to
collect fees from the telecommunications industry sufficient to
offset the cost of its enforcement program. CBO assumes that
these additional costs would be offset by an increase in
collections credited to annual appropriations for the FCC.
Hence, we estimate that the net effect on discretionary
spending would be negligible.
The FCC's gross administrative costs would increase
primarily because it would be required to issue a formal order
for each complaint. In 1997, the agency received over 20,000
such complaints, most of which were resolved without issuing
orders. CBO expects that the FCC's caseload would decline as a
result of the bill's incentives for industry to resolve
complaints voluntarily, but that its total workload would grow
because of the time involved in issuing an order for each case.
Based on information provided by the FCC, we estimate that
issuing orders for 12,000 cases would cost an additional $6
million per year and that preparing the regulations and reports
required by the bill would cost less than $500,000.
The bill also would amend the Communications Act of 1934 to
impose penalties on those who make unauthorized changes in a
subscriber's provider of telephone services. CBO estimates that
this provision would have a negligible effect on revenues.
Pay-as-you-go considerations: Section 252 of the Balanced
Budget and Emergency Deficit Control Act of 1985 sets up pay-
as-you-go procedures for legislation affecting direct spending
and receipts. Enacting S. 1618 could affect receipts because
the bill would authorize civil penalties, but CBO estimates
that this provision would have little or no budgetary impact.
Estimated impact on State, local, and tribal governments:
S. 1618 contains no intergovernmental mandates as defined in
UMRA and would impose no costs on state, local, or tribal
governments.
Estimated impact on the private sector: S. 1618 would
impose new private-sector mandates, as defined by UMRA, on
telephone carriers and resellers. The most significant burden
would fall on those carriers and resellers when they process a
customer's request to change providers. CBO estimates that the
annual direct costs of complying with private-sector mandates
in the bill would probably not exceed the statutory threshold
($100 million in 1996, adjusted annually for inflation).
Current regulations specify the verification process
required for any change in a subscriber's choice of provider of
telephone toll service (long-distance) generated by
telemarketing. S. 1618 would expand the current verification
procedures, and extend those procedures to include providers of
telephone exchange (local) service and customer-initiated
changes. The bill would also require that the carrier or
reseller respond in writing to unresolved complaints within a
prescribed time. Although the verification process could lead
to substantial aggregate costs because it would apply to
providers of both local and long-distance service and to both
telemarketing and customer-initiated changes, it is unlikely
that the incremental costs attributable to the new mandate
would reach the statutory threshold for private-sector
mandates. In response to a FCC Notice of Proposed Rulemaking
released on July 15, 1997, implementing provisions in the
Telecommunications Act of 1996 concerning unauthorized changes
of consumers' long-distance carriers, three major telephone
carriers claimed that the cost of requiring verification of
customer-initiated changes would total nearly $60 million
annually. Information provided by the FCC, however, suggests
that those costs represented total costs and not the
incremental costs of the proposed rule. Similarly, CBO has
concluded the incremental costs of other requirements relating
to verification--responding to complaints and adding local
service providers--would be relatively small.
Estimate prepared by: Federal costs: Kim Cawley, revenues:
Alyssa Trzeszkowski, and impact on the private sector: Jean
Wooster.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
regulatory impact statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
This legislation establishes expedited procedures for
resolution of slamming complaints and authorizes the FCC to
impose additional penalties against telecommunications carriers
found guilty of slamming. It will have no effect on the number
of individuals regulated.
economic impact
This legislation authorizes the FCC to impose additional
penalties on telecommunications carriers for slamming. However,
it is expected to have little economic impact.
privacy
This legislation will not have any adverse impact on the
personal privacy of the individuals affected.
paperwork
This bill requires the FCC to resolve slamming complaints
within 150 days. However, it is expected to reduce the number
of slamming complaints that the FCC will receive. Therefore,
any additional paperwork requirements associated with this bill
should be minimal.
section-by-section analysis
Section 1. Improved protection for consumers
Section 1(a) establishes minimum verification requirements
for submitting or executing a change in a subscriber's provider
of telephone exchange service or telephone toll service. This
section requires telecommunications carriers to have the
subscriber: acknowledge the type of service to be changed;
affirm the subscriber's intent to select the provider; affirm
that the subscriber is authorized to select the provider for
the telephone number in question; acknowledge that the
selection of the provider will result in a changein the
provider of that service; and provide such other information as the
Commission considers appropriate for protection of the subscriber.
A Committee amendment to S. 1618 provides that resellers, not
the underlying telecommunications carriers, are liable for the
resellers' slamming violations. Resellers therefore must comply
with the verification requirements outlined in section 1(a).
They are also liable for the damages and penalties described in
section 1(b). This change will ensure that resellers are held
responsible for their own slamming activities.
Wherever it appears in the bill, the phrase ``carrier'' is
intended to refer to all telecommunications carriers including,
but not limited to, resellers. The use of the phrase ``carrier
or reseller'' does not in any way suggest that a reseller is
not a carrier or is otherwise distinguishable from a carrier
under the Communications Act of 1934 as amended by the
Telecommunications Act of 1996.
Another amendment would change the verification procedures in
the original bill by eliminating a provision that required a
consumer agreeing to a carrier change to acknowledge that he is
the subscriber and by adding language that would only require a
person to affirm that he is the subscriber or is otherwise
authorized to make the change. Many times spouses or parents
are authorized to switch carriers, but their names are not on
the billing statements. This provision would provide more
flexibility for both consumers and carriers in making carrier
changes.
Another amendment also provides that the verification
procedures that apply to changes in carrier selection will also
apply when consumers establish service for the first time.
Consumers are exposed to the risk of being slammed when they
make their initial carrier selection as well as when they
switch their carrier.
Section 1(a) establishes that additional requirements
prescribed by the Commission shall preclude the use of negative
option marketing; provide for verification of a change in the
telephone exchange service or the telephone toll service
provider in oral, written, or electronic form; and require the
retention of such verification for such time that the
Commission considers appropriate. These procedures are expected
to help the Commission and other relevant parties to determine
whether a slamming incident has taken place. Evidence of an
authorized switch or the absence of such evidence can resolve
the issue of whether or not consent was given to switch
carriers.
Under section 1(a), state commissions are not precluded from
enforcing the procedures provided in this bill with respect to
the provision of intrastate services.
This Act does not apply to providers of commercial mobile
services, as that term is defined in section 332(d)(1) of the
Communications Act of 1934. The Committee intends to exempt
such providers from section 258 of the Communications Act
because, within the commercial mobile service industry, the
number of slamming complaints has been negligible.
Section 1(b) provides that when there is a change in a
subscriber's selection of a provider of telephone exchange
service or telephone toll service, the telecommunications
carrier selected shall notify the subscriber of the change, in
writing, not more than 15 days after the change is made. The
Committee's amendment to section 1(b) provides that the 15-day
period that carriers have to notify subscribers of their
carrier change would begin running after the change is
processed by the long distance carrier after dealing with the
subscriber rather than after the change is executed by the
local exchange carrier after the local exchange carrier
receives notice of the change by the long distance carrier.
This approach recognizes that long distance carriers are often
unaware of when the change is actually executed by the local
company.
In addition, with the amendment, carriers will only have to
notify subscribers that they may request information regarding
when the carrier change was made and the name of the person who
made the change. In the original version of the bill, carriers
were required to provide this information automatically.
Section 1(b) requires the Commission to prescribe a period of
time, not exceeding 120 days, for a telecommunications carrier
to resolve a complaint by a subscriber concerning an
unauthorized change in the subscriber's selection of a provider
of telephone exchange service or telephone toll service. The
amendment adopted by the Committee provides that the period of
time to resolve the complaint will begin running after the
carrier receives notice of the complaint.
If a carrier fails to resolve a complaint within the time
period prescribed by the Commission, then, within 10 days after
the end of that period, the carrier must notify the subscriber
in writing of the subscriber's right to file a complaint with
the Commission concerning the unresolved complaint, the
subscriber's other rights under this section, and the other
remedies available to the subscriber concerning unauthorized
changes. The carrier also must inform the subscriber in writing
of the procedures prescribed by the Commission for filing a
complaint and provide the subscriber a copy of any evidence in
the carrier's possession showing that the change in the
subscriber's provider was submitted or executed in accordance
with the verification procedures prescribed by the bill as
reported. Failure to comply with these requirements amounts to
a violation of section 1(a).
Section 1(b) also requires the Commission to establish a
simplified process for resolving complaints that does not
increase the expense, formality, and time involved in the
process. The bill requires the Commission to issue an order
resolving a complaint no later than 150 days after the date on
which it received the complaint, with respect to violations of
the law, and 90 days after it resolves a complaint, with
respect to penalties and damages issues.
When a violation is found, the Commission may award damages
equal to the greater of $500 or the amount of actual damages.
The Commission may, at its discretion, award treble damages.
This provision anticipates that the Commission will award
damages where there is fault on the part of the carrier and
will use discretion to not award or mitigate damages in cases,
for example, where the complaint was a result of customer
confusion, carrier error, or an unauthorized change by a
carrier's unaffiliated reseller (in which case the reseller,
but not the underlying carrier, may be liable for damages), an
error by the local exchange carrier or interexchange carrier in
keying in a change, or some other error. Likewise, the
Commission may consider these, and any other mitigating
circumstances, when determining whether to impose treble
damages under this section.
This bill gives a considerable amount of discretion to the
Commission and to the courts in determining fault and imposing
penalties and damages on carriers who make unauthorized changes
of telephone service providers. Discretion is critical because
it allows the Commission and the courts to focus on punishing
fraudulent carriers who seek to profit from changing a
consumer's telephone provider without permission, while
dispensing with complaints that have been brought in error or
are unfounded. Section 1(b) of the bill provides that, unless
there are mitigating circumstances, a violation of the
verification procedures is punishable by a fine of not less
than $40,000 for the first offense, and not less than $150,000
for each subsequent offense. The consideration of circumstances
mitigating an apparent violation of the Commission's rules is a
customary practice by the FCC in assessing fines and other
penalties. For purposes of assessing fines under this statute,
mitigating circumstances may include instances in which an
unauthorized change is made by a carrier's unaffiliated
reseller, a complaint is served in error, a complaint is caused
by a local exchange carrier or interexchange carrier's
unintentional error in keying in a change or by unintended
customer confusion (e.g., where one individual in a household
or office authorizes a change but fails to communicate this to
anyone else), or in which a simple billing error is
misperceived as slamming. Because the penalties authorized
under this section of the bill are severe, the Commission
should use its discretion to punish wrongful behavior and
should not misapply the penalties in cases where a slamming
complaint turns out to be the result of circumstances such as
those listed here.
Likewise, the above situations, and any similar
circumstances, may be considered by a court when determining
whether to award $500 or actual damages or treble damages under
section 1(c) of the bill.
The bill gives the Commission authority to take action on its
own behalf to collect any fines it imposes under this section,
and on behalf of any subscriber, to collect any damages awarded
to the subscriber. This provision empowers the Commission to
prosecute slammers who refuse to pay fines or damages. The
Commission no longer has to go through the Department of
Justice to collect the fines or damages it levies.
Section 1(c) provides that whenever a state has reason to
believe that a carrier has engaged in a pattern or practice of
changing telephone exchange service or telephone toll service
providers without authority from subscribers in that state in
violation of this section, the state may bring a civil action
on behalf of its residents to enjoin such unauthorized changes,
an action to recover for actual monetary loss or $500 in
damages for each violation, or both such actions. If the court
finds willful or knowing action on the part of carriers to
violate this legislation, the court may increase the award to
an amount equal to not more than treble the amount available
above.
The district courts of the United States have exclusive
jurisdiction over all civil actions brought under this section.
Such courtsalso have jurisdiction, upon proper application, to
issue writs of mandamus, or similar orders, directing the defendant to
comply with section 258 of the Communications Act. The bill also
stipulates that courts have the authority to grant a permanent or
temporary injunction or restraining order upon a proper showing.
Section 1(c) requires a state to serve prior written notice
of any civil action upon the Commission and provide the
Commission with a copy of its complaint. The Commission has the
right to intervene in the action; upon so intervening, to be
heard on all matters arising therein; and to file petitions for
appeal.
Any civil action brought under this section may be brought in
the U.S. district court where the defendant is found or is an
inhabitant or transacts business, or where the violation
occurred. The bill establishes that nothing in section 258 of
the Communications Act prevents the attorney general of a state
from exercising the power to conduct investigations or to
administer oaths or affirmations or to compel the attendance of
witnesses or the production of documentary and other evidence.
Moreover, nothing in this bill prohibits 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.
When the Commission has instituted a civil action for
violation of regulations prescribed under this section, no
state may, during the pendency of such action, institute a
civil action against the same defendant named in the complaint
before the Commission for the same violations alleged in the
complaint before the Commission. However, the state may
institute a civil action against the same defendant for a
violation different from that alleged in the complaint before
the Commission.
Section 1(c) defines the term ``attorney general'' as the
chief legal officer of a state.
Section 1(c) states that nothing in section 258 of the
Communications Act shall preempt any state law that imposes
more restrictive intrastate requirements regarding changes in a
subscriber's selection of a provider of telephone exchange
service or telephone toll service.
Section 1(d) of the bill requires the Commission to submit a
report to Congress no later than October 31, 1998, on
unauthorized changes of subscribers' providers of telephone
exchange service or telephone toll service. The report must
include a list of the 10 carriers that, during the one-year
period ending on the date of the report, were subject to the
highest number of slamming complaints when compared with the
total number of subscribers served by such carriers. The report
also must identify the carriers, if any, assessed fines under
section 1(c) of this bill, during the one-year period,
including the amount of each fine and whether the fine assessed
was as a result of a court judgment, a Commission order, or a
consent decree.
The purpose of the Commission's report to Congress under
section 1(d) is to inform Congress of the most egregious
violators of Section 258 of the Communications Act. To fulfill
this goal, the Commission should focus on reporting complaints
that reflect wrongdoing on the part of a carrier. To that end,
the Commission, in preparing its reports to Congress, should
verify the identity of the alleged slammers in the consumers'
complaints and use those verified complaints as the basis for
its final report citing the 10 carriers that have been the
object of the highest number of complaints. Complaints that
have been fully investigated, found to have merit, and
attributed to the actual wrongdoer will provide Congress
factual information on those carriers who slam consumers.
For purposes of this section, instances in which it would be
an error to attribute a complaint to the carrier to which it
was originally addressed are generally the same as those
enumerated above that the FCC should consider in mitigation of
apparent liability for forfeiture.
Section 2. Report on telemarketing practices
Section 2 requires the FCC to issue a report within 180 days
after enactment of this bill on the telemarketing practices
used by carriers or their agents or employees for the purpose
of soliciting carrier changes by subscribers. As part of the
report, the Commission must include findings on the extent to
which imposing penalties on telemarketers would deter slamming;
the need for rules requiring third-party verification of
changes in a subscriber's selection of a provider; and whether
wireless carriers should continue to be exempt from the
verification and retention requirements.
If the Commission determines that particular telemarketing
practices are being used with the intention to mislead,
deceive, or confuse subscribers, then the Commission must
initiate a rulemaking to prohibit the use of such practices
within 120 days after the completion of its report.
changes in existing law
In the opinion of the Committee, it is necessary to dispense
with the requirements of paragraph 12 of Rule XXVI of the
Standing Rules of the Senate in order to expedite the business
of the Senate.