[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Proposed Rules]
[Pages 39107-39110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19137]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 93-22; CC Docket No. 96-146; FCC 96-289]


Interstate Information Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission adopted this Notice of Proposed Rule Making to 
address possible evasions of new statutory requirements that impose 
more stringent restrictions on the use of toll-free numbers to charge 
callers for information services and repeal the exemption to pay-per-
call status accorded to any service provided pursuant to tariff. This 
action was taken to amend the Commission's rules to ensure that these 
requirements governing interstate pay-per-call and other information 
services contained in the Telecommunications Act of 1996 are fully 
realized.

DATES: Comments must be submitted on or before August 26, 1996. Reply 
comments must be submitted on or before September 16, 1996. Written 
comments by the public on the proposed and/or modified information 
collections are due August 26, 1996. Written comments must be submitted 
by the Office of Management and Budget (OMB) on the proposed and/or 
modified information collections on or before September 24, 1996.

ADDRESSES: Federal Communications Commission, 1919 M Street N.W., 
Washington, D.C. 20554. In addition to filing comments with the 
Secretary, a copy of any comments on the information collections 
contained herein should be submitted to Dorothy Conway, Federal 
Communications Commission, Room 234, 1919 M Street, N.W., Washington, 
D.C. 20554, or via the Internet to [email protected], and to Timothy 
Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W., Washington, 
D.C. 20503 or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Mary Romano, Enforcement Division, 
Common Carrier Bureau, (202) 418-0960. For additional information 
concerning the information collections contained in this NPRM contact 
Dorothy Conway at (202) 418-0217, or via the Internet at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Proposed Rule Making (NPRM) in CC Docket No. 96-146 [FCC 96-
289], adopted June 28, 1996 and released July 11, 1996. The full text 
of the NPRM is available for inspection and copying during normal 
business hours in the FCC Reference Center, Room 239, 1919 M Street, 
N.W., Washington, D.C. The full text of this NPRM may also be purchased 
from the Commission's duplicating contractor, International 
Transcription Services, 2100 M Street, N.W., Suite 140, Washington, 
D.C. 20037, (202) 857-3800. For a document relating to this NPRM, see 
final rules involving interstate information services published 
elsewhere in this issue.

Paperwork Reduction Act

    This NPRM contains either a proposed or modified information 
collection. The Commission, as part of its continuing effort to reduce 
paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collections 
contained in this NPRM as required by the Paperwork Reduction Act of 
1995, Public Law 104-13. Public and agency comments are due on or 
before August 26, 1996. OMB comments are due September 24, 1996. 
Comments should address: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    Title: Disclosure Requirements for Information Services Provided 
Under a Presubscription or Comparable Arrangement.
    Type of Review: New collection.
    Respondents: Information providers offering services under a 
presubscription or comparable arrangement.
    Number of Respondents: 1,000.
    Estimated Time per Response: 5.
    Total Annual Burden: 5,000.
    Estimated costs per respondent: $0.00.
    Needs and Uses: This disclosure requirement will ensure that 
consumers are fully informed about an information service before 
entering into an agreement to purchase the service on a subscription 
basis.

Summary of Notice of Proposed Rule Making

    1. On June 28, 1996, the Commission adopted a Notice of Proposed 
Rule Making (NPRM) in CC Docket No. 96-146 (released July 11, 1996; FCC 
96-289) proposing changes to Part 64 of the Commission's rules which 
govern the provision of interstate pay-per-call and information 
services. In a companion Order, the Commission amended these rules to 
conform with amendments to Section 228 of the Communications Act of 
1934, as amended, (Communications Act), 47 USC Sec. 228, that were 
enacted by the Telecommunications Act of 1996,

[[Page 39108]]

Public Law 104-104, (1996 Act). The NPRM proposes limited additional 
rule changes intended to prevent evasion of the new statutory 
requirements.
    2. Through amendments to Section 228 of the Communications Act, the 
1996 Act addresses abusive practices that have threatened public 
confidence in toll-free numbers and left telephone subscribers 
vulnerable to unexpected charges for calls to information services, 
subject to disconnection of local and long-distance telephone service 
for failure to pay such charges, and unable to block access to unwanted 
services. In apparent efforts to avoid consumer safeguards applicable 
to pay-per-call (or 900 number) services, information providers (IPs) 
have offered their programs through collect calls, purported 
presubscription arrangements, and tariffed-service systems that have 
been available on 500, 700, 800, international and domestic POTS 
(``plain old telephone service'') numbers. IPs evidently move their 
services from one arrangement and dialing sequence to another in 
response to new protective regulations, rulings, or enforcement 
actions, sometimes with the apparent encouragement of common carriers 
who pay commissions to IPs in exchange for the increased traffic 
generated by information-service calls.
    3. The provisions of Section 228 of the Communications Act attest 
to Congress' determination that consumers should be: (1) Provided basic 
information regarding the price and other material terms and conditions 
applicable to interstate information services before agreeing to 
purchase them; (2) able to block access to unwanted services; and (3) 
protected from disconnection of basic communications services for 
failure to pay information-services charges. 47 USC Sec. 228(c) (4), 
(5). The revisions to Section 228 enacted by the 1996 Act are intended 
to ensure that consumers are not deprived of these protections by 
information services available through toll-free dialing sequences or 
tariffed-service systems.
    4. The Commission determined that in analyzing the effect of the 
new statutory requirements, it must look not only to the practices that 
are now prohibited but also to the likely responses of IPs and common 
carriers who might seek to evade the statute. The Commission stated 
that its consideration of possible evasions has been influenced by 
awareness of past evasions that have resulted in widespread deception 
and abuse. The Commission concluded that it should act now to 
discourage future abuse. Accordingly, as set forth in the proposed 
rules and explained below the Commission proposed certain very limited 
modifications to Sections 64.1501(b), 64.1504, and 64.1510 of the 
rules, which contain the presubscription definition, toll-free number 
limitations, and billing requirements. We also seek comment on whether 
additional regulations are necessary to protect consumers from certain 
practices by common carriers involved in transmitting interstate 
information services that could be interpreted as not being just and 
reasonable under Section 201(b) of the Act.

I. Proposed Rule Changes

A. ``Definitions--Presubscription or Comparable Arrangement''--47 CFR 
Sec. 64.1501(b)

    5. While the 1996 Act requires written subscription to information 
services available through toll-free numbers, written agreements are 
not explicitly required for information services that might be offered 
through other telephone numbers. Although virtually all complaints 
involving purportedly presubscribed information services have involved 
programs available through 800 numbers, the Commission expressed 
concern that, without a uniform requirement for written 
presubscription, the same ``instant presubscription'' abuses 
experienced by 800-number callers when oral presubscription was 
permissible might emerge on other dialing sequences. Accordingly, the 
Commission proposed to revise the presubscription definition to include 
a requirement that all presubscription arrangements (not just those 
involving toll-free service) be executed in writing or, alternatively, 
through payment by direct remittance, prepaid account, or debit, 
credit, charge or calling card regardless of the telephone number used 
to access the relevant information service. The Commission also 
proposed to require explicitly that presubscription agreements must be 
executed by a legally competent adult. In addition, to prevent 
deceptive use of presubscription agreements tied to contests or other 
promotions, the Commission proposed that the presubscription document 
be separate or easily severable from any promotions or inducements. The 
Commission asked commenters to consider whether safeguards should be 
required to ensure that electronically transmitted presubscription 
agreements are valid commercial instruments and that electronic 
execution does not encourage the abuses that arose from oral execution 
of presubscription contracts.
    6. The Commission also proposed to add to the presubscription 
definition a requirement that a consumer must use a pre-existing 
credit, charge, or calling cards to obtain information services and 
that an actual card must have been delivered to the party to be billed 
prior to assessment of any charges. Additionally, such cards could not 
operate to assess charges through automatic number identification 
(ANI). The Commission stated that these proposals are intended to 
prevent use of ``instant'' credit, charge, or calling cards that might 
be issued by an IP during the course of a call to an information 
service without confirming that the caller is, in fact, the party to be 
billed.

B. ``Restrictions on the Use of Toll-Free Numbers''--47 CFR 
Sec. 64.1504

    7. The limitations on the use of toll-free numbers to provide 
information services contained in Section 228(c)(7) of the 
Communications Act are framed to apply to ``the calling party.'' Thus, 
the statute explicitly protects callers to toll-free numbers from six 
prohibited transactions, including connection to a pay-per-call service 
and assessment of information-service charges absent a written 
agreement or payment by prepaid account, debit, credit, charge, or 
calling card. The Commission proposed to modify Section 64.1504 of the 
rules to ensure that subscribers whose telephone lines may be used to 
place calls to toll-free numbers likewise are not assessed charges for 
calls to information services provided by means specifically described 
in the statutory prohibitions. Thus, the Commission proposed to amend 
Section 64.1504 (c), (d), and (e) to state explicitly that the 
protections afforded to ``the calling party'' also apply to ``the 
subscriber to the originating line.''
    8. The Commission urged parties to comment on the potential 
effectiveness of these provisions in combating deception and fraud that 
have been associated with 800 number information services and invited 
comment as to whether any other actions might be warranted to forestall 
future abuse involving toll-free numbers. The Commission asked parties 
to address its tentative conclusion that a carrier's billing of calls 
dialed to an 800 or other toll-free number on the basis of ANI is a 
violation of Section 228(c)(7)(A) of the Communications Act unless the 
call involves use of telecommunications devices for the deaf. Usually, 
calls to carriers' toll-free-access numbers are delivered only if a 
calling card is used or the call is collect. The Commission tentatively 
concluded that with the exception of calls using

[[Page 39109]]

telecommunications devices for the deaf, reliance on ANI to bill any 
type of call to a toll-free number--even a carrier's toll-free-access 
code--does not appear to satisfy a common carrier's statutory 
obligation to provide communications service in a just and reasonable 
manner under Section 201(b) of the Communications Act. The Commission 
sought comment on that tentative conclusion and encouraged parties to 
address whether it is appropriate to revisit issues involving use of 
ANI to bill callers to toll-free numbers now, and, if so, what would be 
the most effective regulatory response.

C. ``Billing and Collection of Pay-Per-Call and Similar Service 
Charges''--47 CFR Sec. 64.1510

    9. The Commission proposed one minor modification to Section 
64.1510(c) to implement the 1996 Act's billing requirements virtually 
verbatim. The Commission proposed to add language to state explicitly 
that charges for presubscribed information services accessed through a 
toll-free number must be displayed separately from those for local and 
long-distance telephone service. The Commission asked for comment on 
the costs to carriers for separate billing. In addition, the Commission 
requested commenters' views as to whether current or predicted 
conditions warrant adoption of a rule covering carrier billing of 
presubscribed information services that are not available through toll-
free numbers.

D. Redefinition of Pay-Per-Call to Remove the Tariffed Services 
Exemption

    10. The Commission noted that in repealing the tariffed services 
exemption to pay-per-call status, Congress specifically sought to end 
service arrangements in which telephone subscribers are charged high 
prices for transmission of calls to ostensibly free information 
services. The Commission expressed concern, however, that some entities 
may seek to continue these arrangements despite Congress' clear 
intention that they be ended. Under Section 228(i)(1) of the 
Communications Act, imposition of a per-call or per-time-interval 
charge in excess of the charge assessed for transmitting a call is a 
requirement for pay-per-call status. Carriers who have invoked the 
tariffed services exemption in an effort to shelter arrangements 
whereby information services are provided at tariffed rates might 
likewise still claim that their services do not meet the criteria for 
pay-per-call status because callers purportedly are not charged for 
conveyance of information but only for transmission of calls. While 
recognizing that there may be some truly free information services that 
callers might wish to access through a toll call, the Commission 
concluded that it must take steps to ensure that the protective 
purposes underlying Congress' decision to remove the tariffed services 
exemption are fully realized.
    11. The Commission tentatively concluded that when a common carrier 
charges a telephone subscriber for a call to an interstate information 
service, any form of remuneration from that carrier to an entity 
providing or advertising the service, or any reciprocal arrangement 
between such entities, constitutes per se evidence that the charge 
levied actually exceeds the charge for transmission. Accordingly, 
interstate services provided through such arrangements would fit within 
the pay-per-call definition and, thus, be required to be offered 
exclusively through 900 numbers. The Commission invited comment on this 
tentative conclusion and, also, as to whether, in any event, such 
conduct by a common carrier is just and reasonable.

II. Procedural Issues

A. Ex Parte Presentations

    12. This is a non-restricted notice-and-comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided that they are disclosed as provided in 
the Commission's rules. See generally 47 CFR Secs. 1.1202, 1.1203, 
1.1206.

B. Initial Regulatory Flexibility Analysis

    13. Pursuant to the Regulatory Flexibility Act of 1980, 5 USC 601, 
the Commission concluded that the proposals contained in the NPRM may 
have some impact on small entities due to the proposed requirement that 
all presubscription agreements to obtain interstate information 
services be executed in writing. Public comment is requested on the 
initial regulatory flexibility analysis set forth fully in the NPRM. 
These comments must be filed in accordance with the same filing 
deadlines set for comments on the other issues in this NPRM but they 
must have a separate and distinct heading designating them as responses 
to the Regulatory Flexibility Analysis.

C. Comment Filing Procedures

    14. Pursuant to applicable procedures set forth in Sections 1.415 
and 1.419 of the Commission's rules, 47 CFR Secs. 1.415, 1.419, 
interested parties may file comments on or before August 26, 1996 and 
reply comments on or before September 16,1996. To file formally in this 
proceeding, participants must file an original and four copies of all 
comments, reply comments, and supporting comments. If participants wish 
each Commissioner to have a personal copy of their comments, an 
original plus nine copies must be filed. Comments and reply comments 
should be sent to the Office of the Secretary, Federal Communications 
Commission, Washington, D.C. 20554. Comments and reply comments will be 
available for public inspection during regular business hours in the 
FCC Reference Center (Room 239) of the Federal Communications 
Commission, 1919 M Street, N.W., Washington, D.C. 20554.
    15. Parties are asked to submit comments and reply comments on 
diskette. Such diskette submission are in addition to the formal filing 
requirements addressed above. Parties submitting diskettes should 
submit them to Mary Romano of the Common Carrier Bureau, 2025 M Street, 
N.W., Room 6120, Washington, D.C. 20554. Such submissions should be on 
a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 
5.0 and WordPerfect 5.1 software. The diskette should be submitted in 
``read only'' mode. The diskette should be clearly labelled with the 
party's name, proceeding, type of pleading (comment or reply comments) 
and date of submission. The diskette should be accompanied by a cover 
letter.

Ordering Clauses

    16. It is ordered, pursuant to Sections 1, 4(i), 4(j), and 228 of 
the Communications Act, 47 USC Secs. 152, 154(i), 154(j), and 228, that 
a Notice of Proposed Rule Making is hereby adopted, proposing amendment 
of 47 CFR Part 64 as set forth below.
    17. It is further ordered that CC Docket No. 93-22 is hereby 
terminated.
    18. It is further ordered that the Secretary shall send a copy of 
this Notice of Proposed Rule Making including the initial regulatory 
flexibility analysis to the Chief Counsel for Advocacy of the Small 
Business Administration, in accordance with Section 603(a) of the 
Regulatory Flexibility Act.

List of Subjects in 47 CFR Part 64

    Communications common carriers, Computer technology, Federal 
Communications Commission, Telephone.


[[Page 39110]]


Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    Part 64 of Title 47 of the Code of Federal Regulations is proposed 
to be amended as follows:
    1. The authority citation for Part 64 continues to read as follows:

    Authority: Sec. 4, 48 Stat. 1066, as amended; 47 USC 154, unless 
otherwise noted. Interpret or apply secs. 201, 218, 226, 228, 48 
Stat 1070, as amended, 1077; 47 USC 201, 218, 226, 228 unless 
otherwise noted.

    2. Section 64.1501(b) is revised to read as follows:


Sec. 64.1501  Definitions.

* * * * *
    (b) Presubscription or comparable arrangement means an agreement to 
purchase information services evidenced by:
    (1) A written contractual agreement (including one transmitted 
through electronic medium) between an information services provider and 
a legally competent individual that is executed for the sole purpose of 
arranging purchase of information services and is separate or easily 
severable from any promotions or inducements, and in which:
    (i) The service provider clearly and conspicuously discloses to the 
consumer all material terms and conditions associated with the use of 
the service, including the service provider's name and address, a 
business telephone number which the consumer may use to obtain 
additional information or to register a complaint, and the rates for 
the service;
    (ii) The service provider agrees to notify the consumer at least 
one billing cycle in advance of any future rate changes;
    (iii) The consumer agrees to use the service on the terms and 
conditions disclosed by the service provider; and
    (iv) The service provider requires the use of an identification 
number or other means to prevent unauthorized access to the service by 
nonsubscribers; or
    (2) Disclosure of a pre-existing credit, prepaid account, debit, 
charge, or calling card number, along with authorization to bill that 
number: Provided, that an actual credit, charge, or calling card:
    (i) Has, upon request or application, been delivered to the party 
to be billed prior to assessment of charges; and
    (ii) Does not operate to assess charges through automatic number 
identification;
    (3) Provided, that a presubscription arrangement to obtain 
information services provided by means of a toll-free number shall 
conform to the requirements of Sec. 64.1504(c).
    3. Section 64.1504 is amended by revising introductory text of 
paragraph (c) and paragraphs (d) and (e) to read as follows:


Sec. 64.1504  Restrictions on the use of toll-free numbers.

* * * * *
    (c) The calling party or subscriber to the originating line being 
charged for information conveyed during the call unless:
* * * * *
    (d) The calling party or subscriber to the originating line being 
called back collect for the provision of audio or data information 
services, simultaneous voice conversation services, or products; and
    (e) The calling party or subscriber to the originating line being 
assessed by virtue of the caller being asked to connect or otherwise 
transfer to a pay-per-call or other information service, a charge for 
the call.
* * * * *
    4. Section 64.1510 is amended by revising paragraph (c)(2) to read 
as follows:


Sec. 64.1510  Billing and collection of pay-per-call and similar 
service charges.

* * * * *
    (c) * * *
    (2) Clearly list the 800 or other toll-free number dialed in a 
location separate from local and long distance telephone charges.

[FR Doc. 96-19137 Filed 7-25-96; 8:45 am]
BILLING CODE 6712-01-P