[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39084-39088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19138]


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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 Pay-Per-Call and Other Information Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopted this Order to amend its rules governing 
the provision of interstate pay-per-call and other information services 
to conform with the requirements of Section 701 of the 
Telecommunications Act of 1996 which amended Section 228 of the 
Communications Act of 1934, as amended. The rules adopted in the Order 
incorporate the amendments to Section 228 virtually verbatim and are 
intended to protect consumers from abuses involving use of toll-free 
numbers and tariffed service systems to levy charges for interstate 
information services.

EFFECTIVE DATE: December 23, 1996.

FOR FURTHER INFORMATION CONTACT: Mary Romano, Enforcement Division, 
Common Carrier Bureau, (202) 418-0960.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Order 
in CC Docket Nos. 93-22 and 96-146 [FCC 96-289], adopted June 28, 1996 
and released July 11, 1996. The full text of the Order 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 Order 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

[[Page 39085]]

relating to this Order, see a proposed rule involving interstate 
information services published elsewhere in this issue.

Paperwork Reduction

    Public reporting burden for collections of information is estimated 
as follows:

------------------------------------------------------------------------
                                                        Est.            
                                                        avg.            
                      Sections                          hours    Annual 
                                                         per     burden 
                                                      response          
------------------------------------------------------------------------
Section 64.1504.....................................      3750    10,500
Section 64.1510.....................................      1350   540,000
------------------------------------------------------------------------

    Total Annual Burden: 550,500.
    Frequency of Response: On Occasion.
    These estimates include the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collections of information. 
Send comments regarding these burden estimates or any other aspects of 
the collections of information, including suggestions for reducing the 
burden, to the Federal Communications Commission, Records Management 
Branch, Room 234, Paperwork Reduction Project, Washington, D.C. 20554 
and to the Office of Management and Budget, Paperwork Reduction 
Project, Washington, D.C. 20503.

Summary of Order:

    1. On June 28, 1996, the Commission adopted an Order in CC Docket 
No. 93-22 and 96-146 (released July 11, 1996; FCC 96-289) that amends 
Part 64 of the Commission's rules to conform with the 
Telecommunications Act of 1996, Public Law 104-104, (1996 Act). Among 
other things, the 1996 Act amended Section 228 of the Communications 
Act of 1934, as amended, (Communications Act), 47 USC Sec. 228, to 
enact new restrictions on the manner in which toll-free numbers may be 
used to provide information services and to repeal of the statutory 
exemption to pay-per-call status accorded to any tariffed service under 
the Telephone Disclosure and Dispute Resolution Act of 1992, Public Law 
102-556 (TDDRA). As set forth in the final rules and explained below, 
the Commission amended its pay-per-call regulations to comply with the 
statutory mandate that our rules reflect the new requirements of 
Section 228 of the Communications Act.

I. Requirements of Amended Section 228

A. ``Billing for 800 Calls''--47 USC Sec. 228(c)(7)

    2. The TDDRA placed limits on charging callers who place calls to 
toll-free numbers to reach information services. The 1996 Act amends 
Section 228(c) of the Communications Act to expand those restrictions.
    The 1996 Act adds a new prohibition on ``the calling party being 
assessed, by virtue of being asked to connect or otherwise transfer to 
a pay-per-call service, a charge for the call [to an 800 or any other 
toll-free number].'' 47 USC Sec. 228(c)(7)(E). The Commission added to 
its rules Section 64.1504(e) to codify, verbatim, this statutory 
provision.
    3. The 1996 Act also modifies Section 228(c)(7)(C) to prohibit 
charging callers for calls to toll-free numbers for conveyance of 
information unless ``the calling party has a written agreement, 
including an agreement transmitted through an electronic medium,'' or 
``the calling party is charged for the information * * * by means of a 
credit, prepaid, debit, charge, or calling card.'' 47 USC 
Secs. 228(c)(7)(C)(i)-(ii), (c)(9). These requirements and the 
Commission's new implementing regulations are explained below.
1. ``Subscription Agreements for Billing for Information Provided Via 
Toll-Free Calls''--47 USC Sec. 228(c)(8)
    4. ``In General''--47 USC Sec. 228(c)(8)(A). The 1996 Act 
enumerates specific requirements that must be followed when information 
services are charged to callers to an 800 or other toll-free number 
pursuant to a written presubscription agreement.
    As provided in 47 USC Sec. 228(c)(8)(A)(i)-(vi), the agreement must 
include:
    (i) the rate at which charges are assessed for the information;
    (ii) the information provider's name;
    (iii) the information provider's business address;
    (iv) the information provider's regular business telephone number;
    (v) the information provider's agreement to notify the subscriber 
at least one billing cycle in advance of all future changes in the 
rates charged for the information; and
    (vi) the subscriber's choice of payment method, which may be by 
direct remit, debit, prepaid account, phone bill, or credit or calling 
card.
    The Commission added to its rules Sections 64.1504(c)(1)(i)-(vi) to 
codify, verbatim, these statutory requirements governing 
presubscription agreements to obtain information services available 
through a toll-free number.
    5. ``Billing Arrangements''--47 U.S.C. 228(c)(8)(B). The 1996 Act 
prescribes new requirements for common carriers who bill telephone 
subscribers for information services that are available through a toll-
free number and provided pursuant to a written presubscription 
agreement. Section 228(c)(8)(B)(i) provides that

    If a subscriber elects * *  to pay by means of a phone bill, * * 
* the [written presubscription] agreement shall clearly explain that 
the subscriber will be assessed for calls made to the information 
service from the subscriber's phone line.

    Further, under Section 228(c)(8)(B) (ii)-(iii), any telephone bill 
containing such charges must display the toll-free number that was 
dialed to access the information service and contain a prominent 
disclaimer stating that local and long distance telephone service may 
not be disconnected for failure to pay disputed information-service 
charges. The Commission added to its rules Secs. 64.1504(c)(vi) and 
64.1510(c) and amended Sec. 64.1510(b) to codify, virtually verbatim, 
these statutory requirements governing billing of presubscribed 
information services through a telephone bill.
    6. ``Use of PINs to Prevent Unauthorized Access''--47 U.S.C. 
228(c)(8)(C). The 1996 Act provides that a presubscription agreement to 
obtain information services through a toll-free number must include ``a 
unique personal identification number or other subscriber-specific 
identifier,'' a requirement that ``a subscriber use this number or 
identifier to obtain access to the information provided,'' 
``instructions on its use,'' and assurance ``that services accessed by 
use of the subscriber's personal identification number or subscriber-
specific identifier'' will be billed in the manner specified by the 
subscriber (e.g., ``direct remit, debit, prepaid account, phone bill, 
or credit or calling card''). 47 U.S.C. 228(c)(8)(C), (c)(8)(A)(vi). 
The Commission added to its rules Sec. 64.1504(c)(vii) to codify, 
virtually verbatim, these statutory requirements governing PINs.
    7. ``Exceptions''--47 U.S.C. 228(c)(8)(D). The 1996 Act establishes 
exceptions to the requirement for written presubscription ``for calls 
utilizing telecommunications devices for the deaf, for directory 
services provided by a common carrier or its affiliate or by a local 
exchange carrier or its affiliate, or for any purchase of goods or of 
services that are not information services.'' 47 U.S.C. 228(c)(8)(D). 
The

[[Page 39086]]

Commission added to its rules Sec. 64.1504(f)(1) to codify, verbatim, 
these statutory exceptions to the requirement that presubscription be 
executed in writing for information services available through a toll-
free number.
    8. ``Termination of Service''--47 U.S.C. 228(c)(8)(E). The 1996 Act 
directs common carriers to investigate promptly complaints that a 
presubscribed information service accessed through an 800 or other 
toll-free number has not been provided in accordance with the statutory 
requirements. Carriers also explicitly are accorded authority to 
terminate service to an IP who fails to provide evidence of a written 
presubscription agreement for disputed charges. The Commission added to 
its rules Sec. 64.1503(b) to codify, virtually verbatim, statutory 
provisions involving common carriers' investigations of complaints and 
termination of service.
    9. ``Treatment of Remedies''--47 U.S.C. 228(c)(8)(F). Section 
228(c)(8)(F) provides that the remedies specified in Section 228(c) 
``are in addition to any other remedies that are available under [the 
Commission's forfeiture authority in] Title V of [the Communications] 
Act. This provision simply specifies that both the Commission's Title V 
statutory penal provisions and the remedies contained in Section 
228(c), (e.g., termination of service to an information provider) may 
be invoked against parties who violate Commission rules or orders 
concerning interstate information services. The Commission determined 
that the provision is effectively implemented by the statute alone and 
need not be added to our pay-per-call regulations, which govern the 
conduct of common carriers who transmit or bill and collect for pay-
per-call or other information services.
2. ``Charges by Credit, Prepaid, Debit, Charge, or Calling Card in 
Absence of Agreement''--47 U.S.C. 228(c)(9)
    10. The 1996 Act establishes payment by prepaid account, debit, 
credit, charge, or calling card as alternatives to written 
presubscription for information services charged to callers to 800 or 
other toll-free numbers provided that all such calls begin with an 
introductory disclosure message that--
    (A) clearly states that there is a charge for the call;
    (B) clearly states the service's total cost per minute and any 
other fees for the service or for any service to which the caller may 
be transferred;
    (C) explains that the charge must be billed on either a credit, 
prepaid, debit, charge, or calling card;
    (D) asks the caller for the card number; clearly states that 
charges for the call begin at the end of the introductory message; and
    (E) clearly states that the caller can hang up at or before the end 
of the introductory message without incurring any charge whatsoever.
    47 U.S.C. 228(c)(9) (A)-(F). The Commission added to its rules 
Sec. 64.1504(c)(2) to codify, verbatim, these statutory provisions 
governing use of a prepaid account, debit, credit, charge, or calling 
card to pay for information services that are accessed through an 800 
or other toll-free number.
    11. ``Bypass of Introductory Disclosure Message''--47 U.S.C. 
228(c)(10). Under the 1996 Act, IPs may install a bypass mechanism so 
that repeat callers to an information service accessed through an 800 
or other toll free number can ``avoid listening to the introductory 
message, provided that the information providers shall disable such a 
bypass mechanism after the institution of any price increase and for a 
period of time determined to be sufficient by the Federal Trade 
Commission to give callers adequate and sufficient notice of a price 
increase.'' The Commission added to its rules Sec. 64.1504(f)(2) to 
codify, verbatim, these statutory provisions governing mechanisms that 
permit repeat callers to bypass the introductory message required for 
all information services that are accessed through an 800 or other 
toll-free number and that bill through a prepaid account, debit, 
credit, charge, or calling card rather than by means of a 
presubscription agreement.

B. Definitions

1. Pay-Per-Call Services--47 U.S.C. Sec. 228(i)
    12. The 1996 Act redefines the term ``pay-per-call services'' by 
eliminating the exemption accorded to any service provided pursuant to 
tariff under the TDDRA. The Commission amended Section 64.1501(a) of 
its rules to remove the tariffed services exception.
2. Calling Card--47 U.S.C. Sec. 228(c)(11)
    13. After recognizing payment by ``calling card'' as an acceptable 
means of obtaining information services available through a toll-free 
number, the 1996 Act defines a calling card as ``an identifying number 
or code unique to the individual, that is issued to the individual by a 
common carrier and enables the individual to be charged by means of a 
phone bill for charges incurred independent of where the call 
originates.'' The Commission added to its rules Section 64.1501(c) to 
codify, verbatim, the statutory definition of ``calling card.''
3. Presubscription or Comparable Arrangement--47 CFR Sec. 1501(b).
    14. Neither the TDDRA nor the 1996 Act defines the term 
``presubscription or comparable arrangement,'' which Section 228(i)(2) 
establishes as an exemption to pay-per-call status. In implementing the 
TDDRA, however, the Commission and the FTC adopted identical 
definitions intended to guard against uncontrolled access to 
information services and to ensure that consumers receive information 
necessary to make informed choices about whether to subscribe to such 
services. The 1996 Act does not directly mandate modification of the 
presubscription definition contained in Section 64.1501(b) of our 
rules. The Commission determined, however, that certain aspects of the 
definition are inconsistent with statutory requirements governing 
presubscription to information services available through 800 or other 
toll-free numbers. Therefore, the Commission added to its rules Section 
64.1501(b)(6) to specify that presubscription arrangements to obtain 
information services provided by means of an 800 or other toll-free 
number must conform to the requirements of Section 64.1504(c). This 
amendment incorporates into the Commission's general presubscription 
definition statutory requirements that govern 800-number 
presubscription.

II. Procedural Issues

A. Administrative Procedure Act Requirements

    15. Because the rule changes set forth in Appendix A and adopted 
herein simply conform the Commission's rules to the statute, the 
Commission found for good cause that compliance with the notice and 
comment provisions of the Administrative Procedure Act is unnecessary. 
See 5 U.S.C. Sec. 553(b)(B). Moreover, to the extent that the 
provisions of the 1996 Act mirror proposals set forth in the 
Commission's Further Notice of Proposed Rule Making, Policies and Rules 
Implementing the Telephone Disclosure and Dispute Resolution Act, CC 
Docket No. 93-22, 59 FR 46806 (September 12, 1994), notice and comment 
requirements have been satisfied.

Ordering Clauses

    16. Accordingly, it is ordered, pursuant to Sections 1, 4(i), 4(j), 
and 228 of the Communications Act, 47 U.S.C. Secs. 152, 154(i), 154(j), 
and 228, that 47 CFR Part 64 IS AMENDED as set forth below, effective 
December 23, 1996.
    17. It Is further ordered that CC Docket No. 93-22 is hereby 
terminated.

[[Page 39087]]

List of Subjects in 47 CFR Part 64

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

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

Rules Changes

    Part 64 of Title 47 of the Code of Federal Regulations is amended 
as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    1. The authority citation for Part 64 continues to read as follows:

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

    2. The heading of Subpart O of Part 64 is revised to read as 
follows:

Subpart O--Interstate Pay-Per-Call and Other Information Services

    3. Section 64.1501 is revised to read as follows:


Sec. 64.1501  Definitions.

    For purposes of this subpart, the following definitions shall 
apply:
    (a) Pay-per-call service means any service:
    (1) In which any person provides or purports to provide:
    (i) Audio information or audio entertainment produced or packaged 
by such person;
    (ii) Access to simultaneous voice conversation services; or
    (iii) Any service, including the provision of a product, the 
charges for which are assessed on the basis of the completion of the 
call;
    (2) For which the caller pays a per-call or per-time-interval 
charge that is greater than, or in addition to, the charge for 
transmission of the call; and
    (3) Which is accessed through use of a 900 number;
    (4) Provided, however, such term does not include directory 
services provided by a common carrier or its affiliate or by a local 
exchange carrier or its affiliate, or any service for which users are 
assessed charges only after entering into a presubscription or 
comparable arrangement with the provider of such service.
    (b) Presubscription or comparable arrangement means a contractual 
agreement in which:
    (1) 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;
    (2) The service provider agrees to notify the consumer of any 
future rate changes;
    (3) The consumer agrees to use the service on the terms and 
conditions disclosed by the service provider; and
    (4) The service provider requires the use of an identification 
number or other means to prevent unauthorized access to the service by 
nonsubscribers;
    (5) Provided, however, that disclosure of a credit, prepaid 
account, debit, charge, or calling card number, along with 
authorization to bill that number, made during the course of a call to 
an information service shall constitute a presubscription or comparable 
arrangement if an introductory message containing the information 
specified in Sec. 64.1504(c)(2) is provided prior to, and independent 
of, assessment of any charges. No other action taken by a consumer 
during the course of a call to an information service, for which 
charges are assessed, can create a presubscription or comparable 
arrangement.
    (6) 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).
    (c) Calling card means an identifying number or code unique to the 
individual, that is issued to the individual by a common carrier and 
enables the individual to be charged by means of a phone bill for 
charges incurred independent of where the call originates.
    4. Section 64.1503 is revised to read as follows:


Sec. 64.1503  Termination of pay-per-call and other information 
programs.

    (a) Any common carrier assigning a telephone number to a provider 
of interstate pay-per-call service shall specify by contract or tariff 
that pay-per-call programs not in compliance with Sec. 64.1502 shall be 
terminated following written notice to the information provider. The 
information provider shall be afforded a period of no less than seven 
and no more than 14 days during which a program may be brought into 
compliance. Programs not in compliance at the expiration of such period 
shall be terminated immediately.
    (b) Any common carrier providing transmission or billing and 
collection services to a provider of interstate information service 
through any 800 telephone number, or other telephone number advertised 
or widely understood to be toll-free, shall promptly investigate any 
complaint that such service is not provided in accordance with 
Sec. 64.1504 or Sec. 64.1510(c), and, if the carrier reasonably 
determines that the complaint is valid, may terminate the provision of 
service to an information provider unless the provider supplies 
evidence of a written agreement that meets the requirements of this 
Sec. 64.1504(c)(1).
    5. Section 64.1504 is revised to read as follows:


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

    A common carrier shall prohibit by tariff or contract the use of 
any 800 telephone number, or other telephone number advertised or 
widely understood to be toll-free, in a manner that would result in:
    (a) The calling party or the subscriber to the originating line 
being assessed, by virtue of completing the call, a charge for a call;
    (b) The calling party being connected to a pay-per-call service;
    (c) The calling party being charged for information conveyed during 
the call unless:
    (1) The calling party has a written agreement (including an 
agreement transmitted through electronic medium) that specifies the 
material terms and conditions under which the information is offered 
and includes:
    (i) The rate at which charges are assessed for the information;
    (ii) The information provider's name;
    (iii) The information provider's business address;
    (iv) The information provider's regular business telephone number;
    (v) The information provider's agreement to notify the subscriber 
at least one billing cycle in advance of all future changes in the 
rates charged for the information;
    (vi) The subscriber's choice of payment method, which may be by 
direct remit, debit, prepaid account, phone bill, or credit or calling 
card and, if a subscriber elects to pay by means of phone bill, a clear 
explanation that the subscriber will be assessed for calls made to the 
information service from the subscriber's phone line;
    (vii) A unique personal identification number or other subscriber-
specific identifier that must be used to obtain access to the 
information service and instructions on its use, and, in addition, 
assures that any charges for services

[[Page 39088]]

accessed by use of the subscriber's personal identification number or 
subscriber-specific identifier be assessed to subscriber's source of 
payment elected pursuant to paragraph (c)(1)(vi) of this section; or
    (2) The calling party is charged for the information by means of a 
credit, prepaid, debit, charge, or calling card and the information 
service provider includes in response to each call an introductory 
message that:
    (i) Clearly states that there is a charge for the call;
    (ii) Clearly states the service's total cost per minute and any 
other fees for the service or for any service to which the caller may 
be transferred;
    (iii) Explains that the charges must be billed on either a credit, 
prepaid, debit, charge, or calling card;
    (iv) Asks the caller for the card number;
    (v) Clearly states that charges for the call begin at the end of 
the introductory message; and
    (vi) Clearly states that the caller can hang at or before the end 
of the introductory message without incurring any charge whatsoever.
    (d) The calling party being called back collect for the provision 
of audio or data information services, simultaneous voice conversation 
services, or products; and
    (e) The calling party being assessed by virtue of the caller being 
asked to connect or otherwise transfer to a pay-per-call service, a 
charge for the call.
    (f) Provided, however, that:
    (1) Notwithstanding paragraph (c)(1) of this section, a written 
agreement that meets the requirements of that paragraph is not required 
for:
    (i) Calls utilizing telecommunications devices for the deaf;
    (ii) Directory services provided by a common carrier or its 
affiliate or by a local exchange carrier or its affiliate; or
    (iii) Any purchase of goods or of services that are not information 
services.
    (2) The requirements of paragraph (c)(2) of this section shall not 
apply to calls from repeat callers using a bypass mechanism to avoid 
listening to the introductory message: Provided, That information 
providers shall disable such a bypass mechanism after the institution 
of any price increase for a period of time determined to be sufficient 
by the Federal Trade Commission to give callers adequate and sufficient 
notice of a price increase.
    6. In Section 64.1510, paragraph (b) is revised and new paragraph 
(c) is added to read as follows:


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

* * * * *
    (b) Any common carrier offering billing and collection services to 
an entity providing interstate information services on a collect basis 
shall, to the extent possible, display the billing information in the 
manner described in paragraphs (a)(2)(i), (A), (B), (D) and (a)(2)(ii) 
of this section.
    (c) If a subscriber elects, pursuant to Sec. 64.1504(c)(1)(vi), to 
pay by means of a phone bill for any information service provided by 
through any 800 telephone number, or other telephone number advertised 
or widely understood to be toll-free, the phone bill shall:
    (1) Include, in prominent type, the following disclaimer: ``Common 
carriers may not disconnect local or long distance telephone service 
for failure to pay disputed charges for information services;'' and
    (2) Clearly list the 800 or other toll-free number dialed.

[FR Doc. 96-19138 Filed 7-25-96; 8:45 am]
BILLING CODE 6712-01-P