Federal Communications Commission.
In this document, the Commission denies an Application for Review filed by a coalition of local exchange carriers (“LEC Petitioners”) regarding the Commission's carrier change verification rules. Specifically, the Commission affirms that it is not permissible for an executing carrier to block a carrier change submission by a submitting carrier, based on the executing carrier's own finding that the customer's information does not match exactly the information in the executing carrier's records.
Effective February 4, 2008.
Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Nancy Stevenson, Consumer & Governmental Affairs Bureau at (202) Start Printed Page 6445418-7039 (voice), or e-mail Nancy.Stevenson@fcc.gov.End Further Info End Preamble Start Supplemental Information
On July 8, 2005, an application for review was filed by a coalition of local exchange carriers against the Commission's Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996, declaratory ruling, DA 05-1618, published at 71 FR 2895 (January 18, 2006). This is a summary of the Commission's document FCC 07-222, adopted December 18, 2007, released January 4, 2008, denying the application for review. Copies of document FCC 07-222 and any subsequently filed documents in this matter will be available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. Document FCC 07-222 and any subsequently filed documents in this matter may also be purchased from the Commission's duplicating contractor at Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact the Commission's duplicating contractor at their Web site: http://www.bcpiweb.com or call 1-800-378-3160. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to email@example.com or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY). Document FCC 07-222 can also be downloaded in Word and Portable Document Format (PDF) at: http://www.fcc.gov/cgb/policy.
Paperwork Reduction Act of 1995 Analysis
The document does not contain new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198. See 47 U.S.C. 3506(c)(4).
Section 64.1120(a)(2) of the Commission's rules provides that “[a]n executing carrier shall not verify the submission of a change in the subscriber's selection of a telecommunications service received from a submitting carrier.” The Commission affirms that it is not permissible for an executing carrier to block a carrier change submission by a submitting carrier, based on the executing carrier's own finding that the customer's information does not match exactly the information in the executing carrier's records. The Commission expressed concern that executing carriers could use the verification process as a means to delay or deny carrier change requests in order to benefit themselves or their affiliates. While the Commission agreed that allowing executing carriers to re-verify carrier change requests could, under certain circumstances, help deter slamming, it ultimately concluded that the anti-competitive effects of re-verification outweighed the potential benefits.
The LEC Petitioners contend that the Bureau mischaracterized their argument. Rather, according to the LEC Petitioners, under general principles of agency law, an executing carrier simply has a much more limited obligation to its subscribers not to make changes to subscriber accounts without prior indication from the subscriber that the submitting carrier request was so authorized. The LEC Petitioners liken their actions to that of a clerk at a liquor store that asks a customer for identification as a condition of purchase.
The Commission disagrees with LEC Petitioners and finds there is no material distinction between rejecting a carrier change request because of a determination that the customer is not authorized, and rejecting a change request because the LEC has determined that customer information does not match the LEC's records. As the Bureau emphasized in its declaratory ruling, and as commenters reiterate here, the Commission has already clearly defined the roles of the submitting and executing carrier in a carrier change request. Specifically, in the course of verifying the subscriber's intention to change long distance service, a submitting carrier's independent, third-party verifier is required to elicit confirmation that the person contacted is authorized to make the change (that is, either the party or an agent of the party identified on the account). As to executing carriers, the Commission's rules simply require “prompt execution of changes verified by a submitting carrier.” As stated in the declaratory ruling, the mere fact that the name(s) contained in the executing carrier's LEC account information may differ from that of the contact person listed on the submitting carrier's change request does not necessarily indicate a lack of authority or agency on the part of the person requesting the IXC change. The Commission finds credible, and LEC Petitioners do not dispute, that “customers often authorize a spouse, a roommate, or other associate to act on their behalf,” or may use a different name for billing purposes, and this information may not reside in the LEC's files. The Commission does not believe the LEC Petitioners' liquor store analogy is applicable to the actions at issue here. In the LEC Petitioners' purported analogy, the customer is directly requesting a product sold by that store. Here, an executing carrier seeks to block a transaction that has already occurred between a customer and another carrier.
The LEC Petitioners also argue that the Bureau erred when it failed to consider their arguments in light of AT&T v. FCC. In that decision, the court found that the Commission could not require submitting carriers to obtain actual authorization from a subscriber for a carrier change. Instead, the court found that Section 258 of the Act provides that carriers must comply only with “such verification procedures as the Commission shall prescribe (emphasis added).” The court added that requiring actual authorization was tantamount to holding submitting carriers to a strict liability standard, but that no such standard was contained in section 258 of the Act. The LEC Petitioners point to the court's statement that the customer's local exchange carrier “might be able to verify the subscriber's identity by consulting its own customer records,” to support their proposition that they should not have to presume that any name submitted in connection with a carrier change order is authorized by the subscriber. The Commission disagrees. In AT&T v. FCC, the court reviewed the Commission's enforcement action imposing forfeiture against AT&T for slamming. That decision concerned only the obligations of a submitting carrier; it did not address the rights or obligations of LECs. The specific language cited by the LEC Petitioners occurs in the context of the court's explanation of why the Commission exceeded its statutory authority in creating an “actual authorization from the subscriber” requirement and enforcing it against AT&T.
The Bureau cited several examples (provided by the LEC Petitioners) of situations in which a LEC could, under the Commission's rules, legitimately reject a submitting carrier's change request, such as when a customer is already subscribed to the submitting carrier, when a customer has a PIC freeze in place, or when PIC changes are not permitted (e.g., certain college dormitory rooms). The LEC Petitioners Start Printed Page 6446argue that rejection of a carrier change for the reasons at issue here cannot be disallowed if it is in fact permissible for a LEC to utilize its records when processing a carrier change request, as in the examples described above. The Commission disagrees. The Commission reiterates that carriers may access account information in the course of effectuating carrier changes, and we do not believe that, under the limited circumstances described above, an executing carrier's return of a carrier change to the submitting carrier constitutes re-verification in violation of the Commission's rules. The Commission's objection to the LEC actions at issue here is not related to their consulting account information per se during the course of executing a carrier change. Rather, it violates Commission rules for executing carriers to make an independent determination with respect to the ability of a person to authorize a carrier change based on such information.
Executing carriers have means (other than re-verification) of protecting their customers that do not interfere with competition or undermine consumer choice. Executing carriers can, for example, alert customers to preferred carrier changes, such as by highlighting changes to customers' accounts in customer billings, and can offer a preferred carrier freeze option to customers who are concerned about slamming. However, as the Commission expressed in the past, re-verification by executing carriers could function as a de facto preferred carrier freeze in situations where a subscriber has not requested such a freeze. The Commission emphasized that the imposition of a preferred carrier freeze must be authorized by the consumer to minimize any anticompetitive effects and to maintain flexibility for consumers. While preferred carrier freezes can provide consumers with extra protection from slamming, freezes by their very nature impose additional burdens on subscribers, and as such should only be enacted as a result of consumer choice. In the declaratory ruling, the Bureau reiterated this concern with respect to the LEC Petitioners' actions. The LEC actions at issue here serve to restrict consumer control by eliminating the consumer's ability to designate someone (such as a spouse) as authorized to change telecommunications service without first contacting the local carrier, thereby increasing the ability of the executing carrier to act in an anti-competitive manner. Endorsement of the LEC Petitioners' policies would result in inconvenience and delays for customers. The Commission continues to believe that the actions of the LEC Petitioners can, and do, result in de facto preferred carrier freezes where the customer has not requested such a freeze.
Finally, the Commission notes that IUB and NASUCA commented in support of the LEC Petitioners. While the Commission declines to grant the LEC Petitioners' request to reverse the Bureau's finding in the declaratory ruling, the Commission recognizes that state authorities may have verification requirements for matters within their jurisdiction that are stricter than those of the Commission. As the Commission recognized in the Third Report and Order, FCC 00-255, published at 66 FR 12877 (March 1, 2001), states have valuable insight into the slamming problems experienced by consumers in their respective locales. Accordingly, the Commission declined to require that “states * * * limit their verification requirements so that they are no more stringent than those promulgated by this Commission.” As was noted in the declaratory ruling, the Commission's decision here concerns the question of permissible actions by private companies, not actions by a state regulatory agency.
Congressional Review Act
The Commission will not send a copy of document FCC 07-222 pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because no new rules were adopted in the document.
Pursuant to the authority contained in sections 1, 2, 4(i), and 258 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), and 258, and sections 1.115 and 64.1120(a)(2) of the Commission's rules, 47 CFR 1.115 and 64.1120(a)(2), document FCC 07-222 is adopted.
Pursuant to the authority contained in sections 1, 2, 4(i), and 258 of the Communications Act, of 1934, as amended, 47 U.S.C. 151, 152, 154(i), and 258, and sections 1.115 and 64.1120(a)(2) of the Commission's rules, 47 CFR 1.115 and 64.1120(a)(2), the LEC Petitioners' Application for Review is denied.Start Signature
Federal Communications Commission.
Marlene H. Dortch,
[FR Doc. E8-1980 Filed 2-1-08; 8:45 am]
BILLING CODE 6712-01-P