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PA Bulletin, Doc. No. 99-855



[52 PA. CODE CH. 64]

[29 Pa.B. 2779]


Cramming and Slamming

   The Pennsylvania Public Utility Commission (Commission) on January 14, 1999, adopted a proposed rulemaking to standardize local exchange company (LEC) responses to customer contacts alleging cramming and slamming. The contact persons are Terrence Buda, Law Bureau, (717) 787-5755, and Janice Ragonese, Bureau of Consumer Services, (717) 772-4835.

Executive Summary

   Over the last 2 years, hundreds of residential customers have filed informal telecommunications industry-related complaints with the Commission regarding certain practices identified as cramming, which is adding an unauthorized charge to a customer's telephone bill, and slamming, which is changing a customer's telecommunications service provider without authorization. The purpose of the proposed regulations is to standardize LEC responses to customer contacts alleging these practices. By standardizing these responses, the procedures will reduce the need for customers to seek Commission intervention to resolve cramming and slamming complaints. Thus, by having the LEC place the responsibility for resolving the complaint on the interexchange carrier, information service provider, or billing clearinghouse, the party responsible for the problem will have to expend time and effort to resolve the matter, as opposed to the LEC and the Commission's Bureau of Consumer Services.

Public Meeting held
January 14, 1999

   Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson; David W. Rolka; Nora Mead Brownell; and Aaron Wilson, Jr.

Proposed Rulemaking Order and Final Interim Guidelines*

By the Commission:

I.  Procedural History

   On June 4, 1998, the Pennsylvania Public Utility Commission (Commission) issued a Tentative Order at Docket No. M-00981063 proposing to adopt voluntary interim guidelines (Interim Guidelines) pending the promulgation of formal regulations to standardize LEC responses to customer contacts alleging unauthorized changes in telecommunications service providers and unauthorized billing charges. These voluntary Interim Guidelines, when finalized after the receipt of public comment, are intended to provide guidance to jurisdictional utilities when handling customer contacts involving cramming and slamming complaints.1

   Written comments were received from AT&T Communications of Pennsylvania, Inc. (AT&T); Bell Atlantic-Pennsylvania, Inc. (BA-PA); GTE North Incorporated and GTE Communications Corporation (GTE); MCI Telecommunications Corporation (MCI); the Office of Consumer Advocate (OCA); the Pennsylvania Telephone Association (PTA), and the United Telephone Company of Pennsylvania and Sprint Communications Company, L.P. (Sprint). After review and consideration of all comments, the Commission has developed final-form voluntary Interim Guidelines. These Interim Guidelines will also serve as proposed regulations for standardizing LEC responses to customer contacts alleging unauthorized changes to a residential customer's telecommunications service provider, and unauthorized charges added to the customer's bill. The following is a summary of comments and our response to the comments, and regulatory analysis in support of the adoption of voluntary Interim Guidelines and proposed amendments.


   A.  Cramming

   1.  General Comments

   AT&T recommends that rather than implementing its own guidelines at this time, the Commission should await the implementation of several national initiatives designed to combat cramming. (AT&T Comments, p. 1). AT&T notes that the Anti-Cramming Best Practices Guidelines (Best Practices Guidelines),2 which were developed by the carriers who most frequently face cramming complaints, appear to address the same issues raised in the Commission's Tentative Order as well as additional cramming issues such as LEC-service provider contract terms and provisions. AT&T believes that the Commission's best course at this time would be to determine first whether the LECs operating in this Commonwealth in fact implement these Best Practices Guidelines. If the LECs do use them, AT&T concludes that ''an additional set of largely redundant state guidelines should be unnecessary.'' (AT&T Comments, pp. 2-3).

   Based on the need for a jurisdictional consistency, Sprint recommends that the Commission refrain from adopting any binding regulations prior to Federal direction. Sprint notes that ''the FCC is wisely delaying its rules to ensure they are in line with any new Federal legislative direction.'' (Sprint Comments, p. 6).

   The PTA states that ''with some modification, the Interim Guidelines will be a step in the right direction toward elimination of this illegal and reprehensible conduct,'' but also advises that the Commission should ''keep in mind that the unauthorized carriers, and not the LECs should be made to atone for the illegal conduct.'' (PTA Comments, p. 8).

   GTE supports ''all commercially reasonable efforts to control slamming and cramming,'' and, agreeing with PTA's theme, asserts that ''the Commission should focus action on the offending carriers and not the LECs.'' (GTE Comments, p. 3).

   The BA-PA suggests that the Commission defer the rulemaking until the Commission can determine the effect of Federal guidelines, but states that it ''intends to implement the Commission's interim guidelines, once they are finalized, except in limited instances where it may be impracticable for it to do so.'' (BA-PA Comments, pp. 1-2).

   MCI states that ''well-intentioned measures taken against cramming caused by non-telecommunications companies--such as billing aggregators, clubs, and entities offering hotlines--may adversely affect MCI's ability to offer its 'casually' billed, tariffed services and such popular services as 1-800-COLLECT and 10-10-321 and other third party billed services.'' MCI is afraid that the Commission's rules will have the unintended and adverse anticompetitive effect of reducing customer choice. (MCI Comments, p. 4-5). MCI believes that the timing of BA-PA's July 22, 1998, announcement that it will be the first company to ''limit the number of service providers whose charges can appear on their bills'' with the publication of the Commission's Interim Guidelines is no coincidence, and asserts that ''the Commission should not give the dominant carrier in this Commonwealth the legally sanctioned means to discriminate.'' (MCI Comments, p. 7).

   The OCA supports the Tentative Order of June 5, 1998, and Interim Guidelines and proposes, with specific explanations, that the Interim Guidelines be further strengthened. (OCA Comments, p. 1). One of the OCA's proposals for strengthening the Interim Guidelines is to require the LEC to advise consumers that local service cannot be terminated for nonpayment of charges that result from slamming or cramming. The OCA believes that with such a requirement in place, ''consumers will be able to refuse to pay unauthorized charges without unwarranted fear that they may risk the loss of their basic telephone service as a result.'' (OCA Comments, p. 1).

   The OCA also questions the extent to which similar remedies would be applied to consumers who are victims of slamming or cramming by local exchange carriers. Although the cramming and slamming definitions appear, in OCA's opinion, to apply to cramming and slamming by LECs, the OCA believes that the cramming and slamming remedies do not seem to specifically apply to unauthorized charges imposed by a LEC or toll service slammed by a LEC. The OCA submits that ''the PUC should make the Interim Guidelines applicable to all potential slamming and cramming incidents, regardless of the type of service provider.'' (OCA Comments, p. 5-6).

2.  Response to General Comments

   We do not agree with the recommendations that would prevail upon this Commission to refrain from finalizing the proposed Interim Guidelines, or refrain from a rulemaking pending review of the effect of the various National initiatives and Federal action. Having recognized that the problem of cramming exists, we have a responsibility and duty to the consumers in this Commonwealth, at the very least, to provide a means for them to eliminate these crammed charges from their telephone bills. Moreover, we do not believe there is anything in our voluntary Interim Guidelines that conflicts with the Anti-Cramming Best Practices Guidelines advocated by some of the commentators, which are also voluntary. As a result of our viewpoint, we are not predisposed to find that our Interim Guidelines with respect to cramming are largely redundant and therefore unnecessary. Instead of taking a wait and see attitude and delaying any action until we determine whether the LECs use the Best Practices Guidelines, we will have in place our own guidelines in the interim.

   Our experience with some consumers who have had charges crammed on their bills is that one of the most frustrating aspects of the problem is the inability to reach the party responsible for the crammed charge. The consumer might attempt to call the interexchange carrier, but instead reach the clearing house or billing aggregator, and the billing agent may attempt to resolve the billing dispute charges, but cannot provide the consumer with details about the call. The consumer often wants to know who provided the service for which they are charged and they want to talk to that company. Given that consumers often cannot reach the company to discuss the legitimacy of the charge, many of these consumers will then turn to their LEC to express their dissatisfaction over the crammed charge. We believe that the Interim Guidelines establish a process for the LEC to remove the charges, thereby addressing an important part of a residential customer's cramming complaint quickly and effectively.

   It is not our specific intent, at this point, to prevent the actual cramming occurrence. Rather, the purpose of the Interim Guidelines is to standardize the LEC's response to the customer contact once the authorized charge appears on the bill. Consequently, we are not persuaded by arguments that we do not have jurisdiction to regulate this response. We submit that arguments raised by GTE on this jurisdictional issue miss the mark because of a misunderstanding regarding the intent and scope of the proposed guidelines.

   Instead of regulating the services that a LEC provides on a contractual basis to other carriers, Chapter 64 (relating to standards and billing practices for residential telephone service) and the proposed amendments address the billing and collection service a LEC provides to its customers. As indicated in § 64.1 (relating to statement of purpose and policy), the regulatory provisions are intended to establish and enforce fair residential telephone service standards for, among other services, billing. Therefore, under Commonwealth law, LECs are obligated to provide consumers with basic billing rights for all billing on the local telephone bill.

   Stated another way, we perceive billing as a part of the overall local exchange service a Pennsylvania LEC provides to its customers, as opposed to the service provided to a carrier or service provider under a contract where the LEC bills for their charges. We believe that the bill a utility presents to its customers is included within the service it provides, whether the utility service is dial tone, natural gas, kilowatts or water. Cf. West Penn Power Company v. Pennsylvania Public Utility Commission, 578 A.2d 75 (Pa. Cmwlth. 1990), (vegetation maintenance by an electric utility is a service which is governed by section 1501 of the Public Utility Code, 66 Pa.C.S. § 1501). Even if the bill included charges for services we do not regulate or calls outside our jurisdiction (interstate), we still regulate presentation of the charges on the bill. The fact that we may not regulate the rate for a long distance telephone call or the quality of service for the call does not mean we do not regulate the presentation of the charges for the call by a Pennsylvania LEC to a Pennsylvania consumer. In fact, as a point of reference, if an interexchange carrier issued the bill, these same regulations under Chapter 64 would not have to be complied with by the carrier since the carrier is not a LEC. Final Rulemaking Order, Chapter 64--Standards and Billing Practices for Residential Telephone Service, I-80090338, adopted November 30, 1984, effective January 1, 1985 (14 Pa.B. 4354). It is through the billing service provided by the LEC to its customers that the Commission asserts jurisdiction.

   Additionally, specific regulations in Chapter 64 clarify that while we may not have jurisdiction over an interstate call, we retain jurisdiction over how the call is to be billed to a Pennsylvania consumer by a Pennsylvania LEC. Section 64.14(a)(5) (relating to billing information) requires that the bill for toll charges list the ''date, time, destination, duration and rate period for each toll call.'' GTE's assertion that the Commission has not asserted jurisdiction over the intrastate billing process could not be further from the truth. Billing is a part of the telecommunications service that a LEC provides to its customers. Therefore, it is effectively tariffed since the rate for dial tone by a LEC is tariffed.

   We also disagree with the OCA recommendation that ''the PUC should make the Interim Guidelines applicable to all potential slamming and cramming incidents, regardless of the type of service provider.'' It is specifically the submission of charges by third parties to LECs for inclusion on the customer's local telephone bill that led us to recognize the problem of cramming. We believe that the problem is, by definition, a problem with third-party billing. We further believe that there are already remedies in place under the Chapter 64 residential telephone service standards to deal with a LEC that would include unauthorized charges of its own on its bill. Regarding the OCA's recommendation to require the LEC to advise consumers that local service cannot be terminated for nonpayment of charges that result from slamming or cramming, we do not believe this additional information needs to be part of the guidelines since the charges are to be removed from the LEC bill. Finally, the residential suspension notice required under § 64.72 (relating to suspension notice information) clearly informs a customer, at the appropriate time, of the part of an arrearage that threatens basic service.

3.  Comments Responding to Specific Issues Raised in Tentative Order

   In the Tentative Order, the Commission expressed interest in receiving comments about the following four specific issues relating to cramming: (1) the extent of Commission jurisdiction over complaints which involve cramming of telephone related charges or service and nontelephone related charges or service; (2) the Commission's authority to order LECs to recourse the charges to the information service provider and what effect billing contracts may or may not have on the Commission's authority; (3) the Commission's authority to order LECs to flag an account at the request of a customer so that no future billing or charges can be placed on the account; and (4) the type of complaints that should be referred to the Office of Attorney General (OAG), the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC).

   In regard to the first two issues, we have already indicated that GTE asserts that the Commission does not have jurisdiction in these instances and emphasizes that ''the Commission has no jurisdiction over interstate calls and the vast amount of the disputed charges will be interstate calls.'' Additionally, GTE argues that the current billing and collections contracts with the carriers do not contain terms and conditions that permit the actions proposed in the Interim Guidelines. (GTE Comments, pp. 3-10). Finally, GTE states that the Commission does not have the authority to order the LEC to recourse the unauthorized charges ''especially if such recourse violates the current contract between the LEC and IXC.'' (GTE Comments, p. 11).

   The BA-PA believes that the Commission ''correctly suggests that the wellspring of its jurisdiction in this area is its power to control the service quality and adequacy of LEC billing and collection directed at the LEC's end user customers.'' The BA-PA also believes that the Commission's jurisdiction should encompass LEC billing and collection for information service provider charges, regardless of whether such charges are telephone or non-telephone related. (BA-PA Comments, p. 2).

   MCI maintains that there is the potential for anticompetitive behavior and fraud with respect to recoursing charges. MCI also calls into question the Commission's authority regarding this type of regulatory provision given sections 253 and 258 of the Telecommunications Act of 1996 (TA-96 or the Act) (MCI Comments, p. 21).

   Regarding the third issue on the Commission's authority to order LECs to ''flag'' an account, GTE again believes that the Commission does not have the authority to order LECs to ''flag'' an account. (GTE Comments, p. 11). In response to the Commission's query about flagging being anticompetitive, GTE suggests that flagging is not permissible when it is based on types of service and not a provider. GTE references section 251(b) of TA-96 and the FCC Second Report and Order in Docket No. CC 96-98, pointing out that although the issue of flagging is not addressed specifically, these sections indicate that ''nondiscriminatory treatment should be permissible if directed by the Commission.'' (GTE Comments, pp. 11-12).

   MCI interprets the Interim Guidelines as allowing third party billing for such services as 1-800-COLLECT (where the called party consents to the call), 10-10-321 and 10-10-222 ''dial around'' calls (where the end users affirmatively dial MCI's carrier identification code, thus indicating consent to be billed for the call by the LEC on MCI's behalf). MCI has not yet determined whether it is technically possible to ''bill block'' in accordance with the provisions, but is certain that such capacity would give LECs ''the unilateral ability to prevent the use of MCI's casual services, thus diminishing consumer choice and protecting the LECs' services from competitive pressures.'' (MCI Comments, p. 21-22).

   The BA-PA believes that the Commission's jurisdiction to direct LECs to flag accounts is questionable and suggests that the Commission remove the flag provision of the interim cramming guidelines. The BA-PA argues that a broad prohibition of this sort would take LECs beyond the limits of their authority and force them to be billing police. In addition to being impracticable, the BA-PA asserts that should an account flag prevent the billing of any competitive telecommunications service covered by TA-96, an aggrieved provider might contest the flag as a barrier to entry or otherwise unlawful under the Act. (BA-PA Comments, p. 5).

   The fourth issue relates to the appropriate complaint referral. GTE comments that the FCC has jurisdiction over interstate or international service charges, the FTC has responsibility over nontelephone service charges, and the OAG is responsible for investigating any case of suspected fraud or violation of State law. (GTE Comments, p. 12).

   The BA-PA recommends that the Commission require LECs to provide information about complaint options only to customers who inquire about filing a complaint with a regulatory agency. The BA-PA argues that it would be time-consuming and potentially confusing to have to determine which regulatory agency is the appropriate complaint forum for a particular consumer. In many cases, the BA-PA submits, the information would be unnecessary considering that some consumers will have no interest in filing a complaint with another agency after they get the cramming charges off their bill. The BA-PA believes that the jurisdictional distinction for complaints to the FCC, FTC and OAG, as set forth in the Tentative Order, is reasonable and would apply that criteria in assisting crammed customers seeking information about filing a complaint with a regulatory agency. (BA-PA Comments, p. 5-6).

4.  Response to Comments on Specific Issues

   Although the billing and collection contracts between the LEC and the information service provider or billing aggregator do not need to be filed with the Commission, we do have oversight responsibilities regarding the billing practices of the LECs. (See 52 Pa. Code § 64). The Anti-Cramming Best Practices Guidelines issued on July 22, 1998, concede that ''consumer-designated billing options can be an extremely powerful method of controlling third party cramming on the LEC bill and should be actively pursued.'' (p. 25). It is interesting to note that these industry sponsored guidelines consider this method a Best Practice worth pursuing. Yet, most of the comments on the practice of flagging an account for telephone-related services were negative and perceive the practice to be anticompetitive.

   The purpose of proposed § 64.23(a)(3) (relating to standardizing LEC responses to customer contacts alleging unauthorized changes to the customer's long distance carrier and unauthorized changes added to the customer's bill) is to address the recurring nature of some third-party crammed charges. In many of the cramming complaints filed with the Commission, the crux of the complaint is that the charge appears on the customer's bill every month. Even though the charge is removed when the customer complains to the company, the customer does not want to have to call each month to dispute the charge and have it removed. Therefore, we included the requirement that in addition to recoursing the disputed charge, the LEC will make an effort to stop further billing of the charge. Given the ongoing nature of this unsavory billing practice, it is necessary that we retain this provision.

   In light of the comments, however, we clarify that it is only when a charge is recurring that the LEC must attempt to prevent the further billing of that charge. For example, a customer may notice on his bill a monthly charge of $4.05 for voicemail. Simply recoursing the $4.05 will not necessarily mean that the charge will not appear again the next month. The proposed amendments require the LEC to notify the alleged crammer that charges for this voicemail service should no longer be sent through for billing.

   In the previous section of this order we have addressed at length our authority over the presentation of the bill by the LEC and our jurisdiction over the billing service provided by a LEC. We are satisfied that the conclusion we have reached is legally correct.

   Contrary to GTE's assertion, in our experience, the vast amount of disputed charges regarding cramming are not for interstate calls--most are for charges for products or services such as caller ID, pager, personal 800 number, and the like. Furthermore, as evidenced by recent actions of the BA-PA, billing and collections contracts can be modified. In fact, the Best Practices Guidelines, which GTE played a part in developing, rely heavily on modifying billing and collection contracts as a means to thwart cramming. Give the amount of time that will elapse between the issuance of voluntary Interim Guidelines and final-form regulations, it is our opinion the LECs will have ample time to address appropriate modification of billing and collection contracts. Finally, in light of the BA-PA's comments on the complaint options, we have modified subsection (a)(5). However, rather than making the customer ask, the modified provision will state that the LEC should ask if the customer wants additional information for filing a complaint with a regulatory agency or other appropriate entity.

5.  Comment on Definitions

   GTE recommends using the definition of ''cramming'' that appears as follows in the Best Practices Guidelines: ''The submission or inclusion of unauthorized, misleading, or deceptive charges for products or services on End-user Customer's local telephone bills.'' GTE reasons that the definition as proposed in the Interim Guidelines ''may lead a reader to believe that the LEC is in the practice of billing in a careless manner and is not implementing the proper rules to combat the cramming problem.'' (GTE Comments, p. 13).

   MCI believes that the words ''customer'' and ''authorized'' used in the definition of ''cramming'' and also ''slamming'' are vague and can be interpreted in different ways. MCI explains that if ''customer'' means the person responsible for the telephone bill and ''thereby the only person who may authorize a change in carrier,'' the definitions are ''contrary to the way many households conduct business today and would impose a burden on consumers'' by not permitting one spouse or member of a household to change the telecommunications service of the household. MCI states that the terms are ''pejorative and lend themselves to emotional responses, are overbroad and subject to differing interpretations.'' (MCI Comments, pp. 13-15). Regarding the definition of ''service provider,'' MCI recommends that a distinction be made between ''service provider'' and ''telecommunications provider.'' The definition of service provider, in MCI's opinion, should include only ''unregulated entities--those entities maintaining 'hotlines,' 'clubs,' 900-numbers and the like.'' Furthermore, MCI believes that the interim rules should not apply to telecommunications providers, ''pending further proceedings.'' (MCI Comments, p. 15).

6.  Response to Comments on Definitions

   We agree with GTE's recommendation to use the definition that appears in the Best Practices Guidelines. However, in changing the definition to reflect the language in the Best Practices Guidelines, we are not changing our position that a ratepayer of record clearly has the right to contact a LEC about the bill for which he is responsible, and allege that there are charges on the bill for services or products that the ratepayer neither ordered nor authorized and, therefore, wants removed.

   MCI's recommendation to modify the definition appears to reflect its fear that ''casually'' billed, tariffed services will be adversely affected if a distinction is not made between service provider and telecommunications service provider. We do not believe that such a distinction is necessary since it has been our experience in the handling of informal complaints alleging cramming that the services that are ''crammed'' onto customers' local exchange bills are nonbasic services which, by definition, are services and products other than telephone service. See, 52 Pa. Code § 64.2.

7.  Comments on subsection (a)(1)--Clarifying the Customer's Complaint

   MCI seeks a determination as to what ''clarification'' the LECs would ''suggest and thereby procure'' from a customer. MCI anticipates that ''given the other powers conferred by the Interim Guidelines,'' one might question whether the LECs can be ''depended upon to give neutral information.'' MCI also questions what investigation the LECs would ''engage in before 'removing' charges and 'instructing' an IXC as to how it may proceed with respect to the latter's customers?'' In answer to its own questions, MCI postulates that litigation would ensue over, not only the effect of the Interim Guidelines on billing and collection agreements, but also over the Commission's authority under sections 253 and 258 of TA-96. In regard to ''cramming,'' MCI recommends that if interim rules are issued at all, they should be with respect to ''unauthorized charges from non-telecommunications companies.'' (MCI Comments, p. 20-21).

8.  Response to Comments on subsection (a)(1)

   We will not modify the language in subsection (a)(1) since the proposed language requires only that the LEC identify the charge and clarify that it is a cramming complaint.3 In other words, upon contact from a customer alleging that the bill includes an unauthorized charge for, by way of example, a paging service, the LEC would pick out the charge on the bill and make sure that the customer is complaining about the charge because he or she never ordered a paging service from that company. No investigation is needed since the LEC is not making a determination as to the legitimacy of the charge and merits of the complaint--the LEC is simply removing the charge from the bill and sending it back to the third party. Rather than ''instructing the IXC as to how it may proceed'' with its customers, the LEC is removing the charge and telling the company in question not to send that charge through again because the customer has complained that the charge is unauthorized. The IXC or service provider certainly has the choice to bill the charge directly or to pursue other avenues of collection.

   With respect to the authority to enforce these types of provisions under section 253 of the Act, the argument appears to be that this state regulatory provision is an ''illegal barrier to entry'' under section 253. In response, we submit that there is no legal right to bill for an unauthorized service and, in any event, nothing in TA-96 would prohibit the state from protecting public welfare and safeguarding the rights of consumers.

9.  Comments on Subsection (a)(2)--Removing Charges from LEC Bill and Recoursing to Service Provider or Billing Agent

   The PTA agrees that the unauthorized cramming charges should be recoursed to the IXC, billing clearinghouse, or information service provider. (PTA Comments, p. 2). The BA-PA comments in a footnote that the LEC's removal and recoursing of claimed cramming charges ''should put the information service provider and any billing aggregator involved on notice that the customer has objected to the charges as unauthorized, and that no additional charges for the unauthorized service should be billed on the customer's telephone bill.'' (BA-PA Comments, p. 4).

10.  Response to Comment on Subsection (a)(2)

   No changes will be made in this provision. To reiterate, no determination is being made by the LEC as to the legitimacy of the charges. The charges are simply being removed from the LEC bill.

11.  Comments on Subparagraph (a)(3)--LEC Informing Billing Agent and/or Service Provider to Prevent Further Billing

   The PTA emphasizes that its member companies do not currently have mechanisms in place to flag an individual account in order to prevent the billing of future unauthorized charges. Furthermore, the PTA member companies ''do not believe that it is their responsibility to block the charges from an IXC, billing clearinghouse, or information service provider.'' It is the belief of these member companies that a ''flag,'' instituted by a LEC could disadvantage a customer and, practically speaking, it would be difficult to flag an account for many services.'' (PTA Comments, p. 2).

12.  Response to Comment on Subsection (a)(3)

   The purpose of this provision is not to prevent further cramming. We included the provision as a means to stop the continued billing of a charge for a product or service that the customer claims has been crammed onto their local telephone bill. Many of these charges represent monthly recurring fees. We recognize the difficulty that LECs may encounter when attempting to limit the charges that appear on the LEC's bill to only the charges from the LEC and from the customer's regional and long distance carriers. We also recognize that such a move may be impracticable. However, given this clarification, we will retain this provision to help stop the continued billing of a charge for a product or service that the customer claims has been crammed onto his local telephone bill.

13.  Comments on Subsection (a)(4) and (5)--LEC Informing the Customer of Other Collection Remedies and the Right to Contact the OAG, the FCC and the FTC

   In regard to subsection (a)(4), the PTA agrees with informing the customer that the billing entity may attempt other methods to collect the charges. (PTA Comments, p. 3). However, with respect to subsection (a)(5), the PTA objects to having to inform the customer of the right to pursue a cramming complaint with the OAG, FCC or FTC. The PTA believes that the provision would require the LEC to make judgment calls on the nature of the complaint and the charge at issue in order to make an assessment of which agency would have jurisdiction. (PTA Comments, p. 3). The PTA emphasizes that the revisions to the Residential Telephone Service Regulations4 relieved LECs of having to take responsibility for this type of dispute. The PTA submits that, instead of the responsibility being the LECs, the IXC or other service provider ''with whom the customer has the dispute'' should be charged with the responsibility of informing the customer of his or her options to pursue a complaint. (PTA Comments, p. 4).

   MCI states that carriers should ''when asked'' advise consumers to contact the appropriate agency. It is MCI's opinion, however, that, if the consumer is satisfied, ''not all complaints need to be escalated to a State or Federal agency.'' (MCI Comments, p. 3).

   The BA-PA recommends that this guideline be changed to require the LEC to provide this information only to those customers who inquire about filing a complaint with a regulatory agency. (BA-PA Comments, p. 5).

14.  Response to Comments on Subsection (a)(4) and (5)

   In light of the comments, we have modified subsection (a)(5). However, rather than making the LEC ask if the customer wants additional information for filing a complaint with a regulatory agency or other appropriate entity, the LEC will only be required to provide the information to customers who indicate a desire to receive this information.

15.  Comments on Subsection (a)(6)--Record Maintenance to Monitor Adherence to Billing Contract

   Sprint recommends that in the interest of jurisdictional consistency, the Commission should adopt the FCC's guideline of preserving complaint records for a 12-month period. According to their comments, Sprint has already implemented policies and updated billing and collection contracts to allow for ''the termination of billing for service providers that knowingly and purposefully slam or cram customers.'' Sprint states that revised National billing and collection policy guidelines issued by Sprint on March 1, 1998 are more restrictive as to what services and products Sprint will bill. (Sprint Comments, p. 4).

   The BA-PA maintains that, as part of its anticramming program, it has developed an internal data base to track individual customer cramming complaints. The BA-PA explains that it will use this data base to monitor billing and collection contract compliance, ''and to directly notify information service providers and/or their billing agents to cease billing charges objected to by customers as unauthorized.'' (BA-PA Comments, p. 6).

16.  Response to Comments on Subsection (a)(6)

   We have modified the time frame for record maintenance from 2 years to 3 years to be consistent with 66 Pa.C.S. § 3314, which sets 3 years as the time frame within which the Commission can bring an action or prosecution for violations of our regulations. If it becomes necessary to initiate some type of enforcement action to assess penalties, the 3 year record retention will provide the opportunity to review instances that may be part of the action. Therefore, although we originally proposed 2 years as the time period for record retention that the commentators were to consider, we must settle on three years to acknowledge the statutory provision in the Public Utility Code.

B.  Slamming

17.  General Comments

   GTE expressed a general concern that the Commission's proposed guidelines would effectively ''put the responsibility of the 'enforcement/correction efforts' on the LECs.'' GTE believes that the Commission's proposals would place the administrative burden and cost of slamming on the LEC. According to GTE, slamming is best prevented and controlled through proper verification procedures, and it recommends the use of the current FCC verification rules in this Commonwealth to assure cross-jurisdictional consistency. (GTE comments, p. 4).

   AT&T notes that the FCC has instituted two prior rulemaking proceedings regarding slamming and is currently considering comments in response to a July 15, 1997, Further Notice of Proposed Rule Making and Memorandum Opinion and Order on Reconsideration (FNPRM) in CC Docket 94-129. (AT&T Comments, p. 3). AT&T, along with Sprint and MCI, suggest that the Commission evaluate the impact of the FCC's regulations before implementing additional rules within the Commonwealth. (AT&T Comments, p. 4; Sprint Comments, p. 6; MCI Comments, p. 9).

   More specifically, Sprint believes that customer education is also an important factor in minimizing instances of slamming as well as cramming, and reveals that it is developing material to educate consumers on issues such as ''fully reading and understanding the fine print before signing Letter of Authorization (LOA) forms, and listening to and understanding telemarketing sales attempts.'' (Sprint Comments p. 5).

   MCI again expresses concern that the Interim Guidelines inadvertently provide the BA-PA with an additional weapon against its competitors by allowing LECs to remove and return legitimate long distance and related charges to IXCs. (MCI Comments, p. 4). Furthermore, MCI argues that the Interim Guidelines, if unchanged, will have the effect of raising toll rates and stifling the development of competition in this Commonwealth. (MCI Comments, p. 4). MCI recommends that the Interim Guidelines be modified to state that the Commission will enforce the FCC's verification rules with respect to unauthorized changes of carriers. (MCI Comments, p. 9). MCI believes these FCC verification rules, codified at 47 CFR 64.1100 and 64.1150, combined with the voluntary practices of responsible carriers, provide a consistent, balanced approach to slamming. (MCI Comments, p. 4).

   The OCA supports the proposed guidelines and suggests two ways to further strengthen them. First, the OCA recommends specifically informing customers that their basic local service cannot be terminated for failure to pay charges resulting from slamming and cramming. (OCA Comments, p. 1). The OCA submits that in many instances consumers pay charges resulting from slamming and cramming because they believe the failure to pay the charges may risk termination of local or basic service. The OCA, therefore, believes the Interim Guidelines would be strengthened by a requirement that the LECs advise consumers they may refuse to pay unauthorized charges without the fear of loss of basic telephone service. (OCA Comments, p. 2). Second, the OCA recommends that the Commission apply the Interim Guidelines to local services. The OCA notes that the proposed definition of slamming includes reference to local exchange service; however, the slamming remedies seem to apply only to slamming by IXCs. The OCA argues that the PUC not discriminate between industry segments when applying slamming and cramming remedies. The OCA, therefore, recommends that the Interim Guidelines should be applicable to all potential slamming and cramming incidents regardless of the type of service provider. (OCA Comments, pp. 5-6).

18.  Response to General Comments

   At this point, given the negative comments from parties regarding the ''slamming'' portion of our proposed rulemaking order, we believe it important to reiterate and clarify some points made in our Tentative Order. First, the proposed regulations are intended to focus on resolution of the narrow portion of the customer's complaint over which the Commission clearly has jurisdiction; namely, the LEC intrastate billing and collection service. The fact that the LEC performs billing on a contractual basis for IXCs does not negate the Commission's jurisdiction over this LEC intrastate billing function. Customers who receive consolidated billing from their local exchange company favor such billing because of its convenience. When consolidated billing becomes a vehicle for placement of unauthorized charges, a residential customer deserves a quick method of eliminating the unauthorized charges. Under the Interim Guidelines, customers who allege they are victims of an unauthorized presubscribed interexchange carrier (PIC) switch receive the immediate benefit of removal of outstanding charges placed by an allegedly unauthorized party on their LEC bills, along with an offer to ''flag'' or ''freeze,'' at the customer's request, the customer's account to prevent a recurrence of the incident.


*Editor's Note: Interim Guidelines Docket No. M-00981063 was published at 28 Pa.B. 3176 (July 4, 1999).

1The terms ''cramming'' and ''slamming'' are specifically defined in Appendix A and refer to unauthorized charges for products or services and unauthorized changes of telecommunications service providers, respectively.

2The Best Practices Guidelines, issued on July 22, 1998, are the culmination of an industry workshop's efforts to identify best practices designed to prevent, deter, and eliminate cramming. On April 22, 1998, William Kennard, Chairperson of the Federal Communications Commission, invited a group of the largest local exchange carrier providers of billing and collection services to participate in this workshop.

3We are, however, modifying subsection (a), as well as subsection (b), for slamming by deleting the phrase ''it is recommended'' since final regulations (Annex A) will require mandatory language.

4See Rulemaking to Rescind Obsolete Regulations Regarding Telephone and Residential Telephone Service, 52 Pa. Code Chapters 63 and 64, Docket No. L-00960113.

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