Fair Telephone Billing Act of 2013

Summary: Fair Telephone Billing Act of 2013 - Amends the Communications Act of 1934 to prohibit local exchange carriers or providers of interconnected VoIP (Voice over Internet Protocol) service from placing, or causing to be placed, a third-party charge that is not directly related to the provision of telephone services on the bill of a customer, unless: (1) the third-party charge is from a contracted third-party vendor and for a product or service that the carrier or provider markets or sells jointly with its own service, (2) the customer provided affirmative consent for the charge, (3) the customer was provided with a disclosure of material terms and conditions prior to such consent, and (4) the charge is implemented with reasonable procedures to ensure that the customer has requested the product or service.  Defines: (1) a &quot;third-party charge&quot; as a charge for a product or service not provided by a local exchange carrier or a provider of interconnected VoIP service, and (2) a &quot;contracted third-party vendor&quot; as a person with a contractual right to receive billing and collection services from such a carrier or provider for a product or service the person provides directly to a customer. Subjects violators to civil forfeiture and specified penalties and refund requirements. Directs the Federal Communications Commission (FCC) to promulgate rules to: (1) define how local exchange carriers and providers of interconnected VoIP service will obtain affirmative consent from a consumer for a third-party charge, (2) ensure that consumers are fully aware of the charges to which they are consenting, and (3) impose recordkeeping requirements on such carriers and providers related to any grants of affirmative consent by consumers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Telephone Billing Act of 
2013''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) For years, telephone users have complained that their 
        wireline telephone bills included unauthorized third-party 
        charges.
            (2) This problem, commonly referred to as ``cramming'', 
        first appeared in the 1990s, after wireline telephone companies 
        opened their billing platforms to an array of third-party 
        vendors offering a variety of services.
            (3) Since the 1990s, the Federal Communications Commission, 
        the Federal Trade Commission, and State attorneys general have 
        brought multiple enforcement actions against dozens of 
        individuals and companies for engaging in cramming.
            (4) An investigation by the Committee on Commerce, Science, 
        and Transportation of the Senate confirmed that cramming is a 
        problem of massive proportions and has affected millions of 
        telephone users, costing them billions of dollars in 
        unauthorized third-party charges over the past decade.
            (5) The Committee showed that third-party billing through 
        wireline telephone numbers has largely failed to become a 
        reliable method of payment that consumers and businesses can 
        use to conduct legitimate commerce.
            (6) Telephone companies regularly placed third-party 
        charges on their customers' telephone bills without their 
        customers' authorization.
            (7) Many companies engaged in third-party billing were 
        illegitimate and created solely to exploit the weaknesses in 
        the third-party billing platforms established by telephone 
        companies.
            (8) In the last decade, millions of business and 
        residential consumers have transitioned from wireline telephone 
        service to interconnected VoIP service.
            (9) Users of interconnected VoIP service often use the 
        service as the primary telephone line for their residences and 
        businesses.
            (10) Millions more business and residential consumers are 
        expected to migrate to interconnected VoIP service in the 
        coming years as the evolution of the nation's traditional voice 
        communications networks to IP-based networks continues.
            (11) Users of interconnected VoIP service that have 
        telephone numbers through the service should be protected from 
        the same vulnerabilities that affected third-party billing 
        through wireline telephone numbers.

SEC. 3. UNAUTHORIZED THIRD-PARTY CHARGES.

    (a) In General.--Section 258 of the Communications Act of 1934 (47 
U.S.C. 258) is amended--
            (1) by amending the heading to read as follows: ``sec. 258. 
        preventing illegal changes in subscriber carrier selections and 
        unauthorized third-party charges.''; and
            (2) by adding at the end the following:
    ``(c) Prohibition.--
            ``(1) In general.--No local exchange carrier or provider of 
        interconnected VoIP service shall place or cause to be placed a 
        third-party charge that is not directly related to the 
        provision of telephone services on the bill of a customer, 
        unless--
                    ``(A) the third-party charge is from a contracted 
                third-party vendor;
                    ``(B) the third-party charge is for a product or 
                service that a local exchange carrier or provider of 
                interconnected VoIP service jointly markets or jointly 
                sells with its own service;
                    ``(C) the customer was provided with clear and 
                conspicuous disclosure of all material terms and 
                conditions prior to consenting under subparagraph (D);
                    ``(D) the customer provided affirmative consent for 
                the placement of the third-party charge on the bill; 
                and
                    ``(E) the local exchange carrier or provider of 
                interconnected VoIP service has implemented reasonable 
                procedures to ensure that the third-party charge is for 
                a product or service requested by the customer.
            ``(2) Forfeiture and refund.--
                    ``(A) In general.--Any person who commits a 
                violation of paragraph (1) shall be subject to a civil 
                forfeiture, which shall be determined in accordance 
                with section 503 of title V of this Act, except that 
                the amount of the penalty shall be double the otherwise 
                applicable amount of the penalty under that section.
                    ``(B) Refund.--Any local exchange carrier or 
                provider of interconnected VoIP service that commits a 
                violation of paragraph (1) shall be liable to the 
                customer in an amount equal to all charges paid by that 
                customer related to the violation of paragraph (1), in 
                accordance with such procedures as the Commission may 
                prescribe.
            ``(3) Additional remedies.--The remedies under this 
        subsection are in addition to any other remedies provided by 
        law.
            ``(4) Definitions.--In this subsection:
                    ``(A) Affirmative consent.--The term `affirmative 
                consent' means express verifiable authorization.
                    ``(B) Contracted third-party vendor.--The term 
                `contracted third-party vendor' means a person that has 
                a contractual right to receive billing and collection 
                services from a local exchange carrier or a provider of 
                interconnected VoIP service for a product or service 
                that the person provides directly to a customer.
                    ``(C) Third-party charge.--The term `third-party 
                charge' means a charge for a product or service not 
                provided by a local exchange carrier or a provider of 
                interconnected VoIP service.''.
    (b) Rulemaking.--
            (1) In general.--Not later than 90 days after the date of 
        enactment of this Act, the Federal Communications Commission, 
        in consultation with the Federal Trade Commission, shall 
        prescribe any rules necessary to implement the provisions of 
        this section.
            (2) Minimum contents.--At a minimum, the regulations 
        promulgated by the Federal Communications Commission under this 
        subsection shall--
                    (A) define how local exchange carriers and 
                providers of interconnected VoIP service will obtain 
                affirmative consent from a consumer for a third-party 
                charge;
                    (B) include adequate protections to ensure that 
                consumers are fully aware of the charges to which they 
                are consenting; and
                    (C) impose recordkeeping requirements on local 
                exchange carriers and providers of interconnected VoIP 
                service related to any grants of affirmative consent by 
                consumers.
    (c) Effective Date.--The Federal Communications Commission shall 
prescribe that any rule adopted under subsection (b) shall become 
effective for a local exchange carrier or provider of interconnected 
VoIP service not later than the date that the carrier's or provider's 
contractual obligation to permit another person to charge a customer 
for a good or service on a bill rendered by the carrier or provider 
expires, or 180 days after the date of enactment of this Act, whichever 
is earlier.

SEC. 4. RELATIONSHIP TO OTHER LAWS.

    (a) No Preemption of State Laws.--Nothing in this Act shall be 
construed to preempt any State law, except that no State law may 
relieve any person of a requirement otherwise applicable under this 
Act.
    (b) Preservation of FTC Authority.--Nothing in this Act shall be 
construed as modifying, limiting, or otherwise affecting the 
applicability of the Federal Trade Commission Act (15 U.S.C. 41 et 
seq.) or any other law enforced by the Federal Trade Commission.

SEC. 5. SEVERABILITY.

    If any provision of this Act or the application of that provision 
to any person or circumstance is held invalid, the remainder of this 
Act and the application of that provision to any other person or 
circumstance shall not be affected thereby.