Slamming Prevention and Consumer Protection Act of 1997

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Slamming Prevention and Consumer 
Protection Act of 1997''.

       TITLE I--IMPROVED COMMUNICATIONS ACT REMEDIES FOR SLAMMING

SEC. 101. COMPLETION AND ENFORCEMENT OF FCC RULES.

    Section 258 of the Communications Act of 1984 (47 U.S.C. 258) is 
amended by adding at the end the following:
    ``(c) Subscriber Changes.--The Commission's regulations under this 
section shall require any carrier that submits or executes a change in 
a subscriber's selection of a provider of telephone exchange service or 
telephone toll service in violation of the verification procedures 
prescribed by the Commission shall refund to the subscriber (or 
discharge the subscriber from liability for) any charges imposed for 
such service by such carrier during the 3-month period after the change 
in the subscriber's selection is effected.
    ``(d) Negative Option Selection Prohibited.--The Commission's 
regulations under this section shall prohibit any change in selection, 
or any verification of a change in selection, without the affirmative 
request of the subscriber. A subscriber's failure to refuse a change in 
selection, or failure to refuse to verify a change in selection, shall 
not be deemed to be an affirmative request.
    ``(e) Completion of Rulemaking.--The Commission shall complete all 
actions necessary, including any reconsideration, to prescribe rules to 
implement and enforce this section within two years after the date of 
enactment of the Telecommunications Act of 1996.
    ``(f) Private Right of Action.--
            ``(1) In general.--A subscriber whose selection of a 
        provider of telephone exchange service or telephone toll 
        service is changed in violation of the procedures prescribed 
        under subsection (a) may, within one year after the change, if 
        otherwise permitted by the laws or rules of court of a State, 
        bring in an appropriate court of that State an action--
                    ``(A) for an order to revoke the change;
                    ``(B) for an award of damages in an amount equal to 
                the greater of--
                            ``(i) the actual monetary loss resulting 
                        from the change; or
                            ``(ii) an amount not to exceed $500; or
                    ``(C) for relief under both subparagraphs (A) and 
                (B).
        In any such action in which the plaintiff substantially 
        prevails the court may assess reasonable costs, including 
        attorneys' fees, against the defendant.
            ``(2) Increased award.--If the court finds that the 
        defendant executed the change in willful and knowing violation 
        of the procedures prescribed under subsection (a), the court 
        may, in its discretion, increase the amount of the award under 
        paragraph (1) to an amount equal to not more than three times 
        the maximum amount awardable under subparagraph (B) of that 
        paragraph.
    ``(g) No Preemption of State Law.--Nothing in this section shall 
preempt the availability of relief under State law for unauthorized 
changes of providers of intrastate telephone exchange service or 
telephone toll service.''.

  TITLE II--REGULATION OF UNFAIR AND DECEPTIVE ACTS AND PRACTICES IN 
                        CONNECTION WITH SLAMMING

SEC. 201. FEDERAL TRADE COMMISSION REGULATIONS.

    (a) In General.--
            (1) Regulations required.--The Commission shall prescribe 
        rules in accordance with this subsection to prohibit unfair and 
        deceptive acts and practices in any advertisement for or 
        solicitation of any change in a subscriber's selection of a 
        provider of telephone exchange service or telephone toll 
        service. Such rules shall require that the person offering or 
        soliciting any change in the subscriber's selection of the 
        provider of a telephone exchange service or telephone toll 
        service--
                    (A) clearly and conspicuously disclose--
                            (i) that the offer or solicitation seeks 
                        authority to change the subscriber's selection 
                        of the provider of a telephone exchange service 
                        or telephone toll service; and
                            (ii) the cost of the use of telephone 
                        exchange service or telephone toll service, 
                        including the total cost or the cost per minute 
                        and any other fees for that service, including 
                        any cost imposed for changing the subscriber's 
                        selection of service providers;
                    (B) not submit or execute a change in a 
                subscriber's selection of the provider of any telephone 
                exchange service or telephone toll service in violation 
                of the verification procedures prescribed by the 
                Federal Communications Commission pursuant to section 
                258 of the Communications Act of 1934;
                    (C) in the case of an advertisement or solicitation 
                which offers a prize or award or a service or product 
                at no cost or for a reduced cost, clearly and 
                conspicuously disclose the odds of being able to 
                receive such prize, award, service, or product at no 
                cost or reduced cost, or, if such odds are not 
                calculable in advance, disclose the factors determining 
                such odds; and
                    (D) comply with such additional standards as the 
                Commission may prescribe to prevent unfair or abusive 
                practices.
            (2) Access to information.--The Commission shall by rule 
        require a common carrier that uses any person other than an 
        employee of such carrier to solicit changes in the provider of 
        any telephone exchange service or telephone toll service to 
        make available to the Commission any contracts, records, and 
        financial information maintained by such carrier relating to 
        the use of such person to make such solicitations.
            (3) Evasions.--The rules issued by the Commission under 
        this section shall include provisions to prohibit unfair or 
        deceptive acts or practices that evade such rules or undermine 
        the rights provided to telephone exchange service or telephone 
        toll service subscribers under this title.
            (4) Treatment of rules.--A rule issued under this 
        subsection shall be treated as a rule issued under section 
        18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
        57a(a)(1)(B)).
    (b) Rulemaking.--The Commission shall prescribe the rules under 
subsection (a) within 270 days after the date of enactment of this Act. 
Such rules shall be prescribed in accordance with section 553 of title 
5, United States Code.
    (c) Enforcement.--Any violation of any rule prescribed under 
subsection (a) shall be treated as a violation of a rule respecting 
unfair or deceptive acts or practices under section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45). Notwithstanding section 5(a)(2) of 
such Act (15 U.S.C. 45(a)(2)), communications common carriers shall be 
subject to the jurisdiction of the Commission for purposes of this 
title.

SEC. 202. ACTIONS BY STATES.

    (a) In General.--Whenever an attorney general of any State has 
reason to believe that the interests of the residents of that State 
have been or are being threatened or adversely affected because any 
person has engaged or is engaging in a pattern or practice which 
violates any rule of the Commission under section 201(a), the State may 
bring a civil action on behalf of its residents in an appropriate 
district court of the United States to enjoin such pattern or practice, 
to enforce compliance with such rule of the Commission, to obtain 
damages on behalf of their residents, or to obtain such further and 
other relief as the court may deem appropriate.
    (b) Notice.--The State shall serve prior written notice of any 
civil action under subsection (a) upon the Commission and provide the 
Commission with a copy of its complaint, except that if it is not 
feasible for the State to provide such prior notice, the State shall 
serve such notice immediately upon instituting such action. Upon 
receiving a notice respecting a civil action, the Commission shall have 
the right (1) to intervene in such action, (2) upon so intervening, to 
be heard on all matters arising therein, and (3) to file petitions for 
appeal.
    (c) Venue.--Any civil action brought under this section in a 
district court of the United States may be brought in the district 
wherein the defendant is found or is an inhabitant or transacts 
business or wherein the violation occurred or is occurring, and process 
in such cases may be served in any district in which the defendant is 
an inhabitant or wherever the defendant may be found.
    (d) Investigatory Powers.--For purposes of bringing any civil 
action under this section, nothing in this Act shall prevent the 
attorney general from exercising the powers conferred on the attorney 
general by the laws of such State to conduct investigations or to 
administer oaths or affirmations or to compel the attendance of 
witnesses or the production of documentary and other evidence.
    (e) Effect on State Court Proceedings.--Nothing contained in this 
section shall prohibit an authorized State official from proceeding in 
State court on the basis of an alleged violation of any general civil 
or criminal antifraud statute of such State.
    (f) Limitation.--Whenever the Commission has instituted a civil 
action for violation of any rule or regulation under this Act, no State 
may, during the pendency of such action instituted by the Commission, 
subsequently institute a civil action against any defendant named in 
the Commission's complaint for violation of any rule as alleged in the 
Commission's complaint.
    (g) Actions by Other State Officials.--
            (1) Nothing contained in this section shall prohibit an 
        authorized State official from proceeding in State court on the 
        basis of an alleged violation of any general civil or criminal 
        statute of such State.
            (2) In addition to actions brought by an attorney general 
        of a State under subsection (a), such an action may be brought 
        by officers of such State who are authorized by the State to 
        bring actions in such State for protection of consumers and who 
        are designated by the Commission to bring an action under 
        subsection (a) against persons that the Commission has 
        determined have or are engaged in a pattern or practice which 
        violates a rule of the Commission under section 201(a).

SEC. 203. ADMINISTRATION AND APPLICABILITY OF TITLE.

    (a) In General.--Except as otherwise provided in section 202, this 
title shall be enforced by the Commission under the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.). Consequently, no activity which 
is outside the jurisdiction of that Act shall be affected by this Act, 
except for purposes of this title.
    (b) Actions by the Commission.--The Commission shall prevent any 
person from violating a rule of the Commission under section 201 in the 
same manner, by the same means, and with the same jurisdiction, powers, 
and duties as though all applicable terms and provisions of the Federal 
Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and 
made a part of this title. Any person who violates such rule shall be 
subject to the penalties and entitled to the privileges and immunities 
provided in the Federal Trade Commission Act in the same manner, by the 
same means, and with the same jurisdiction, power, and duties as though 
all applicable terms and provisions of the Federal Trade Commission Act 
were incorporated into and made a part of this title.

SEC. 204. DEFINITIONS.

    For purposes of this title:
            (1) The terms ``telephone exchange service'' and 
        ``telephone toll service'' have the meaning provided in section 
        3 of the Communications Act of 1934.
            (2) The term ``attorney general'' means the chief legal 
        officer of a State.
            (3) The term ``State'' means any State of the United 
        States, the District of Columbia, Puerto Rico, the Northern 
        Mariana Islands, and any territory or possession of the United 
        States.
            (4) The term ``Commission'' means the Federal Trade 
        Commission.

Summary: TABLE OF CONTENTS: Title I: Improved Communications Act Remedies for Slamming Title II: Regulation of Unfair and Deceptive Acts and Practices in Connection with Slamming Slamming Prevention and Consumer Protection Act of 1997 - Title I: Improved Communications Act Remedies for Slamming - Amends the Communications Act of 1934 to require any telephone exchange carrier that submits or executes a change in a subscriber's selection of a provider of telephone exchange or toll service in violation of subscriber verification requirements prescribed by the Federal Communications Commission (FCC) to refund to such subscriber any charges imposed for such service during the three-month period after such change is effected. Prohibits any change in selection, or verification of such a change, without the affirmative request of the subscriber. Requires the FCC to complete rulemaking for enforcement of such verification requirements within two years after the enactment of the Telecommunications Act of 1996. Provides a private right of action for any subscriber whose service is changed in violation of such requirements. Authorizes the appropriate State court to increase damage awards by up to three times the maximum allowable award for willful and knowing violations. Title II: Regulation of Unfair and Deceptive Acts and Practices in Connection With Slamming - Directs the Federal Trade Commission (FTC) to prescribe rules to prohibit unfair and deceptive acts and practices in any advertisement for or solicitation of any change in a subscriber's selection of a service provider. Requires a carrier to clearly and conspicuously disclose that the offer seeks to change the subscriber's service provider, as well as the total cost for such new service. Permits States to bring civil actions on behalf of residents to enjoin unlawful exchange practices, to enforce carrier compliance with FTC rules, or to obtain damages or other appropriate relief.