```

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1084 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                S. 1084

 To amend the Communications Act of 1934 to protect consumers from the 
         unauthorized switching of their long-distance service.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 19, 1999

   Mr. McCain (for himself, Mr. Bryan, and Ms. Snowe) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL

 
 To amend the Communications Act of 1934 to protect consumers from the 
         unauthorized switching of their long-distance service.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Telecommunications Competition and 
Consumer Protection Act of 1999''.

                           TITLE I--SLAMMING

SEC. 101. IMPROVED PROTECTION FOR CONSUMERS.

    (a) Consumer Protection Practices.--Section 258 of the 
Communications Act of 1934 (47 U.S.C. 258) is amended to read as 
follows:

``SEC. 258. ILLEGAL CHANGES IN SUBSCRIBER SELECTIONS OF CARRIERS.

    ``(a) Alternative Modes of Regulation.--
            ``(1) Industry/commission code.--Within 180 days after the 
        date of enactment of the Telecommunications Competition and 
        Consumer Protection Act of 1999, the Commission, after 
        consulting with the Federal Trade Commission and 
        representatives of telecommunications carriers providing 
        telephone toll service and telephone exchange service, State 
        commissions, and consumers, and considering any proposals 
        developed by such representatives, shall prescribe, after 
        notice and public comment and in accordance with subsection 
        (b), a Code of Subscriber Protection Practices (hereinafter in 
        this section referred as the `Code') governing changes in a 
        subscriber's selection of a provider of telephone exchange 
        service or telephone toll service.
            ``(2) Obligation to comply.--No telecommunications carrier 
        (including a reseller of telecommunications services) shall 
        submit or execute a change in a subscriber's selection of a 
        provider of telephone exchange service or telephone toll 
        service except in accordance with--
                    ``(A) the Code, if such carrier elects to comply 
                with the Code in accordance with subsection (b)(2); or
                    ``(B) the requirements of subsection (c), if--
                            ``(i) the carrier does not elect to comply 
                        with the Code under subsection (b)(2); or
                            ``(ii) such election is revoked or 
                        withdrawn.
    ``(b) Minimum Provisions of the Code.--
            ``(1) Subscriber protection practices.--The Code required 
        by subsection (a)(1) shall include guidelines addressing the 
        following:
                    ``(A) In general.--A telecommunications carrier 
                (including a reseller of telecommunications services) 
                electing to comply with the Code shall submit a change 
                in a subscriber's selection of a provider of telephone 
                exchange service or telephone toll service only in 
                accordance with the provisions of the Code.
                    ``(B) Negative option.--A telecommunications 
                carrier shall not use negative option marketing.
                    ``(C) Verification.--A submitting carrier shall 
                verify the subscriber's selection of the carrier in 
                accordance with procedures specified in the Code. The 
                executing carrier may rely on the submitting carrier's 
                verification in executing the change or may, at its 
                discretion, confirm the verification of a change in the 
                subscriber's selection with the customer.
                    ``(D) Unfair and deceptive acts and practices.--No 
                telecommunications carrier, nor any person acting on 
                behalf of any such carrier, shall engage in any unfair 
                or deceptive acts or practices in connection with the 
                solicitation of a change in a subscriber's selection of 
                a telecommunications carrier.
                    ``(E) Notification and rights.--A 
                telecommunications carrier shall provide timely and 
                accurate notification to the subscriber in accordance 
                with procedures specified in the Code.
                    ``(F) Slamming liability and remedies.--
                            ``(i) Required reimbursement and credit.--A 
                        telecommunications carrier that has improperly 
                        changed the subscriber's selection of a 
                        telecommunications carrier without 
                        authorization, shall at a minimum--
                                    ``(I) reimburse the subscriber for 
                                the fees associated with switching the 
                                subscriber back to their original 
                                carrier; and
                                    ``(II) provide a credit for any 
                                telecommunications charges incurred by 
                                the subscriber during the period, not 
                                to exceed 30 days, while that 
                                subscriber was improperly 
                                presubscribed.
                            ``(ii) Procedures.--The Code shall 
                        prescribe procedures by which--
                                    ``(I) a subscriber may make an 
                                allegation of a violation under clause 
                                (i);
                                    ``(II) the telecommunications 
                                carrier may rebut such allegation;
                                    ``(III) the subscriber may, without 
                                undue delay, burden, or expense, 
                                challenge the rebuttal; and
                                    ``(IV) resolve any administrative 
                                review of such an allegation within 75 
                                days after receipt of an appeal.
                    ``(G) Recordkeeping.--A telecommunications carrier 
                shall make and maintain a record of the verification 
                process and shall provide a copy to the subscriber 
                immediately upon request.
                    ``(H) Quality control.--A telecommunications 
                carrier shall institute a quality control program to 
                prevent inadvertent changes in a subscriber's selection 
                of a carrier.
                    ``(I) Independent audits.--A telecommunications 
                carrier shall provide the Commission with an 
                independent audit regarding its compliance with the 
                Code at intervals prescribed by the Code. The 
                Commission may require a telecommunications carrier to 
                provide an independent audit on a more frequent basis 
                if there is evidence that such telecommunications 
                carrier is violating the Code.
            ``(2) Election by carriers.--Each telecommunications 
        carrier electing to comply with the Code shall file with the 
        Commission within 20 days after the adoption of the Code, or 
        within 20 days after commencing operations as a 
        telecommunications carrier, a statement electing the Code to 
        govern such carrier's submission or execution of a change in a 
        customer's selection of a provider of telephone exchange 
        service or telephone toll service. Such election by a carrier 
        may not be revoked or withdrawn unless the Commission finds 
        that there is good cause therefor, including a determination 
        that the carrier has failed to adhere in good faith to the 
        applicable provisions of the Code, and that the revocation or 
        withdrawal is in the public interest. Any telecommunications 
        carrier that fails to elect to comply with the Code shall be 
        deemed to have elected to be governed by the subsection (c) and 
        the Commission's regulations thereunder.
            ``(3) Penalties available.--Nothing in this subsection or 
        in any regulations thereunder shall be construed as limiting 
        the application of section 503 to violations of the Code.
    ``(c) Regulations of Carriers Not Electing To Comply With Code.--
            ``(1) In general.--A telecommunications carrier (including 
        a reseller of telecommunications services) that has not elected 
        to comply with the Code under subsection (b), or as to which 
        the election has been withdrawn or revoked, shall not submit or 
        execute a change in a subscriber's selection of a provider of 
        telephone exchange service or telephone toll service except in 
        accordance with this subsection and such verification 
        procedures as the Commission shall prescribe.
            ``(2) Verification.--
                    ``(A) In general.--In order to verify a 
                subscriber's selection of a telephone exchange service 
                or telephone toll service provider under this 
                subsection, the telecommunications carrier submitting 
                the change to an executing carrier shall, at a minimum, 
                require the subscriber--
                            ``(i) to affirm that the subscriber is 
                        authorized to select the provider of that 
                        service for the telephone number in question;
                            ``(ii) to acknowledge the type of service 
                        to be changed as a result of the selection;
                            ``(iii) to affirm the subscriber's intent 
                        to select the provider as the provider of that 
                        service;
                            ``(iv) to acknowledge that the selection of 
                        the provider will result in a change in 
                        providers of that service; and
                            ``(v) to provide such other information as 
                        the Commission considers appropriate for the 
                        protection of the subscriber.
                    ``(B) Additional requirements.--The procedures 
                prescribed by the Commission to verify a subscriber's 
                selection of a provider shall--
                            ``(i) preclude the use of negative option 
                        marketing;
                            ``(ii) provide for a complete copy of 
                        verification of a change in telephone exchange 
                        service or telephone toll service provider in 
                        oral, written, or electronic form;
                            ``(iii) require the retention of such 
                        verification in such manner and form and for 
                        such time as the Commission considers 
                        appropriate;
                            ``(iv) mandate that verification occur in 
                        the same language as that in which the change 
                        was solicited; and
                            ``(v) provide for verification to be made 
                        available to a subscriber on request.
                    ``(C) Notice to subscriber.--Whenever a 
                telecommunication carrier submits a change in a 
                subscriber's selection of a provider of telephone 
                exchange service or telephone toll service, such 
                telecommunications carrier shall clearly notify the 
                subscriber in writing, not more than 15 days after the 
                change is submitted to the executing carrier--
                            ``(i) of the subscriber's new carrier; and
                            ``(ii) that the subscriber may request 
                        information regarding the date on which the 
                        change was agreed to and the name of the 
                        individual who authorized the change.
            ``(3) Liability for violations.--
                    ``(A) Notification of change.--The first bill 
                issued after the effective date of a change in a 
                subscriber's provider of telephone exchange service or 
                telephone toll service by the executing carrier for 
                such change shall--
                            ``(i) prominently disclose the change in 
                        provider and the effective date of such change;
                            ``(ii) contain the name and toll-free 
                        number of any telecommunications carrier for 
                        such new service; and
                            ``(iii) direct the subscriber to contact 
                        the executing carrier if the subscriber 
                        believes that such change was not authorized 
                        and that the change was made in violation of 
                        this subsection, and contain the toll-free 
                        number by which to make such contact.
                    ``(B) Automatic switch-back of service and credit 
                to consumer of charges.--
                            ``(i) Obligations of executing carrier.--If 
                        a subscriber of telephone exchange service or 
                        telephone toll service makes an allegation, 
                        orally or in writing, to the executing carrier 
                        that a violation of this subsection has 
                        occurred with respect to such subscriber--
                                    ``(I) the executing carrier shall, 
                                without charge to the subscriber, 
                                execute an immediate change in the 
                                provider of the telephone service that 
                                is the subject of the allegation to 
                                restore the previous provider of such 
                                service for the subscriber, as 
                                reflected in the records of the 
                                executing carrier;
                                    ``(II) the executing carrier shall 
                                provide an immediate credit to the 
                                subscriber's account for any charges 
                                for executing the original change of 
                                service provider;
                                    ``(III) if the executing carrier 
                                conducts billing for the carrier that 
                                is the subject of the allegation, the 
                                executing carrier shall provide an 
                                immediate credit to the subscriber's 
                                account for such service, in an amount 
                                equal to any charges for the telephone 
                                service that is the subject of the 
                                allegation incurred during the period--
                                            ``(aa) beginning upon the 
                                        date of the change of service 
                                        that is the subject of the 
                                        allegation; and
                                            ``(bb) ending on the 
                                        earlier of the date that the 
                                        subscriber is restored to the 
                                        previous provider, or 30 days 
                                        after the date the bill 
                                        described in subparagraph (A) 
                                        is issued; and
                                    ``(IV) the executing carrier shall 
                                recover the costs of executing the 
                                change in provider to restore the 
                                previous provider, and any credits 
                                provided under subclauses (II) and 
                                (III), by recourse to the provider that 
                                is the subject of the allegation.
                            ``(ii) Obligations of carriers not billing 
                        through executing carriers.--If a subscriber of 
                        telephone exchange service or telephone toll 
                        service transmits, orally or in writing, to any 
                        carrier that does not use an executing carrier 
                        to conduct billing an allegation that a 
                        violation of this subsection has occurred with 
                        respect to such subscriber, the carrier shall 
                        provide an immediate credit to the subscriber's 
                        account for such service, and the subscriber 
                        shall, except as provided in subparagraph 
                        (C)(iii), be discharged from liability, for an 
                        amount equal to any charges for the telephone 
                        service that is the subject of the allegation 
                        incurred during the period--
                                    ``(I) beginning upon the date of 
                                the change of service that is the 
                                subject of the allegation; and
                                    ``(II) ending on the earlier of the 
                                date that the subscriber is restored to 
                                the previous provider, or 30 days after 
                                the date the bill described in 
                                subparagraph (A) is issued.
                            ``(iii) Time limitation.--This subparagraph 
                        shall apply only to allegations made by 
                        subscribers before the expiration of the 1-year 
                        period that begins on the issuance of the bill 
                        described in subparagraph (A).
                    ``(C) Procedure for carrier remedy.--
                            ``(i) In general.--The Commission shall, by 
                        rule, establish a procedure for rendering 
                        determinations with respect to violations of 
                        this subsection. Such procedure shall permit 
                        such determinations to be made upon the filing 
                        of (I) a complaint by a telecommunications 
                        carrier that was providing telephone exchange 
service or telephone toll service to a subscriber before the occurrence 
of an alleged violation, and seeking damages under clause (ii), or (II) 
a complaint by a telecommunications carrier that was providing services 
after the alleged violation, and seeking a reinstatement of charges 
under clause (iii). Either such complaint shall be filed not later than 
6 months after the date on which any subscriber whose allegation is 
included in the complaint submitted an allegation of the violation to 
the executing carrier under subparagraph (B)(i). Either such complaint 
may seek determinations under this paragraph with respect to multiple 
alleged violations in accordance with such procedures as the Commission 
shall establish in the rules prescribed under this subparagraph.
                            ``(ii) Determination of violation and 
                        remedies.--In a proceeding under this 
                        subparagraph, if the Commission determines that 
                        a violation of this subsection has occurred, 
                        other than an inadvertent or unintentional 
                        violation, the Commission shall award damages--
                                    ``(I) to the telecommunications 
                                carrier filing the complaint, in an 
                                amount equal to the sum of (aa) the 
                                gross amount of charges that the 
                                carrier would have received from the 
                                subscriber during the violation, and 
                                (bb) $500 per violation; and
                                    ``(II) to the subscriber that was 
                                subjected to the violation, in the 
                                amount of $500.
                            ``(iii) Determination of no violation.--If 
                        the Commission determines that a violation of 
                        this subsection has not occurred, the 
                        Commission shall order that any credit provided 
                        to the subscriber under subparagraph (B)(ii) be 
                        reversed, or that the carrier may resubmit a 
                        bill for the amount of the credit to the 
                        subscriber notwithstanding any discharge under 
                        subparagraph (B)(ii).
                            ``(iv) Speedy resolution of complaints.--
                        The procedure established under this 
                        subparagraph shall provide for a determination 
                        of each complaint filed under the procedure not 
                        later than 6 months after filing.
                    ``(D) Maintenance of information.--
                            ``(i) In general.--The Commission shall, by 
                        rule, require each executing carrier to 
                        maintain information regarding each alleged 
                        violation of this subsection of which the 
                        carrier has been notified.
                            ``(ii) Contents.--The information required 
                        to be maintained pursuant to this paragraph 
                        shall include, for each alleged violation of 
                        this subsection, the effective date of the 
                        change of service involved in the alleged 
                        violation, the name of the provider of the 
                        service to which the change was made, the name, 
                        address, and telephone number of the subscriber 
                        who was subject to the alleged violation, and 
                        the amount of any credit provided under 
                        subparagraph (B)(ii).
                            ``(iii) Form.--The Commission shall 
                        prescribe one or more computer data formats for 
                        the maintenance of information under this 
                        paragraph, which shall be designed to 
                        facilitate submission and compilation pursuant 
                        to this subparagraph.
                            ``(iv) Monthly reports.--Each executing 
                        carrier shall, on not less than a monthly 
                        basis, submit the information maintained 
                        pursuant to this subparagraph to the 
                        Commission.
                            ``(v) Access to information.--The 
                        Commission shall make the information submitted 
                        pursuant to clause (iv) available upon request 
                        to any telecommunications carrier. Any 
                        telecommunications carrier obtaining access to 
                        such information shall use such information 
                        exclusively for the purposes of investigating, 
                        filing, or resolving complaints under this 
                        section.
            ``(4) Civil penalties.--Unless the Commission determines 
        that there are mitigating circumstances, violation of this 
        subsection is punishable by a forfeiture penalty under section 
        503 of not less than $40,000 for the first offense, and not 
        less than $150,000 for each subsequent offense.
            ``(5) Recovery of forfeitures.--The Commission may take 
        such action as may be necessary--
                    ``(A) to collect any forfeitures it imposes under 
                this subsection; and
                    ``(B) on behalf of any subscriber, to collect any 
                damages awarded the subscriber under this subsection.
    ``(d) Application to Wireless.--This section does not apply to a 
provider of commercial mobile service.
    ``(e) Commission Requirements.--
            ``(1) Semiannual reports.--Every 6 months, the Commission 
        shall compile and publish a report ranking telecommunications 
        carriers by the percentage of verified complaints, excluding 
        those generated by the carrier's unaffiliated resellers, 
        compared to the number of the carrier's changes in a 
        subscriber's selection of a provider of telephone exchange 
        service and telephone toll service.
            ``(2) Investigation.--If a telecommunications carrier is 
        listed among the 5 worst performers based upon the percentage 
        of verified complaints, excluding those generated by the 
        carrier's unaffiliated resellers, compared to its number of 
        carrier selection changes in the semiannual reports 3 times in 
        succession, the Commission shall investigate the carrier's 
        practices regarding subscribers' selections of providers of 
        telephone exchange service and telephone toll service. If the 
        Commission finds that the carrier is misrepresenting adherence 
        to the Code or is willfully and repeatedly changing 
        subscribers' selections of providers, the Commission shall find 
        such carrier to be in violation of this section and shall 
        impose a civil penalty on the carrier under section 503 of up 
        to $1,000,000.
            ``(3) Code review.--Every 2 years, the Commission shall 
        review the Code to ensure its requirements adequately protect 
        subscribers from improper changes in a subscriber's selection 
        of a provider of telephone exchange service and telephone toll 
        service.
    ``(f) Actions by States.--
            ``(1) 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 violated the Code or subsection 
        (c), or any rule or regulation prescribed by the Commission 
        under subsection (c), the State may bring a civil action on 
        behalf of its residents in an appropriate district court of the 
        United States to enjoin such violation, to enforce compliance 
        with such Code, subsection, rule, or regulation, to obtain 
        damages on behalf of their residents, or to obtain such further 
        and other relief as the court may deem appropriate.
            ``(2) Notice.--The State shall serve prior written notice 
        of any civil action under paragraph (1) 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 (A) to 
        intervene in such action, (B) upon so intervening, to be heard 
        on all matters arising therein, and (C) to file petitions for 
        appeal.
            ``(3) 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.
            ``(4) Investigatory powers.--For purposes of bringing any 
        civil action under paragraph (1), 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.
            ``(5) Effect on state court proceedings.--Nothing contained 
        in this subsection 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.
            ``(6) Limitation.--Whenever the Commission has instituted a 
        civil action for violation of this section or any rule or 
        regulation thereunder, no State may, during the pendency of 
        such action instituted by the Commission, 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.
            ``(7) Actions by other state officials.--In addition to 
        actions brought by an attorney general of a State under 
        paragraph (1), 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.
    ``(g) State Law Not Preempted.--
            ``(1) In general.--Nothing in this section or in the 
        regulations prescribed under this section shall preempt any 
        State law that imposes more restrictive requirements, 
        regulations (including an option protecting a subscriber's 
        choice of a provider of telephone exchange service or telephone 
        toll service from being switched without the subscriber's 
        express consent), damages, costs, or penalties on changes in a 
        subscriber's service or selection of a provider of telephone 
        exchange service or telephone toll services than are imposed 
        under this section.
            ``(2) Preservation of commission authority with respect to 
        unfair marketing of subscriber selection freezes.--
        Notwithstanding paragraph (1), the Commission shall prescribe 
        rules to prevent the marketing or provision in an unfair or 
        deceptive manner of an option protecting a subscriber's choice 
        of a provider of telephone exchange service or telephone toll 
        service from being switched without the subscriber's express 
        consent.
    ``(h) Rules of Construction.--
            ``(1) Change includes initial selection.--For purposes of 
        this section, the initiation of telephone toll service to a 
        subscriber by a telecommunications carrier shall be treated as 
        a change in selection of a provider of telephone toll service.
            ``(2) Action by unaffiliated reseller not imputed to 
        carrier.--No telecommunications carrier may be found in 
        violation of this section solely on the basis of a violation of 
        this section by an unaffiliated reseller of that carrier's 
        services or facilities.
    ``(i) Definitions.--For purposes of this section:
            ``(1) Subscriber.--The term `subscriber' means the person 
        named on the billing statement or account, or any other person 
        authorized to make changes in the providers of telephone 
        exchange service or telephone toll service.
            ``(2) Executing carrier.--The term `executing carrier' 
        means, with respect to any change in the provider of local 
        exchange service or telephone toll service, the local exchange 
        carrier that executed such change.
            ``(3) Attorney general.--The term `attorney general' means 
        the chief legal officer of a State.''.
    (b) NTIA Study of Third-Party Administration.--Within 180 days of 
enactment of this Act, the National Telecommunications and Information 
Administration shall report to the Committee on Commerce of the House 
of Representatives and the Committee on Commerce, Science, and 
Transportation of the Senate on the feasibility and desirability of 
establishing a neutral third-party administration system to prevent 
illegal changes in telephone subscriber carrier selections. The study 
shall include--
            (1) an analysis of the cost of establishing a single 
        national or several independent databases or clearinghouses to 
        verify and submit changes in carrier selections;
            (2) the additional cost to carriers, per change in carrier 
        selection, to fund the ongoing operation of any or all such 
        independent databases or clearinghouses; and
            (3) the advantages and disadvantages of utilizing 
        independent databases or clearinghouses for verifying and 
        submitting carrier selection changes.
                                 <all>
```