II 

113TH CONGRESS 

1ST SESSION S. 1144 

To prohibit unauthorized third-party charges on wireline telephone bills, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 12, 2013 

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

A BILL 

To prohibit unauthorized third-party charges on wireline 

telephone bills, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fair Telephone Billing 

5 Act of 2013’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) For years, telephone users have complained 

9 that their wireline telephone bills included unauthor10 ized third-party charges. 

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1 (2) This problem, commonly referred to as 

2 ‘‘cramming’’, first appeared in the 1990s, after 

3 wireline telephone companies opened their billing 

4 platforms to an array of third-party vendors offering 

5 a variety of services. 

6 (3) Since the 1990s, the Federal Communica7 tions Commission, the Federal Trade Commission, 

8 and State attorneys general have brought multiple 

9 enforcement actions against dozens of individuals 

10 and companies for engaging in cramming. 

11 (4) An investigation by the Committee on Com12 merce, Science, and Transportation of the Senate 

13 confirmed that cramming is a problem of massive 

14 proportions and has affected millions of telephone 

15 users, costing them billions of dollars in unauthor16 ized third-party charges over the past decade. 

17 (5) The Committee showed that third-party bill18 ing through wireline telephone numbers has largely 

19 failed to become a reliable method of payment that 

20 consumers and businesses can use to conduct legiti21 mate commerce. 

22 (6) Telephone companies regularly placed third23 party charges on their customers’ telephone bills 

24 without their customers’ authorization. 

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1 (7) Many companies engaged in third-party bill2 ing were illegitimate and created solely to exploit the 

3 weaknesses in the third-party billing platforms es4 tablished by telephone companies. 

5 (8) In the last decade, millions of business and 

6 residential consumers have transitioned from 

7 wireline telephone service to interconnected VoIP 

8 service. 

9 (9) Users of interconnected VoIP service often 

10 use the service as the primary telephone line for 

11 their residences and businesses. 

12 (10) Millions more business and residential con13 sumers are expected to migrate to interconnected 

14 VoIP service in the coming years as the evolution of 

15 the nation’s traditional voice communications net16 works to IP-based networks continues. 

17 (11) Users of interconnected VoIP service that 

18 have telephone numbers through the service should 

19 be protected from the same vulnerabilities that af20 fected third-party billing through wireline telephone 

21 numbers. 

22 SEC. 3. UNAUTHORIZED THIRD-PARTY CHARGES. 

23 (a) IN GENERAL.—Section 258 of the Communica24 tions Act of 1934 (47 U.S.C. 258) is amended— 

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1 (1) by amending the heading to read as follows: 

2 ‘‘SEC. 258. PREVENTING ILLEGAL CHANGES IN

3 SUBSCRIBER CARRIER SELECTIONS AND UNAU4 THORIZED THIRD-PARTY CHARGES.’’; and 

5 (2) by adding at the end the following: 

6 ‘‘(c) PROHIBITION.— 

7 ‘‘(1) IN GENERAL.—No local exchange carrier 

8 or provider of interconnected VoIP service shall 

9 place or cause to be placed a third-party charge that 

10 is not directly related to the provision of telephone 

11 services on the bill of a customer, unless— 

12 ‘‘(A) the third-party charge is from a con13 tracted third-party vendor; 

14 ‘‘(B) the third-party charge is for a prod15 uct or service that a local exchange carrier or 

16 provider of interconnected VoIP service jointly 

17 markets or jointly sells with its own service; 

18 ‘‘(C) the customer was provided with clear 

19 and conspicuous disclosure of all material terms 

20 and conditions prior to consenting under sub21 paragraph (D); 

22 ‘‘(D) the customer provided affirmative 

23 consent for the placement of the third-party 

24 charge on the bill; and 

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1 ‘‘(E) the local exchange carrier or provider 

2 of interconnected VoIP service has implemented 

3 reasonable procedures to ensure that the third4 party charge is for a product or service re5 quested by the customer. 

6 ‘‘(2) FORFEITURE AND REFUND.— 

7 ‘‘(A) IN GENERAL.—Any person who com8 mits a violation of paragraph (1) shall be sub9 ject to a civil forfeiture, which shall be deter10 mined in accordance with section 503 of title V 

11 of this Act, except that the amount of the pen12 alty shall be double the otherwise applicable 

13 amount of the penalty under that section. 

14 ‘‘(B) REFUND.—Any local exchange car15 rier or provider of interconnected VoIP service 

16 that commits a violation of paragraph (1) shall 

17 be liable to the customer in an amount equal to 

18 all charges paid by that customer related to the 

19 violation of paragraph (1), in accordance with 

20 such procedures as the Commission may pre21 scribe. 

22 ‘‘(3) ADDITIONAL REMEDIES.—The remedies 

23 under this subsection are in addition to any other 

24 remedies provided by law. 

25 ‘‘(4) DEFINITIONS.—In this subsection: 

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1 ‘‘(A) AFFIRMATIVE CONSENT.—The term 

2 ‘affirmative consent’ means express verifiable 

3 authorization. 

4 ‘‘(B) CONTRACTED THIRD-PARTY VEN5 DOR.—The term ‘contracted third-party vendor’ 

6 means a person that has a contractual right to 

7 receive billing and collection services from a 

8 local exchange carrier or a provider of inter9 connected VoIP service for a product or service 

10 that the person provides directly to a customer. 

11 ‘‘(C) THIRD-PARTY CHARGE.—The term 

12 ‘third-party charge’ means a charge for a prod13 uct or service not provided by a local exchange 

14 carrier or a provider of interconnected VoIP 

15 service.’’. 

16 (b) RULEMAKING.— 

17 (1) IN GENERAL.—Not later than 90 days after 

18 the date of enactment of this Act, the Federal Com19 munications Commission, in consultation with the 

20 Federal Trade Commission, shall prescribe any rules 

21 necessary to implement the provisions of this sec22 tion. 

23 (2) MINIMUM CONTENTS.—At a minimum, the 

24 regulations promulgated by the Federal Communica25 tions Commission under this subsection shall— 

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1 (A) define how local exchange carriers and 

2 providers of interconnected VoIP service will 

3 obtain affirmative consent from a consumer for 

4 a third-party charge; 

5 (B) include adequate protections to ensure 

6 that consumers are fully aware of the charges 

7 to which they are consenting; and 

8 (C) impose recordkeeping requirements on 

9 local exchange carriers and providers of inter10 connected VoIP service related to any grants of 

11 affirmative consent by consumers. 

12 (c) EFFECTIVE DATE.—The Federal Communica13 tions Commission shall prescribe that any rule adopted 

14 under subsection (b) shall become effective for a local ex15 change carrier or provider of interconnected VoIP service 

16 not later than the date that the carrier’s or provider’s con17 tractual obligation to permit another person to charge a 

18 customer for a good or service on a bill rendered by the 

19 carrier or provider expires, or 180 days after the date of 

20 enactment of this Act, whichever is earlier. 

21 SEC. 4. RELATIONSHIP TO OTHER LAWS. 

22 (a) NO PREEMPTION OF STATE LAWS.—Nothing in 

23 this Act shall be construed to preempt any State law, ex24 cept that no State law may relieve any person of a require25 ment otherwise applicable under this Act. 

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1 (b) PRESERVATION OF FTC AUTHORITY.—Nothing 

2 in this Act shall be construed as modifying, limiting, or 

3 otherwise affecting the applicability of the Federal Trade 

4 Commission Act (15 U.S.C. 41 et seq.) or any other law 

5 enforced by the Federal Trade Commission. 

6 SEC. 5. SEVERABILITY. 

7 If any provision of this Act or the application of that 

8 provision to any person or circumstance is held invalid, 

9 the remainder of this Act and the application of that provi10 sion to any other person or circumstance shall not be af11 fected thereby. 

Æ 

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