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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1527 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                S. 1527

 To amend section 258 of the Communications Act of 1934 to enhance the 
 protections against unauthorized changes in subscriber selections of 
          telephone service providers, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             August 5, 1999

   Mr. Reed introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL

 
 To amend section 258 of the Communications Act of 1934 to enhance the 
 protections against unauthorized changes in subscriber selections of 
          telephone service providers, and for other purposes.

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

SECTION 1. FINDINGS; PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) As the telecommunications industry has moved toward 
        competition in the provision of long distance telephone 
        services, consumers have increasingly elected to change the 
        carriers that provide their long distance telephone services. 
        As many as 50,000,000 consumers now change long distance 
        telephone service providers each year.
            (2) The fluid nature of the market for long distance 
        telephone services has also allowed an increasing number of 
        unauthorized changes of telephone service providers to occur. 
        Such changes have been called ``slamming'', a term which 
        denotes any practice in which a consumer's long distance 
        telephone service provider is changed without the consumer's 
        knowledge or consent.
            (3) Slamming accounts for the largest number of consumer 
        complaints received by the Common Carrier Bureau of the Federal 
        Communications Commission. As many as 1,000,000 consumers are 
        subject to the unauthorized change of telephone service 
        providers each year.
            (4) The increased costs which consumers face as a result of 
        the unauthorized change of telephone service providers threaten 
        to deprive consumers of the financial benefits created by a 
        competitive marketplace in telephone services.
            (5) The burdens placed upon consumers by unauthorized 
        changes of telephone service providers will expand 
        exponentially as competition enters into the markets for 
        intraLATA and local telephone services.
            (6) The Telecommunications Act of 1996 sought to combat 
        unauthorized changes of telephone service providers by 
        requiring that a provider who changes a subscriber without 
        authorization pay the previously selected carrier an amount 
        equal to all charges paid by the subscriber after the change. 
        The Federal Communications Commission has proposed regulations 
        to implement this requirement. Implementing these regulations 
        will eliminate many of the financial incentives to execute 
        unauthorized changes of telephone service providers. However, 
        under current and proposed regulations consumers have, and will 
        continue to face, difficulty in securing proof of unauthorized 
        changes. Thus, enforcement of the regulations will be impeded 
        by a lack of tangible proof of consumer consent to the change 
        of telephone service providers.
            (7) The interests of consumers require that telephone 
        service providers maintain evidence of their verification of 
        consumer consent to changes in telephone service providers. 
        This evidence should take the form of a consumer's written 
        consent or a recording of a consumer's oral consent obtained by 
        the telephone service provider or a third party.
            (8) Both Congress and the Federal Communications Commission 
        should continue to examine electronic means by which consumers 
        could most readily change telephone service providers while 
        ensuring that such changes would result only from consumer 
        action evidencing express consent to such changes.
            (9) By providing consumers with a private right of action 
        in State court, if State law permits, against those who have 
        executed unauthorized changes of telephone service providers, 
        Congress insures in a constitutional manner that neither 
        Federal nor State courts will be overburdened with litigation, 
        while also providing the proper forum for such actions given 
        that competition will soon come to all segments of the 
        telephone service market.
            (10) The majority of consumers who have been subject to the 
        unauthorized change of telephone service do not seek redress 
        through the Federal Communications Commission. In light of the 
        general responsibilities of the States for consumer protection, 
        as well as the prosecutions against unauthorized changes 
        already undertaken by the States, it is essential that the 
        States be allowed to pursue actions on behalf of their 
        citizens, while also preserving the proper role of the Federal 
        Communications Commission in regulating the telecommunications 
        industry.
    (b) Purposes.--The purposes of this Act are--
            (1) to protect consumers from unauthorized changes of 
        telephone service providers;
            (2) to allow the efficient prosecution of legal actions 
        against telephone service providers who defraud consumers by 
        transferring telephone service providers without consumer 
        consent; and
            (3) to facilitate the ready selection of telephone service 
        providers by consumers.

SEC. 2. ENHANCEMENT OF PROTECTIONS AGAINST UNAUTHORIZED CHANGES IN 
              SUBSCRIBER SELECTIONS OF TELEPHONE SERVICE PROVIDERS.

    (a) Verification of Authorization.--
            (1) In general.--Subsection (a) of section 258 of the 
        Communications Act of 1934 (47 U.S.C. 258) is amended--
                    (A) by striking ``(a) Prohibition.--No 
                telecommunications'' and inserting the following:
    ``(a) Prohibition.--
            ``(1) In general.--No telecommunications'';
                    (B) in paragraph (1), as so designated, by 
                inserting after the first sentence the following: 
                ``Such procedures shall require the verification of a 
                subscriber's selection of a provider in written or oral 
                form (including a signature or voice recording) and 
                shall require the retention of such verification in 
                such manner and form and for such time as the 
                Commission considers appropriate.''; and
                    (C) by adding at the end the following:
            ``(2) Verification.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the verification of a subscriber's selection of a 
                telephone exchange service or telephone toll service 
                provider shall take the form of a written or oral 
                communication (in the same language as the solicitation 
                of the selection) in which the subscriber--
                            ``(i) acknowledges the type of service to 
                        be changed as a result of the selection;
                            ``(ii) affirms the subscriber's intent to 
                        select the provider as the provider of that 
                        service;
                            ``(iii) affirms that the subscriber is 
                        authorized to select the provider of that 
                        service for the telephone number in question;
                            ``(iv) acknowledges that the selection of 
                        the provider will result in a change in 
                        providers of that service;
                            ``(v) acknowledges that only one provider 
                        may provide that service for that telephone 
                        number; and
                            ``(vi) provides such other information as 
                        the Commission considers appropriate for the 
                        protection of the subscriber.
                    ``(B) Requirements for oral verifications.--An oral 
                verification of a change in telephone service providers 
                under this paragraph--
                            ``(i) may not be made in the same 
                        communication in which the change is solicited;
                            ``(ii) may be made only to a qualified and 
                        independent agent (as determined in accordance 
                        with regulations prescribed by the Commission) 
                        of the provider concerned; and
                            ``(iii) shall include a prompt and clear 
                        disclosure by the agent that the purpose of the 
                        telephone call is to verify that the subscriber 
                        has consented to the change.
                    ``(C) Confirmation of change.--A provider 
                submitting or executing a change in telephone service 
                providers shall notify the subscriber concerned by mail 
                of the change not later than 5 business days after the 
                date on which the change is executed. The confirmation 
                shall be provided in the language in which the change 
                was solicited.
                    ``(D) Availability of verifications.--A provider 
                shall make available to a subscriber a copy of a 
                verification under this paragraph upon the request of 
                the subscriber or an authorized representative of the 
                subscriber.''.
            (2) Regulations.--The Federal Communications Commission 
        shall complete the adoption of the regulations required under 
        section 258(a) of the Communications Act of 1934 by reason of 
        the amendments made by paragraph (1) not later than 270 days 
        after the date of enactment of this Act.
    (b) Additional Remedies.--Such section is further amended by adding 
at the end the following:
    ``(c) Private Right of Action.--
            ``(1) Private right.--A person or entity may, if otherwise 
        permitted by the laws or rules of court of a State, bring in an 
        appropriate court of that State--
                    ``(A) an action based on a violation of subsection 
                (a) or the regulations prescribed under such subsection 
                to enjoin such violation;
                    ``(B) an action to recover for actual monetary loss 
                from such a violation or to receive $1,000 in damages 
                for each such violation, whichever is greater; or
                    ``(C) both such actions.
            ``(2) Treble damages.--If the court finds that the 
        defendant willfully or knowingly violated subsection (a) or the 
        regulations prescribed under such subsection, the court may, in 
        its discretion, increase the amount of the award to an amount 
        equal to not more than 3 times the amount available under 
        paragraph (1)(B).
            ``(3) Costs of litigation.--The court, in issuing any final 
        order in an action brought pursuant to this subsection may 
        award costs of litigation (including reasonable attorney and 
        expert witness fees) to the prevailing plaintiff whenever the 
        court determines that such award is appropriate.
    ``(d) Actions by States.--
            ``(1) Authority of states.--
                    ``(A) In general.--Whenever the attorney general of 
                a State, or an official or agency designated by a 
                State, has reason to believe that any person has 
                engaged or is engaging in an activity or practice of 
                activities with respect to residents of that State in 
                violation of subsection (a) or the regulations 
                prescribed under such subsection, the State may bring a 
                civil action on behalf of its residents to enjoin such 
                activities, an action to recover for the greater of 
                actual monetary loss or $1,000 in damages for each 
                violation, or both such actions.
                    ``(B) Treble damages.--If the court finds the 
                defendant willfully or knowingly violated such 
                subsection or regulations, the court may, in its 
                discretion, increase the amount of the award to an 
                amount equal to not more than 3 times the amount 
                available under the subparagraph (A).
            ``(2) Exclusive jurisdiction of federal courts.--
                    ``(A) In general.--The district courts of the 
                United States, the United States courts of any 
                territory, and the District Court of the United States 
                for the District of Columbia shall have exclusive 
                jurisdiction over all civil actions brought under this 
                subsection.
                    ``(B) Additional relief.--Upon proper application, 
                such courts shall also have jurisdiction to issue writs 
                of mandamus, or orders affording like relief, 
                commanding the defendant to comply with the provisions 
                of subsection (a) or regulations prescribed under such 
                subsection, including the requirement that the 
                defendant take such action as is necessary to remove 
                the danger of such violation. Upon a proper showing, a 
                permanent or temporary injunction or restraining order 
                shall be granted without bond.
            ``(3) Rights of commission.--
                    ``(A) Notice.--The State shall serve prior written 
                notice of any such civil action upon the Commission and 
                provide the Commission with a copy of its complaint, 
                except in any case where such prior notice is not 
                feasible, in which case the State shall serve such 
                notice immediately upon instituting such action.
                    ``(B) Rights.--The Commission shall have the 
                right--
                            ``(i) to intervene in any action covered by 
                        subparagraph (A);
                            ``(ii) upon so intervening, to be heard on 
                        all matters arising therein; and
                            ``(iii) to file petitions for appeal.
            ``(4) Venue; service of process.--Any civil action brought 
        under this subsection in a district court of the United States 
        may be brought in the district wherein the defendant or victim 
        is found, wherein the defendant 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 where the defendant may 
        be found.
            ``(5) Investigatory powers.--For purposes of bringing a 
        civil action under this subsection, nothing in this subsection 
        shall prevent the attorney general of a State, or an official 
        or agency designated by a State, from exercising the powers 
        conferred on the attorney general or such official 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.
            ``(6) Effect on state court proceedings.--Nothing in this 
        subsection shall be construed to prohibit any official 
        authorized by State law from proceeding in State court on the 
        basis of an alleged violation of any civil or criminal statute 
        of such State.
            ``(7) Limitation.--Whenever the Commission has instituted a 
        civil action for violation of subsection (a) or the regulations 
        prescribed under such subsection, 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 any violation as 
        alleged in the Commission's complaint.
            ``(8) Definition.--In this subsection, the term `attorney 
        general' means the chief legal officer of a State.''.

SEC. 3. REPORT ON ELECTRONIC MEANS FOR VERIFYING SUBSCRIBER 
              AUTHORIZATIONS OF SELECTIONS OF TELEPHONE SERVICE 
              PROVIDERS.

    Not later than 180 days after the date of enactment of this Act, 
the Federal Communications Commission shall submit to Congress a report 
on the technological feasibility and practicability of permitting 
subscribers to authorize changes in telephone service providers by 
electronic means (including authorization by electronic mail or by use 
of personal identification numbers or other security mechanisms) 
without thereby increasing the likelihood of unauthorized changes in 
such providers.
                                 <all>
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