Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12877

intermittent. The certification shall be

based on the method or means

designated in paragraph (c)(5)(iii)(B) of

this section. The certification shall

identify each deviation and take it into

account in the compliance certification;

and

* * * * *

[FR Doc. 01–4975 Filed 2–28–01; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 64

[CC Docket No. 94–129; FCC 00–255 and

FCC 01–67]

Implementation of the Subscriber

Carrier Selection Changes Provisions

of the Telecommunications Act of

1996, Policies and Rules Concerning

Unauthorized Changes of Consumers

Long Distance Carriers

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: In this document, the

Commission adopts rules proposed in

the Second Report and Order and

Further Notice of Proposed Rulemaking

to implement the slamming provisions

of the Communications Act of 1934, as

amended by the Telecommunications

Act of 1996. Telecommunications

carriers are prohibited from carrier from

submitting or executing an

unauthorized change in a subscriber’s

selection of a provider of telephone

exchange service or telephone toll

service. This practice, known as

‘‘slamming,’’ enables those companies

who engage in fraudulent activity to

increase their customer and revenue

bases at the expense of consumers and

law-abiding companies. The rules

adopted in this document will improve

the carrier change process for

consumers and carriers alike, while

making it more difficult for

unscrupulous carriers to perpetrate

slams.

DATES: Effective April 2, 2001 except for

§§ 64.1130(a) through (c), 64.1130(i),

64.1130(j), 64.1180, 64.1190(d)(2),

64.1190(d)(3), 64.1190(e), and 64.1195,

which contain information collection

requirements that have not yet been

approved by the Office of Management

and Budget (OMB). The Commission

will publish a document in the Federal

Register announcing the effective date

of those sections.

FOR FURTHER INFORMATION CONTACT:

Dana Walton-Bradford, Attorney,

Accounting Policy Division, Common

Carrier Bureau, (202) 418–7400.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Third

Report and Order and Second Order on

Reconsideration (Third Report and

Order) in CC Docket No. 94–129, which

was released on August 15, 2000. This

summary also contains amendments

and modifications to the Third Report

and Order that were adopted in an

Order released on February 22, 2001.

The full text of this document is

available for public inspection during

regular business hours in the FCC

Reference Center, Room CY–A257, 445

Twelfth Street, SW., Washington, DC

20554.

I. Introduction and Background

1. In this Third Report and Order and

Second Order on Reconsideration

(Order), we adopt rules proposed in the

Second Report and Order and Further

Notice of Proposed Rulemaking (Section

258 Order or FNPRM, 64 FR 07745 (2/

16/1999) to implement Section 258 of

the Communications Act of 1934 (Act),

as amended by the Telecommunications

Act of 1996 (1996 Act). Section 258

prohibits any telecommunications

carrier from submitting or executing an

unauthorized change in a subscriber’s

selection of a provider of telephone

exchange service or telephone toll

service. This practice, known as

‘‘slamming,’’ enables those companies

who engage in fraudulent activity to

increase their customer and revenue

bases at the expense of consumers and

law-abiding companies. The rules we

adopt in this Order will improve the

carrier change process for consumers

and carriers alike, while making it more

difficult for unscrupulous carriers to

perpetrate slams.

2. In the Section 258 Order, we

established a comprehensive framework

designed to close loopholes used by

carriers who slam consumers and to

bolster certain aspects of our slamming

rules to increase their deterrent effect. In

particular, we adopted aggressive new

liability rules designed to take the profit

out of slamming. We also broadened the

scope of our slamming rules to

encompass all carriers and imposed

more rigorous verification measures. In

our First Reconsideration Order, we

amended certain aspects of the

slamming liability rules, granting in part

petitions for reconsideration of our

Section 258 Order. Although the

petitions raised a broad range of issues

relating to the slamming rules, the First

Reconsideration Order addressed only

those issues relating to our liability

rules, which had been stayed by the

D.C. Circuit. We chose to resolve those

issues separately, and on an expedited

basis, because of the overriding public

interest in reinstating the liability rules

in order to deter slamming.

3. When the Commission released the

Section 258 Order, it recognized that

additional revisions to the slamming

rules could further improve the

preferred carrier change process and

prevent unauthorized changes. Thus,

concurrent with the release of the

Section 258 Order, the Commission

issued a Further Notice of Proposed

Rulemaking and sought comment on the

following proposals: (1) Permitting the

authorization and verification of

preferred carrier changes over the

Internet; (2) requiring resellers to obtain

their own carrier identification codes

(CICs), or, in the alternative, some type

of pseudo-CIC that would provide

underlying facilities-based carriers and

subscribers of resellers with a way to

identify the service provider; (3)

modifying the independent third party

verification method; (4) defining the

term ‘‘subscriber’’ for purposes of

authorizing preferred carrier changes;

(5) requiring carriers to submit reports

on the number of slamming complaints

they receive; (6) creating a registration

requirement for all providers of

interstate telecommunications services;

and (7) requiring unauthorized carriers

to remit to authorized carriers certain

amounts in addition to the amount paid

by slammed subscribers.

4. On June 30, 2000, the President

signed into law a piece of legislation

that is relevant to our slamming rules

and some of the issues pending in this

proceeding, particularly our proposal in

the FNPRM to allow the authorization

and verification of preferred carrier

changes using the Internet. The

Electronic Signatures in Global and

National Commerce Act, S. 761 (E-Sign

Act) is intended to foster the

development of e-commerce, or

commerce conducted electronically over

the Internet. To accomplish this goal,

the E-Sign Act establishes a framework

governing the use of electronic

signatures and records in transactions in

or affecting interstate and foreign

commerce. With certain exceptions not

relevant here, the provisions of the ESign Act took effect on October 1, 2000.

5. In this Order, we adopt a number

of the proposals discussed in the

FNPRM, and we also address the

remaining issues that were raised on

reconsideration of the Section 258

Order. Specifically, in this Order, we

amend the current carrier change

authorization and verification rules to

expressly permit the use of Internet

Letters of Agency (Internet LOAs) in a

12878 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

manner consistent with the new E-Sign

Act; we direct the North American

Numbering Plan Administration

(NANPA) to eliminate the requirement

that carriers purchase Feature Group D

access in order to obtain a CIC; we

provide further guidance on

independent third party verification; we

define the term ‘‘subscriber;’’ we require

each carrier providing telephone

exchange and/or telephone toll service

to submit a semiannual report on the

number of slamming complaints it

receives; and we expand the existing

registration requirement on carriers

providing interstate telecommunications

service to include additional facts that

will assist our enforcement efforts. This

Order also contains a Second Order on

Reconsideration, in which we uphold

our rules governing the submission of

preferred carrier freeze orders, the

handling of preferred carrier change

requests and freeze orders in the same

transaction, and the automated

submission and administration of freeze

orders and changes. In addition, we

reaffirm our decision not to preempt

state regulations governing verification

procedures for preferred carrier change

requests that are consistent with the

provisions of Section 258. We also

decline to adopt a 30-day limit on the

amount of time an LOA confirming a

carrier change request should be

considered valid and instead adopt a 60-

day limit. Finally, we clarify certain of

our rules regarding the payment of

preferred carrier change charges after a

slam.

II. Third Report and Order

A. Preferred Carrier Changes Using the

Internet

6. Discussion. We continue to believe

that the Internet provides a quick and

efficient means of signing up new

subscribers and should be made widely

available to carriers and consumers. We

recognize that consumers’ use of the

Internet for electronic commerce has

grown tremendously in recent years, as

more and more businesses provide

services online, and a greater percentage

of consumers and businesses utilize

computers and the Internet to transact

business. In addition, we recognize that

Section 104(e) of the E-Sign Act directs

us not to differentiate between written

LOAs and LOAs that are submitted and

signed electronically. In view of these

developments, we hereby amend our

carrier change authorization and

verification rules to expressly permit the

use of Internet LOAs, in a manner

consistent with the provisions of the ESign Act.

1. Authorization and Verification of

Internet LOAs.

7. As stated in the FNPRM, we believe

that subscribers using the Internet to

change telecommunications service

providers are entitled to the same level

of protection against slamming that we

have mandated for other forms of

solicitation. Internet LOAs must comply

with the requirements of our rules

governing written LOAs, subject to the

clarifications and modifications adopted

in this Order. Carriers who wish to sign

up new subscribers over the Internet

must adhere to the informational

requirements for written LOAs, as

specified in § 64.1130(e) of our existing

rules. In light of the E-Sign Act, we now

conclude that an electronic signature

used for a carrier change submitted over

the Internet will satisfy the signature

requirement of § 64.1130(b) governing

LOAs, and that the information

submitted to authorize and verify a

carrier change request may be submitted

in the form of an electronic record.

8. Carriers using Internet LOAs to sign

up subscribers will be required to

comply with the consumer disclosure

requirements of Section 101(c) of the ESign Act. Section 101(c) requires, among

other things, that the carrier obtain the

subscriber’s consent to use electronic

records, obtain the subscriber’s

acknowledgment that he or she has the

software and hardware necessary to

access the information in the electronic

form (i.e., Internet LOA) used by the

carrier, and give the subscriber notice of

the procedures for withdrawing consent.

Section 101(c) also requires carriers to

inform subscribers of any right (after

consent to the transaction) to a nonelectronic (that is, paper) copy of the

electronic record of the transaction, to

tell them how to obtain such a copy,

and to make clear whether a fee will be

charged for the copy. Accordingly, we

modify our rules to incorporate by

reference the requirements of Section

101(c) of the E-Sign Act. We note that

these consumer disclosures, in

conjunction with the form and content

requirements for LOAs under § 64.1130

of our rules, are likely to address

concerns about unwary consumers who

might inadvertently switch their

telephone service providers while

exploring websites or participating in

contests on the Internet. At the same

time, we recognize that many

commenters expressed concerns

regarding fraudulent use of Internet

LOAs that may not be fully addressed

by the protections afforded by

compliance with Section 101(c) of the ESign Act. In this regard, we note that, if

a subscriber contests the authenticity of

an Internet LOA, the carrier will have

the burden of proof to counter the

subscriber’s allegation. For this reason,

we would expect a carrier to employ

procedures that would enable it to

demonstrate that the electronic

signature on an Internet LOA could not

have been submitted by anyone other

than the subscriber. While it is our

expectation that the consumer

protection measures afforded by the

combination of the requirements in the

E-Sign Act and our LOA rules will

suffice, we note that, if we detect an

inordinate increase in slamming after

these changes take effect, we may

choose to re-evaluate our rules.

9. We are aware that some consumers

may be concerned about security and

privacy issues associated with

submitting carrier change requests and

associated personal information over the

Internet. Security and privacy issues

arise because Internet communications

are sent from computer to computer

until the communications reach their

final destinations. When information is

sent from point A to point B over the

Internet, every computer involved in the

transmission path has an opportunity to

intercept and view the information

being sent. As a result, we acknowledge

the concerns of commenters who argue

that carriers should provide subscribers

with a secured web transaction for

submitting Internet LOAs. At this time,

we decline to impose specific

requirements regarding security and

privacy as it relates to Internet LOAs,

but we strongly encourage carriers who

utilize Internet LOAs to sign up new

subscribers to employ security measures

in keeping with the best practices used

for Internet transactions, such as

providing subscribers with secured web

access. In addition, we strongly

encourage carriers to provide notice to

subscribers regarding the level of

security that applies to the submission

of Internet LOAs. We also support the

use of digital signatures, when they are

made widely available, in order to more

precisely establish the identity of the

subscriber submitting an Internet LOA,

the date of the submission, and other

specifics.

10. We also acknowledge that

consumers have a legitimate interest in

the privacy of personal information that

they may be asked to submit with an

Internet LOA. Again, we decline to

mandate a specific action with regard to

such information at this time. However,

we encourage carriers to keep such

information confidential and not use a

subscriber’s information, including his

or her electronic mail (e-mail) address,

for marketing or other business

purposes without the express consent of

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12879

the subscriber. In addition, we recognize

that some consumers may prefer, for a

variety of reasons, not to use the

Internet to authorize carrier changes.

Consistent with Section 101(b)(2) of the

E-Sign Act, we will amend our rules to

state that carriers must give subscribers

the option of using one of the other

authorization and verification methods

specified in § 64.1120 of our rules, in

addition to the use of Internet LOAs.

2. Pre-Existing Relationships

11. We recognize that some carriers

and subscribers who have pre-existing

business relationships may wish to

follow a more truncated authorization

and verification process for making

carrier changes than required for written

and Internet LOAs. AOL and other

commenters assert that subscribers and

carriers belonging to a closed user group

(CUG) or linked in a similar ongoing

business relationship should be

permitted to utilize a less stringent

verification method for Internet LOAs.

However, we see no compelling reason

to determine that our LOA rules, which

are designed to protect subscribers,

should apply to a lesser degree when

the subscriber belongs to a CUG or has

a similar type of pre-existing

relationship with the carrier. Therefore,

at this time, we decline to permit

carriers and subscribers with preexisting business relationships, such as

CUG providers and members, to use less

stringent verification methods to

authorize and verify carrier changes

processed over the Internet.

3. Separate Screen Requirement

12. In the FNPRM, we sought

comment on the extent to which change

requests submitted over the Internet

may or may not contain all the required

elements of a valid LOA, and we also

sought comment on ways in which we

might ensure that consumer interests are

protected when Internet LOAs are used.

In certain respects, our existing rules on

the form and content of LOAs reflect the

fact that they were written with paper

documents in mind. For example, a

written LOA must be a separate

document not combined with

inducements of any kind. In order to

conform Internet LOAs to this

preexisting requirement, we amend our

rules to specify that Internet LOAs must

appear on a separate screen from any

inducements or solicitations for a

carrier’s services and contain only the

authorizing language found in

§ 64.1130(e) of our rules. We regard this

requirement as the functional equivalent

of the pre-existing requirements that a

written LOA must be a separate

document not combined with

inducements of any kind. Moreover, as

noted by several commenters, this

separate screen requirement is easily

achievable and is necessary to eliminate

the possibility of customer confusion

and the potential for inadvertent

selection of a new preferred carrier.

13. We believe that this determination

is consistent with Section 104(b)(2)(C)

of the E-Sign Act. That section of the ESign Act allows agencies to include

requirements for electronic records that

are ‘‘substantially equivalent to the

requirements imposed on records that

are not electronic records,’’ that will not

‘‘impose unreasonable costs on the

acceptance and use of electronic

records,’’ and will not ‘‘require, or

accord greater legal status or effect to,

the implementation or application of a

specific technology or technical

specification for performing the

functions of creating, storing,

generating, receiving, communicating,

or authenticating electronic records or

electronic signatures.’’ As stated above,

this separate screen requirement is

substantially equivalent to the

requirements found in §§ 64.1130(b) and

(c) as they apply to written LOAs.

Moreover, the record in this proceeding

indicates that this separate screen

requirement will not impose

unreasonable costs on the acceptance

and use of electronic records.

4. Choice of Telecommunications

Services

14. We adopt our tentative conclusion

that carriers who solicit service over the

Internet and require subscribers to sign

up for more than one service (e.g.,

interLATA and intraLATA) in order to

authorize a carrier change, rather than

giving subscribers the option of signing

up for individual services, violate our

rule requiring all LOAs to contain

separate statements regarding choices of

interLATA and intraLATA toll service.

While we presented this issue in the

FNPRM as a ‘‘general concern[] about

the content of the solicitation using the

Internet’’ and cited some IXC webpages

as examples of the practice, we note that

there is no reason to believe this type of

inappropriate carrier change solicitation

would only appear in an electronic

medium. We emphasize that carriers

must clearly and conspicuously

delineate on any LOA, written or

Internet, the individual services that the

subscriber may choose to be covered by

the carrier change request, including,

but not limited to, local, intraLATA, and

interLATA services. Consumers should

know what specific services are being

offered and should have the discretion

to subscribe to only the services they

desire. Such consumer choice and

discretion are essential to maintaining

and advancing the development of a

competitive telecommunications

marketplace.

5. Preferred Carrier Freeze

15. Consistent with our amendment of

the rules governing LOAs, we are also

amending our rules to allow subscribers

to submit, and carriers to process, the

imposition and/or lifting of preferred

carrier freezes over the Internet, as

recommended by many commenters.

Carriers must comply with the same

verification requirements that apply to

LOAs, as discussed, to help prevent the

unauthorized imposition or lifting of

preferred carrier freezes over the

Internet. In addition, we encourage

carriers to employ measures to protect

the security and confidentiality of

subscribers’ personal information.

6. State Authority

16. We note that the amendments to

our rules that we adopt in this Order for

Internet LOAs represent a minimum

threshold for carrier change

authorization and verification with

which all carriers must comply. State

jurisdictions may adopt verification

requirements for Internet LOAs, so long

as they are consistent with Section 258,

as implemented by our rules, and the ESign Act. We disagree with Cable &

Wireless that we should preempt state

laws regarding the legality and form of

Internet LOAs at this time. Carriers

already must comply with state

requirements for written LOAs that are

consistent with Section 258 and the

Commission’s rules, and state

requirements for Internet LOAs that are

consistent with Section 258, as

implemented by our rules, and the ESign Act warrant the same compliance.

B. Resellers and CICs

17. Discussion. As set forth below, we

shall direct the NANPA to eliminate the

requirement that carriers purchase

‘‘Feature Group D’’ to obtain CICs. This

action will facilitate the assignment of

CICs to switchless resellers and remove

one obstacle to their independent use of

CICs. At the present time, we are not

requiring resellers to obtain their own

CICs, nor are we adopting either of our

other two proposals. Although we

believe that requiring switchless

resellers to obtain CICs may well be an

effective solution to soft slamming and

related carrier identification problems,

commenters have raised a number of

concerns regarding the potential impact

of such a requirement on the carrier

industry. Based on our review of the

record, as discussed herein, we are not

persuaded that we should adopt a CIC

12880 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

requirement for switchless resellers at

this time. However, in order to continue

developing the record, we shall refer the

CIC assignment and use issues

discussed below to the North American

Numbering Council (NANC) for analysis

and recommendations. We intend to

reevaluate the costs and benefits of the

proposed CIC requirement when we

receive the NANC’s report.

18. Under the current CIC Assignment

Guidelines, a carrier must purchase

Feature Group D access service to be

assigned a CIC. A switchless reseller

does not require the physical or trunk

access to the public switched telephone

network (PSTN) available through the

purchase of Feature Group D, and is

unlikely to bear the expense simply to

obtain a CIC. The NANC’s CIC Ad Hoc

Working Group has recommended

elimination of the Feature Group D

requirement as ‘‘an unnecessary

administrative burden for resale

providers[.]’’ In light of this

recommendation, and based on our

examination of the record in this

proceeding, we direct the NANPA to

eliminate the Feature Group D

requirement. This action, which is an

aspect of our first proposal, ‘‘will

facilitate the assignment of CICs to

resellers, and thereby allow easier

[carrier] identification * * *, enhancing

the ability to resolve conflicts, including

disputes which involve slamming.’’

19. Commenters are divided on our

proposal to require switchless resellers

to obtain their own CICs. Generally,

supporters argue that it would be a costeffective and administratively simple

solution to soft slamming and related

problems. Opponents raise a number of

concerns regarding the impact of a CIC

requirement on the carrier industry,

including that it would: (1) Impose

undue financial burdens on resellers

and damage them competitively; (2)

require expensive and time-consuming

LEC switch upgrades; and (3) accelerate

exhaustion of the four-digit CIC pool.

Opponents also contend that the record

contains insufficient evidence of the

dimensions of soft slamming and related

problems to warrant regulatory action

and, in any event, that other recent

Commission actions are likely to

address such problems. We address

these issues in turn below.

20. Turning to the first issue, the

principal cost of the subject proposal for

a switchless reseller would be deploying

or loading a CIC in LEC switches in each

LATA where it operates. In this regard,

‘‘the use of translations access does not

significantly reduce the time or expense

required’’ to deploy a CIC. On a

nationwide basis, most estimates of this

cost range from $500,000 to $1 million

for a single CIC. Relying on such

estimates, and on the small size of many

resellers, opponents maintain that a CIC

requirement would create a substantial

market entry barrier for resellers. Our

review of the record suggests that in

many cases such estimates are

unrealistic because resellers typically

operate on a regional basis. In addition,

CIC deployment costs may be viewed as

‘‘a legitimate cost of doing business,’’

and the independent use of CICs clearly

has competitive advantages for resellers.

Nevertheless, we are concerned about

restricting competition in the wholesale

long distance service market by limiting

resellers’ ability to change and/or use

multiple underlying carriers. Although

some resellers use their own CICs

despite the asserted disadvantages, we

are reluctant to adopt a requirement that

resellers obtain their own CICs pending

further review of the conclusions

reached by the NANC.

21. Second, GTE, SBC, and USTA

express concern that a CIC requirement

may exhaust the limited capacity of

certain types of LEC switches. For

example, GTE states that:

[GTE] generally averages over two hundred

CICs per switch in its 1600 plus switches.

Almost half of these switches have a capacity

of only 255 codes today. * * * The GTD5

switch, which comprises over a third of

[GTE’s] total, has a capacity of only 500 CICs.

A 500 CIC capacity could well be insufficient

in some locations to handle all resellers who

would obtain CICs. * * * [GTE] cannot add

any new CICs to its switches in Hawaii

because international operations have

already utilized the total capacity.

It is unclear how many LEC switches

are implicated by this issue, as only

GTE has identified the number of

limited-capacity switches deployed in

its territory, and the likelihood of

exhausting switch capacity depends on

the related questions of demand and

location. To the extent that upgrades are

necessary, however, GTE, SBC, and

USTA state that they are likely to be

costly and time-consuming.

Furthermore, although the need for

upgrades was contemplated when the

carrier industry moved from a threedigit to a four-digit CIC format, USTA

suggests that requiring investment in

switch upgrades may be wasteful

because the industry now is moving

towards new technology platforms.

There may be ways to ensure that any

systems modifications necessary to

accommodate the use of additional CICs

do not impose undue burdens on LECs.

Nevertheless, we believe that this matter

warrants further consideration.

22. Third, several commenters argue

that adoption of a CIC requirement

would accelerate exhaustion of the pool

of four-digit CICs, thereby inflicting

undue disruption and expense on the

entire carrier industry. Preliminarily, we

find no compelling evidence of a

significant threat of premature CIC

exhaustion. The pool of four-digit CICs

is 10,000, of which only 2,031 were

assigned as of January, 2000, and the

NANC CIC Report predicts that they

will last for 22 years, assuming a limit

of six per carrier. In addition, it is not

clear that the subject proposal would

substantially increase the long-term net

demand for CICs, given that some

resellers already have CICs, and those

without CICs are likely to obtain them

as their businesses develop, without any

regulatory requirement.

23. Turning to the fourth issue, there

is a consensus among commenters that

the shared use of CICs by resellers gives

rise to significant problems that warrant

Commission action. Opponents of the

subject proposal, however, argue that

the record contains insufficient

evidence for us to determine whether a

CIC requirement is warranted in light of

its potential costs. The Commission

does not maintain data as to the specific

dimensions of these problems, but our

review of the record suggests that they

represent a substantial percentage of all

slamming complaints. We agree,

however, that recent Commission

actions in this proceeding and in the

Truth-in-Billing proceeding may help to

address soft slamming and related

problems indirectly. In this regard, Bell

Atlantic and USTA point out that the

Section 258 Order imposes on facilitiesbased carriers the responsibilities of

executing carriers in soft slam

situations, and AT&T notes that the

framework of the slamming rules is

‘‘intended to increase effective

deterrence of slamming, including

* * * ‘soft slamming.’ ’’ In the Truth-inBilling proceeding, the Commission

adopted a rule that the name of the

service provider associated with each

charge must be clearly and

conspicuously identified on the

telephone bill. AT&T contends that this

action ‘‘should substantially alleviate

the ‘soft slamming’ problem by making

unauthorized carrier changes readily

detectable by end users.’’

24. Based on our review of the record

as a whole, we are not persuaded that

we should adopt a CIC requirement at

this time. Rather, as explained below,

we wish to have more information on

the financial and competitive issues

discussed herein before imposing a CIC

requirement. By directing that the

Feature Group D requirement be

eliminated, we are taking a step that

will facilitate the ability of switchless

resellers to obtain and use their own

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12881

CICs, while allowing them to choose

whether to do so based on their own

competitive needs. Nevertheless, we

continue to believe that requiring

resellers to obtain their own CICs holds

promise as a direct and effective

solution to the significant problems that

arise from the shared use of CICs. We

therefore wish to continue developing a

record on the subject proposal, in order

to be in a position to take informed and

expeditious action, should we deem it

necessary to do so. Accordingly, we

shall refer the CIC use and assignment

issues discussed herein to the NANC for

analysis and recommendations. To the

extent possible, we also request that the

NANC submit any data it develops that

may shed light on the financial and

competitive issues discussed herein, as

well as the dimensions of soft slamming

and related problems. We request that

the NANC provide its report to the

Commission by August 1, 2001. We

intend to reassess the costs and benefits

of the proposed CIC requirement after

receiving the NANC’s report. In the

meantime, we anticipate that the

reporting requirements we adopt herein

will help to furnish us with more data

as to the ongoing significance of the

problems at issue and the impact of the

Commission’s recent anti-slamming and

truth-in-billing measures.

25. Finally, we conclude that

adoption of either the second or the

third proposals set forth in the FNPRM

would not serve the public interest.

Whereas a CIC requirement would rely

on existing call routing and billing

systems and provide consumers with

equal access to switchless resellers, the

‘‘pseudo-CIC’’ proposal would require

extensive systems modifications by both

LECs and underlying carriers, without

the advantage of equal access.

Commenters argue persuasively that the

third proposal, carrier systems

modifications, is not viable because,

among other things, it would be costly

and time-consuming to implement,

would be likely to complicate and delay

the carrier change process, and would

not comport with existing billing

systems.

C. Independent Third Party Verification

34. Discussion. The first issue we

address is whether a carrier’s sales

representative should be permitted to

remain on the line during the three-way

verification call. NAAG raises concerns

that the subscriber might remain under

the influence of the sales representative

during the verification process. NAAG

argues that third party verification

should be separated completely from

the sales transaction, so that a carrier

would not be permitted to connect the

subscriber to the third party verifier by

initiating a three-way call. Other

commenters support allowing the

carrier’s representative to remain on the

line during the three-way conference

call.

35. As we stated in the FNPRM, the

three-way call is often the most efficient

means of accomplishing third party

verification. We believe that subscribers

may benefit from the convenience of

authorizing and verifying the carrier

change in one phone call. In addition,

use of this method of verification

minimizes the risk that the subscriber

will not be available when the third

party verifier calls to confirm the

change.

36. Some commenters propose that

the Commission impose certain limited

restrictions on such calls to ensure that

the verification process will not become

tainted, cause subscriber confusion, or

go forward without the subscriber’s

express consent. The proposed

restrictions range from prohibiting

carriers from remaining on the line once

a connection is established with the

third party verifier to requiring that all

conversation on a three-way conference

call be recorded.

37. We agree with NAAG and others

that the Commission should delineate

minimum requirements to ensure that

verification ultimately involves only the

consumer and the third party verifier.

Given the convenience and costeffectiveness of the three-way

conference call as a verification method,

we will retain the three-way call as a

verification method, subject to one

limited restriction. The carrier’s sales

representative may initiate the threeway conference call but must drop off

the call once the connection has been

established between the subscriber and

the third party verifier. We believe that

this limited restriction will help ensure

the independence of the third party

verification process and prevent the

carrier’s sales representative from

improperly influencing subscribers,

without burdening the verification

process. Once the connection has been

established between the subscriber and

the third party verifier, there is no need

for the carrier’s sales representative to

stay on the line.

38. With respect to the content and

format of the third party verification, we

asked parties in the FNPRM to comment

on a possible requirement that all third

party verifications include certain

information, such as information on

preferred carrier freezes or the carrier

change process. We also asked parties to

comment on any benefits that might be

gained from permitting or requiring

third party verifiers to provide

subscribers with such additional

information. This proposal generated

both strong support and opposition.

Although many commenters argue that

requiring third party verifiers to follow

a scripted format would impose

unnecessary, additional rules on the

carrier change process without

producing a significant corresponding

benefit, several other commenters ask

the Commission for additional guidance

regarding the format and content of the

third party verification. For instance,

Media One states that third party

verifiers should be required to confirm

the identity of the subscriber, to

ascertain that the person contacted is

authorized to make a change, and to

frame the request for confirmation of the

change as a simple yes/no question.

39. We decline to mandate specific

language to be used in third party

verification calls. In order to eliminate

uncertainty as to what practices are

necessary and acceptable, however, we

adopt minimum content requirements

for third party verification. We believe

that having minimum content

requirements for third party verification

calls will provide useful guidance to the

third party verifiers and carriers without

locking carriers into using a set script.

These requirements also allow for more

streamlined enforcement because they

will assist the Commission in

determining the adequacy of steps taken

by independent third parties in the

verification process. Accordingly, we

conclude that a script for third party

verification should elicit, at a minimum,

the identity of the subscriber;

confirmation that the person on the call

is authorized to make the carrier change;

confirmation that the person on the call

wants to make the change; the names of

the carriers affected by the change; the

telephone numbers to be switched; and

the types of service involved (i.e., local,

in-state toll, out-of-state toll, or

international service). We note that

these content requirements do not differ

in substance from our rules regarding

LOAs.

40. In addition, the third party

verification must be conducted in the

same language that was used in the

underlying sales transaction. We also

conclude that the entire third party

verification transaction must be

recorded, a practice that is already

common in the industry. Consistent

with our requirements under

§ 64.1120(a)(1)(ii), submitting carriers

must maintain and preserve these

recordings for a minimum period of two

years after obtaining such verification. If

a slamming dispute arises, having a

recorded verification will help

determine whether the subscriber was

12882 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

simply seeking information or was in

fact agreeing to change carriers and, if

so, which service(s) the subscriber

agreed to change.

41. We further conclude that third

party verifiers may not dispense

information concerning the carrier or its

services, including information

regarding preferred carrier freeze

procedures or other nontelecommunications services that the

carrier may offer to the subscriber.

Allowing third party verifiers to

effectively market the carrier’s services

could compromise the third party

verifiers’ independence and neutrality

because verifiers could easily be drawn

into presenting the particular market

viewpoints of carriers by whom they are

retained. In addition, providing the

verifier with certain carrier information

could result in the disclosure of

proprietary information to competing

carriers. We also believe that

incorporating information about

preferred carrier freezes into the

verification script is likely to be

confusing to subscribers and would

prolong the verification process

unnecessarily.

42. Finally, we conclude that

automated systems that preserve the

independence of the third party

verification process may be used to

verify carrier change requests. The use

of automated third party verification

systems not only promotes consistency

in the verification process and adequacy

of the information provided to

subscribers, but also gives carriers a

cost-effective way to create a readily

accessible record of each order

confirmation. Moreover, the recordings

generated by this automated process

may be useful in addressing subscriber

complaints of slamming. For instance,

the recording can reveal whether the

carrier change at issue was properly

verified and whether an authorized

person provided the verification.

Automated systems may also help

provide predictable and consistent

service.

43. Although several commenters

argue that using automated verification

systems that record the verification

should obviate the need for more

detailed script requirements, we

conclude that these systems should

elicit, at a minimum, the same

information that our rules currently

require, as well as the information

specified. To reiterate, automated

verification systems must elicit, at a

minimum, the identity of the subscriber;

confirmation that the person on the call

is authorized to make the carrier change;

confirmation that the person on the call

wants to make the change; the names of

the carriers affected by the change; the

telephone numbers to be switched; and

the types of service affected by the

transaction (i.e., local, in-state toll, outof-state toll, or international service). In

addition, automated verifications must

be conducted in the same language that

was used in the underlying sales

transaction and must be recorded in

their entirety to ensure that there is a

record of the verification in the event of

a slamming dispute. As with the threeway conference call, and for the same

reasons, a carrier’s sales representative

initiating the automated verification call

may not remain on the line after the

connection has been established. We

further conclude that automated

verification systems should provide

subscribers with an option of speaking

with a live person at any time during

the call. We believe that, in situations

where the subscriber cannot follow the

prompts of an automated system (or has

questions once the automated

verification commences), the subscriber

should be able to reach a live person

who can complete the process. If the

subscriber does not want to complete

the verification process, or is unable to

do so, the third party verifier must end

the call, and the transaction must be

treated as unverified.

44. We note that, although our rules

do not generally prohibit automated

third party verification systems, certain

types of automated verification systems

undermine the independence

requirement and contradict the intent

behind our rules to produce evidence,

independent of the telemarketing

carrier, that a subscriber wishes to

change his or her carrier. In particular,

we conclude that the ‘‘live-scripted’’

automated verification system is at odds

with our rules because it permits the

carrier’s agent, who is not an

independent party located in a separate

physical location, to solicit the

subscriber’s confirmation. From a

subscriber perspective, the ‘‘livescripted’’ version may be appealing

because the subscriber is interacting

with a live person, even though that

person is following a set script. The fact

that the questions on the script are being

read by the carrier’s sales representative,

however, compromises the

independence of the verification. The

risk that the sales representative may

ask the questions in a pressuring or

misleading manner is inherent in the

‘‘live-scripted’’ version. Because the

carrier’s sales representative is usually

compensated for sales completed, and

not for sales attempts, the sales

representative could not be considered

an unbiased third party that lacks

motivation to influence the outcome of

the verification process.

D. Definition of ‘‘Subscriber’’

45. Discussion. Based on our

consideration of the comments filed in

this proceeding, we adopt the following

definition of the term ‘‘subscriber’’ for

purposes of our rules implementing

Section 258 of the Act: ‘‘The party

identified in the account records of a

common carrier as responsible for

payment of the telephone bill, any adult

person authorized by such party to

change telecommunications services or

to charge services to the account, and

any person contractually or otherwise

lawfully authorized to represent such

party.’’ We believe that this definition

will serve our public interest goals of

promoting consumer protection,

consumer convenience, and competition

in telecommunications services.

Specifically, this definition will allow

customers of record to authorize

additional persons to make

telecommunications decisions, while

protecting consumers by giving the

customers of record control over who is

authorized to make such decisions on

their behalf. In addition, this definition

will provide carriers with the flexibility

to establish authorization procedures

that are appropriate to their own and

their customers’ needs, consistent with

the framework of our rules.

46. The definition we adopt is similar

to the SBC proposal set forth in the

FNPRM, in that it allows customers of

record to authorize additional persons

to make telecommunications decisions.

We believe that it is preferable to the

SBC proposal, however, because it

clearly identifies the customer of record

as the source of authority over who is

authorized to make telecommunications

decisions. In addition, the definition we

adopt distinguishes between two

different types of authority: (1)

Authority based on the express or

implied authorization of the customer of

record, as reflected in carrier account

records or elsewhere; and (2) authority

based on federal and/or state law and

regulations concerning agency and

authority.

47. The principal concern expressed

by commenters opposed to a definition

that allows customers of record to

authorize additional persons to make

telecommunications decisions is that

such a definition invites disputes among

household members. We conclude that

this concern does not warrant restricting

customer options. Commenters favoring

a broad definition generally indicate

that the current carrier practice is to

allow persons other than the customer

of record to make telecommunications

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12883

decisions subject to varying

authorization procedures, and that

consumers expect and value this

service. Examination of the record does

not indicate that this practice has given

rise to a substantial number of slamming

complaints. Moreover, as discussed

below, we believe that our current rules

provide sufficient incentives for carriers

to adopt appropriate safeguards to

ensure that only authorized persons are

permitted to change

telecommunications services. Absent

more concrete evidence of the

likelihood of harm to consumers, we

agree with the majority of commenters

that consumers ‘‘should be able to make

decisions about their preferred carrier

[and] delegate that authority if

needed[.]’’

48. We emphasize that, by adopting a

definition, we are not imposing

additional responsibilities on carriers in

the submission or execution of carrier

changes. Rather, carriers’

responsibilities are determined by the

framework of the current rules. Under

these rules, submitting carriers are

subject to liability for the submission of

unauthorized changes, regardless of

intent. As we held in the Section 258

Order, strict liability ‘‘provides

appropriate incentives for carriers to

obtain authorization properly and to

implement their verification procedures

in a trustworthy manner.’’ Within this

framework, the definition that we adopt

will permit submitting carriers to utilize

varying authorization procedures based

on their own and their customers’

needs, without tolerating procedures

likely to enable unauthorized persons to

make telecommunications decisions.

With regard to executing carriers, their

responsibility is limited to prompt

execution of changes verified by a

submitting carrier. Carriers that execute

changes verified by submitting carriers

are not subject to liability for

unauthorized changes. For these

reasons, we are not concerned that the

definition we adopt will impose

unreasonable burdens on executing

carriers.

49. In sum, we believe the

‘‘subscriber’’ definition that we adopt

herein will serve our public interest

goals of promoting consumer

convenience and competition in

telecommunications services, without

leading to increased slamming. The

definition we adopt is consistent with

the framework of our rules and will

enable carriers to adopt safeguards

against unauthorized carrier changes

that are suited to their own and their

customers’ needs.

E. Submission of Reports by Carriers

50. Discussion. We will require

carriers providing telephone exchange

and/or telephone toll service to

periodically submit reports regarding

slamming complaints they received.

Carriers objecting to this reporting

requirement are concerned that the

reports on slamming complaints

received by carriers would produce

inaccurate and misleading information.

Specifically, these carriers argue that

such information, when provided by

LECs, will inflate the number of slams

attributed to other carriers because what

is reported is the total number of

slamming allegations, without reference

to their validity or their underlying

causes. We believe the reporting

requirement adopted herein is designed

to address these concerns, and we are

confident that reliance on the reported

information as an ‘‘early warning’’

system will not misdirect the

enforcement of the Commission’s

slamming rules. Moreover, the

information will be invaluable in

enabling the Commission to identify, as

soon as possible, the carriers who

repeatedly initiate unauthorized

changes. In addition, because the

reports will be available for public

inspection, they may compel carriers to

reduce slamming on their own to avoid

public embarrassment or loss of

goodwill.

51. We recognize that a subscriber

complaint is not, in and of itself,

dispositive proof of a slam.

Nevertheless, an excessive number of

complaints directed at a particular

carrier, or an increase in the number of

such complaints, suggests that an

immediate investigation into that

carrier’s practices may be warranted.

Accordingly, to assist our enforcement

efforts in this area, we conclude that

each carrier providing telephone

exchange and/or telephone toll service

must submit to the Commission via email, U.S. Mail, or facsimile, a

slamming complaint reporting form

which will identify the number of

slamming complaints received and state

the number of such complaints that the

carrier has investigated and found to be

valid. This report also must include the

number of slamming complaints

involving local intrastate and interstate

interexchange service, investigated or

not, that the carrier has chosen to

resolve directly with subscribers.

Moreover, because most subscribers

who are slammed by an IXC report the

slam to their LEC, rather than the IXC,

LECs should include in their reports the

name of each entity against which

slamming complaints have been

directed and the number of complaints

involving unauthorized changes that

have been lodged against each entity.

Carriers shall file their first slamming

complaint reports on August 15, 2001,

to cover the period commencing on the

effective date of this requirement, as

announced in the Federal Register, and

ending on June 30, 2001. Reports for the

second half of 2001 shall be filed on

February 15, 2002, covering the period

between July 1, 2001 and December 31,

2001. Thereafter, carriers shall submit

their semiannual slamming complaint

reports on August 15 (covering January

1 through June 30) and on February 15

(covering July 1 through December 31).

The slamming complaint reporting form

may be obtained in the Commission’s

Public Reference Room or by accessing

the Commission’s website.

52. Based on the record before us, we

do not believe that this requirement will

impose significant additional costs or

administrative burdens on carriers.

Indeed, several carriers have indicated

that they already track slamming

complaints received from subscribers. It

would be a reasonable business practice

for all telecommunications carriers,

including small carriers, to track

slamming complaints they receive in the

course of their business; we would be

surprised if carriers did not do this.

Thus, we do not believe we are

requiring carriers to keep information

that they would not otherwise keep.

F. Registration Requirement

53. Discussion. The Commission

currently requires carriers providing

interstate interexchange

telecommunications service to submit

various types of information, and the

Commission recently streamlined many

of these information collection

requirements. For example, the

Commission has consolidated several

different worksheets into the

Telecommunications Reporting

Worksheet (FCC Form 499), which is

used to calculate carriers’ contributions

to fund four different programs:

interstate telecommunications relay

service (TRS), federal universal service

support mechanisms, the cost-recovery

mechanism for the North American

Numbering Plan Administration, and

the cost recovery mechanism for the

shared costs of long-term local number

portability. In addition, to assist carriers

in meeting the requirement of Section

1.47 of our rules that all common

carriers must designate an agent for

service of process in the District of

Columbia, we have allowed carriers to

report such information on the Form

499. Our rules now provide that carriers

may file the relevant portion of the

12884 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

Form 499 with the Commission to

satisfy this requirement, and must

update the information about the

registered agent for service of process by

submitting the revised portion of the

Form 499 to the Chief of the

Enforcement Bureau’s Market Disputes

Resolution Division within one week of

any changes. The rules also provide that

a paper copy of the designation list shall

be maintained in the Office of the

Secretary of the Commission.

54. We adopt our tentative conclusion

that all new and existing common

carriers providing interstate

telecommunications service must

register with the Commission. We

believe such a registration requirement

will bolster our efforts to curb slamming

by enabling us to monitor the entry of

carriers into the interstate

telecommunications market and any

associated increases in slamming

activity. This requirement will also

enhance our ability to take appropriate

enforcement action against carriers that

have demonstrated a pattern or practice

of slamming. Slammers that simply

change their names and/or move to

different jurisdictions will find it

difficult to escape detection if they

cannot escape the obligation to register

with the Commission. This registration

information will enable the Commission

to identify those entities providing

interstate telecommunications service, it

will complement the certification and

registration requirements in effect in

almost every state for intrastate service

providers, and it will enable the

Commission and state authorities to

coordinate enforcement actions through

the creation of a central repository of

key facts about carriers providing

interstate telecommunications.

55. While we decline to rely

exclusively on existing annual reporting

mechanisms, we are mindful of the

importance of not overburdening

carriers with obligations. Therefore, we

will revise the annually-filed

Telecommunications Reporting

Worksheet (FCC Form 499–A), which

must be filed by all telecommunications

carriers in April of each year, to include

the following additional information

that is targeted to assist our antislamming efforts and thereby minimize

the burden of this registration

requirement: the carrier’s business

name(s) and primary address; the names

and business addresses of the carrier’s

chief executive officer, chairman, and

president, or, in the event that a

company does not have such executives,

three similarly senior-level officials of

the company; the carrier’s regulatory

contact and/or designated agent for

service of process; all names under

which the carrier has conducted

business in the past; and the state(s) in

which the carrier provides

telecommunications service. The next

scheduled filing of the Form 499–A is

April 1, 2001, at which time carriers

will file the revised form containing the

additional information described above

in accordance with the Instructions to

FCC Form 499–A. This information

shall be submitted under oath and

penalty of perjury, and must be updated

to reflect any changes. Pursuant to the

existing requirement in § 1.47 of our

rules, a carrier shall update its

registration to reflect any changes by

submitting the revised relevant portion

of the FCC Form 499–A within no more

than one week of the change. The

Commission will make the registration

information described above available

for public inspection in its reference

room and on its website.

56. We believe that all carriers

providing interstate telecommunications

service, including small carriers

providing such service, should be able

to submit this information without

much expense or difficulty because it is

readily available and, to a large degree,

must already be submitted in state

jurisdictions. In addition, we note that

making the registration information part

of an existing form that must be

completed and submitted for other

obligations will minimize the burden on

carriers. We therefore conclude that

carriers failing to register with the

Commission may, after notice and

opportunity to respond, be subject to a

fine. Carriers providing false or

misleading information in their

registrations may have their operating

authority revoked or suspended, after

receiving appropriate notice and

opportunity to respond.

57. We further conclude that any

telecommunications carrier providing

telecommunications service for resale

shall have an affirmative duty to

ascertain whether a potential carriercustomer (i.e., a reseller) has filed a

registration with the Commission prior

to providing that carrier-customer with

service. Once the telecommunications

carrier that provides

telecommunications service for resale

determines the registration status of its

potential carrier-customer, such carrier

will not be responsible for monitoring

the registration status of that customer

on an ongoing basis, although we

believe that a prudent carrier may

choose to do so. In situations where

such carrier is currently providing a

reseller with service, we direct the

reseller to notify its underlying carrier

that it has submitted the registration

information to the Commission, within

a week of having done so.

58. We note that a

telecommunications carrier providing

telecommunications service for resale

will not be responsible for the accuracy

of the registration provided to the

Commission by its potential carriercustomer, nor will such carrier, relying

in good faith on the absence of such

registration, be liable under Section 251

of the Act for withholding service from

the unregistered entity. The

Commission may, however, after giving

appropriate notice and opportunity to

respond, impose a fine on carriers that

fail to determine the registration status

of other carriers before providing them

with service. The dollar amount of the

fine imposed on such carrier for failing

to meet its affirmative duty with respect

to an unregistered reseller will depend

on the egregiousness of the facts

surrounding the particular incident. We

conclude that this will deter carriers

from providing service to resellers that

have not registered with the

Commission, which will, in turn, make

it more difficult for ‘‘bad actor’’ resellers

to stay in business.

G. Recovery of Additional Amounts

from Unauthorized Carriers

59. Discussion. We believe that the

issue of recovery of additional amounts

from unauthorized carriers has been

effectively resolved in the context of our

First Reconsideration Order. As

discussed, in that order, we reaffirmed

our decision to absolve consumers of

liability for slamming charges for a

limited period of time, i.e., within the

first 30 days after the unauthorized

change. We established procedures that

apply when a consumer has not paid

charges to the slamming carrier and also

modified the liability rules that apply

when a subscriber has paid charges to

a slamming carrier. Specifically, we

concluded that, when the slamming

carrier receives payment from the

subscriber, such carrier must pay out

150% of the collected charges to the

authorized carrier, which, in turn, will

pay to the subscriber 50% of his or her

original payment. In addition, the order

provides specific notification

requirements to facilitate carriers’

compliance with the liability rules.

Given these modifications, we do not

believe that there is a need for further

action in this area at the present time.

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12885

III. Second Order on Reconsideration

A. Administration of Preferred Carrier

Freezes

1. IXC Submission of Preferred Carrier

Freeze Orders and Freeze Lifts

60. Several parties argue on

reconsideration that the Commission

should allow carriers to verify and

submit orders to implement or lift

preferred carrier freezes, just as the

Commission allows carriers to verify

and submit preferred carrier change

orders. We decline to modify our rules

and retain the requirement that

subscribers must implement or lift

preferred carrier freezes through contact

with their local carriers.

61. In the Section 258 Order, we

decided carriers should not be

permitted to submit preferred carrier

freeze lifts, even if those lift orders were

first verified by a neutral third party. We

stated that ‘‘the essence of a preferred

carrier freeze is that a subscriber must

specifically communicate his or her

intent to request or lift a freeze [and it

is this] limitation on lifting preferred

carrier freezes that gives the freeze

mechanism its protective effect.’’ We

determined that subscribers would gain

no additional protection from the

implementation of a preferred carrier

freeze if we were to allow third party

verification of a carrier change to

override a preferred carrier freeze.

Although such a proposal minimizes the

risk that unscrupulous carriers might

attempt to impose preferred carrier

freezes without the consent of

subscribers, we concluded that it

frustrates the subscriber’s ability to

change carriers. Petitioners have not

persuaded us that we erred in making

these determinations. We therefore

affirm our decision that only a

subscriber may request or lift a preferred

carrier freeze.

62. Consistent with this purpose, we

also take this opportunity to clarify that

LECs may not accept preferred carrier

freeze orders from carriers on behalf of

subscribers, even if they are properly

verified. We believe that limiting the

submission of preferred carrier freeze

requests to subscribers will help curb

the potential for abuse by slamming

carriers. To interpret our rules otherwise

would undermine the effectiveness of

preferred carrier freezes. For example, if

a slamming carrier were allowed to

submit an unauthorized freeze order

with an unauthorized change order, not

only would the subscriber be slammed,

but it would also be more difficult for

the subscriber to be switched back to the

authorized carrier because of the

unauthorized freeze. This freeze

mechanism assures that no carrier

change is processed without the direct

involvement of the subscriber.

2. Simultaneous Submission of

Preferred Carrier Change Requests and

Preferred Carrier Freeze Requests

63. RCN and Excel seek clarification

that a subscriber request a change and

obtain a preferred carrier freeze in the

same transaction. Nothing in our rules

prohibits a subscriber from changing a

carrier and requesting a freeze in the

same transaction. We emphasize that

the LEC must, however, verify both the

freeze request and the carrier change

request in accordance with our rules.

Specifically, the LEC must obtain a

Letter of Agency, electronic

authorization, or third party verification

that applies to the freeze request and, if

the LEC is the provider of the requested

long distance service, the LEC must also

properly verify the carrier change

request. We note that, in situations

where a customer initiates or changes

long distance service by contacting the

LEC directly, verification of the

customer’s choice is not necessary by

either the LEC or the chosen IXC

because neither carrier is the

‘‘submitting carrier’’ as we have defined

it.

3. Effecting Freeze Lifts and Change

Requests in the Same Three-Way Call

64. MCI asks the Commission to

clarify that executing carriers have an

obligation to lift a preferred carrier

freeze and switch a customer during the

same three-way call. MCI states that it

has experienced difficulties in making

authorized carrier changes where

preferred carrier freezes have been in

place. MCI explains that, after a carrier

change request is properly verified, MCI

electronically sends the request to the

executing carrier. In situations where

the customer has a preferred carrier

freeze in place, but may have forgotten,

the change request has been rejected by

the executing carrier. At that point, MCI

states that it contacts the customer and

initiates a three-way call between the

executing carrier, the customer, and

MCI. According to MCI, the executing

carrier will only sometimes accept the

three-way call, will only sometimes lift

the preferred carrier freeze during the

three-way call, and will never execute

the carrier change during the three-way

call. Thus, MCI appears to argue that, in

situations where the submitting carrier

initiates a three-way call for the purpose

of simultaneously lifting a preferred

carrier freeze and submitting a carrier

change request that has been already

properly verified, the Commission

should require the executing carrier to

accept the freeze lift and effect the

carrier change request in the same threeway call.

65. Although we agree with MCI that

accepting both freeze lift and properly

verified carrier change requests during

the same three-way call may be an

efficient means of effectuating a

consumer’s carrier change request, we

need not mandate that executing

carriers follow this course at this time.

As we stated in the Section 258 Order,

carriers must offer subscribers a simple,

easily understandable, but secure way of

lifting preferred carrier freezes in a

timely manner. We concluded that LECs

administering a preferred carrier freeze

program must accept the subscriber’s

authorization, either oral or written and

signed, stating an intent to lift a

preferred carrier freeze. We determined

that LECs also must permit a submitting

carrier to conduct a three-way

conference call with the LEC and the

subscriber in order to lift a freeze. Our

rules do not, however, prohibit LECs

from requiring submitting carriers to use

separate methods for lifting a preferred

carrier freeze and submitting a carrier

change request. If MCI is concerned

about the delay that may result from

some LECs refusing to accept properly

verified carrier change orders during the

same three-way call initiated for the

purpose of lifting a freeze, it may file a

complaint in the appropriate forum.

66. We also note that, in the Section

258 Order, we declined to enumerate all

acceptable procedures for lifting

preferred carrier freezes. Rather, we

encouraged parties to develop other

methods of accurately confirming a

subscriber’s identity and intent to lift a

preferred carrier freeze, in addition to

offering written and oral authorization

to lift preferred carrier freezes. We

continue to believe that, as long as these

other methods are secure and ‘‘impose

only the minimum burdens necessary

on subscribers who wish to lift a

preferred carrier freeze,’’ we need not

mandate an automated process for

carrier freezes, as requested by AT&T.

67. Furthermore, for the same reasons

articulated in the Section 258 Order, we

will not require LECs administering

preferred carrier freeze programs to

make subscriber freeze information

available to other carriers. We continue

to believe that, in light of our preferred

carrier freeze solicitation requirements,

subscribers should know whether there

are preferred carrier freezes in place on

their carrier selections. As we noted in

the Section 258 Order, if a subscriber is

uncertain about whether a preferred

carrier freeze has been imposed, the

submitting carrier may use the threeway calling mechanism to confirm the

12886 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

presence of a freeze. Carriers therefore

would not need to rely on a LECprepared list identifying those

subscribers who have freezes in place.

Moreover, there is no indication, based

on the record before us, that this

information has been used in an anticompetitive manner, as AT&T suggests.

If, in the future, we find that LECs are

using this information for anticompetitive purposes, we will revisit

this issue at that time.

B. Verification of Preferred Carrier

Changes

1. Liability of an Executing Carrier

68. Several carriers ask the

Commission to clarify that an executing

carrier is liable for an unauthorized

carrier change when the carrier

improperly executes a carrier change

request. Section 258 of the Act

contemplates that the submitting carrier

and/or the executing carrier could be

liable for an unauthorized change in a

subscriber’s telecommunications

service. In the Section 258 Order, we

delineated the duties and obligations of

submitting and executing carriers in

order to minimize disputes over the

source or cause of unauthorized carrier

changes. Generally, we concluded that

submitting carriers are responsible for

submitting, without unreasonable delay,

authorized and properly verified carrier

change requests; while executing

carriers are charged with executing

promptly and without unreasonable

delay changes that have been verified by

the submitting carrier. We found that

‘‘where the submitting carrier submits a

carrier change request that fails to

comply with our rules and the executing

carrier performs the change in

accordance with the submission, only

the submitting carrier is liable as an

unauthorized carrier; [but] where the

submitting carrier submits a change

request that conforms with our rules

and the executing carrier fails to

perform the change in conformance

with the submission, * * * the

executing carrier is liable. * * *’’

Thus, an executing carrier that fails to

execute promptly and without

unreasonable delay a change request

that has been properly submitted and

verified is in violation of Section 258 of

the Act and § 64.1100(b) of our rules

and may be subject to liability for

damages.

2. Separate Authorizations for Multiple

Services

69. We affirm our decision to require

separate authorization for each service

for which a subscriber requests a carrier

change and/or freeze. Excel has not

presented any new arguments or

credible evidence that would cause us

to conclude our original decision was in

error.

70. We also clarify that the separate

authorization requirement does not

prohibit carriers from obtaining a

customer’s authorization to change more

than one service on the same LOA.

Section 64.1130(d) of our rules allows

carriers to use these ‘‘combined checkLOAs,’’ as long as they comply with all

the requirements governing Letters of

Agency in § 64.1130. Thus, a carrier

may use one combined check-LOA to

obtain authorization for more than one

service. It must be clear to the

subscriber, however, that he or she will

be receiving each service listed on the

combined check-LOA from the same

carrier.

C. Rules Governing LOAs

1. Limitation on the Effectiveness of an

LOA

71. We will not adopt a 30-day limit

on the effectiveness of an LOA as

suggested by petitioner SBC. We believe

a more reasonable limitation on the

amount of time an LOA should be

considered valid is 60 days, and we

hereby adopt this 60-day limit. We

further conclude that the 60-day limit

shall apply to submitting carriers rather

than executing carriers, because

submitting carriers are actually parties

to the contractual agreement with the

customer and, as such, are more capable

of conforming their behavior to the

obligation.

72. Although we recognize that a LEC

may be able to lift a freeze in as few as

24 or 48 hours, there are several factors

to consider in determining the time

period that an LOA should be

considered valid. For example, if a

carrier change request is rejected

because the subscriber has not lifted the

freeze on his or her account, the carrier

must contact the subscriber and give

him or her the opportunity to lift the

freeze via a three-way call to the LEC.

The subscriber may, however, be out of

town or otherwise unable to be reached

immediately. In either case, the carrier

will be forced to continue to hold the

LOA indefinitely or until the subscriber

can be contacted. A 60-day limitation

permits more flexibility under these and

other, similar circumstances. We

emphasize that this 60-day limitation

represents the maximum time period for

which an LOA will be considered valid.

We note that consumers expect that

their expressed preference for a new

carrier will be honored within a

reasonable time frame, and we think

that a 60-day period sets a reasonable

outer limit. In addition, a time period

exceeding 60 days may cause confusion

for customers regarding requests they

may have made concerning their

account but no longer remember. We

encourage carriers to submit a change

order immediately after the subscriber

authorizes the change to minimize the

risk that the subscriber will have

forgotten the change.

2. Contents of LOA Regarding Preferred

Carrier Change Charge

73. Under § 64.1130(e)(5) of our rules,

LOAs are required to include a

statement ‘‘[t]hat the subscriber

understands that any preferred carrier

selection the subscriber chooses may

involve a charge to the subscriber for

changing the subscriber’s preferred

carrier.’’ In its petition, MediaOne

explains that this requirement, which

initially applied only to changes of a

subscriber’s long distance provider, can

now be read to apply to changes of local

service providers. Because preferred

carrier change charges do not apply

when a subscriber changes from one

local service provider to another,

MediaOne argues that the requirement

set forth in Section 64.1130(e) will

result in consumer confusion.

Accordingly, MediaOne asserts that this

rule should be revised to provide that

this statement is not required in LOAs

authorizing changes of local service

providers.

74. We will revise our requirements

for the content of LOAs. Our current

rules state that an LOA must indicate to

the subscriber that a charge ‘‘may’’ be

assessed for any preferred carrier

change. We agree with MediaOne that

§ 64.1130(e)(5) of our rules, as written,

may result in consumer confusion to the

extent there is no preferred carrier

change charge applied for a change in

local service providers. To alleviate

consumer confusion, we therefore

amend § 64.1130(e)(5) to provide that an

LOA must contain language giving a

subscriber the option of consulting with

the carrier as to whether a fee applies to

his or her preferred carrier change.

D. Payment of Preferred Carrier Change

Charges After Slam

75. There are two preferred carrier

change charges that can be involved in

a slam. The first charge is assessed

when the LEC executes the slamming

carrier’s preferred carrier change order.

The second charge is assessed when the

LEC returns the subscriber to his or her

authorized carrier. SBC seeks

clarification as to whether, under the

new slamming procedures, the

unauthorized carrier is responsible for

paying the carrier change charge when

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12887

the subscriber is returned to his or her

authorized carrier. SBC also requests

clarification that, when a slam has been

alleged, the LEC, acting as executing

carrier, is no longer obligated to

investigate or make a determination as

to the validity of the initial carrier

change.

76. We have previously stated that

where an IXC submits a request that is

disputed by a subscriber and the IXC is

unable to produce verification of that

subscriber’s change request, the LEC

must assess the applicable change

charge against that IXC. We also stated

in the Section 258 Order that the

unauthorized carrier must pay for the

expenses of restoring the subscriber to

his or her authorized carrier. We

continue to believe that an

unscrupulous carrier should bear full

financial responsibility for the costs of

its unlawful actions. Accordingly, we

hereby clarify that the unauthorized

carrier shall pay the preferred carrier

change charges that are assessed in the

event of a slam, i.e., the charge assessed

when the LEC executes the slamming

carrier’s preferred carrier change order

and the charge assessed when the LEC

returns the subscriber to his or her

authorized carrier. Unauthorized

carriers also are responsible for

reimbursing authorized carriers in

accordance with the requirements set

forth in Section 258 of the Act and

§ 64.1170 of our rules.

77. We note that SBC’s second

clarification request regarding the

executing carrier’s role in investigating

slamming allegations was made in

response to the Commission’s prior

liability rules, which were superceded

by the liability rules adopted in the First

Reconsideration Order. The procedures

we adopted in the First Reconsideration

Order provide that ‘‘disputes between

alleged slamming carriers, authorized

carriers, and subscribers now will be

brought before an appropriate state

commission, or this Commission in

cases where the state has not elected to

administer these rules, rather than to the

authorized carriers, as adopted in the

Section 258 Order.’’ Under these

procedures, carriers must inform

subscribers who believe that they have

been slammed of their right to file a

complaint with the appropriate

governmental entity. We have not,

however, restricted the ability of carriers

to try to satisfy subscribers who alleged

they have been slammed. For example,

an IXC might authorize a LEC to fix

alleged slams on a no-fault basis or to

investigate the validity of the carrier

changes. Nothing in the First

Reconsideration Order precludes

carriers from attempting to resolve

slamming allegations, either directly or

through contractual arrangement with

another carrier, before the subscribers

have filed complaints, and, indeed, we

anticipate that carriers will have

incentives to continue such practices.

E. Preemption of State Regulations

78. Excel and RCN argue in their

petitions that the Commission should

reconsider its decision not to preempt

state regulations regarding slamming

because they believe that ‘‘the costs to

carriers to comply with a patchwork of

inconsistent federal and state

regulations could be exorbitant, while

accruing little benefit to consumers.’’

Although we recognize that it may be

simpler for carriers to comply with one

set of verification rules, we will not

interfere with the states’ ability to adopt

more stringent regulations. As we

observed in both the Section 258 Order

and the First Reconsideration Order, the

Commission must work hand-in-hand

with the states towards the common

goal of eliminating slamming. States

have valuable insight into the slamming

problems experienced by consumers in

their respective locales and can share

their expertise with this Commission.

We will not thwart that effort by

requiring states to limit their

verification requirements so that they

are no more stringent than those

promulgated by this Commission. The

carriers challenging the Commission’s

decision to refrain from preempting

state regulations have failed to identify

a particular state law that should be

preempted and how that state law

conflicts with federal law or obstructs

federal objectives. In the absence of

such evidence, we will not preempt

state regulations governing verification

procedures for preferred carrier change

requests.

A. Procedural Matters

A. Final Regulatory Flexibility Analysis

89. As required by the Regulatory

Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis (IRFA)

was incorporated in the FNPRM in this

proceeding. The Commission sought

written public comment on the

proposals in the FNPRM, including

comment on the IRFA. The comments

received are discussed below. The

instant Final Regulatory Flexibility

Analysis (FRFA) conforms to the RFA.

1. Need For and Objectives of This

Action

90. Section 258 of the Act makes it

unlawful for any telecommunications

carrier ‘‘to submit or execute a change

in a subscriber’s selection of a provider

of telephone exchange services or

telephone toll service except in

accordance with such verification

procedures as the Commission shall

prescribe.’’ In the Section 258 Order, the

Commission established a

comprehensive framework of rules to

implement Section 258 and strengthen

its existing anti-slamming rules.

Concurrent with the release of the

Section 258 Order, the Commission

issued a FNPRM seeking comment on a

number of additional proposals to

further improve the preferred carrier

change process and to prevent

unauthorized carrier changes. In the

instant Order, the Commission adopts

some of the proposals set forth in the

FNPRM. Specifically, the Commission:

(1) amends the current carrier change

authorization and verification rules to

expressly permit the use of Internet

Letters of Agency (Internet LOAs) in a

manner consistent with the new E-Sign

Act; (2) directs the North American

Numbering Plan Administration

(NANPA) to eliminate the requirement

that carriers purchase Feature Group D

access in order to obtain a carrier

identification code (CIC); (3) provides

further guidance on the independent

third party verification process; (4)

defines the term ‘‘subscriber’’ for

purposes of its slamming rules; (5)

requires carriers providing telephone

exchange and/or telephone toll service

to submit a semiannual report on the

number of slamming complaints it

receives; and (6) expands the existing

registration requirement on carriers

providing interstate telecommunications

service to include additional facts that

will assist the Commission’s

enforcement efforts. The objectives of

the modified rules adopted in this Order

are to implement Section 258 by

improving the preferred carrier change

process and strengthening the

Commission’s framework of antislamming rules.

2. Summary of Significant Issues Raised

by Public Comments in Response to the

IRFA

91. The Commission received no

comments directly in response to the

IRFA.

92. Resellers and CICs. Relying in part

on the small size of many resellers,

opponents of the Commission’s

proposal to require switchless resellers

to use their own CICs argue that such a

requirement would create a substantial

market entry barrier for resellers. Others

maintain that CIC deployment costs

would be manageable for resellers

because they typically operate on a

regional rather than on a national basis,

that such costs may be viewed as ‘‘a

12888 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

legitimate cost of doing business,’’ and

that the independent use of CICs has

significant competitive advantages for

switchless resellers. These comments

are discussed in more detail in

paragraph 27 above.

93. Submission of Reports by Carriers.

Commenters contend that requiring

each carrier to submit reports on the

number of slamming complaints that it

receives would create serious burdens

for the Commission and compliant

carriers alike. We do not believe that the

reporting requirement adopted in this

Order will impose significant additional

costs or administrative burdens on

carriers. Several carriers indicated that

they already track slamming complaints

received from subscribers. Thus, we do

not believe that we are requiring carriers

to keep information that they would not

otherwise already keep. Moreover, this

requirement will enable the

Commission to identify the carriers who

repeatedly initiate unauthorized

changes. In addition, carriers may be

compelled to reduce slamming on their

own because the reports will be

available for public inspection.

94. Registration Requirement.

Commenters argue that the proposed

registration requirement would impose

unnecessary costs on carriers and would

do little to alleviate the slamming

problem. We believe that all carriers

providing interstate telecommunications

should be able to comply with the

registration requirement adopted herein

without much expense or difficulty

because the information requested is

readily available, and to a large degree,

must be provided to the states. We have

minimized the burden that this

requirement may have on carriers by

making the registration information part

of an existing form that must be

completed and submitted for other

obligations. We believe this requirement

will benefit consumers by enhancing

our ability to take appropriate

enforcement action against carriers that

have demonstrated a pattern or practice

of slamming.

3. Description and Estimate of the

Number of Small Entities To Which

This Action Will Apply

95. The RFA directs agencies to

provide a description of and, where

feasible, an estimate of the number of

small entities that may be affected by

the proposed rules, if adopted. The RFA

generally defines the term ‘‘small

entity’’ as having the same meaning as

the terms ‘‘small business,’’ ‘‘small

organization,’’ ‘‘small governmental

jurisdiction,’’ and ‘‘small business

concern’’ under section 3 of the Small

Business Act. A small business concern

is one which: (1) Is independently

owned and operated; (2) is not

dominant in its field of operation; and

(3) satisfies any additional criteria

established by the Small Business

Administration (SBA). A small

organization is generally ‘‘any not-forprofit enterprise which is independently

owned and operated and is not

dominant in its field.’’ Nationwide, as of

1992, there were approximately 275,801

small organizations. ‘‘Small

governmental jurisdiction’’ generally

means ‘‘governments of cities, counties,

towns, townships, villages, school

districts, or special districts, with a

population of less than 50,000.’’ As of

1992, there were approximately 85,006

such jurisdictions in the United States.

This number includes 38,978 counties,

cities, and towns; of these, 37,566, or 96

percent, have populations of fewer than

50,000. The Census Bureau estimates

that this ratio is approximately accurate

for all governmental entities. Thus, of

the 85,006 governmental entities, we

estimate that 81,600 (96 percent) are

small entities. According to SBA

reporting data, there were 4.44 million

small business firms nationwide in

1992. Below, we further describe and

estimate the number of small entity

licensees and regulatees that may be

affected by the proposed rules, if

adopted.

96. The most reliable source of

information regarding the total numbers

of certain common carrier and related

providers nationwide, as well as the

number of commercial wireless entities,

appears to be data the Commission

publishes in its Trends in Telephone

Service report. In a recent news release,

the Commission indicated that there are

4,144 interstate carriers. These carriers

include, inter alia, local exchange

carriers, wireline carriers and service

providers, interexchange carriers,

competitive access providers, operator

service providers, pay telephone

operators, providers of telephone

service, providers of telephone

exchange service, and resellers.

97. The SBA has defined

establishments engaged in providing

‘‘Radiotelephone Communications’’ and

‘‘Telephone Communications, Except

Radiotelephone’’ to be small businesses

when they have no more than 1,500

employees. Below, we discuss the total

estimated number of telephone

companies falling within the two

categories and the number of small

businesses in each, and we then attempt

to refine further those estimates to

correspond with the categories of

telephone companies that are commonly

used under our rules.

98. We have included small

incumbent LECs in this present RFA

analysis. As noted above, a ‘‘small

business’’ under the RFA is one that,

inter alia, meets the pertinent small

business size standard (e.g., a telephone

communications business having 1,500

or fewer employees), and ‘‘is not

dominant in its field of operation.’’ The

SBA’s Office of Advocacy contends that,

for RFA purposes, small incumbent

LECs are not dominant in their field of

operation because any such dominance

is not ‘‘national’’ in scope. We have

therefore included small incumbent

LECs in this RFA analysis, although we

emphasize that this RFA action has no

effect on FCC analyses and

determinations in other, non-RFA

contexts.

99. Total Number of Telephone

Companies Affected. The U.S. Bureau of

the Census (‘‘Census Bureau’’) reports

that, at the end of 1992, there were

3,497 firms engaged in providing

telephone services, as defined therein,

for at least one year. This number

contains a variety of different categories

of carriers, including local exchange

carriers, interexchange carriers,

competitive access providers, cellular

carriers, mobile service carriers,

operator service providers, pay

telephone operators, covered

specialized mobile radio providers, and

resellers. It seems certain that some of

these 3,497 telephone service firms may

not qualify as small entities because

they are not ‘‘independently owned and

operated.’’ For example, a PCS provider

that is affiliated with an interexchange

carrier having more than 1,500

employees would not meet the

definition of a small business. It is

reasonable to conclude that 3,497 or

fewer telephone service firms are small

entity telephone service firms that may

be affected by the new rules.

100. Wireline Carriers and Service

Providers. The SBA has developed a

definition of small entities for telephone

communications companies except

radiotelephone (wireless) companies.

The Census Bureau reports that there

were 2,321 such telephone companies

in operation for at least one year at the

end of 1992. According to the SBA’s

definition, a small business telephone

company other than a radiotelephone

company is one employing no more

than 1,500 persons. All but 26 of the

2,321 non-radiotelephone companies

listed by the Census Bureau were

reported to have fewer than 1,000

employees. Thus, even if all 26 of those

companies had more than 1,500

employees, there would still be 2,295

non-radiotelephone companies that

might qualify as small entities. We do

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12889

not have data specifying the number of

these carriers that are not independently

owned and operated, and thus are

unable at this time to estimate with

greater precision the number of wireline

carriers and service providers that

would qualify as small business

concerns under the SBA’s definition.

Consequently, we estimate that 2,295 or

fewer small telephone communications

companies other than radiotelephone

companies are small entities that may be

affected by the new rules.

101. Local Exchange Carriers. Neither

the Commission nor the SBA has

developed a definition for small

providers of local exchange services

(LECs). The closest applicable definition

under the SBA rules is for telephone

communications companies other than

radiotelephone (wireless) companies.

According to the most recent

Telecommunications Industry Revenue

data, 1,348 incumbent carriers reported

that they were engaged in the provision

of local exchange services. We do not

have data specifying the number of

these carriers that are either dominant

in their field of operations, are not

independently owned and operated, or

have more than 1,500 employees, and

thus are unable at this time to estimate

with greater precision the number of

LECs that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that 1,348 or fewer providers of local

exchange service are small entities that

may be affected by the new rules.

102. Interexchange Carriers. Neither

the Commission nor the SBA has

developed a definition of small entities

specifically applicable to providers of

interexchange services (IXCs). The

closest applicable definition under the

SBA rules is for telephone

communications companies other than

radiotelephone (wireless) companies.

According to the most recent Trends in

Telephone Service data, 171 carriers

reported that they were engaged in the

provision of interexchange services. We

do not have data specifying the number

of these carriers that are not

independently owned and operated or

have more than 1,500 employees, and

thus are unable at this time to estimate

with greater precision the number of

IXCs that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are 171 or fewer small entity

IXCs that may be affected by the new

rules.

103. Competitive Access Providers.

Neither the Commission nor the SBA

has developed a definition of small

entities specifically applicable to

competitive access services providers

(CAPs). The closest applicable

definition under the SBA rules is for

telephone communications companies

other than radiotelephone (wireless)

companies. According to the most

recent Trends in Telephone Service

data, 212 CAP/CLECs carriers and 10

other LECs reported that they were

engaged in the provision of competitive

local exchange services. We do not have

data specifying the number of these

carriers that are not independently

owned and operated, or have more than

1,500 employees, and thus are unable at

this time to estimate with greater

precision the number of CAPs that

would qualify as small business

concerns under the SBA’s definition.

Consequently, we estimate that there are

212 or fewer small entity CAPs and 10

other LECs that may be affected by the

new rules.

104. Operator Service Providers.

Neither the Commission nor the SBA

has developed a definition of small

entities specifically applicable to

providers of operator services. The

closest applicable definition under the

SBA rules is for telephone

communications companies other than

radiotelephone (wireless) companies.

According to the most recent Trends in

Telephone Service data, 24 carriers

reported that they were engaged in the

provision of operator services. We do

not have data specifying the number of

these carriers that are not independently

owned and operated or have more than

1,500 employees, and thus are unable at

this time to estimate with greater

precision the number of operator service

providers that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are 24 or fewer small entity

operator service providers that may be

affected by the new rules.

105. Pay Telephone Operators.

Neither the Commission nor the SBA

has developed a definition of small

entities specifically applicable to pay

telephone operators. The closest

applicable definition under SBA rules is

for telephone communications

companies other than radiotelephone

(wireless) companies. According to the

most recent Trends in Telephone

Service data, 615 carriers reported that

they were engaged in the provision of

pay telephone services. We do not have

data specifying the number of these

carriers that are not independently

owned and operated or have more than

1,500 employees, and thus are unable at

this time to estimate with greater

precision the number of pay telephone

operators that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are 615 or fewer small entity

pay telephone operators that may be

affected by the new rules.

106. Resellers (including debit card

providers). Neither the Commission nor

the SBA has developed a definition of

small entities specifically applicable to

resellers. The closest applicable SBA

definition for a reseller is a telephone

communications company other than

radiotelephone (wireless) companies.

According to the most recent Trends in

Telephone Service data, 388 toll and 54

local entities reported that they were

engaged in the resale of telephone

service. We do not have data specifying

the number of these carriers that are not

independently owned and operated or

have more than 1,500 employees, and

thus are unable at this time to estimate

with greater precision the number of

resellers that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are 388 or fewer small toll

entity resellers and 54 small local entity

resellers that may be affected by the new

rules.

107. Toll-Free 800 and 800-Like

Service Subscribers. Neither the

Commission nor the SBA has developed

a definition of small entities specifically

applicable to 800 and 800-like service

(‘‘toll free’’) subscribers. The most

reliable source of information regarding

the number of these service subscribers

appears to be data the Commission

collects on the 800, 888, and 877

numbers in use. According to our most

recent data, at the end of January 1999,

the number of 800 numbers assigned

was 7,692,955; the number of 888

numbers that had been assigned was

7,706,393; and the number of 877

numbers assigned was 1,946,538. We do

not have data specifying the number of

these subscribers that are not

independently owned and operated or

have more than 1,500 employees, and

thus are unable at this time to estimate

with greater precision the number of toll

free subscribers that would qualify as

small business concerns under the

SBA’s definition. Consequently, we

estimate that there are 7,692,955 or

fewer small entity 800 subscribers,

7,706,393 or fewer small entity 888

subscribers, and 1,946,538 or fewer

small entity 877 subscribers may be

affected by the new rules.

108. Cellular Licensees. Neither the

Commission nor the SBA has developed

a definition of small entities applicable

to cellular licensees. Therefore, the

applicable definition of small entity is

the definition under the SBA rules

applicable to radiotelephone (wireless)

companies. This provides that a small

entity is a radiotelephone company

12890 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

employing no more than 1,500 persons.

According to the Census Bureau, only

twelve radiotelephone firms from a total

of 1,178 such firms which operated

during 1992 had 1,000 or more

employees. Therefore, even if all twelve

of these firms were cellular telephone

companies, nearly all cellular carriers

were small businesses under the SBA’s

definition. In addition, we note that

there are 1,758 cellular licenses;

however, a cellular licensee may own

several licenses. In addition, according

to the most recent Telecommunications

Industry Revenue data, 808 carriers

reported that they were engaged in the

provision of either cellular service or

Personal Communications Service (PCS)

services, which are placed together in

the data. We do not have data specifying

the number of these carriers that are not

independently owned and operated or

have more than 1,500 employees, and

thus are unable at this time to estimate

with greater precision the number of

cellular service carriers that would

qualify as small business concerns

under the SBA’s definition.

Consequently, we estimate that there are

808 or fewer small cellular service

carriers that may be affected by the new

rules.

4. Summary of Projected Reporting,

Recordkeeping, and Other Compliance

Requirements

109. Below, we analyze the projected

reporting, recordkeeping, and other

compliance requirements that might

affect small entities.

110. Preferred Carrier Changes Using

the Internet. The Commission amends

its rules to expressly permit preferred

carrier changes to be conducted

electronically through the use of

Internet Letters of Agency (LOAs).

Internet LOAs must comply with all

current Commission authorization and

verification requirements (as modified),

and consumers must have the option of

using alternative authorization and

verification methods. This action is

consistent with the E-Sign Act’s

mandate that electronic signatures and

transactions be treated the same as

written ones, and will promote

consumer convenience and competition

by facilitating the use of the Internet for

preferred carrier changes.

111. Resellers and CICs. The

Commission directs the NANPA to

eliminate the requirement that carriers

purchase ‘‘Feature Group D access’’ to

obtain CICs. This action will facilitate

the assignment of CICs to switchless

resellers and eliminate a financial and

administrative obstacle to their

independent use of CICs.

112. Independent Third Party

Verification. The Commission retains

the three-way conference call and

confirms that automated systems may be

used as independent third party

verification methods, but requires that

the carrier’s sales representative drop off

the call once the connection has been

established between the subscriber and

the third-party verifier. This action will

ensure the independence of the third

party verification process and prevent

the carrier’s sales representative from

improperly influencing subscribers,

without burdening the verification

process. In addition, the Commission

adopts minimum content requirements

for third party verification to provide

guidance as to what practices are

necessary and acceptable, and confirms

that automated verification systems that

preserve the independence of the third

party verification process may be used

to verify carrier change requests.

113. Definition of ‘‘Subscriber.’’ The

Commission adopts a definition of the

term ‘‘subscriber’’ for purposes of its

slamming rules that will allow

customers of record to authorize

additional persons to make

telecommunications decisions, while

retaining control over who is authorized

to make such decisions on their behalf.

The adoption of this definition will

benefit all carriers, including small

carriers, by providing them with the

flexibility to establish authorization

procedures appropriate to their own and

their customers’ needs, consistent with

the framework of the Commission’s

slamming rules.

114. Submission of Reports by

Carriers. Each carrier providing

telephone exchange and/or telephone

toll service is required to submit to the

Commission a semiannual report

identifying the number of complaints

involving unauthorized changes that it

has received, the number that it has

investigated and found to be valid, and

the number, investigated or not, that it

has chosen to resolve directly with

consumers. The report also must

include the number of slamming

complaints involving local intrastate

and interstate interexchange service,

investigated or not, that the carrier has

chosen to resolve directly with

subscribers. Because most subscribers

who are slammed by an IXC report the

slam to their LEC, rather than the IXC,

LECs should include in their reports the

name of each entity against which

slamming complaints were directed and

the number of complaints involving

unauthorized changes that have been

lodged against each entity. These

reporting requirements will enable the

Commission to identify carriers who

repeatedly initiate unauthorized

changes, and may induce carriers to

reduce slamming on their own to avoid

public embarrassment or loss of

goodwill.

115. Registration Requirement. Each

carrier is required to register with the

Commission, and an affirmative duty is

established on the part of a

telecommunications carrier providing

telecommunications service for resale to

confirm that a reseller has registered

with the Commission prior to providing

that reseller with service. Specifically,

the annually-filed Telecommunications

Reporting Worksheet (FCC Form 499–

A), which must be filed by all

telecommunications carriers in April of

each year, will be revised to include the

following additional information that is

targeted to assist the Commission’s antislamming efforts: the carrier’s business

name(s) and primary address; the names

and business addresses of the carrier’s

chief executive office, chairman, and

president, or, in the event that a

company does not have such executives,

three similarly senior-level officials of

the company; the carrier’s regulatory

contact and/or designated agent for

service of process; all names under

which the carrier has conducted

business in the past; and the state(s) in

which the carrier provides

telecommunications service. The new

registration requirement will enable the

Commission to monitor the entry of

carriers into the interstate

telecommunications market and any

associated increases in slamming,

enhance the Commission’s ability to

take appropriate enforcement action

against carriers that have demonstrated

a pattern or practice of slamming, and

deter carrier providing

telecommunications service for resale

from offering service to unregistered

resellers.

5. Steps Taken to Minimize the

Significant Economic Impact of This

Action on Small Entities, and

Significant Alternatives Considered

116. Resellers and CICs. The

Commission requested comment in the

FNPRM on three possible approaches to

the problems arising from the shared

use of CICs by switchless resellers and

their underlying, facilities-based

carriers. The Commission believes that

its proposal to require resellers to obtain

their own CICs holds promise as a direct

and effective solution to the significant

problems that arise from the shared use

of CICs. Based on review of the record

as a whole, however, including

concerns raised by some commenters

regarding the financial and competitive

impact of a CIC requirement on

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12891

resellers, many of which are small

entities, the Commission is not adopting

a CIC requirement at this time. By

directing that the Feature Group D

requirement be eliminated, the

Commission is taking a step that will

facilitate the ability of resellers to obtain

and use their own CICs, while allowing

them to choose whether to do so based

on their own competitive needs.

117. Submission of Reports by

Carriers. The Commission has

considered whether the reporting

requirements adopted herein will

impose significant additional costs or

administrative burdens on carriers. The

Commission concludes that this

requirement would not impose

significant additional costs or

administrative burdens on carriers. In

this regard, the Commission notes the

comments of several carriers that they

already track slamming complaints

received from subscribers, and reasons

that it would be a reasonable business

practice for all telecommunications

carriers, including small carriers, to

track slamming complaints they receive

in the course of their business. Indeed,

the Commission states that it would be

surprised if carriers did not do this.

Accordingly, the Commission concludes

that it is not requiring carriers to keep

information that they would not

otherwise keep. Moreover, these modest

reporting requirements will help the

Commission to achieve important

objectives: identifying carriers that

repeatedly initiate unauthorized

changes, and deterring carriers from

slamming.

118. Registration Requirement. To

minimize the administrative burden on

carriers of the registration requirement

adopted herein, the Commission makes

the registration information part of an

existing form that must be completed

and submitted for other obligations. The

Commission also observes that all

carriers providing interstate

telecommunications service, including

small carriers providing such service,

should be able to submit this

information without much expense or

difficulty because it is readily available,

and to a large degree, must already be

submitted in state jurisdictions.

6. Report to Congress

119. The Commission will send a

copy of the Order, including this FRFA,

in a report to Congress pursuant to the

Small Business Regulatory Enforcement

Fairness Act of 1996. In addition, the

Commission will send a copy of the

Order, including the FRFA, to the Chief

Counsel for Advocacy of the Small

Business Administration. A copy of the

Order and FRFA (or summaries thereof)

also will be published in the Federal

Register.

B. Supplemental Final Regulatory

Flexibility Analysis

120. As required by the Regulatory

Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis (IRFA)

was incorporated in the Further Notice

of Proposed Rule Making and

Memorandum Opinion and Order on

Reconsideration, 62 FR 43493, August

14, 1997, in this proceeding. The

Commission sought written public

comment on the proposals in the

FNPRM and Order, including comment

on the IRFA. A Final Regulatory

Flexibility Analysis (FRFA) was

incorporated in the subsequent Section

258 Order in this proceeding. The

Commission received a number of

petitions for reconsideration in response

to the Section 258 Order. The instant

Second Order on Reconsideration

addresses issues raised in those

reconsideration petitions. This

associated Supplemental Final

Regulatory Flexibility Analysis (SFRFA)

reflects revised or additional

information to that contained in the

FRFA. This SFRFA is thus limited to

matters raised in response to the Section

258 Order and addressed in the instant

Second Order on Reconsideration. This

SFRFA conforms to the RFA.

1. Need for and Objectives of this Action

121. Section 258 of the Act makes it

unlawful for any telecommunications

carrier ‘‘to submit or execute a change

in a subscriber’s selection of a provider

of telephone exchange services or

telephone toll service except in

accordance with such verification

procedures as the Commission shall

prescribe.’’ In the Section 258 Order, the

Commission established a

comprehensive framework of rules to

implement section 258 and strengthen

its existing anti-slamming rules. In this

Second Order on Reconsideration, the

Commission upholds its rules governing

the submission of preferred carrier

freeze orders, the handling of preferred

carrier change requests and freeze

orders in the same transaction, and the

automated submission and

administration of freeze orders and

changes. In addition, the Commission

reaffirms its decision not to preempt

state regulations governing verification

procedures for preferred carrier change

requests that are consistent with the

provisions of Section 258. Furthermore,

the Commission declines to adopt a 30-

day limit on the amount of time an LOA

confirming a carrier change request

should be considered valid and instead

adopts a 60-day limit. Finally, the

Commission clarifies certain of its rules

regarding the payment of preferred

carrier change charges after a slam.

2. Summary of Significant Issues Raised

by Petitions in Response to the FRFA

122. The Commission received no

comments directly in response to the

previous FRFA concerning the issues

addressed in this Order.

3. Description and Estimate of the

Number of Small Entities To Which

This Action Will Apply

123. In the associated FRFA, supra,

we have provided a detailed description

of the pertinent small entities. Those

entities include wireline carriers, local

exchange carriers, interexchange

carriers, competitive access providers,

resellers, and wireless carriers. We

hereby incorporate those detailed

descriptions by reference.

4. Summary of Projected Reporting,

Recordkeeping, and Other Compliance

Requirements

124. Administration of Preferred

Carrier Freezes. The Commission

clarifies that only subscribers may

submit freeze requests to LECs. The

Commission also clarifies that a

subscriber may request a preferred

carrier change and obtain a preferred

carrier freeze in the same transaction. In

addition, the Commission declines to

prohibit LECs from requiring submitting

carriers to use separate methods for

lifting a preferred carrier freeze and

submitting a carrier change request, or

to require LECs to make subscriber

freeze information available to other

carriers.

125. Verification of Preferred Carrier

Changes. The Commission clarifies that

an executing carrier that fails to

promptly execute a properly submitted

and verified change request has violated

Section 258 and the Commission’s

slamming rules. In addition, the

Commission reaffirms its prior decision

to require separate authorization for

each service for which a subscriber

requests a carrier change and/or freeze,

and clarifies that the separate

authorization requirement does not

prohibit carriers from obtaining

authorization to change more than one

service in the same LOA.

126. Rules Governing Letters of

Agency (LOAs). The Commission

declines to adopt 30-day limit on the

amount of time that an LOA confirming

a carrier change request is considered

valid, instead adopting a 60-day limit as

a more reasonable limitation. The 60-

day limit applies to submitting carriers

only. To avoid customer confusion as to

whether a preferred carrier change

12892 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

charge applies for a change in local

service providers, the Commission also

amends its rules to provide that LOAs

must contain language giving a

subscriber the option of consulting with

the carrier as to whether a fee applies to

his or her preferred carrier change.

127. Payment of Preferred Carrier

Change Charge After Slam. The

Commission clarifies that the

unauthorized carrier shall pay the

preferred carrier change charge assessed

when the LEC executes the slamming

carrier’s preferred carrier change order

and the change charge assessed when

the LEC returns the subscriber to his or

her authorized carrier. The Commission

also clarifies that slamming carriers are

responsible for payment of all preferred

carrier change charges associated with a

slam, including both the charge assessed

when the LEC executes the slamming

carrier’s preferred carrier change order

and the charge assessed when the LEC

returns the subscriber to his or her

authorized carrier.

128. Preemption of State Regulations.

The Commission reaffirms its decision

in the Section 258 Order not to preempt

state regulations regarding slamming.

5. Steps Taken To Minimize the

Significant Economic Impact of This

Action on Small Entities, and

Significant Alternatives Considered

129. The clarifications and minor

modifications to the Commission’s

slamming rules made in this Second

Order on Reconsideration will benefit

all carriers, including small carriers, by

providing certainty and guidance in the

preferred carrier change process. For

instance, the Commission declines to

adopt a 30-day time limit on the amount

of time that an LOA confirming a carrier

change request is considered valid

because it does not provide enough

flexibility to submitting carriers.

Instead, the Commission adopts a 60-

day time limit as a reasonable time

frame which will provide flexibility but

will also avoid consumer confusion that

may be produced by a indefinite period

of validity. We expect that the 60-day

time limit will have no significant

economic impact.

6. Report to Congress

130. The Commission will send a

copy of the Second Order on

Reconsideration, including this SFRFA,

in a report to Congress pursuant to the

Small Business Regulatory Enforcement

Fairness Act of 1996. In addition, the

Commission will send a copy of the

Second Order on Reconsideration,

including the SFRFA, to the Chief

Counsel for Advocacy of the Small

Business Administration. A copy of the

Second Order on Reconsideration and

SFRFA (or summaries thereof) also will

be published in the Federal Register.

C. Paperwork Reduction Act

131. The action contained herein has

been analyzed with respect to the

Paperwork Reduction Act of 1995 and

found to impose new or modified

reporting and recordkeeping

requirements or burdens on the public.

Implementation of these new or

modified reporting and recordkeeping

requirements will be subject to approval

by the Office of Management and

Budget (OMB) as prescribed by the Act

and will go into effect upon

announcement in the Federal Register

of OMB approval.

VI. Ordering Clauses

132. Pursuant to Sections 1, 4, 201–

205, and 258 of the Communications

Act of 1934, as amended, the policies,

rules, and requirements set forth herein

are adopted. It is further ordered that 47

CFR Part 64 is amended as set forth.

133. Pursuant to Sections 1, 4(i), 4(j)

of the Communications Act of 1934, as

amended, that the petitions for

reconsideration or clarification filed by

AT&T Corp., Excel

Telecommunications, Inc., MediaOne

Group, National Telephone Cooperative

Association, RCN Telecom Services,

Inc., Rural LECs, and SBC

Communications, Inc. are granted in

part and denied in part to the extent

discussed.

134. The requirements contained

herein not pertaining to new or

modified reporting or recordkeeping

requirements shall become effective

April 2, 2001 except for §§ 64.1130(a)

through (c), 64.1130(i), 64.1130(j),

64.1180, 64.1190(d)(2), 64.1190(d)(3),

64.1190(e), and 64.1195, which contain

information collection requirements that

have not yet been approved by the

Office of Management Budget (OMB).

The Commission will publish a

document in the Federal Register

announcing the effective date of those

sections.

135. The Commission’s Consumer

Information Bureau, Reference

Information Center, shall send a copy of

this Order, including the Final

Regulatory Flexibility Analysis and the

Supplemental Final Regulatory

Flexibility Analysis, to the Chief

Counsel for Advocacy of the Small

Business Administration.

List of Subjects in 47 CFR Part 64

Communications common carriers,

Reporting and recordkeeping

requirements, Telephone.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

Rule Changes

For the reasons discussed in the

preamble, the Federal Communications

Commission amends 47 CFR part 64 as

follows:

PART 64—MISCELLANEOUS RULES

RELATING TO COMMON CARRIERS

1. The authority citation for part 64

continues to read as follows:

Authority: 47 U.S.C. 154, 47 U.S.C. 225, 47

U.S.C. 251(e)(1). 151, 154, 201, 202, 205,

218–220, 254, 302, 303, and 337 unless

otherwise noted. Interpret or apply sections

201, 218, 225, 226, 227, 229, 332, 48 Stat.

1070, as amended. 47 U.S.C. 201–204, 208,

225, 226, 227, 229, 332, 501 and 503 unless

otherwise noted.

2. Section 64.1100 is amended by

adding paragraph (h) to read as follows:

§ 64.1100 Definitions.

* * * * *

(h) The term subscriber is any one of

the following:

(1) The party identified in the account

records of a common carrier as

responsible for payment of the

telephone bill;

(2) Any adult person authorized by

such party to change

telecommunications services or to

charge services to the account; or

(3) Any person contractually or

otherwise lawfully authorized to

represent such party.

3. Section 64.1120 is amended by

revising paragraphs (c)(1), (c)(3), and by

adding paragraph (d).

§ 64.1120 Verification of orders for

telecommunications service.

* * * * *

(c) * * *

(1) The telecommunications carrier

has obtained the subscriber’s written or

electronically signed authorization in a

form that meets the requirements of

§ 64.1130; or

* * * * *

(3) An appropriately qualified

independent third party has obtained, in

accordance with the procedures set

forth in paragraphs (c)3)(i) through

(c)(3)(iv) of this section, the subscriber’s

oral authorization to submit the

preferred carrier change order that

confirms and includes appropriate

verification data (e.g., the subscriber’s

date of birth or social security number).

The independent third party must not

be owned, managed, controlled, or

directed by the carrier or the carrier’s

marketing agent; must not have any

Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations 12893

financial incentive to confirm preferred

carrier change orders for the carrier or

the carrier’s marketing agent; and must

operate in a location physically separate

from the carrier or the carrier’s

marketing agent.

(i) Methods of third party verification.

Automated third party verification

systems and three-way conference calls

may be used for verification purposes so

long as the requirements of paragraphs

(c)(3)(ii) through (c)(3)(iv) of this section

are satisfied.

(ii) Carrier initiation of third party

verification. A carrier or a carrier’s sales

representative initiating a three-way

conference call or a call through an

automated verification system must

drop off the call once the three-way

connection has been established.

(iii) Requirements for content and

format of third party verification. All

third party verification methods shall

elicit, at a minimum, the identity of the

subscriber; confirmation that the person

on the call is authorized to make the

carrier change; confirmation that the

person on the call wants to make the

carrier change; the names of the carriers

affected by the change; the telephone

numbers to be switched; and the types

of service involved. Third party verifiers

may not market the carrier’s services by

providing additional information,

including information regarding

preferred carrier freeze procedures.

(iv) Other requirements for third party

verification. All third party verifications

shall be conducted in the same language

that was used in the underlying sales

transaction and shall be recorded in

their entirety. In accordance with the

procedures set forth in 64.1120(a)(1)(ii),

submitting carriers shall maintain and

preserve audio records of verification of

subscriber authorization for a minimum

period of two years after obtaining such

verification. Automated systems must

provide consumers with an option to

speak with a live person at any time

during the call.

* * * * *

(d) Telecommunications carriers must

provide subscribers the option of using

one of the authorization and verification

procedures specified in § 64.1120(c) in

addition to an electronically signed

authorization and verification procedure

under 64.1120(c)(1).

3. Section 64.1130 is amended by

revising paragraphs (a), (b), (c), and

(e)(4), and by adding paragraphs (i) and

(j) to read as follows:

§ 64.1130 Letter of Agency form and

content.

(a) A telecommunications carrier may

use a written or electronically signed

letter of agency to obtain authorization

and/or verification of a subscriber’s

request to change his or her preferred

carrier selection. A letter of agency that

does not conform with this section is

invalid for purposes of this part.

(b) The letter of agency shall be a

separate document (or an easily

separable document) or located on a

separate screen or webpage containing

only the authorizing language described

in paragraph (e) of this section having

the sole purpose of authorizing a

telecommunications carrier to initiate a

preferred carrier change. The letter of

agency must be signed and dated by the

subscriber to the telephone line(s)

requesting the preferred carrier change.

(c) The letter of agency shall not be

combined on the same document,

screen, or webpage with inducements of

any kind.

* * * * *

(e) * * *

(4) That the subscriber may consult

with the carrier as to whether a fee will

apply to the change in the subscriber’s

preferred carrier.

* * * * *

(i) Letters of agency submitted with an

electronically signed authorization must

include the consumer disclosures

required by Section 101(c) of the

Electronic Signatures in Global and

National Commerce Act.

(j) A telecommunications carrier shall

submit a preferred carrier change order

on behalf of a subscriber within no more

than 60 days of obtaining a written or

electronically signed letter of agency.

4. Add § 64.1180 to subpart K to read

as follows:

§ 64.1180 Reporting requirement.

(a) Applicability. Each provider of

telephone exchange and/or telephone

toll service shall submit to the

Commission via e-mail

(slamming478@fcc.gov), U.S. Mail, or

facsimile a slamming complaint report

form identifying the number of

slamming complaints received during

the reporting period and other

information as specified in paragraph

(b) of this section.

(b) Contents of report. The report shall

contain the following information:

(1) The information specified in

paragraph (a) of this section;

(2) The number of slamming

complaints received during the

reporting period that the carrier has

investigated and found to be valid.

(3) The number of slamming

complaints received during the

reporting period, investigated or not,

that the carrier has directly resolved

with consumers;

(4) If the reporting carrier is a wireline

or fixed wireless local exchange carrier

providing service to end user

subscribers, the name of each entity

against which the slamming complaints

received during the reporting period

were directed;

(5) If the reporting carrier is a wireline

or fixed wireless local exchange carrier

providing service to end user

subscribers, the number of slamming

complaints received during the

reporting period that were lodged

against each entity identified in

paragraph (b)(4) of this section; and

(6) The total number of subscribers

the reporting carrier is serving at the

end of the relevant reporting period.

(c) Semiannual reporting requirement.

Reporting shall commence on August

15, 2001, covering the effective date of

this requirement, as announced in the

Federal Register, through June 30, 2001.

Reports filed on February 15, 2002 shall

cover the period between July 1, 2001

and December 31, 2001. Thereafter,

carriers subject to the reporting

requirement pursuant to paragraph (a) of

this section shall submit semiannual

slamming complaint reports on August

15 (covering January 1 through June 30)

and on February 15 (covering July 1

through December 31).

5. Section 64.1190 is amended by

revising paragraphs (d)(1)(ii), (d)(2)(i),

(d)(3)(i), and (e)(1) to read as follows:

§ 64.1190 Preferred carrier freezes.

* * * * *

(d) * * *

(1) * * *

(ii) A description of the specific

procedures necessary to lift a preferred

carrier freeze; an explanation that these

steps are in addition to the

Commission’s verification rules in

§§ 64.1120 and 64.1130 for changing a

subscriber’s preferred carrier selections;

and an explanation that the subscriber

will be unable to make a change in

carrier selection unless he or she lifts

the freeze.

* * * * *

(2) * * *

(i) The local exchange carrier has

obtained the subscriber’s written or

electronically signed authorization in a

form that meets the requirements of

§ 64.1190(d)(3); or

* * * * *

(3) * * *

(i) The written authorization shall

comply with §§ 64.1130(b), (c), and (h)

of the Commission’s rules concerning

the form and content for letters of

agency.

* * * * *

(e) * * *

(1) A local exchange carrier

administering a preferred carrier freeze

12894 Federal Register / Vol. 66, No. 41 / Thursday, March 1, 2001 / Rules and Regulations

must accept a subscriber’s written or

electronically signed authorization

stating his or her intent to lift a

preferred carrier freeze; and

* * * * *

6. Add § 64.1195 to Subpart K to read

as follows:

§ 64.1195 Registration requirement.

(a) Applicability. A

telecommunications carrier that will

provide interstate telecommunications

service shall file the registration

information described in paragraph (b)

of this section in accordance with the

procedures described in paragraphs (c)

and (g) of this section. Any

telecommunications carrier already

providing interstate telecommunications

service on the effective date of these

rules shall submit the relevant portion

of its FCC Form 499–A in accordance

with paragraphs (b) and (c) of this

section.

(b) Information required for purposes

of part 64. A telecommunications carrier

that is subject to the registration

requirement pursuant to paragraph (a) of

this section shall provide the following

information:

(1) The carrier’s business name(s) and

primary address;

(2) The names and business addresses

of the carrier’s chief executive officer,

chairman, and president, or, in the

event that a company does not have

such executives, three similarly seniorlevel officials of the company;

(3) The carrier’s regulatory contact

and/or designated agent;

(4) All names that the carrier has used

in the past; and

(5) The state(s) in which the carrier

provides telecommunications service.

(c) Submission of registration. A

carrier that is subject to the registration

requirement pursuant to paragraph (a) of

this section shall submit the information

described in paragraph (b) of this

section in accordance with the

Instructions to FCC Form 499–A. FCC

Form 499–A must be submitted under

oath and penalty of perjury.

(d) Rejection of registration. The

Commission may reject or suspend a

carrier’s registration for any of the

reasons identified in paragraphs (e) or

(f) of this section.

(e) Revocation or suspension of

operating authority. After notice and

opportunity to respond, the Commission

may revoke or suspend the

authorization of a carrier to provide

service if the carrier provides materially

false or incomplete information in its

FCC Form 499–A or otherwise fails to

comply with paragraphs (a), (b), and (c)

of this section.

(f) Imposition of fine. After notice and

opportunity to respond, the Commission

may impose a fine on a carrier that is

subject to the registration requirement

pursuant to paragraph (a) of this section

if that carrier fails to submit an FCC

Form 499–A in accordance with

paragraphs (a), (b), and (c) of this

section.

(g) Changes in information. A carrier

must notify the Commission of any

changes to the information provided

pursuant to paragraph (b) of this section

within no more than one week of the

change. Carriers may satisfy this

requirement by filing the relevant

portion of FCC Form 499–A in

accordance with the Instructions to such

form.

(h) Duty to confirm registration of

other carriers. The Commission shall

make available to the public a

comprehensive listing of registrants and

the information that they have provided

pursuant to paragraph (b) of this section.

A telecommunications carrier providing

telecommunications service for resale

shall have an affirmative duty to

ascertain whether a potential carriercustomer (i.e., reseller) that is subject to

the registration requirement pursuant to

paragraph (a) of this section has filed an

FCC Form 499–A with the Commission

prior to offering service to that carriercustomer. After notice and opportunity

to respond, the Commission may

impose a fine on a carrier for failure to

confirm the registration status of a

potential carrier-customer before

providing that carrier-customer with

service.

[FR Doc. 01–4794 Filed 2–28–01; 8:45 am]

BILLING CODE 6712–01–U

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[DA 01–487, MM Docket No. 00–235, RM–

9992]

Digital Television Broadcast Service;

Lead, SD

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission, at the

request of Duhamel Broadcasting

Enterprises, licensee of station

KHSDTV, substitutes DTV 10 for DTV

30 at Lead, South Dakota. See 65 FR

71079, November 29, 2000. DTV

channel 10 can be allotted to Lead in

compliance with the principle

community coverage requirements of

section 73.625(a) at reference

coordinates (44–19–36 N. and 103–50–

12 W.) with a power of 34.8, HAAT of

576 meters and with a DTV service

population of 146 thousand.

DATES: Effective April 12, 2001.

FOR FURTHER INFORMATION CONTACT: Pam

Blumenthal, Mass Media Bureau, (202)

418–1600.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Report

and Order, MM Docket No. 00–235,

adopted February 23, 2001, and released

February 26, 2001. The full text of this

Commission decision is available for

inspection and copying during normal

business hours in the FCC Reference

Center 445 12th Street, S.W.,

Washington, DC. The complete text of

this decision may also be purchased

from the Commission’s copy contractor,

International Transcription Services,

Inc., (202) 857–3800, 1231 20th Street,

NW., Washington, DC 20036.

List of Subjects in 47 CFR Part 73

Television, Digital television

broadcasting.

Part 73 of Title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—[AMENDED]

1. The authority citation for Part 73

continues to read as follows:

Authority: 47 U.S.C. 154, 303, 334, and

336.

73.622 [Amended]

2. Section 73.622(b), the Table of

Digital Television Allotments under

South Dakota, is amended by removing

DTV channel 30 and adding DTV

channel 10 at Lead.

Federal Communications Commission.

Barbara A. Kreisman,

Chief, Video Services Division, Mass Media

Bureau.

[FR Doc. 01–4915 Filed 2–28–01; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[DA 01–488, MM Docket No. 00–236, RM–

10000]

Digital Television Broadcast Service;

La Crosse, WI

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission, at the

request of QueenB Television, LLC,