I
106TH CONGRESS
1ST SESSION
H. R. 2727
To amend the Communications Act of 1934 to improve protections against
telephone service ‘‘slamming’’ and provide protections against telephone
billing ‘‘cramming’’, to provide the Federal Trade Commission jurisdic-
tion over unfair and deceptive trade practices of telecommunications
carriers, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 5, 1999
Mr. BASS introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committee on the Judiciary, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To amend the Communications Act of 1934 to improve pro-
tections against telephone service ‘‘slamming’’ and pro-
vide protections against telephone billing ‘‘cramming’’,
to provide the Federal Trade Commission jurisdiction
over unfair and deceptive trade practices of telecommuni-
cations carriers, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Telephone Services
Consumer Protection Act’’.
SEC. 2. CONSUMER PROTECTIONS AGAINST TELEPHONE
SERVICE SLAMMING.
(a) IN GENERAL.—Section 258 of the Communica-
tions Act of 1934 (47 U.S.C. 258) is amended to read
as follows:
‘‘SEC. 
258. 
PROTECTIONS 
AGAINST 
UNAUTHORIZED
CHANGES IN SUBSCRIBER SELECTIONS OF
TELEPHONE EXCHANGE SERVICE OR TELE-
PHONE TOLL SERVICE.
‘‘(a) PROHIBITION ON UNAUTHORIZED CHANGES.—
No telecommunications carrier or reseller of telecommuni-
cations services shall submit or execute a change of a pro-
vider of telephone exchange service or telephone toll serv-
ice except in accordance with this section and such
verification procedures as the Commission shall prescribe.
‘‘(b) VERIFICATION PROCEDURE REQUIREMENTS.—
‘‘(1) IN GENERAL.—In order to verify a sub-
scriber’s selection of a telephone exchange service or
telephone toll service provider under this section, a
telecommunications carrier or reseller shall, at a
minimum, require the subscriber—
‘‘(A) to affirm that the subscriber is au-
thorized to select the provider of that service
for the telephone number in question;
‘‘(B) to acknowledge the type of service to
be changed as a result of the selection;
‘‘(C) to affirm the subscriber’s intent to
select the provider as the provider of that serv-
ice;
‘‘(D) to acknowledge that the selection of
the provider will result in a change in providers
of that service; and
‘‘(E) to provide such other information as
the Commission considers appropriate for the
protection of the subscriber.
‘‘(2) ADDITIONAL REQUIREMENTS.—The proce-
dures prescribed by the Commission to verify a sub-
scriber’s selection of a provider shall—
‘‘(A) provide for a complete copy of
verification of a change in provider in oral,
written, or electronic form;
‘‘(B) 
require 
the 
retention 
of 
such
verification in such manner and form and for
such time as the Commission considers appro-
priate; and
‘‘(C) provide for a copy of the verification
to be made available to the subscriber con-
cerned on request.
‘‘(3) PROTECTION OF FREEZE OPTION.—
‘‘(A) PROTECTION.—The Commission may
not take action under this section to limit or
prevent a subscriber’s capability to require that
any change in the subscriber’s selection of a
provider of telephone exchange service or tele-
phone toll service not be carried out unless the
subscriber communicates the authorization for
the change to the subscriber’s service provider
in an express and direct manner.
‘‘(B) PRESERVATION OF AUTHORITY RE-
LATING TO UNFAIR MARKETING OF FREEZE OP-
TIONS.—Nothing in this section shall be con-
strued to prohibit the Commission from pre-
venting the marketing or provision in an unfair
or anti-competitive manner of a capability to
preclude a change in a subscriber’s provider of
telephone exchange service or telephone toll
service without the subscriber’s affirmative con-
sent.
‘‘(c) NOTICE TO SUBSCRIBERS OF CHANGES.—
‘‘(1) IN GENERAL.—Whenever there is a change
in a subscriber’s selection of a provider of telephone
exchange service or telephone toll service, the tele-
communications carrier or reseller selected shall no-
tify the subscriber in a specific and unambiguous
writing, not more than 15 days after the change is
processed by the carrier or the reseller—
‘‘(A) of the subscriber’s new carrier or re-
seller;
‘‘(B) that the subscriber may request in-
formation regarding the date on which the
change was agreed to and the name of the indi-
vidual who authorized the change;
‘‘(C) of a toll-free telephone number of the
new carrier or reseller that the subscriber may
call to request the information referred to in
subparagraph (B); and
‘‘(D) of the rights of the subscriber under
subsection (d)(2) (relating to liability for the
change) and the time limitation under such sub-
section.
‘‘(2) RESPONSE TO REQUEST.—A carrier or re-
seller receiving a request under paragraph (1)(B)
shall submit to the subscriber concerned, not later
than 15 days after the date of the request, the infor-
mation covered by the request.
‘‘(d) FORFEITURE AND LIABILITY FOR UNAUTHOR-
IZED CHANGES.—
‘‘(1) FORFEITURE.—Unless the Commission de-
termines there are mitigating circumstances, viola-
tion of subsection (a) is punishable by a forfeiture
of not less than $40,000 for the first offense, and
not less than $100,000 for each subsequent offense.
‘‘(2) SUBSCRIBER LIABILITY.—
‘‘(A) IN
GENERAL.—In accordance with
such procedures as the Commission shall pre-
scribe, a subscriber whose telephone exchange
service or telephone toll service is changed in
violation of the provisions of this section or the
verification procedures under this section and
who provides notice of the change in accordance
with subparagraph (B), shall not be liable to
the telecommunications carrier or reseller pro-
viding such service for any charges for such
service during the period, not exceeding 90 days
after the date of the change, that such carrier
or reseller provides such service pursuant to
such change, or for any charges for such
change or a change to restore the previous such
‘‘(e) DISQUALIFICATION AND REINSTATEMENT.—
‘‘(1) DISQUALIFICATION FROM CERTAIN ACTIVI-
TIES BASED ON CONVICTION.—
‘‘(A) DISQUALIFICATION
OF
PERSONS.—
Subject to subparagraph (C), any person con-
victed under section 2328 of title 18, United
States Code, in addition to any fines or impris-
onment under that section, may not carry out
any activities covered by section 214.
‘‘(B) DISQUALIFICATION OF COMPANIES.—
Subject to subparagraph (C), any company sub-
stantially controlled by a person convicted
under section 2328 of title 18, United States
Code, in addition to any fines or imprisonment
under that section, may not carry out any ac-
tivities covered by section 214.
‘‘(C) REINSTATEMENT.—
‘‘(i) IN GENERAL.—The Commission
may terminate the application of subpara-
graph (A) to a person, or subparagraph
(B) to a company, if the Commission de-
termines that the termination would be in
the public interest.
‘‘(ii) EFFECTIVE
DATE.—The termi-
nation of the applicability of subparagraph
(A) to a person, or subparagraph (B) to a
company, under clause (i) may not take ef-
fect earlier than 5 years after the date on
which the applicable subparagraph applied
to the person or company concerned.
‘‘(2) CERTIFICATION REQUIREMENT.—Any per-
son described in subparagraph (A) of paragraph (1),
or company described in subparagraph (B) of that
paragraph, not reinstated under subparagraph (C)
of that paragraph shall include with any application
to the Commission under section 214 a certification
that the person or company, as the case may be, is
described in such subparagraph (A) or (B).
‘‘(f) STATE LAW NOT PREEMPTED.—
‘‘(1) IN
GENERAL.—Nothing in this section
shall be construed to preempt any State law that im-
poses more restrictive requirements, regulations,
damages, costs, or penalties on changes in a sub-
scriber’s service or selection of a provider of tele-
phone exchange service or telephone toll services
than are imposed under this section.
‘‘(2) 
EFFECT
ON
STATE
COURT
PRO-
CEEDINGS.—Nothing in this section shall be con-
strued to prohibit an authorized State official from
proceeding in State court on the basis of an alleged
violation of any general civil or criminal statute of
such State or any specific civil or criminal statute
of such State not preempted by this section.
‘‘(g) REPORTS ON COMPLAINTS.—
‘‘(1) REQUIREMENT.—Each local exchange car-
rier shall submit to the Commission on a quarterly
basis a report on the number of complaints of unau-
thorized changes in providers of telephone exchange
service or telephone toll service that are submitted to
such carrier by its subscribers. Each report shall
specify each provider of service complained of and
the number of complaints relating to such provider.
‘‘(2) LIMITATION ON SCOPE.—The Commission
may not require any information in a report under
paragraph (1) other than the information specified
in the second sentence of that paragraph.
‘‘(3) UTILIZATION.—The Commission shall use
the information submitted in reports under para-
graph (1) to identify telecommunications carriers or
resellers that engage in patterns and practices of un-
authorized changes in providers of telephone ex-
change service or telephone toll service.
‘‘(4) TERMINATION AUTHORITY.—The Commis-
sion may terminate the requirement in paragraph
(1) upon a determination by the Commission that
the number of complaints submitted to local ex-
change carriers regarding the changes described in
that paragraph has decreased by a significant
amount.’’.
(b) CRIMINAL PENALTY.—
(1) IN GENERAL.—Chapter 113A of title 18,
United States Code, is amended by adding at the
end the following:
‘‘§ 2328. Unauthorized changes in telephone exchange
or telephone toll service
‘‘Any person who submits or executes a change in a
provider of telephone exchange service or telephone toll
service not authorized by the subscriber concerned in will-
ful violation of the provisions of section 258 of the Com-
munications Act of 1934 (47 U.S.C. 258), or the proce-
dures prescribed under subsection (a) of that section—
‘‘(1) shall be fined in accordance with this title,
imprisoned not more than 1 year, or both; but
‘‘(2) if previously convicted under this section
at the time of a subsequent offense, shall be fined
in accordance with this title, imprisoned not more
than 5 years, or both, for such subsequent offense.’’.
(2) CLERICAL AMENDMENT.—The chapter anal-
ysis for chapter 113A of title 18, United States
Code, is amended by adding at the end the fol-
lowing:
‘‘2328. Unauthorized changes in telephone exchange or telephone toll service.’’.
SEC. 3. CONSUMER PROTECTIONS AGAINST TELEPHONE
BILLING CRAMMING.
Part II of title II of the Communications Act of 1934
(47 U.S.C. 251 et seq.) is amended by inserting after sec-
tion 258 the following new section:
‘‘SEC. 258A. SUBSCRIBER PROTECTIONS RELATING TO
TELEPHONE BILLING.
‘‘(a) PROHIBITION ON KNOWING SUBMISSION OF UN-
AUTHORIZED CHARGES.—
‘‘(1) IN GENERAL.—No person, including a bill-
ing agent or telephone exchange service or telephone
toll service provider, may cause a charge to be in-
cluded on a subscriber’s bill for telephone exchange
service or telephone toll service unless such charge
has been specifically and knowingly authorized by
the subscriber or is otherwise authorized or required
by law.
‘‘(2) SCOPE OF PROHIBITION.—The prohibition
in paragraph (1) shall apply to any submission of a
charge for purposes of the inclusion of the charge on
the bill of a subscriber, including the submission of
the charge to another entity by direct or indirect
means.
‘‘(3) REGULATIONS.—The Commission may
prescribe regulations for purposes of carrying out
this subsection.
‘‘(b) OBLIGATIONS OF BILLING AGENTS.—A billing
agent, including a telecommunications carrier or reseller
of telecommunications services, who issues a bill for tele-
phone exchange service or telephone toll service to a sub-
scriber shall—
‘‘(1) state on the bill—
‘‘(A) the name and toll-free telephone
number of any telecommunications carrier or
reseller for the subscriber’s telephone exchange
service and telephone toll service;
‘‘(B) the identity of each presubscribed
carrier or reseller of telecommunications serv-
ices; and
‘‘(C) the charges associated with each car-
rier’s or reseller’s provision of telecommuni-
cations service during the billing period;
‘‘(2) for services other than services described
in paragraph (1), state on a separate page—
‘‘(A) the name of any company whose
charges are reflected on the subscriber’s bill;
‘‘(B) the services for which the subscriber
is being charged by that company;
‘‘(C) the charges associated with that com-
pany’s provision of service during the billing pe-
riod;
‘‘(D) the toll-free telephone number that
the subscriber may call to dispute that com-
pany’s charges; and
‘‘(E) that disputes about that company’s
charges will not result in disruption of tele-
phone exchange service or telephone toll service;
and
‘‘(3) show the mailing address of any tele-
communications carrier or reseller or other company
whose charges are reflected on the bill.
‘‘(c) ADDITIONAL REQUIREMENTS RELATING
TO
BILLING.—
‘‘(1) PROHIBITION ON DISRUPTION OF TELE-
PHONE SERVICE BASED ON DISPUTE OF CERTAIN
CHARGES.—A provider of telephone exchange service
or telephone toll service may not cease or otherwise
disrupt the provision of such service to a subscriber
in the event of the subscriber’s dispute of a charge
for any service other than telephone exchange service
or telephone toll service that is included on the sub-
scriber’s bill for such service.
‘‘(2) TOLL-FREE
NUMBER
FOR
DISPUTE
OF
CERTAIN CHARGES.—Any provider of services cov-
ered by subsection (b)(2) shall ensure the availability
of a toll-free telephone number that a subscriber
issued a bill including a charge for such services
may call in order to resolve disputes relating to the
charge. Such number may be the number of the pro-
vider or the agent that issued the bill.
‘‘(d) SUBSCRIBER LIABILITY.—
‘‘(1) IN
GENERAL.—In accordance with such
procedures as the Commission shall prescribe, a sub-
scriber of telephone exchange service or telephone
toll service whose bill for such service includes a
charge for a service covered by subsection (b) in vio-
lation of the provisions of section or the procedures
prescribed under this section and who provides no-
tice of the charge in accordance with paragraph (2)
of this subsection, shall not be liable to the entity
providing such service for any charges for providing
such service during the period, not exceeding 180
days after the date of the initiation of the service for
which the charge is made, that such entity provides
such service. In the case of a subscriber who submits
payment for service for which the subscriber is not
liable, pursuant to this paragraph, the procedures
prescribed by the Commission shall require the enti-
ty providing the service to refund such payment to
the subscriber.
‘‘(2) NOTICE BY SUBSCRIBER OF UNAUTHOR-
IZED CHANGE.—Notice in accordance with this para-
graph is notice that the subscriber’s bill for tele-
phone exchange service or telephone toll service con-
tained a charge for a service covered by subsection
(b) in violation of the provisions of this section or
the procedures under this section, which is made
orally or in writing by the subscriber, not later than
12 months after the date of the initiation of such
service, to the provider of the service or the agent
that issued the subscriber’s bill.
‘‘(e) FORFEITURE FOR VIOLATIONS.—
‘‘(1) FORFEITURE.—Unless the Commission de-
termines there are mitigating circumstances, viola-
tion of subsection (a) is punishable by a forfeiture
of not less than $40,000 for the first offense, and
not less than $100,000 for each subsequent offense.
‘‘(2) RECOVERY.—The Commission may take
such action as may be necessary to collect any for-
feitures imposed under paragraph (1).
‘‘(f) STATE LAW NOT PREEMPTED.—
‘‘(1) IN
GENERAL.—Nothing in this section
shall be construed to preempt any State law that im-
poses more restrictive requirements, regulations,
damages, costs, or penalties on the inclusion on sub-
scriber bills of charges for telephone exchange serv-
ice or telephone toll service than are imposed under
this section.
‘‘(2) 
EFFECT
ON
STATE
COURT
PRO-
CEEDINGS.—Nothing in this section shall be con-
strued to prohibit an authorized State official from
proceeding in State court on the basis of an alleged
violation of any general civil or criminal statute of
such State or any specific civil or criminal statute of
such State not preempted by this section.
‘‘(g) REPORTS ON COMPLAINTS.—
‘‘(1) REQUIREMENT.—Each local exchange car-
rier shall submit to the Commission on a quarterly
basis a report on the number of complaints of the
inclusion of unauthorized charges on the bills of its
subscribers that are submitted to such carrier by its
subscribers. Each report shall specify the basis of
each charge complained of and the number of com-
plaints arising from such basis.
‘‘(2) LIMITATION ON SCOPE.—The Commission
may not require any information in a report under
paragraph (1) other than the information specified
in the second sentence of that paragraph.
‘‘(3) UTILIZATION.—The Commission shall use
the information submitted in reports under para-
graph (1) to identify telephone exchange service and
telephone toll service providers that engage in pat-
terns and practices of including unauthorized
charges in their bills for such service.
‘‘(4) TERMINATION AUTHORITY.—The Commis-
sion may terminate the requirement in paragraph
(1) upon a determination by the Commission that
the number of complaints submitted to local ex-
change carriers regarding the inclusion of charges
described in that paragraph has decreased by a sig-
nificant amount.’’.
SEC. 4. FEDERAL COMMUNICATIONS COMMISSION JURIS-
DICTION OVER TELEPHONE SERVICE BILL-
ING PROVIDERS AND CERTAIN OTHER SERV-
ICE PROVIDERS.
Part II of title II of the Communications Act of 1934
(47 U.S.C. 251 et seq.), as amended by section 3(a) of
this Act, is further amended by inserting after section
258A the following new section:
‘‘SEC. 258B. JURISDICTION OVER TELEPHONE SERVICE
BILLING PROVIDERS AND CERTAIN OTHER
SERVICE PROVIDERS.
‘‘(a) IN GENERAL.—Subject to subsections (b) and
(c), the Commission may assess and recover any penalty,
fine, or forfeiture provided for under this Act and may
impose any other sanction provided for under this Act (in-
cluding an order to cease and desist under section 312(b))
against any entity that is not a telecommunications carrier
for a violation of or failure to comply with any provision
of this Act, or any rule, regulation, or order under this
Act, to the extent that such entity—
‘‘(1) provides billing services for the provision
of telephone exchange service or telephone toll serv-
ice;
‘‘(2) provides billing services for services for
which charges appear on a subscriber’s bill for tele-
phone exchange service or telephone toll service; or
‘‘(3) provides services for which charges appear
on a subscriber’s bill for telephone exchange service
or telephone toll service.
‘‘(b) LIMITATION.—The Commission may not exer-
cise the authority in subsection (a) with regard to an enti-
ty unless the Commission determines that the entity has
willfully or knowingly violated or failed to comply with a
provision of this Act or a rule, regulation, or order under
this Act.
‘‘(c) ENFORCEMENT ACTIONS.—
‘‘(1) IN GENERAL.—The Commission may un-
dertake any action provided for under this Act for
purposes of the enforcement of a penalty, fine, for-
feiture, or other sanction under subsection (a).
‘‘(2) CERTAIN FORFEITURE ACTIONS.—In de-
termining and imposing a forfeiture penalty under
section 503(b) utilizing the authority in subsection
(a), the Commission shall not be subject to the re-
quirements set forth in paragraph (5) of such sec-
tion.’’.
SEC. 5. FEDERAL TRADE COMMISSION JURISDICTION OVER
UNFAIR OR DECEPTIVE PRACTICES OF TELE-
COMMUNICATIONS CARRIERS.
Section 5(a) of the Federal Trade Commission Act
(15 U.S.C. 45(a)) is amended by adding at the end the
following:
‘‘(4) Notwithstanding the exception in paragraph (2),
the Commission is empowered to prevent telecommuni-
cations carriers (as that term is defined in section 3(44)
of the Communications Act of 1934 (47 U.S.C. 153(44)))
from using unfair or deceptive acts or practices in or af-
fecting commerce. The power of the Commission under
this paragraph is in addition to any power or authority
of the Federal Communications Commission over tele-
communications carriers under the Communications Act
of 1934.’’.
SEC. 6. PROVISION TO FEDERAL TRADE COMMISSION OF
FEDERAL 
COMMUNICATIONS 
COMMISSION
INFORMATION 
ON 
TELEPHONE 
SERVICES
FRAUD.
(a) REQUIREMENT.—Part II of title II of the Com-
munications Act of 1934 (47 U.S.C. 251 et seq.) is
amended by adding at the end the following:
‘‘SEC. 262. PROVISION TO FEDERAL TRADE COMMISSION OF
FEDERAL 
COMMUNICATIONS 
COMMISSION
INFORMATION 
ON 
TELEPHONE 
SERVICES
FRAUD.
‘‘Not later than 180 days after the date of the enact-
ment of the Telephone Services Consumer Protection Act,
and every month thereafter, the Commission shall provide
to the Federal Trade Commission any information col-
lected by the Commission as a result of complaints to the
Commission regarding telephone services fraud, including
the following:
‘‘(1) The submission or execution of an unau-
thorized change of provider of telephone exchange
service or telephone toll service.
‘‘(2) The inclusion on a subscriber’s bill for
telephone exchange service or telephone toll service
of a charge that has not been specifically and know-
ingly authorized by the subscriber concerned or oth-
erwise authorized or required by law.’’.
(b) TREATMENT
OF INFORMATION.—The Federal
Trade Commission shall incorporate in an appropriate
manner into the Consumer Sentinel online database main-
tained by that Commission any information provided to
that Commission under section 262 of the Communica-
tions Act of 1934, as added by subsection (a).
SEC. 7. STUDY OF CONSUMER BILLING CONTROLS RELAT-
ING TO TELEPHONE BILLS.
(a) REQUIREMENT.—The Federal Communications
Commission shall carry out a study of the feasibility and
advisability of requiring telephone service billing agents,
including telecommunications carriers who issue bills for
telephone exchange service or telephone toll service, to es-
tablish and provide consumer billing controls in order to
permit subscribers to prevent the inclusion of unauthor-
ized charges on bills for telephone service.
(b) CONSULTATION.—In carrying out the study, the
Commission shall consult with the Federal Trade Commis-
sion, representatives of telecommunications carriers pro-
viding telephone exchange service or telephone toll service,
State commissioners, and consumers of telephone service.
(c) REPORT.—The Federal Communications Com-
mission shall submit to Congress a report on the results
of the study not later than 6 months after the date of
the enactment of this Act.
Æ