******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** STATE OF NEW YORK PUBLIC SERVICE COMMISSION At a session of the Public Service Commission held in the City of New York on June 3, 1998 COMMISSIONERS PRESENT: Maureen O. Helmer, Chairman Thomas J. Dunleavy James D. Bennett CASE 28425 - Proceeding on Motion of the Commission as to the Impact of the Modification of the Final Judgment and the Federal Communications Commission's Docket 78-72 on the Provision of Toll Service in New York State, filed in C 28425. CASE 92-C-0665 - Proceeding on Motion of the Commission to Investigate Performance-Based Incentive Regulatory Plans for New York Telephone Company. CASE 95-C-0154 - Joint Complaint of AT&T Communications of New York, Inc, and MCI Telecommunications Corporation Against New York Telephone Company Concerning Establishment of a Schedule to Implement IntraLATA Presubscription in all New York Telephone Company End Offices by not Later than December 31, 1995, filed in C 28425. CASE 95-C-0650 - Joint Complaint of MCI Telecommunications Corporation, AT&T Communications of New York, Inc., Sprint Communications Company L.P. and the Empire Association of Long Distance Telephone Companies, Pursuant to Section 97 of the Public Service Law, Against New York Telephone Company Presubscription in NYNEX Service Territories in New York State. CASE 96-C-1041 - Ordinary Tariff Filing of New York Telephone Company to Revise its IntraLATA Presubscription (ILP) Tariff. ORDER ADOPTING NEW YORK TELEPHONE COMPANY'S INTRALATA FREEZE PLAN WITH MODIFICATIONS (Issued and Effective December 23, 1998) BY THE COMMISSION: SUMMARY AND BACKGROUND By order dated December 15, 1997/, the Commission denied a petition by Sprint Communications Company, L.P. (Sprint) to rehear the Order Directing Revised ILP Tariffs/, but directed an examination of the process that New York Telephone Company (NYT) utilizes to freeze and unfreeze customers' intraLATA accounts. Sprint had alleged that many intraLATA Primary Interexchange Carrier (PIC)/ change orders were being improperly rejected by NYT. In the December 15 Order, the Commission concluded that the method NYT uses to process PIC changes for customer accounts with LPIC freezes merits modification and invited comments on two alternatives to the three-way conference call confirmation method: independent third-party verification; and/or, a voice mail system provided by the Local Exchange Company (LEC) that would permit a sales agent, while a prospective customer is on the telephone, to record and provide confirmation for the customers request to "unfreeze" the account so that a LPIC change may be processed. This system would be operable 24 hours a day, 7 days a week and NYT would not be permitted to reject a LPIC change request until retrieving the voice mail data. Comments were received from AT&T Communications of New York, Inc. (AT&T), LCI International Telecom, Inc. (LCI), MCI Telecommunications Corporation (MCI), Sprint Communications Company, L.P. (Sprint), and New York Telephone Company (NYT). NYT was directed to demonstrate that intraLATA customer accounts frozen after the implementation of intraLATA presubscription (ILP) were the result of an affirmative request. It was also directed to obtain and keep the information necessary to verify that an end-use customer requested a freeze for each service frozen. Based on our review, we conclude that NYT has kept accurate records of its LPIC customer freeze status and that its records sufficiently demonstrate that freezes have been properly implemented in the past. The Commission also adopts NYT's plan, with modifications, to administer customer freezes through an automated 800 number. This system should streamline the freeze/unfreeze system and minimize competitive concerns of carriers seeking to obtain customers. COMMENTS The commenters, exclusive of NYT, generally stated that NYT abuses its position as the provider of the network by unilaterally freezing customers' LPICs and that such actions are anti-competitive. Carriers stated that numerous options should be available for customers to administer freeze options. AT&T suggested that the three-way conference call should remain available at the discretion of the interexchange carriers. It also advocated the use of a voice mail system and independent third party verification (TPV) as alternatives to the three-way conference call. LCI proposed that a number of LPIC freeze options be available, including three-way conference calling and Realtime PIC Processing, which NYT withdrew on an interstate basis. LCI also suggested that, ultimately, a third-party clearinghouse model should be adopted to execute all PIC freeze changes. Absent such a clearinghouse, LCI recommended that the Commission require NYT to reinstate the three-way conference calls subject to monitoring by LCI sales representatives to prevent anti-competitive activity by NYT representatives. MCI urged that the Commission adopt a rule that all LPIC and PIC change requests handled by third party verification (TPV) should be processed by NYT, regardless of the PIC freeze status of the account. It also advocated a voice mail system as an acceptable alternative. Like LCI, it supported an independent third-party LPIC and PIC administrator. Finally, Sprint supported independent TPV with costs initially shared between the interexchange carriers and the LEC. These costs would eventually be passed on to the end user in a charge similar to the PIC change charges. In the alternative, Sprint suggested that the voice mail system would be satisfactory, if certain conditions were fulfilled. These include an audit and control process. NYT responded that several methods are currently available to administer LPIC freezes - customers may call or write a letter directly to NYT to request a change in their PIC freeze status. NYT suggested an alternative to those proposed by the Commission and the commenters - an automated freeze/unfreeze system accessed directly by the customer through an 800 number. This system would be used both to freeze and unfreeze LPICs and would operate as follows: The customer would access the system by dialing an 800 telephone number. The system would prompt the customer to enter his or her telephone number, along with three additional digits from the account number. The customer would be prompted to indicate the action requested (PIC freeze, unfreeze, LPIC freeze, unfreeze). The system would automatically forward the customer's request to ICRIS (Interactive Customer Record Information System) for processing. If any of the steps is incorrectly performed, or if the customer presses "0" during the call, the customer would be transferred to a service representative queue or would be prompted to call the service center during business hours. The proposed system would build upon the existing automated account information system used by NYT. Therefore, the costs of the system would be minimal. The company estimates that full implementation of this system could be accomplished within a period of nine months to a year. NYT explained that both voice mail and the three-way conference calls are unwieldy and are inferior alternatives to the automated 800 system. It pointed out that the voice mail method is the least efficient alternative, since it would require someone to replay the tapes, transcribe the requests and then enter them into NYT's systems. It would have the drawback of having a low accuracy rate due to unintelligible messages or ambiguous requests. Moreover, it stated, the three-way conference call option is "rife with opportunities for friction between carrier personnel and NYT personnel." (NYT comments at 4). NYT argued that maintaining the system would continue to produce complaints by competitive carriers of improper actions by NYT personnel to "win back" the customer. NYT did not support the proposed independent TPV system because it would be expensive and less efficient than the 800 system it proposed. It completely discounted MCI's proposal that if an LPIC change has been verified by an independent TPV pursuant to FCC rules, that this should override any PIC freeze in place. NYT properly stated that the PIC freeze option is specifically designed to afford customers protection against slamming and that allowing this change would defeat the purpose of the PIC freeze. NYT also found that a second TPV in addition to that required for a LPIC change would be costly and less efficient than the proposed 800 system. DISCUSSION Verification of Freeze Process The current status of a customer's PIC and LPIC freezes is available from the NYNEX Subscription System (NSS) and the Interactive Customer Record Information System (ICRIS). The information is available to both NYT and interexchange carriers./ Previous freeze activities with a customer account are retained by ICRIS for six months. Afterward, this information is transferred to microfiche, and retained for six years. NYT states that this information is accurate and reliable and "demonstrates" that freezes have been properly implemented in the past. NYT supplied staff with a description of its procedures, and representative records from the ICRIS system. This was used to demonstrate the reasonableness of the company's procedures. The records indicate that NYT retains sufficient information to verify whether a particular customer's account was handled correctly. It appears that NYT has kept accurate records of its LPIC customer freeze status and that its records sufficiently demonstrate that freezes have been properly implemented in the past. However, if competitors believe that the matter of unrequested PIC and LPIC freezes is a continuing problem, they can provide staff and NYT with information on specific accounts. NYT can then respond with the appropriate information from either NSS, ICRIS or microfiche. LPIC Freeze Administration Of the recommended alternatives to administer freezes (voice mail, TPV, three-way conference calls, and third-party PIC freeze administration), the automated 800 system appears to be the most customer-friendly and cost effective method. AT&T and MCI agree that the automated system would be acceptable, while Sprint does not, and LCI offers no opinion. Sprint believes that the requirement for customer interaction with the system, the need for a password based on the customer's account number, and the intervention of a NYT representative in case of a problem with the system weigh against its consideration. The freeze administration method that is ultimately implemented must be secure, verifiable, and must not place unreasonable requirements on the customer. The automated 800 number system appears to most reasonably meet all of these criteria. The complaint that a NYT representative may intervene if the automated system does not work properly would be equally true for any freeze system that could be devised. The merit of NYT's proposed system is that it is likely to minimize customer contacts with NYT representatives. We agree that the use of voice mail is problematic due to the potential for unintelligible messages that could be misconstrued by the transcriber. Three-way conference calls were the subject of many complaints by the interexchange carriers that NYT was trying to "win back" their customers. It is difficult to see how maintaining this system will be any less controversial than it has been in the past. Finally, TPV and third-party PIC administration result in additional costs which will be ultimately passed on to customers. Therefore, we will direct NYT to implement the automated 800 system for all PIC freeze administration that pertains to intrastate services subject to certain conditions that will help customers avoid unauthorized PIC changes and accomplish the goal of competitively neutral PIC administration. In addition to the features detailed by NYT with respect to the automated system, the Commission requires: (1) that if the system defaults to a NYT customer representative, the representative shall be prohibited from marketing NYT's service or trying to "win back" the customer; (2) that to avoid customer confusion, the system should be effective for all PIC frozen accounts affecting intrastate service; (3) that the system be substantially in operation within six months; (4) that NYT inform customers of the purpose of the system, including instructions on how to use it in a bill insert when the system is implemented; and (5) NYT must print the freeze status of all LPICs and PICs on a customer's bill at least annually and include instructions on how to use the system during the same billing cycle on an annual basis. Emergency SAPA Adoption This order is adopted on an emergency basis pursuant to State Administrative Procedure Act Section 202(6). The immediate adoption of this rule setting forth an efficient and competitively neutral method of PIC freeze administration is necessary to enable consumers to avoid being slammed and to promote competition. Therefore, timely approval and implementation of NYT's 800 number call-in system is essential to promote and preserve the general welfare of New York. The Commission orders: 1. This action is taken on an emergency basis pursuant to SAPA 202(6). 2. New York Telephone Company is directed to maintain records of all PIC freezes and unfreezes affecting intrastate service for a period of 6 years. 3. New York Telephone Company is hereby prohibited from altering any customer's LPIC selection or freezing or unfreezing a PIC absent an affirmative request. 4. New York Telephone Company is ordered to implement the 800 number call-in system for PIC freeze administration for all PICs that may complete an intrastate call within 6 months. 5. New York Telephone Company customer representatives shall be prohibited from marketing or attempting to "win back" customers if a call to the 800 freeze administration number defaults to the customer service system. 6. New York Telephone Company is ordered to insert a notice detailing the purpose of the system in each customer bill along with instructions on its use in the billing cycle prior to its implementation. 7. New York Telephone Company is ordered to print the freeze status of all LPICs and PICs on a customer's bill at least annually along with instructions on how to use the system during the same billing cycle on an annual basis. 8. These proceedings are continued. By the Commission, (SIGNED) JOHN C. CRARY Secretary