NEWSReport No. CC 97-36   COMMON CARRIER ACTION                July 15, 1997
                                    
               FCC Proposes Further Action to Prevent Slamming
                           (CC Docket No. 94-129)
                                    
     The Commission has asked for comment on further ways to eliminate
slamming, the practice of changing a consumer's telephone service provider without
his or her knowledge or consent. In a Notice of Proposed Rulemaking to be released
today, the Commission seeks comment on whether the current procedures used to
verify long distance carrier changes should be strengthened; whether unauthorized
carriers should be liable for any premiums, such as frequent flier miles, that
"slammed" consumers would have received from their authorized carriers; and
whether "slammed" consumers should be liable for any unpaid charges assessed by
unauthorized carriers. The Commission receives more complaints about slamming
than any other telephone-related topic, more than 16,000 in 1996 alone. Over the
past two years it has taken enforcement action against 15 companies for slamming
violations, assessing more than $1 million in forfeitures and consent decrees, with
approximately $500,000 in additional penalties pending.

     The Telecommunications Act of 1996 substantially bolstered the
Commission's efforts to eliminate slamming.  The 1996 Act expanded the scope of
the Commission's authority to address all telecommunications carriers, including
local carriers. In addition, the Act added an economic disincentive for carriers to
slam because it requires an unauthorized carrier that violates the Commission's
change verification procedures to pay the charges it collects from a slammed
consumer to the consumer's properly authorized carrier. The Commission said that
its verification procedures, coupled with this economic disincentive and the rules
proposed today, provide a two-pronged approach to deter slamming.

     The Commission's current verification procedures require long distance
carriers to use one of four methods to confirm long distance carrier change orders
generated by telemarketing.  The Commission has proposed to apply these rules with
equal force to any telecommunications carrier. The Commission also seeks comment
on the volume of consumer-initiated calls, or so-called "in-bound" calls, received by
carriers for changes in carrier selection, the per-consumer costs for verifying such
calls, and its tentative conclusion that the verification rules should apply to these
calls as well as to carrier-initiated calls, or so-called "out-bound" calls.  In addition,
the Commission seeks comment on whether the verification rules should apply when
a carrier solicits a consumer regarding a preferred carrier freeze, which blocks
future carrier changes unless the consumer gives his or her written or oral consent to
the blocking carrier.

     Finally, the Commission asked for comment on a number of other issues
related to slamming. For example, comments are requested concerning: (1) whether
a type of "welcome package" mailed to a consumer's home may continue to serve as
a carrier change verification method; (2) whether, in the event of disputes, the
unauthorized and the authorized carrier must pursue private negotiations related to
the transfer of charges and lost premiums prior to petitioning the FCC to make a
determination; (3) how to determine liability between carriers that submit and
carriers that execute an unauthorized carrier change; and (4) when a resale carrier
must notify a consumer that the underlying network provider is changed.

     Informal comments on the Notice of Proposed Rulemaking may be sent to
"slamming@comments.fcc.gov".

     Action by the Commission July 14, 1997, by Further Notice of Proposed
Rulemaking and Memorandum Opinion and Order on Reconsideration (FCC 97-
248).  Chairman Hundt, Commissioners Quello, Ness, and Chong.
                                    
                                     -FCC-

     News media contact:  Rochelle Cohen at (202) 418-0253.
     Common Carrier Bureau contact:  Diane Harmon (202) 418-7294 or 
Cathy Seidel (202) 418-1699.