WPC F2bs|zT|af~iYXrG*n07KwC?Jzz-)yu퉙9op7r)m,ܢh qĻ Ƙ{BBQGR2C1wR4b",Z6DiYk%!! vh8HGFeT~h4Kj7Z,Ȑqz梛 a88FE)ԇ6ݺLk\"m$אm#;Oy:kѦ|FN>R&iV/ Ҧ*V;a-h.CIL}oZ64H፮ !)im_P 0U uϓ@{kdU6Ү$ n h+Ń#ؾ.3n^ >3 %@ 0@ 0IA 0B 0B 0C 0D 0E 0,F 0G 0H 0I 0gJ 0-K 0K 0L 09M 0M 0N 0fO 0P 0vP 0vQ 0Q 0R 0R 0tS 0cT 0eU 0)zV 0<W 0NX 0a-Z 0[ 0x] 0b_ 0LaU.fb 0b 0+cU :d 0e 0e 0uf 0Mg 0+hg 0/hqi 03j 0GQkU Bl 0\l 06n 0<o 0Tq 0ir 0r 0s 0,t 0u 0u 0vv 07w 0w 0{x 0TJy 0Az 0.{ 0 } 0(~ 00 0% 0ˀ 0 0| 0 0m 0m 0{p 0 0Ik 0 0J 0 0Iz 0|Ê 0b? 0h 0n 01wU : 0I 0ړ 0{ 0V 0B 01Ù 0 0  0 0 0 0Ÿ 0n 0n 0[[ 0[ 0i 0z 0 0 0M 0ۤ 0i 0 0 0* 0Ч 0} 0@@ 0- 0 0Ǭ 0έ 0® 0 0q 0l, 0l 0Y 0Y] 0g 0 0 05 0 0~ 0 0 0( 0ͷ 0s 0 0@ 0-# 0P 0j 0q 0e 0F 0 0l 0l; 0Y 0Y 0gY 0 0R 0 0 0! 0 0= 0 0p 0 0 0 0 0 0e 0 0 0] 0 0y 0@4 0-t 0 0 0 0 0 0) 0 0l 0 0Y 0Y 0gV 0l 0l) 0l 0Y 0YZ 0g 0 0 04 0 0y 0 0 0 0 0d 0 0= 0 0zU. 0rU." 0 P 0Z 0W 0W 0L 0A 0 0 0 0 0 0 0. 0. 0. 0.8 0.f 0. 0. 0. 0hU. 0hU. 0hJU. 0hU.H 0v 0& 0 0Bn 04 04 04  04L  04  0  0\  0 0U.0 0^ 0x 0}c 0r 0E 0  0= 0F# 0Pi 1 7L 0Z 1 7(  0z5 0 0C 0 V 0Fa 0!-;" 1Mih" 0FC"#^&*,{1]o57e~9:;:>WA4CGTKMM9O2Q+SWY[bEgjlo@qs{y|}_%)NaƓ$8!la0sºӼi@' A|J,*"PB,A)-tL Ay O?k#+%&(*_,IM.V027 :=?ADF-JN8PR TVX0\_a`\cRejkNmprsu|wMy{|~ ep~E`SՒL @,RܤqI|^jȸٺa"hXELbJ".I/g0     /5  D"(u*K-0+2:4H6 9;Z=(K@sB|eDFHJLwN"Q'SUWY\^`'bd'fhjlndp,r t voxz|,Q~}a>l،ED\T@ i:es?FQ-Q?/]T$xrR MWh<jr=u|T'Uu 2 p3C  h"'<$ c&o(C*tD-1l3j6+8:<?AC=EJKMnOQ SU;jXFZ\^pfoh#j2k%,nQqFtu xCzKJ|^ɆىTێj/6ye.1дA{z8Wpb?a e2q-y'ho`/2; 5 HX4 0 j!?C$ &)[|+024j6]B9;j/>g@<CH t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  399  0  See,e.g.,USWESTReplyCommentsat25;_USTA_ԀReplyCommentsat5;_TNRA_ԀCommentsat3.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  400  0  SeeAppendixA,64.1190(e)(2).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  401  0  _TOPC_ԀReplyCommentsat5.SeealsoAT&TPetitionCommentsat7;_Telco_ԀCommentsat89;Ohio  CommissionCommentsat11;_Worldcom_ԀCommentsat10. N t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  402  0  See,e.g.,_GTE_ԀPetitionCommentsat5;CitizensPetitionReplyat5;_Ameritech_ԀPetitionCommentsat21. * t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  403  0  Moreover,wecanrevisittheseconclusionsiffurtherexperienceindicatesthattheserulesbecomeunduly  burdensome.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  404  0  SeeAT&TPetitionReplyat5,n.8. & t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  405  0  See,e.g.,_Ameritech_ԀCommentsat2021(discussingdevelopmentof24hourvoiceresponseunit).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  406  0  IXCLongDistanceCommentsat5. ` t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  407  0  _Ameritech_ԀReplyCommentsat14.Seealso_NYSCPB_ԀReplyCommentsat10;USWESTReply  Commentsat25. 5 t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  408  0  MCIPetitionat9.Seealso_Midcom_ԀPetitionCommentsat3;_BCI_ԀCommentsat3.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  409  0  See,e.g.,_CompTel_ԀPetitionCommentsat4;SprintCommentsat34;MCIReplyCommentsat10  (indicatingthat_LECs_Ԁengagein"winback"effortsevenwhileparticipatinginthreewaycalls).Butsee X BellAtlanticReplyCommentsat11,n.21.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  410  0  _SNET_ԀPetitionReplyCommentsat7. Q t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  411  0  See,e.g.,IllinoisCommerceCommission,MCITelecommunicationsCorp.etal.v.IllinoisBell  TelephoneCo.,Order,CaseNos.960075and960084(rel.Apr.3,1996)("[_d]uring_Ԁtelephonecallsfor X thepurposeofchangingthecustomer's_intraMSA_ԀPICtoanothercarrier,Respondentshouldnotattempt P toretainthecustomer'saccountduringtheprocess");MichiganPublicServiceCommission,Sprint  CommunicationsCompany,L.P.v._Ameritech_ԀMichigan,CaseNo.U-11038(Aug.1,1996)(concluding P that"ifacustomerwith[apreferredcarrierfreeze]callstochangeproviders,_Ameritech_ԀMichiganshall H notusethatcontacttotrytopersuadethecustomernottochangeproviders").  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  412  0  47U.S.C.201(b).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  413  0  SeesupradiscussiononMarketingUseofCarrierChangeInformation.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  414  0  See47U.S.C.201,208.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  415  0  SeeMCIPetitionat89;IXCLongDistanceReplyCommentsat5.Wenotethatatleastoneincumbent  LECmakesthisinformationavailablealready.BellSouthReplyCommentsat7;cf._Ameritech_ԀReply X Commentsat1112. S t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  416  0  Ifwefindthatsubstantialimpedimentstothetimelyidentificationandliftingofpreferredcarrierfreezes  existsinthefuture,wecanrevisitthisissue.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  417  0  FurtherNoticeandOrder,12FCC_Rcd_Ԁat10,689.Seealso_OCC_ԀCommentsat3;_Worldcom_ԀComments  at10. ` t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  418  0  See,e.g.,_Ameritech_ԀCommentsat23;BellAtlanticCommentsat5;MCICommentsat17.SeealsoOhio  CommissionCommentsat12. ] t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  419  0  See,e.g.,MCIPetitionReplyat3;IntermediaCommentsat7;LCICommentsat1;_Telco_ԀCommentsat7;  ExcelReplyCommentsat23. 2 t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  420  0  See,e.g.,_NAAG_ԀCommentsat11;_PaOCA_ԀCommentsat7;SprintCommentsat34. > t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  421  0  See,e.g.,MCICommentsat1314;OhioCommissionCommentsat1112;cf._USTA_ԀReplyCommentsat  7.Cf.BellSouthCommentsat12,n.25(statingthatitdoesnotofferpreferredcarrierfreezesforchoiceof X localserviceproviderswhethertheproviderisBellSouthorareseller_CLEC_). y t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  422  0  See,e.g.,OhioCommissionCommentsat1112;LCICommentsat23;IntermediaCommentsat6;_TRA_  PetitionCommentsat24(citingexamplesfromMCIPetition).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  423  0  See,e.g.,_OCC_ԀReplyCommentsat6("Customerswouldthusnotbeabletoprotectthemselvesagainst  slammingforoneyearunderAT&T'sproposal.");_NYSDPS_ԀCommentsat89;_NCL_ԀCommentsat8.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  424  0  See,e.g.,NewJerseyBoardofPublicUtilities,InvestigationofIntraLATATollCompetitionfor  TelecommunicationsServicesona_Presubscription_ԀBasis,DocketNo.TX94090388(June3,1997); X CaliforniaPublicUtilitiesCommission,AlternativeRegulatoryFrameworksforLocalExchangeCarriers, P  Decision9704083(Apr.23,1997);Tex.Admin.CodeTitle16,23.103(prohibitingfreezesfor  _intraLATA_Ԁtollservicesuntilsubscribersreceivenoticeofequalaccess). M t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  425  0  See,e.g.,_NYSDPS_Ԁat9.;_Ameritech_ԀPetitionCommentsat17;USWESTReplyCommentsat11,n.28.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  426  0  SeesupradiscussiononDefinitionof"Submitting"and"Executing"Carriers. ? t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  427  0  SeeinfradiscussioninFurtherNoticeofProposed_Rulemaking_,Resellersand_CICs_.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  428  0  SeesupradiscussiononSubscriberRefundsorCredits.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  429  0  SeeAppendixB,64.1100(c).Thisproposalwouldnotaffecttheobligationofslammingcarriersto  remittoauthorizedcarriersbillingandcollectionexpensesandcarrierchangecharges.SeeAppendixA, X 64.1170(a)(2),(b).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  430  0  SeeAppendixB,64.1100(d)(1).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  431  0  SeeAppendixA,64.1100(d)(3).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  432  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  433  0  47U.S.C.201(b),4(_i_).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  434  0  SeesupradiscussiononLimitationonFreezeMechanismsforResoldServices.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  435  0  SeesupradiscussiononDefinitionof"Submitting"and"Executing"Carriers.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  436  0  SeesupradiscussiononLimitationofFreezeMechanismforResoldServices. ! t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  437  0  See,e.g.,_NYSDPS_ԀCommentsat9;_Ameritech_ԀCommentsat17.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  438  0  Mostaccessprovidersare_ILECs_Ԁthatprovideaccesscustomerswithcircuitsthatinterconnecttothe  _ILEC_'spublicswitchedtelephonenetwork.Commissionrulesrequirethat"interstateaccessservices X shouldbemadeavailableonanondiscriminatorybasisand,asfaraspossible,withoutdistinction P betweenenduserandIC(interexchangecarrier)customers."PetitionofFirstDataResources,Inc.,  RegardingtheAvailabilityofFeatureGroupBAccessServicetoEndUsers,MemorandumOpinionand P Order,1986WL2911786(rel.May28,1986)atpara.13.Typicalaccesscustomersinclude H interexchangecarriers,wirelesscarriers,competitiveaccessproviders,andlargecorporateusers. ! t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  439  0  FeatureGroupDaccess,or"equalaccess,"isknownintheindustryas"Oneplus"("1+")dialing.This  typeofaccessallowscallstoberouteddirectlytothecaller'scarrierofchoice.FeatureGroupDaccess X offersfeatures,including_presubscription_,notgenerallyavailablethroughotherformsofaccess.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  440  0  SeeLetterfromKathleen_M.H._Ԁ_Wallman_,Chief,CommonCarrierBureau,FederalCommunications  CommissiontoRonConners,Directorof_NANP_ԀAdministration,datedMarch17,1995.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  441  0  AdministrationoftheNorthAmericanNumberingPlan,CarrierIdentificationCodes(_CICs_),Second  ReportandOrder,CCDocketNo.92237,12FCC_Rcd_Ԁ8024(1997).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  442  0  AdministrationoftheNorthAmericanNumberingPlan,CarrierIdentificationCodes(_CICs_),Orderon  Reconsideration,OrderonApplicationforReview,andSecondFurtherNoticeofProposed_Rulemaking_, X CCDocketNo.92237,12FCC_Rcd_Ԁ17876(1997).Wenotethat1+dialingisnotaffectedbytransition P fromthethreedigit_CIC_,fivedigitCACformattothefourdigit_CIC_,sevendigitCACformat.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  443  0  Aconsumer"dialsaround"a_presubscribed_Ԁcarrierbydialinganaccesscodeprefix(e.g.,10333or1800  8778000toreachSprint,or1800CALLATTtoreachAT&T)inordertoreachanIXCtowhichheor X sheisnot_presubscribed_. O t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  444  0  CarrierIdentificationCode(_CIC_)AssignmentGuidelines4,INC950127006,IndustryNumbering  Committee(November,1997). X t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  445  0  See,e.g.,TheBellAtlanticTelephoneCompanies,TariffFCCNo.1(June30,1998)andBellSouth  Telecommunications,Inc.,TariffFCCNo.1(May27,1998).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  446  0  47U.S.C.201(b),4(_i_).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  447  0  ReportandRecommendationofthe_CIC_ԀAdHocWorkingGrouptotheNorthAmericanNumbering  Council(_NANC_)RegardingtheuseandAssignmentofCarrierIdentificationCodes(_CICs_),February18, X 1996at7.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  448  0  47U.S.C.251(e)(2).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  449  0  SeePoliciesandRulesConcerningUnauthorizedChangesofConsumers'LongDistanceCarriers,Notice  ofProposed_Rulemaking_,9FCC_Rcd_Ԁ6885(1994),BellSouth'sReplyCommentsat24.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  450  0  See,e.g.,_NAAG_ԀCommentsat17;QuickResponseCommentsat2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  451  0  _NAAG_ԀCommentsat17.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  452  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  453  0  Seealso,e.g.,ACTAReplyCommentsat29;MCIReplyCommentsat4,n.5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  454  0  _VoiceLog_ԀCommentsat3.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  455  0  Id. 1 t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  456  0  See,e.g.,_TPV_ԀServicesReplyCommentsat7;_VoiceLog_ԀCommentsat5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  457  0  SeeQuickResponseCommentsat46.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  458  0  _NAAG_ԀCommentsat17.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  459  0  QuickResponseCommentsat5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  460  0  See,e.g.,ACTAReplyCommentsat28;_TPV_ԀReplyCommentsat6.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  461  0  SeeAppendixA,64.1150. * t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  462  0  See,e.g.,47_C.F.R._Ԁ64.1150(b)(requiringthatanLOAbesignedanddatedbythesubscriber).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  463  0  See47_C.F.R._Ԁ64.1150(e)(4).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  464  0  _SBC_ԀCommentsat6.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  465  0  See1995ReportandOrder,10FCC_Rcd_Ԁat9564,n.16.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  466  0  SeeAppendixB,64.1100(f).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  467  0  SeeS.1618,105thCong.,2ndSess.(1998).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  468  0  Forexample,wehaveexperienceddifficultyintrackingdowncertain_switchless_Ԁresellers.Becausethey  reselltheserviceoffacilitiesbasedcarriersanddonotrequirelargeamountsofcapital,_switchless_ X resellersareextremelyportablebusinesses.Thisportabilityenablesunscrupulousentitiestoentera P marketasresellerstocommitfraudanddisappearatthefirstsignoftrouble,onlytoreappearinanother  stateunderadifferentbusinessname.Inconductingourinvestigationsofslammingcarriers,weoften P encounterthisexactproblemwhenattemptingtoserveprocessonentitiesthathavedesertedtheir H businessaddresslocations.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  469  0  SeeAppendixB,64.1195.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  470  0  Forexample,section1.47(h)oftheCommission'srulesrequirescommoncarrierstodesignateanagentin  theDistrictofColumbiaforserviceofprocess.47_C.F.R._Ԁ1.47(h).Amongotherthings,this X designationincludesthecarrier'sname,businessaddressandtelephonenumber.Id.Also,the P Commissionreceivescertaincarrierinformationthatiscompiledfromworksheetscarriersusetocalculate  theircontributionstofundinterstatetelecommunicationsrelayservice(TRS),federaluniversalservice P supportmechanisms,thecostrecoverymechanismfortheNorthAmericanNumberingPlan H administration,andthecostrecoverymechanismforthesharedcostsoflongtermlocalnumber  portability.TheCommissionhasissuedaNoticeofProposed_Rulemaking_Ԁproposingtosimplifythe H  Commission'sfilingrequirementsforthesepurposes.1998BiennialRegulatoryReview󄄀Streamlined  @ ContributorReportingRequirementsAssociatedwithAdministrationofTelecommunicationsRelay    Services,NorthAmericanNumberingPlan,LocalNumberPortability,andUniversalServiceSupport @   Mechanisms,NoticeofProposed_Rulemaking_ԀandNoticeofInquiry,FCC98233,CCDocket98171(rel.  8  Sept.25,1998).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  471  0  ThisproposalwouldhelptoaddressslammingconcernsraisedbytheGeneralAccountingOffice(GAO)  initsReportonTelephoneSlammingandItsHarmfulEffects.GeneralAccountingOffice, X Telecommunications,TelephoneSlammingandItsHarmfulEffects(1998)(GAOReport).Inthisreport, P theGAOstatedthattheCommissiondidnothaveanypracticeinplaceto"helpensurethatapplicants  whobecomelongdistanceproviders,orothercommoncarriers,havesatisfactoryrecordsofintegrityand P  businessethics."GAOReportat5. + t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  472  0  Forexample,theCommissioncouldpublishalist,tobeupdatedfrequently,ofcarriersthathavefiled  registrations.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  473  0  SeesupradiscussiononThirdPartyAdministratorforDisputeResolution.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  474  0  FurtherNoticeandOrder,12FCC_Rcd_Ԁat10644.Somecarriersareconcernedthatasthecompetitive  marketplacechanges,_LECs_ԀmayhaveaconflictofinterestbetweentheirroleasLECandtheirroleasan X affiliateofaninterexchangecompetitor.See,e.g.,LetterfromBruceK.Cox,AT&T,toJohn_Muleta_, P FederalCommunicationsCommission(Sept.27,1996).AT&Tsuggeststhat"toavoidtheinherent  conflictofinterestbetweencompetingcarriers,seriousconsiderationshouldbegiventoestablishing P proceduresunderwhichneutralthirdpartiesadministerPICprotection."Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  475  0  See,e.g.,_CompTel_ԀCommentsat7;_CWI_ԀCommentsat4;IXCLongDistanceReplyCommentsat3;LCI  Commentsat4;MCICommentsat25;SprintCommentsat19.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  476  0  See_WorldCom_ԀCommentsat16(statingthattheCommissionshouldestablishaseparate_rulemaking_Ԁto  addresstheissueofanindependentthirdpartyadministrator).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  477  0  SeesupradiscussiononConcernswithExecutingCarriers.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  478  0  See,e.g.,LCICommentsat45;SprintCommentsat19.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  479  0  See,e.g.,BellAtlanticReplyCommentsat6;MCICommentsat16.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  480  0  _TRA_ԀReplyCommentsat13.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  481  0  Seesupra  discussiononApplicationoftheVerificationRulestoAllTelecommunicationsCarriers.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  482  0  See5U.S.C.603.The_RFA_,see5U.S.C.601et.seq.XcXX4XXXcP!XX4P!,hasbeenamendedbytheContractWith  AmericaAdvancementActof1996,Pub.L.No.104121,110Stat.847(1996)(_CWAAA_).TitleIIofthe X _CWAAA_ԀistheSmallBusinessRegulatoryEnforcementFairnessActof1996(_SBREFA_).<6X9`(Courier q t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  483  E/Ԁ0  E/FurtherNoticeandOrder,12FCC_Rcd_Ԁ10,674(1997).E/) `CG Times) `CG Times  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  484  0  See5U.S.C.604.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  485  0  47U.S.C.258. c t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  486  0  SeesupradiscussiononApplicationoftheVerificationRulestotheLocalMarket;Applicationofthe  VerificationRulestoAllTelecommunicationsCarriers.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  487  0  SeesupradiscussionontheWelcomePackage.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  488  0  SeesupradiscussiononApplicationoftheVerificationRulestoInBoundTelemarketing.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  489  0  SeesupradiscussiononOtherVerificationMechanisms  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  490  0  SeesupradiscussiononLiabilityofSubscriberstoCarriers.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  491  0  SeesupradiscussiononReimbursementProcedures.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  492  0  SeesupradiscussiononSubscriberRefundsorCredits.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  493  0  SeesupradiscussionRestorationofPremiums.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  494  0  SeesupradiscussiononPreferredCarrierFreezes.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  495  0  FurtherNoticeandOrder,12FCC_Rcd_Ԁat10,708.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  496  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  497  0  Id.at10,70809.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  498  0  Id.at10,715.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  499  0  SeeACTACommentsRegarding_IRFA_Ԁ(ACTA_IRFA_ԀComments).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  500  0  ACTA_IRFA_ԀCommentsat1.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  501  0  Id.at3.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  502  0  Id.at9.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  503  0  Id.at3.Wenotethatthisparticularproposalwillbedealtwithinasubsequentorder.Seesuprapara.3.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  504  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  505  0  Id.at9.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  506  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  507  0  ACTAclaims,forexample,thattheCommissionskeweditsstatisticsintheCommonCarrierScorecard  tomakeitappearasthoughthemajorityofslammingcomplaintsmaybeduetothemarketingpracticesof X smallercompanies.Id.at5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  508  0  Id.at10.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  509  0  ACTACommentsat24.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  510  0  Id.at26.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  511  0  ACTA_IRFA_ԀCommentsat9.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  512  0  47U.S.C.258.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  513  0  See,e.g.,BellSouthReplyCommentsat3.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  514  0  5U.S.C.603(b)(3).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  515  0  Id.at601(6).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  516  0  5U.S.C.601(3)(incorporatingbyreferencethedefinitionof"smallbusinessconcern"in15U.S.C.  632).Pursuanttothe_RFA_,thestatutorydefinitionofasmallbusinessapplies"unlessanagency,after X consultationwiththeOfficeofAdvocacyoftheSmallBusinessAdministrationandafteropportunityfor P publiccomment,establishesoneormoredefinitionsofsuchtermwhichareappropriatetotheactivitiesof  theagencyandpublishessuchdefinition(s)intheFederalRegister."5U.S.C.601(3).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  517  0  SmallBusinessAct,15U.S.C.632(1996).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  518  0  FCC,TelecommunicationsIndustryRevenue:TRSFundWorksheetData,Figure2(NumberofCarriers  PayingIntotheTRSFundbyTypeofCarrier)(Nov.1997)(TelecommunicationsIndustryRevenue).We X believethattheTRSFundWorksheetDataisthemostreliablesourceofinformationforourpurposes P becausecarriersfiletheTRSworksheetsyearlyandareinstructedtoselectthesinglecategoryoftypeof  serviceprovisionthatbestdescribesthem.Othersourcesofcarrierdata,suchasthetariffsonfilewith P theCommonCarrierBureau,maynotreflectthesamefiguresastheTRSFundWorksheetData,because H suchsourcesarenotupdatedannually.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  519  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  520  0  13_CFR_Ԁ121.201,StandardIndustrialClassification(SIC)codes4812and4813.SeealsoExecutive  OfficeofthePresident,OfficeofManagementandBudget,StandardIndustrialClassificationManual X (1987).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  521  0  See13_CFR_Ԁ121.201,SICcode4813.SincethetimeoftheCommission's1996decision,  ImplementationoftheLocalCompetitionProvisionsintheTelecommunicationsActof1996,FirstReport X andOrder,11FCC_Rcd_Ԁ15499,1614445(1996),61FR45476(August29,1996),theCommissionhas P consistentlyaddressedinitsregulatoryflexibilityanalysestheimpactofitsrulesonsuch_ILECs_.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  522  0  U.S.DepartmentofCommerce,BureauoftheCensus,1992CensusofTransportation,Communications,  andUtilities:EstablishmentandFirmSize,atFirmSize1-123(1995)(1992Census).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  523  0  Seegenerally15U.S.C.632(a)(1).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  524  0  1992Census,supra,atFirmSize1-123.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  525  0  13_CFR_Ԁ121.201,SICcode4813.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  526  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  527  0  TelecommunicationsIndustryRevenue,Figure2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  528  0  13_CFR_Ԁ121.201,SICcode4813.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  529  0  TelecommunicationsIndustryRevenue,Figure2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  530  0  13_CFR_Ԁ121.201,SICcode4813.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  531  0  TelecommunicationsIndustryRevenue,Figure2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  532  0  13_CFR_Ԁ121.201,SICcode4813.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  533  0  TelecommunicationsIndustryRevenue,Figure2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  534  0  13_C.F.R._Ԁ121.201,SICcode4812.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  535  0  1992Census,SeriesUC92S1,atTable5,SICcode4812.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  536  0  TelecommunicationsIndustryRevenue,Figure2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  537  0  See47U.S.C.258.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  538  0  See,e.g.,ACTACommentsat25;_TRA_ԀCommentsat11.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  539  0  _TRA_ԀCommentsat1011.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  540  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  541  0  See47U.S.C.415.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  542  0  See,e.g.,_TRA_ԀCommentsat2;USWESTReplyCommentsat5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  543  0  See_Ameritech_ԀCommentsat12;_SBC_ԀCommentsat45;USWESTCommentsat20.Forexample,  under_SBC_'s"3strikesandyou'reout"approach,Strike1wouldoccurifacarrier'sdisputedchangeorders X exceeded2%ofitsserviceordersinonemonth.Thecarrierwouldbeplacedonprobation.Strike2 P wouldoccurifthedisputelevelcontinuedtoexceed2%ofitsserviceordersinonemonthattheendofthe  probationperiod.Thatcarrierwouldthenbesubjectedtoafineofatleast$5,000perslamming P occurrence.Strike3wouldoccurifthedisputelevelcontinuedtoexceed2%ofitsserviceordersinone H month.Thecarrierwouldthenbesubjectto$10,000fines,aswellaspossiblesuspensionofcarrier  changeprivileges._SBC_ԀCommentsat5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  544  0  See_Ameritech_ԀCommentsat12.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  545  0  See_TRA_ԀReplyCommentsat911.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  546  0  See,e.g.,OklahomaCommissionReplyCommentsat4;_WorldCom_ԀCommentsat7.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  547  0  AT&TReplyCommentsat4.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  548  0  See47_C.F.R._Ԁ64.1150.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  549  0  ACTACommentsat26.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  550  0  Id.at27;_RCN_ԀCommentsat5. } t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  551  0  See,e.g.,BellSouthCommentsat11;_GTE_ԀCommentsat1011;IXCLongDistanceCommentsat3;  _TOPC_ԀReplyCommentsat4.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  552  0  SeePICVerificationOrder,7FCC_Rcd_Ԁat1041.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  553  0  Id.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  554  0  See,e.g.,MCICommentsat21;_TPV_ԀServicesCommentsat7. ! t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  555  0  See,e.g.,_NAAG_ԀCommentsat8;_NYSDPS_ԀCommentsat5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  556  0  _NAAG_ԀCommentsat8.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  557  0  _NYSDPS_ԀCommentsat5.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  558  0  See47U.S.C.415.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  559  0  ACTA_IRFA_ԀCommentsat9.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXl  XcXXcXXXc        0   XXcԁ  560    See,e.g.,ACTACommentsat35;_TRA_ԀCommentsat14.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  561  0  See,e.g.,_CompTel_ԀCommentsat8;TRSPetitionCommentsat2.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  562  0  See5U.S.C.801(a)(1)(A)       t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  563  0  See5U.S.C.604(b). w t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  564  0  See5U.S.C.603.The_RFA_,see5U.S.C.601et.seq.,hasbeenamendedbytheContractWith  AmericaAdvancementActof1996,Pub.L.No.104121,110Stat.847(1996)(_CWAAA_).TitleIIofthe X _CWAAA_ԀistheSmallBusinessRegulatoryEnforcementFairnessActof1996(_SBREFA_).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  565  0  See5U.S.C.603(a).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  566  0  Seeid.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  567  0  See47_C.F.R._Ԁ64.1100(c). l t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  568  0  SeediscussioninFinalRegulatoryFlexibilityAnalysis,DescriptionandEstimatesoftheNumberofSmall  EntitiestoWhichtheRulesAdoptedinCCDocketNo.94129WillApply. W t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  569  0  SeesupradiscussioninFurtherNoticeofProposed_Rulemaking_;DoubleRecoveryofChargesPaidby  SlammedSubscribers.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  570  0  See47_C.F.R._Ԁ1.721(a)(8).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  571  0  SeeAmendmentof47_C.F.R._Ԁ1.1200etseq.ConcerningExPartePresentationsinCommission  Proceedings,ReportandOrder,12FCC_Rcd_Ԁ7348,735657,27(citing47_C.F.R._Ԁ1.1204(b)(1))(1997).  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  572  0  See47_C.F.R._Ԁ1.1206(b)(2),asrevised.  t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  573  0  See47_C.F.R._Ԁ1.429(f). 9 t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  574  0  See47_C.F.R._Ԁ1.429.Werequire,however,thatasummarybeincludedwithallcomments,althougha  summarythatdoesnotexceedthreepageswillnotcounttowardthepagelimits.Thesummarymaybe X paginatedseparatelyfromtherestofthepleading(e.g.,as"_i_,ii").id. " t!@@X (4$  _lXX` hp x (#%'0*,.8135@8:<H?AXlӀ  575  0  SeeElectronicFilingofDocumentsin_Rulemaking_ԀProceedings,63Fed.Reg.24,121(1998). ##Xd#  t!@@X (4$  _Q=X` hp x (#%'0*XQӀ  576   4 47U.S.C.258(b)(emphasisadded).  t!@@X (4$  _Q=X` hp x (#%'0*XQӀ  577   4 47U.S.C.258(b).  t!@@X (4$  _Q=X` hp x (#%'0*XQӀ  578   4 Conversely,Irejectthenotionthatauthorizedcarrierswouldobtainawindfallifthesubscriberpaid  themforserviceactuallyprovidedbytheslammingcarrier.Theauthorizedcarriermadecapacityonitsnetwork X availableforthesubscriber'suseinrelianceontheexpectationthatthesubscriberwouldusethatnetworkandpay P forsuchuse.Thus,paymenttotheauthorizedcarrierwouldmerelyaffordtheauthorizedcarrierwiththebenefit  ofthebargainitstruckwiththesubscriber.Inanyevent,theplainlanguageofsection258clearlycontemplates P  authorizedcarriersobtainingmoneypaidbythesubscriber(totheslammer)eventhoughanothercarrierhas  providedservice. & t!@@X (4$  _Q=X` hp x (#%'0*XQӀ  579   4 Forexample,itismyunderstandingthatauthorizedcarriersmaybeabletosueslammingcarriersfor  lostprofitsbeforetheCommissionpursuanttoTitleIIoftheActorbeforestateauthorities.Otherpossible X remediesbasedonstatelawmightincludeactionsalleging_tortious_Ԁinterferencewithcontracts,interferencewith P businessrelationships,andpunitivedamages(forwillfulslammingviolations),orcontractviolations(e.g.,where  theslammingcarrierisaresellerthatcanbesaidtohaveviolatedacontractwiththeauthorizedcarrier). ##Xd#  j#*$ (4$cXԀ  580    _Q=X` hp x (#%'0*XQXcXXc 4 47_USCA_ԀSection258.kX4XXXc('!2#*$ t!X (43x  cXԀ  0  <6X9`(Courier  j#*$ (4$cXԀ  581    _Q=X` hp x (#%'0*XQXcXXc 4 47_USCA_ԀSection258.mX4XXXc<6X9`(Courier*` !"# CRight ParRight-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)o#a) CyParagraph1. a. i. (1) (a) (i) 1) a)I.A.1.a.(1)(a)i)a)q a)3|X ($X (43x dHP DeskJet 970C SeriesT(,,,,T(0!3#37=CIQYag1.a.i.(1)(a)(i)1)a)xi){(.721(a)(TUv]e, t!X (43x  _! XX!      Beforethe ' FEDERALCOMMUNICATIONSCOMMISSION P Washington,D.C.20554 &v% w    N72%'0*,.8135@8:<H?AXNXcX%&vW72%'0*,.8135@8:<H?A2%XWIntheMatterof  ) W      )   ImplementationoftheSubscriberCarrier  )  h  SelectionChangesProvisionsofthe  ) 0  TelecommunicationsActof1996  ) 2  w      ) 2 CCDocketNo.94129 ?  PoliciesandRulesConcerning  ) 2    UnauthorizedChangesofConsumers'  ) P  LongDistanceCarriers  )     SECONDREPORTANDORDERAND p  FURTHERNOTICEOFPROPOSED_RULEMAKING_  8   Z:2%'0*,.8135@8:<H?A2%XZAdopted:December17,1998Q9  Released:December23,1998 G CommentDate:30daysfrompublicationintheFederalRegister X ReplyCommentsDate:45daysfrompublicationintheFederalRegister   {XX` hp x (#%'0*,.8135@8:<H?A2%X{BytheCommission:CommissionersNessand_Tristani_Ԁissuingstatements;CommissionerPowell g concurringinpart,dissentinginpartandissuingastatementandCommissioner_Furchtgott_ԄRoth / dissentingandissuingastatement x   TableofContents      ParagraphNo. O   I.0  Introduction#""e(#. (#(##1  II.  Background""e(#. 9 `  III.  Discussion`"`"d(#.` ` 13  (!   A. ` Section258(b)Liability`"`"d(#.317 o!" 0  0` (#(#1.0 ` (#` (#LiabilityoftheSlammedSubscriber#`"`"d(#.E (# (##17 7"# 0  0` (#(#2.0 ` (#` (#WhentheSlammedSubscriberPaystheUnauthorizedCarrier#`"`"d(#.[ (# (##34 "$ 0  0` (#(#0 ` (#` (#a.  LiabilityoftheUnauthorizedCarrier#`"`"d(#.hhM (# (##35 #H% 0  0` (#(#0 ` (#` (#b.  SubscriberRefundsorCredits#`"`"d(#.hhE (# (##38 $& 0  0` (#(#3.0 ` (#` (#InvestigationandReimbursementProcedures#`"`"d(#.L (# (##41 W%' 0  0` (#(#0 ` (#` (#a.0 (# (#WhentheSubscriberhasnotPaidtheUnauthorizedCarrier#`"`"d(#.| | a(#(##41 &( 0  0` (#(#0 ` (#` (#b.0 (# (#WhentheSubscriberhasPaidtheUnauthorizedCarrier#`"`"d(#.DD](#(##43 &h) 0  0` (#(#4.0 ` (#` (#RestorationofPremiums#`"`"d(#.tt9 (# (##47 '0 * 0  0` (#(#5. LiabilityforInadvertentUnauthorizedChanges#`"`"d(#.``P` (#` (##50 w( + 0  0` (#(#6.0 ` (#` (#DeterminingLiabilityBetweenCarriers#`"`"d(#.H (# (##53 ?)!, 0  B.0` (#(#ThirdPartyAdministratorforDisputeResolution#`"`"d(#.K` (#` (##55 *"-   C.0 ` VerificationRules#`"`"d(#.-` (#` (##58 *P#. 0  0` (#(#1.0 ` (#` (#TheWelcomePackage#`"`"d(#.5 (# (##58 +$/ 0  0` (#(#2.0 ` (#` (#ApplicationoftheVerificationRulestoInboundCalls#`"`"d(#.Y (# (##62 _,$0 0  0` (#(#3. IndependentThirdPartyVerification#`"`"d(#.,,F` (#` (##69 '-%1 0  0` (#(#4. OtherVerificationMechanisms#`"`"d(#.hh?` (#` (##73 -p&2 0  0` (#(#5. UseoftheTerm"Subscriber"#`"`"d(#.>` (#` (##80 .8'3   D. ` ExtensionoftheCommission'sVerificationRulestotheLocalMarket`"`"d(#.$$_81 /(4 0  0` (#(#1. ApplicationoftheVerificationRulestotheLocalMarket#`"`"d(#.[` (#` (##81 G0(5  8cXXdd8   0  0` (#(#2.0 ` (#` (#ApplicationoftheVerificationRulestoAllTelecommunicationsCarriers#`"`"d(#.d"d"j (# (##84  0  0` (#(#3.0 ` (#` (#TheStates'Role#`"`"d(#.2 (# (##86 G 0  E. ` SubmittingandExecutingCarriers#`"`"d(#.<(#(##91   0  0` (#(#1.0 ` (#` (#Definitionof"Submitting"and"Executing"Carriers#`"`"d(#.U (# (##91  X 0  0` (#(#2.0 ` (#` (#ApplicationofVerificationRulestoSubmittingandExecuting  (# (# 0  0` (#(#0 ` (#` (#Carrier#`"`"d(#. ) (# (##97 g  0  0` (#(#3.0 ` (#` (#ConcernswithExecutingCarriers#!!c(#.88B (# (##102 /      ` 0 a.0 (# (#InterferencewiththeExecutionProcess#!!c(#.ttO(#(##102  x 0  0` (#(#0 ` (#` (#b.  _Timeframe_ԀforExecutionofCarrierChanges#!!c(#.R (# (##104  @ 0  0` (#(#0 ` (#` (#c.  MarketingUseofCarrierChangeInformation#!!c(#.XXS (# (##106   0  F. ` PreferredCarrierFreezes#!!c(#.884(#(##112 O  0  0` (#(#1. Background#!!c(#.,` (#` (##112   0  0` (#(#2.0 ` (#` (#OverviewandJurisdiction#!!c(#.; (# (##113 `  0  0` (#(#3.0 ` (#` (#NondiscriminationandApplicationofRulestoAllCarriers#!!c(#.\ (# (##119 (  0  0` (#(#4.0 ` (#` (#SolicitationandImplementationofPreferredCarrierFreezes#!!c(#.^ (# (##121 o  0  0` (#(#5. ProceduresforLiftingPreferredCarrierFreezes#!!c(#.R` (#` (##127 7  0  0` (#(#6. InformationAboutSubscriberswithPreferredCarrierFreezes#!!c(#.^` (#` (##133   0  0` (#(#7.0 ` (#` (#WhenSubscribersChange_LECs_#!!c(#.> (# (##134 H  0  0` (#(#8. PreferredCarrierFreezesofLocalandIntraLATAServices#!!c(#.44[` (#` (##135  0  0` (#(#9.0 ` (#` (#LimitationonFreezeMechanismsforResoldServices#!!c(#.ttU (# (##138 W IV.  FurtherNoticeofProposed_Rulemaking_!!c(#.9139  0  A.0` (#(#RecoveryofAdditionalAmountsfromUnauthorizedCarriers#!!c(#.U` (#` (##140 h   B. ` Resellersand_CICs_!!c(#.DD-145 0 0  C.0` (#(#IndependentThirdPartyVerification#!!c(#.?` (#` (##165 w 0  D. ` CarrierChangesUsingtheInternet#!!c(#.88=(#(##169 ? 0  E.0` (#(#Definitionof"Subscriber"#!!c(#.ll5` (#` (##176  0  F.0` (#(#SubmissionofReportsbyCarriers#!!c(#.<` (#` (##179 P 0  G. ` RegistrationRequirement#!!c(#.TT3(#(##180  0  H.0` (#(#ThirdPartyAdministratorforExecutionofPreferredCarrierChangesand _ PreferredCarrierFreezes#!!c(#.884` (#` (##183 ' V.0  Conclusion#!!c(#. (#(##185 p VI.  ProceduralMatters!!c(#.  &186 8 0  A. ` FinalRegulatoryFlexibilityAnalysis#!!c(#.@(#(##186    0  B. ` InitialRegulatoryFlexibilityAnalysis#!!c(#.B(#(##222 G!! 0  C.0` (#(#InitialPaperworkReductionActAnalysis#!!c(#.HHC` (#` (##241 "" 0  D.0` (#(#FinalPaperworkReductionActAnalysis#!!c(#.A` (#` (##242 "X# 0  E.0` (#(#ExPartePresentations#!!c(#.hh1` (#` (##243 # $   F. ` PetitionsforReconsideration!!c(#.hh8244 g$% 0  G.0` (#(#CommentFilingProcedures#!!c(#.  4` (#` (##247 /%& VII.  OrderingClauses!!c(#.d d $252 %x' Appendices ' ) AmendedRuleshh\(#. AppendixA O( * ProposedRulespp\(#. AppendixB )!+ _Commenters_pp\(#.AppendixC )`",   I.INTRODUCTION  o+#.     2   1  .3   ` InthisSecondReportandOrderandSecondFurtherNoticeofProposed ,%0 _Rulemaking_Ԁ(Order),weadoptrulesproposedintheFirstFurtherNoticeofProposed -H&1 _Rulemaking_ԀandMemorandumOpinionandOrderonReconsideration(FurtherNoticeand .'2 Order)_    1      _Ԁtoimplementsection258oftheCommunicationsActof1934(Act),asamendedbythe  TelecommunicationsActof1996(1996Act)._!0   2      _ԀSection258makesitunlawfulforany G telecommunicationscarrierto"submitorexecuteachangeinasubscriber'sselectionofaprovider   oftelephoneexchangeserviceortelephonetollserviceexceptinaccordancewithsuch  X verificationproceduresastheCommissionshallprescribe.""   3      ׀Thegoalofsection258andthis   Orderistoeliminatethepracticeof"slamming."Asubscribermayauthorizeachangeofhisor g  herlongdistancecarrier,orothertelecommunicationscarrier,byrequestingthechangedirectly /  fromhisorherlocalexchangecarrier(LEC),orbyauthorizingthenewcarriertorequesta  x changeonhisorherbehalf.Slammingoccurswhenacompanychangesasubscriber'scarrier  @ selectionwithoutthatsubscriber'sknowledgeorexplicitauthorization.Slammingnullifiesthe   abilityofconsumerstoselectthetelecommunicationsprovidersoftheirchoice.Slammingalso O  distortsthetelecommunicationsmarketbecauseitrewardsthosecompanieswhoengagein   deceptiveandfraudulentpracticesbyunfairlyincreasingtheircustomerbaseattheexpenseof `  thosecompaniesthatmarketinafairandinformativemanneranddonotusefraudulentpractices. (    2   2  .3   ` Thenumerouscomplaintswecontinuetoreceiveandtheinputofthestate 7  commissionsandthestateattorneysgeneralprovideampleevidencethatslammingisan   extremelypervasiveproblem._#X    4      _ԀIndeed,slammingissorampantthatitgarneredsignificant H  attentioninCongressin1998duringthepostlegislativesession,althoughultimatelynolegislation  waspassed._$   5      _ԀDespitetheCommission'sexistingslammingrules,ourrecordsindicatethat W slamminghasincreasedatanalarmingrate.In1997,theCommissionprocessedapproximately  20,500slammingcomplaintsandinquiries,whichisanincreaseofapproximately61%over1996 h  andanincreaseofapproximately135%over1995.%x   6      ׀FromJanuarytothebeginningofDecember 0 1998,theCommissionprocessed19,769slammingcomplaints.&   7      ׀Furthermore,thenumberof   slammingcomplaintsfiledwiththeCommissionisamerefractionoftheactualnumberof G slammingincidentsthatoccur.'8   8      ׀     2   3  .3   ` TheCommissionrecentlyhasincreaseditsenforcementactionstoimposesevere   financialpenaltiesonslammingcarriers.SinceApril1994,theCommissionhasimposedfinal g  forfeiturestotaling$5,961,500againstfivecompanies,enteredintoconsentdecreeswitheleven /  companieswithcombinedpaymentsof$2,460,000,andhasproposed$8,120,000inpenalties  x againstsixcarriers.(P   9      ׀Additionally,theCommissionmaysanctionacarrierbyrevokingits  @ operatingauthorityundersection214oftheAct._)h   10      _ԀTheCommissionrecentlyhasresortedtosuch   sanctionsagainstcarriersforrepeatedslammingandotheregregiousviolationsoftheActandour O  rules.*(    11      ׀     2   4  .3   ` ThenewrulesweadoptinthisOrderarenotmerelyintendedtoconformour (  existingruleswiththeprovisionsofsection258,butalsooperatetoestablishanew o  comprehensiveframeworktocombataggressivelyanddeterslamminginthefuture._+    12      _ԀWithour 7  newrules,weseektocloseloopholesusedbycarrierstoslamconsumersandtobolstercertain   aspectsoftherulestoincreasetheirdeterrenteffect.Attheheartofthenewslammingrulesis H  ourdeterminationtotaketheprofitoutofslamming.Ournewrulesabsolvesubscribersof  liabilityforsomeslammingchargesinordertoensurethatcarriersdonotprofitfromslamming W activities,aswellastocompensatesubscribersfortheconfusionandinconveniencethey  experienceasaresultofbeingslammed.Asanadditionaldeterrent,westrengthenour h verificationproceduresandbroadenthescopeofourslammingrules. 0   2   5  .3   ` Ournewrulesstrengthentherightsofconsumersinthreeareas:(1)therelief ? giventoslammingvictims;(2)themethodbywhichacarriermustobtaincustomerverificationof  preferredcarrierchangerequests;and(3)themethodbywhichaconsumercan"freeze"hisorher P existingcarrier,thusprohibitinganothercarrierfromclaimingthatithasbeenauthorizedto  requestacarrierchangeonbehalfoftheconsumer.Morespecifically,withrespectto _  compensation,underournewrulesasubscriberwillbeabsolvedofliabilityforallcallsmade ' within30daysafterbeingslammed._,   13      _ԀIfhowever,thesubscriberfailstonoticethatheorshehas   beenslammedandpaystheunauthorizedcarrierforsuchcalls,section258(b)oftheActrequires G theunauthorizedcarriertoremitsuchpaymentstotheauthorizedcarrier.-0   14      ׀Uponreceiptofthis   amount,theauthorizedcarriershallprovidethesubscriberwitharefundorcreditofanyamounts  X thesubscriberpaidinexcessoftheauthorizedcarrier'srates..   15      ׀Theunauthorizedcarriermust   alsopaytheauthorizedcarrierforanyexpensesincurredbytheauthorizedcarrierinrestoringthe g  subscriber'sserviceorincollectingchargesfromtheunauthorizedcarrier./   16      ׀Theseliabilityrules /  willnottakeeffectfor90days,howevertoenableinterestedcarrierstodevelopandimplementan  x alternativeindependententitytoadministercompliancewiththeserulesontheirbehalf.0   17      ׀If  @ carrierssuccessfullyimplementsuchaplan,wewillentertaincarriers'requestsforwaiverofthe   administrativerequirementsofourliabilityrules.1    18      ׀ O    2   6  .3   ` ThisOrderalsomodifiesthemethodsbywhichacarriercanfulfillitsobligationto `  obtainconsumerverificationofcarrierchangerequests.Inparticular,weeliminatethe"welcome (  package"2   19      ׀asaverificationoptionbecausewefindthatithasbeensubjecttoabusebycarriers o   engagedinslamming.3   20      ׀Alsoinconnectionwithverification,we(1)extendourverificationrules 7  _toapplytocarrierchange4   21      ׀requestsmadeduringconsumerinitiated(inbound)callstocarriers,5   22         ratherthanbeingapplicablesolelytooutboundcallsmadebycarrierstoconsumers;(2)extend G ourverificationrulestoapply,withalimitedexception,toalltelecommunicationscarriersin   connectionwithchangesofalltelecommunicationsservice,includinglocalexchangeservice;6(   23      ׀and  X (3)clarifythatallcarrierchangesmustbeverifiedinaccordancewithoneoftheoptionsprovided   inourrules,regardlessofthemannerofsolicitation.78   24      ׀Finally,wesetforthrulesgoverningthe g  preferredcarrierfreezeprocess,includingverificationrequirementsforimposingafreezeand /  mandatingcertainmethodsforliftingafreeze.8   25        x   2   7  .3   ` ThisOrderalsocontainsaFurtherNoticeofProposedRulemaking,inwhichwe   proposeseveraladditionalchangestofurtherstrengthenourslammingrulesandotherwise O  preventslamming.Inparticular,weseekcommenton:(1)requiringunauthorizedcarriersto   remittoauthorizedcarrierscertainamountsinadditiontotheamountpaidbyslammed `  subscribers;(2)requiringresellerstoobtaintheirowncarrieridentificationcodes(CICs)to (  preventconfusionbetweenresellersandtheirunderlyingfacilitiesbasedcarriers;(3)modifying o  theindependentthirdpartyverificationmethod9h   26      ׀toensurethatitwillbeeffectiveinpreventing 7  slamming;(4)clarifyingtheverificationrequirementsforcarrierchangesmadeusingtheInternet;   (5)definingtheterm"subscriber"todeterminewhichpersonorpersonsshouldbeauthorizedto H  makechangesintheselectionofacarrierforaparticularaccount;(6)requiringcarrierstosubmit  totheCommissionreportsonthenumberofslammingcomplaintsreceivedbysuchcarriersto W alerttheCommissionassoonaspossibleaboutcarriersthatpracticeslamming;(7)imposinga  registrationrequirementtoensurethatonlyqualifiedentitiesenterthetelecommunications G market;(8)implementingathirdpartyadministratorforexecutionofpreferredcarrierchanges   andpreferredcarrierfreezes.  X   2   8  .3   ` Weemphasizethatthewaytoattacktheslammingproblemistocombatiton g  severalfronts:improvingtheverificationrules,imposingforfeituresandcreatingotherfinancial /  disincentivesforunscrupulouscarriers,andincreasingconsumerawareness.Inadditionto  x prescribingrulestoeliminateslamming,theCommissionwillcontinuetometeoutswift,  @ meaningfulpunishmentforcarriersthatslamsubscribers.Furthermore,theCommissionwill   continuetoworkwiththestatestoalertconsumersaboutslammingandother O  telecommunicationstrendsthatmayaffectthem,sothatconsumerscanprotectthemselvesfrom   thesepractices.:   27       `    II.BACKGROUND  o      2   9  .3   ` TheCommissionfirstestablishedsafeguardstodeterslammingwhenit   implementedequalaccessrequirementsin1985.Equalaccess,whichfacilitatedtheentryof H  multiplecompetitorsintothelongdistanceservicemarketfollowingthedivestitureofAmerican  Telephone&TelegraphCompany(AT&T),allowssubscriberstoaccessthefacilitiesofa W designatedIXCbydialing"1"only,ratherthanhavingtodialamultidigitaccesscodeforsome  IXCs.;   28      AtthetimeofthedivestitureofAT&T,IXCsbegantocompeteforpresubscription h agreementswithpotentialcustomers.<    29      ׀Slammingdidnotoccurpriortotheadventof 0 competitioninthelongdistancetelephonemarketplacebecauseconsumersdidnothaveany w choicesinlongdistanceservice.Wenotethatslammingdoesnotincludeinstanceswherea ? subscriberisdroppedfromacarrier'sservice,forreasonssuchasnonpaymentofservice,andends  upnotbeingpresubscribedtoanycarrier.Eventhoughthismaybea"change"inasubscriber's P carrier,thesubscriberhasnotbeenchangedtoanewcarrierandthereforehasnotbeenslammed.    2   10  .3   ` TheCommission'soriginalapproachrequiredIXCstoobtainwrittenlettersof ' agency(LOAs)=    30      ׀authorizingtheIXCtorequestonbehalfofasubscriber,achangeinthe p subscriber'spreferredinterexchangecarrier.>    31      ׀Becausesomecarrierscontinuedtoengagein 8 slamming,however,theCommissionin1992adoptedproceduresforverificationoftelemarketing  salesoflongdistanceservices.?   32      ׀In1995,theCommission,onitsownmotionandinresponseto G continuingcomplaintsfromconsumersregardingslammingbyIXCs,adoptedrulesestablishing   furtherantislammingsafeguardstodetertheuseofmisleadingLOAs.@   33      ׀The1995Reportand  X OrderspecificallyprohibitedthepotentiallydeceptiveandconfusingpracticeofcombiningLOAs   withpromotionalmaterials,suchassweepstakesentryforms,inthesamedocument.A   34      ׀The1995 g  ReportandOrderalsoprescribedtheminimumcontentofLOAs,requiredthattheLOAbe /  writteninclearandunambiguouslanguage,prohibited"negativeoption"LOAs,Bh   35      ׀andrequired  x thatLOAscontaincompletetranslationsiftheyemploymorethanonelanguage.C   36      ׀IntheFurther  @ NoticeandOrder,theCommissionclarifiedthatcarriersusingLOAsmustfullytranslatetheir   LOAsintothesamelanguage(s)astheirassociatedpromotionalmaterialsororaldescriptionsand O  instructions.D    37           2   11  .3   ` TheCommission'scurrentslammingrules,whichapplyonlytolongdistance (  carriers,requiresuchcarrierstofirstobtainauthorizationfromsubscribersforpreferredcarrier o  changesandthentoverifythatauthorization.E`    38      ׀ThecurrentrulesalsorequireIXCstoverifyall 7  PICchangesusingeitherawrittenLOAF    39      ׀or,ifthecarrierhasusedtelemarketingtosolicitthe   customer,oneofthefollowingfourprocedures:(1)obtainanLOAfromthesubscriber;(2) H  receiveconfirmationfromthesubscriberviaacallfromthesubscribertoatollfreenumber  providedexclusivelyforthepurposeofconfirmingchangeorderselectronically;G@   40      ׀(3)usean W independentthirdpartytoverifythesubscriber'sorder;or(4)sendaninformationpackage,also  knownasthe"welcomepackage,"thatincludesapostagepaidpostcardwhichthesubscribercan h usetodeny,cancel,orconfirmaserviceorder,andwait14daysaftermailingthepacketbefore 0 submittingthePICchangeorder.H   41      ׀Acarrierthatmakesunauthorizedchangestoasubscriber's w selectionoftelecommunicationsproviderandchargesrateshigherthanthatoftheauthorized ?  carriermustreratethatsubscriber'sbilltoensurethatthesubscriberpaysnomorethanwhathe  orshewouldhavepaidtheauthorizedcarrier.I   42      ׀Theunauthorizedcarriermustalsopayforany   carrierchangechargesassessedbytheLEC.J8   43       G   2   12  .3   ` Aspartofthe1996Act,Congressforthefirsttimeestablishedaspecificstatutory  X prohibitionagainst"slamming."Section258(a)oftheActmakesitunlawfulforany   telecommunicationscarrierKP   44      ׀to"submitorexecuteachangeinasubscriber'sselectionofa g  provideroftelephoneexchangeserviceortelephonetollserviceexceptinaccordancewithsuch /  verificationproceduresastheCommissionshallprescribe."LX    45      ׀Thesectionfurtherprovides:  x 8  Anytelecommunicationscarrierthatviolatestheverificationproceduresdescribed   insubsection(a)andthatcollectschargesfortelephoneexchangeserviceor O  telephonetollservicefromasubscribershallbeliabletothecarrierpreviously   selectedbythesubscriberinanamountequaltoallchargespaidbysuchsubscriber `  aftersuchviolation.M    46      (    Theenactmentofsection258bythe1996Actnecessitatesthatwereexamineourexisting 7  slammingrulestoensurethattheyconformwithCongress'directives.The1996Actisintended,   interalia,toencouragecompetitionintheprovisionoflocalexchangeservicesandfurther H  enhancecompetitioninthelongdistancemarket.Intheenvironmentcreatedbythe1996Act,  LECs,IXCs,andothercarrierswillcompetewitheachothertoprovidelocalexchange, W intraLATAtoll,interLATAtoll,intrastate,andinterstateservices.N8    47      ׀Furthermore,becauseLECs  willbecompetingwithothercarriersforconsumers'localandlongdistanceservices,LECsmay  notbeneutralthirdpartiesinimplementingcarrierchanges.Becausetheantislamming G provisionsofsection258applytoalltelecommunicationscarriers,wemustassesswhether   existingsafeguardsagainstslammingareadequateinamarketplaceinwhichcarrierscancompete  X forlocalaswellaslongdistanceservicecustomers,andwheretheremaynolongerbea   disinterestedpartyexecutingchangesinsubscribers'telecommunicationscarriers. g    III.DISCUSSION   x       2   13  .3   ` Untilnow,oureffortstodeterslamminghaveconcentratedonenhancingthe   verificationofcarrierchangesandonissuingmonetaryforfeituresagainstcarrierswhoviolateour O  verificationrules.Despitethesafeguardsestablishedbyourexistingrules,however,theproblem   ofslamminghascontinuedtogrow.Whilesomeunauthorizedchangesmaybeinadvertent,O0   48      ׀and `  whileitistooearlytomeasuretheimpactofourrecentlyheightenedprosecutionofslamming (  carriers,ourexperienceinthisarealeadsustotheinescapableconclusionthatslamminghas o  becomeaprofitablebusinessformanycarriers.Forthisreason,therulesweadoptinthisOrder 7  notonlyseektostrengthentheexistingverificationrules,butaremorebroadlydesignedto   preventcarriersfrommakinganyprofitswhentheyslamconsumers. H    2   14  .3   ` Anessentialelementofthiseffortistheadoptionofrulesabsolvingconsumersof W liabilitytoslammingcarriersforchargesincurredforalimitedperiodoftimeafteran  unauthorizedchange.Whereasubscriberdoespaytheslammingcarrier,section258requiresthe h slammingcarriertopaythechargesitcollectsfromtheslammedsubscribertotheproperly 0 authorizedcarrier.P   49      ׀Hence,carriersthatviolateourverificationprocedureswilleitherbe w deprivedof,orberequiredtoforfeit,revenuestheyheretoforehavebeenabletokeep.Q   50      ׀Wehave ? seenmanycaseswhereunscrupulouscarriershavegeneratedhugeprofitsthroughslamming,only  todisappearordeclarebankruptcywhenfinallycaught.Onewaytodeterthisbehavioristo P ensurethatthesecarriersneverreceiveanymoneyfromslammedconsumersinthefirstinstance.  Moreover,evenwherecarriershavenotengagedinanintentionalpatternofslamming,the _ strongestincentiveforsuchcarrierstoimplementstrictlyourverificationrulesistoknowthat ' failuretocomplymaymeanthattheywillnotgetpaidforanyservicesrenderedafteran p unauthorizedswitch. 8   2   15  .3   ` Ournewrulesconfronttheproblemofslamminginthreewaysby(1)adopting G!! liabilityprovisionsthattaketheeconomicincentiveoutofslamming;(2)adoptingmorestringent "" verificationrequirements;and(3)broadeningthescopeofourrules.Weconcludethatthis "X# rigorousapproachwillcombateffectivelytheslammingprobleminthelongdistance # $ telecommunicationsmarket,aswellaspreventslammingoccurrencesascompetitiondevelopsin g$% thelocalexchangeandintraLATAtollmarkets.Themajorityofcommenterssupportour  approachasoutlinedintheFurtherNoticeandOrder.Somecommenterscontendthatweshould G notadoptadditionalslammingruleswithoutfurtheranalysisofthecausesofslamming.R   51      ׀Our   experiencewithconsumerslammingcomplaints,however,aswellastheverythoroughrecord  X thathasbeencompiledinthisdocket,havesupplieduswithabundantevidenceconcerningthe   problemandcausesofslammingtoadopttherulescontainedherein. g    2   16  .3   ` Weemphasizethattherulesweadoptstrikeabalancebetweenourgoalsof  x protectingconsumersandofpromotingcompetition.Rulesthatmakeitmoredifficultforcarriers  @ toslamconsumersmayalsomakeitmoredifficultforcarrierstogainnewsubscribersina   legitimatemanner.Nonetheless,ourultimateconcerninthisproceedingisprotectingconsumers O  andconsumerchoice.Wecannotallowthisfraudulentpracticetogrowunabatedasithasin   recentyears.Moreover,forhealthycompetitiontoflourish,consumerchoicemustbeprotected `  vigorously.Thus,theslammingrulesweadopthereinoperatetofostermeaningfulcompetition (  thatisnotattheexpenseofimportantconsumerprotection. o   A.  Section258(b)Liability      1. ` LiabilityoftheSlammedSubscriber      ` a. Background     2   17  .3   ` IntheFurtherNoticeandOrder,theCommissionstatedthatsection258(b)ofthe 0 Actmakesitclearthatanyunauthorizedcarrierisnotentitledtokeepanyrevenuegainedthrough w slamming.S   52      ׀TheCommissionnoted,however,thattheActdidnotaddresswhethersubscribers ? mustpayanyunpaidchargesassessedbyanunauthorizedcarriertotheproperlyauthorized  carrier,orwhetherchargescollectedfromtheunauthorizedcarriershouldbereturnedtothe P subscriberwhohasbeenslammed.TH   53      ׀Inthe1995ReportandOrder,theCommissionsupported  thepolicyofallowingunauthorizedIXCstocollectfromtheconsumertheamountofchargesthe _ consumerwouldhavepaidifthepreferredcarrierhadneverbeenchanged.U   54      TheNational ' AssociationofAttorneysGeneral(NAAG),initspetitionforreconsiderationofthe1995Report p andOrder,urgedtheCommissiontoconsiderabsolvingslammedconsumersofallliabilityfor 8 chargesassessedbyunauthorizedIXCs.V    55      ׀InthesubsequentFurtherNoticeandOrder,the    Commissionconcludedthatitdidnothavesufficientinformationtodeterminewhethertotal G!!  forgivenessofchargeswouldfurtherdeterIXCsfromslammingandsoughtfurthercomment_on "" theissue._W   56      _      ` b. Discussion      2   18  .3   ` Ourexperiencewithslammingandthefailureofourexistingrulestostemthe   growthofthisfraudulentpracticeconvinceusthatstrongprophylacticmeasuresarenecessaryto g  ensurethatconsumers'choicesoftelecommunicationsserviceprovidersarerespected.We /  thereforeconcludethatsubscribersshouldnothavetopayforslammingcharges,achangethat  x shouldpreventcarriersfromgaininganyrevenuesfromslammingactivities.Moreover,  @ consumersdeservesomecompensationfortheinconvenienceandconfusiontheyexperiencefrom   beingslammed.Thereforeweadoptaruleabsolvingconsumersofliabilityforunpaidcharges O  assessedbyunauthorizedcarriersfor30daysafteranunauthorizedcarrierchangehasoccurred._X8   57      _Ԁ   Anycarrierthatthesubscribercallstoreporttheunauthorizedchange,whetherthatentityisthe `  subscriber'sLEC,unauthorizedcarrier,orauthorizedcarrier,isrequiredtoinformthesubscriber (  thatheorsheisnotrequiredtopayforanyslammingchargesincurredforthefirst30daysafter o  theunauthorizedchange.Y   58      ׀Ifasubscriberpayschargestohisorherunauthorizedcarrier, 7  however,suchsubscriber'sliabilitywillbelimitedtotheamountheorshewouldhavepaidthe   authorizedcarrier.Z   59      ׀Wenotethat,asexplainedfullyinthediscussiononThirdParty H  AdministratorforDisputeResolution,wedelaytheeffectivedateoftheliabilityrulesfor90days  toprovideinterestedcarriersanopportunitytoimplementadisputeresolutionmechanism W involvinganindependentadministrator.[   60          2   19  .3   ` Manystatecommissionsandconsumerprotectionorganizationssupportabsolving 0 theconsumerofliabilityforchargesincurredafterbeingslammed._\    61      _ԀWeagreewiththose w _commenters_,suchas_NCL_,_NAAG_,andtheVirginiaCommission,thatabsolvingslammed ? consumersofliabilityforchargeswilldiscourageslammingbytakingtheprofitoutofthis  fraudulentpractice.Specifically,ourliabilityrulesthatprovideforlimitedabsolutionfor P slammingchargeswilldeterslammingbyminimizingtheopportunityforunauthorizedcarriersto  physicallytakecontrolofslammingprofitsforanyperiodoftime._]    62      _ԀEventhoughsection258(b) _  requirestheunauthorizedcarriertoremittotheauthorizedcarrierallchargescollectedfromthe ' subscriber,^   63      ׀thisdoesnotmeanthattheunauthorizedcarrierwillbedeprivedofrevenue,northat   theauthorizedcarrierwillreceivesuchmoney.Several_commenters_Ԁstatethatabsolutionis G preferabletousingtheremedyinsection258(b)becausetheslammingcarrierislikelytorefuseto   remitrevenuestotheauthorizedcarrier.__8   64      _ԀInpractice,unscrupulouscarrierswillhavemany  X excusesfornotremittinganymoneytoauthorizedcarriers,includinggoingbankruptorsimply   disappearing._`   65      _ԀWehaveseenseveralcarriersgobankruptduringorafterourinvestigationsfor g  slammingviolations,_a   66      _Ԁandhaveconcernsthatsuchcarrierswillsimplyreappearinanother /  location,underadifferentname,andcontinuetoslamconsumers.Wehavealsoseencarriers  x changebusinesslocationsfrequentlyinordertoavoidliabilityforslamming.b   67      ׀Wefind,basedon  @ ourexperience,thatunscrupulouscarrierswillattempttotakesuchevasiveactionstoavoid   havingtopayfinancialpenaltiestoauthorizedcarriersforslamming._c    68      _ԀUnscrupulouscarriers O  wouldthereforebeabletocontinuetoprofitfromslammingifwerequiretheconsumertopaythe   unauthorizedcarrier.Eliminatingthecashflowtoslammingcarriersinthefirstinstanceprevents `  slammingcarriersfromkeepinganyslammingprofits. (    2   20  .3   ` Thisrulealsomakesslammingunprofitablebecauseitprovidesconsumerswith 7  incentivetoscrutinizetheirmonthlytelephonebillsearlyandcarefully.Byencouraging   consumerstopolicetheirowntelephonebills,thisruleenliststhepublic'shelpindetecting H  occurrencesofslamming._d   69      _ԀByprovidingsubscriberswitharemedythatiseasytoadminister,  i.e.,consumerssimplyrefusetopaytelephonebillscontainingslammingcharges,weprovidea W quickandsimpleprocesstostopslamming.Althoughrequiringconsumerstopaychargestotheir  authorizedcarrierswouldalsopreventslammingcarriersfromobtainingslammingprofits,this h wouldinvolveamorecomplicatedmechanism.Paymentofslammingchargestoauthorized 0 carriersattheratesoftheauthorizedcarrierswouldrequirereratingofbillsineveryinstanceof w slamming.Italsowouldresultintheauthorizedcarrierbeingpaidforservicesitneverprovided. ? Absolutionprovidesconsumerswiththeincentivetohelpthemselveswithaneasilyadministered  remedy.Forthesereasons,webelievethatabsolvingconsumersofliabilityforslammingcharges P  willbefarmoreeffectivethanrequiringthemtopaychargestotheirauthorizedcarriers,asmany  _commenters_Ԁsuggested._e   70      _     2   21  .3   ` Wealsochoosetoabsolveconsumersofliabilityforalimitedtimebecauseit   providessomecompensationtoconsumersforthetime,effort,andfrustrationtheyexperienceas  X aresultofbeingslammed,aswellasforthelossofchoiceandprivacy._f8   71      _ԀWefindthatconsumers   sufferagreatdealofconfusionandoutrageupondiscoveringthattheyhavebeenslammed.We g  furtherfindthataconsumeroftenexperiencesgreatdifficultyandinconvenienceincorrectingthe /  slammingsituationandbeingrestoredtohisorherrightfulcarrier.Becauseslamminginflicts  x theseburdensonconsumers,slammedconsumersshouldreceivereparationfortheirtroubles.  @   2   22  .3   ` Webalancethisneedtocompensatetheconsumer,however,againstthepossibility O  ofconsumersimproperlyreportingthattheywereslammedinordertoobtainfreetelephone   service.Thelikelihoodofthistypeoffraudisthemainobjectionofmostcarrierstoarule `  absolvingconsumersofliability._g   72      _ԀToaddresssuchconcernsaboutfraud,wepointoutthat (  subscribersmayonlybeabsolvedofliabilityiftheyhaveinfactbeenslammed.Carrierscan,as o  describedbelow,produceproofofvalidverificationtorefuteasubscriber'sclaimthatheorshe 7  wasslammed.Thisapproachhastheaddedbenefitofstrengtheningcarriers'incentivetocomply   strictlywithourverificationproceduresinordertoprotectthemselvesfrominappropriateclaims H  byconsumersthattheyhavebeenslammed.Ourruleswillmotivatecarriersthatsubmit  legitimatecarrierchangesnotonlytoverifycarrierchangesproperly,butalsotouseformsof W verificationthatprovidesolidevidencethataconsumerhasauthorizedandverifiedacarrier  change.h   73      ׀Specifically,wesetforthintheInvestigationandReimbursementProceduressectionof h thisOrderthemechanismbywhichacarriermayrefuteasubscriber'sclaimofbeingslammed.i0   74      ׀ 0   2   23  .3   ` IntheFurtherNoticeandOrder,theCommissionasked_commenters_Ԁtoconsider, ? ifsubscribersweretobeabsolvedofliabilityforunpaidcharges,whetheritshouldlimitthetime  duringwhichsubscriberswouldnotbeliableforcharges,anditaskedforrecommendations P regardingwhatthattimeshouldbe.j   75      ׀_Commenters_Ԁstatethatifconsumersaretobeabsolvedof  liabilityforchargesincurredafterbeingslammed,itshouldbeforonlyalimitedtime.k    76      ׀Weagree _ thatrestrictingtheperiodoftimeforwhichtheconsumerisabsolvedofchargesnotonlylimits ' opportunitiesforconsumerstotakepossibleunfairadvantageofcarriers,butalsoprovides p incentiveforconsumerstoreviewtheirbillscarefullyandpromptly.Welimittheabsolution 8  periodto30daysafteranunauthorizedchangehasoccurred.Severalcarrierssupporta30day    limittoabsolution._l   77      _ԀTotheextentthatthesubscriberreceivesadditionalchargesfromthe   slammingcarrierafterthe30dayabsolutionperiod,thesubscribershallpaysuchchargestothe G authorizedcarrierattheauthorizedcarrier'sratesaftertheauthorizedcarrierhasreratedsuch   charges.m(   78      ׀Inmostcases,theconsumerwilldiscovertheunauthorizedchangeuponreceiptofthe  X firstmonthlybillaftertheunauthorizedchangeoccurs,becausethatbillgenerallyprovidesthe   consumerwiththefirstnoticethatacarrierchangehasbeenmade._n   79      _ԀThebalancedapproachwe g  adopttodayencouragesconsumerstobecomemorevigilantindetectingslammingbygivingthem /  incentivetoreviewtheirtelephonebillscarefully.  x   2   24  .3   ` Thelimitationonabsolutionforthefirst30daysafteranunauthorizedchangemay   bewaivedbytheCommissionincircumstanceswhereitisnecessarytoextendtheperiodof O  absolutioninordertoprovideasubscriberwithafairandequitableresolution.Waiverofthe   Commission'srulesisappropriateonlyifspecialcircumstanceswarrantadeviationfromthe `  generalrule,andsuchdeviationwillservethepublicinterest.oX    80      ׀Asexplainedabove,weconclude (  thata30daylimitisreasonablebecausesubscribersgenerallydiscoverwithinonemonththatan o  unauthorizedchangehasoccurred.Thespecialcircumstancesthatmayaffectthisperiodof 7  absolutionwouldlikelybepracticesusedtodelaythesubscriber'srealizationofthecarrier   change.Forexample,awaiverofthe30daylimitmightbeappropriateifthesubscriber's H  telephonebillfailedtoprovidereasonablenoticetothesubscriberofacarrierchange,orifthe  slammingcarrierdidnothaveamonthlybillingcycle.Anotherfactorthatcouldextendthe W absolutionperiodwouldbeasituationinwhichtheslammingcarrierdidnotimmediatelybillthe  subscriberforcallsmade,butinsteadwithheldchargesforseveralmonthsandplacedallsuch h chargesonalaterbill,suchthatthesubscriberdidnotrealizethataslamoccurreduntilmonths 0 afterthefact.Wenote,however,thatweexpecttheseinstancestobeinfrequentandwillnot w grantwaiversofthe30daylimitunlesstherequestmeetsallofthecriteriaforwaivers. ?   2   25  .3   ` Werecognizethatin1995theCommissiondecidedthatslammedconsumers P shouldpaytheirunauthorizedcarriersforchargesincurredafterbeingslammedattheratethey  wouldhavepaidiftheunauthorizedchangehadneveroccurred._p    81      _ԀTheCommissionbasedits _ decisiononthefactthattheslammedsubscriberdoesreceiveaservice,eventhoughtheserviceis ' providedbyacarriernotoftheconsumer'schoosing.q8    82      ׀TheCommissionrecognized,however, p thatthissolution"maynotbethebestdeterrentagainstslamming...if'slamming'continues 8 unabated...wemayhavetorevisitthisquestionatalaterdate."r   83      ׀Becauseslammingcontinues  tobeamajorconsumerproblem,wenowfindthatourapproachtoconsumerliabilitymustbe G revised.Weconcludethatthemosteffectivedeterrenttoslammingistoabsolveconsumersof   liabilityforalimitedtime.Thiswilldepriveslammingcarriersofrevenuewhilecreating  X incentivesbothforconsumerstoreadtheirtelephonebillsandforcarrierstoensurethatcarrier   changesaremadeinaccordancewithourrules. g    2   26  .3   ` Severalcarriersarguethatslammedconsumersshouldpayallchargesbecause  x absolvingthemofliabilitywouldgiveconsumersawindfall._s8   84      _ԀWedisagree.Thisargumentfails  @ torecognizethatconsumerswhoareslammedhavesufferedboththepersonalintrusionofhaving   theirchoicesdenied,aswellastheimpositionofhavingtoremedytheunauthorizedchange.That O  is,theconsumerhasbeenthesubjectoffraud,orevenmistake,onthepartoftheunauthorized   carrieranddeservessomecompensationfortheintrusion,aswellasforthetimeandeffort `  expendedinreinstatingthepreferredcarrier. (    2   27  .3   ` Furthermore,weagreewiththose_commenters_Ԁthatstatethatalimitedabsolution 7  ruledoesnotsubstantiallyharmtheauthorizedcarrier,whohasnotprovidedservicetothe   slammedconsumerduringtheperiodofabsolution._tp   85      _ԀIntheFurtherNoticeandOrder,the H  Commissionsoughtcommentontheeffectofabsolvingslammedsubscribersofliabilityfor  unpaidcharges,inlightofthefactthattheauthorizedcarriermightbedeprivedofforegone W revenue.u   86      ׀Wenowconcludethat,althoughtheauthorizedcarrierisdeprivedofprofitsthatit  wouldhavereceivedbutfortheunauthorizedchange,italsohasnotactuallyprovidedanyservice h tothesubscriberanditappearsthattheauthorizedcarrierisnotoutofpocketformostcoststhat 0 itwouldhaveborneifithadinfactprovidedservice.Thisincludesnotonlythecostof w transmission,butothercostsofprovidingservice,suchasaccesschargesandotherfees.vP   87      ׀We ? emphasizethat,shouldtheauthorizedcarrierconcludethatitisentitledtoanycompensationfrom  theslammingcarrierthatitdoesnotreceiveunderourrules,suchaslostprofitsorother P damages,theauthorizedcarrierhasrecourseagainsttheslammingcarrierintheappropriate  forum,suchasbeforetheCommissionorinastateorfederalcourt._w    88      _ԀWeconcludethatthe _ approachtoliabilityweadopthereinstrikesareasonablebalancebetweentheinterestsofcarriers ' andconsumers.Wealsonotethat,intheFurtherNoticeofProposed_Rulemaking_Ԁsectionofthis p Order,weproposetopermittheauthorizedcarriertocollectfromtheslammingcarriereither: 8 (1)doubletheamountofchargespaidbyaslammedsubscriber,or(2)theamountforwhicha  subscriberhasbeenabsolvedofliability._x   89      _ԀThisproposalwouldprovidelimitedabsolutionforall G consumersthussatisfyingCongress'policythat"consumersbemadewhole"y   90      ׀whileatthe   sametimeensuringthatauthorizedcarriersarenoworseoffasaresultofanunauthorized  X change.     2   28  .3   ` Several_commenters_,includingAT&Tand_GTE_,statethatconsumersshouldpay /  forservicesreceivedinordertogiveeffecttotheremedyinsection258(b),whichrequires  x unauthorizedcarrierstogiveauthorizedcarriersallchargescollectedfromslammedsubscribers._zP   91      _Ԁ  @ Byitsterms,thatremedyappliesonlywhentheconsumerhasinfactmadepaymenttothe   unauthorizedcarrier.Section258(b)doesnotrequiretheconsumertopayeithertheauthorized O  carrierortheunauthorizedcarrier.{   92      ׀Asdiscussedinthefollowingsection,ifasubscriberdoes   payhisorherunauthorizedcarrier,theauthorizedcarrierwillbeentitledtocollectthatamount `  fromtheunauthorizedcarrierinaccordancewithsection258(b).Althoughwerecognizethat (  encouragingsubscribersnottopaytheslammingcarriermayreducetheamountsauthorized o  carriersmaycollectfromslammingcarrierspursuanttosection258(b),absolvingsubscribersof 7  theresponsibilitytopaytheirslammingcarriersinthefirstinstancedoesnotabrogatethesection   258(b)remedyforauthorizedcarriers. H    2   29  .3   ` Wedorecognizethatbyabsolvingtheconsumerofliabilityforacertainperiodof W time,ourremedygoesbeyondthespecificstatutoryremedythatisexplicitlysetforthinsection  258(b)oftheAct.Section258(b)alsostates,however,that"theremediesprovidedbythis h subsectionareinadditiontoanyotherremediesavailablebylaw."|0   93      ׀Absolvingslammed 0 subscribersofliabilityforalimitedperiodoftimeiswithintheCommission'sauthorityunder w section201(b)to"prescribesuchrulesandregulationsasmaybenecessaryinthepublicinterest ? tocarryouttheprovisionsof[the]Act,"aswellasundersection4(_i_)to"performanyandallacts,  makesuchrulesandregulations,andissuesuchorders,notinconsistentwith[the]Act,asmaybe P necessaryintheexecutionofitsfunctions."_}   94      _ԀPursuanttosuchauthority,wehavedetermined  thatthemosteffectivemethodofdeterringslammingistodeprivecarriersofrevenuefrom _ slammingbyabsolvingconsumersofliabilityfor30daysaftertheunauthorizedchange.Aswe ' havealreadystated,byenablingtheconsumertoforgopaymenttotheslammingcarrier,welimit p theopportunitiesforslammingcarrierstoprofitfromslamming.Furthermore,theabsolution 8 remedyweadoptisnotinconsistentwithsection258becausethesection258(b)remedyonly    appliestochargesthathavebeenpaidtotheslammingcarrieranddoesnotreferencechargesthat G!! havenotbeenpaid. ""   2   30  .3   ` Wealsorecognizethat,totheextentthatourrulespermitauthorizedcarriersto # $ collectsomecharges,attheirrates,forservicesprovidedbyslammingcarriersbeyondthe30day g$% absolutionperiod,theserequirementsarenotinaccordancewithSection203(c),whichrequires  carrierstocollectchargesinaccordancewiththeirfiledtariffs.~   95      ׀Becausetariffsonlypermit G carrierstocollectchargesforservicetheyactuallyprovide,ournewrulerequiringauthorized   carrierstocollectchargesforserviceprovidedbyslammingcarrierswouldnotbeinaccordance  X withtheirtariffs.Section10oftheAct,however,permitstheCommissiontoforbearfrom   applyingsection203tariffrequirementstointerstate,domestic,interexchangecarriersifthe g  Commissiondeterminesthatthreestatutoryforbearancecriteriaaresatisfied.   96      ׀Weconcludethat /  thesecriteriaaremet.  x   2   31  .3   ` First,wefindthatenforcementofsection203(c)inthisinstanceisnotnecessaryto   ensurethatthecharges,practices,classifications,orregulationsby,for,orinconnectionwiththat O  carrierorservicearejustandreasonableandarenotunjustlyorunreasonablydiscriminatory.   97      ׀   Thecircumstancesunderwhichwepermittheauthorizedcarriertocollectchargesthatarenotin `  accordancewithitstariffareverylimited.Infact,byrequiringthesubscribertopaythe (  authorizedcarrierratherthantheslammingcarrier,ourrulehelpstodetertheunlawful,unjust, o  andunreasonablepracticesofslammingcarriersbypreventingthemfrommakingprofitsfrom 7  slammedconsumers.Undertheselimitedcircumstances,ourruleisnotnecessarytoensurethat   theauthorizedcarrier'scharges,practices,classifications,orregulationsfrombeingjustand H  reasonable,andnotunjustlyorunreasonablydiscriminatory.    2   32  .3   ` Second,enforcementofsection203(c)underthesecircumstancesisnotnecessary  fortheprotectionofconsumers.`   98      ׀Onthecontrary,requiringsubscriberstopaytheirslamming h carriersratherthantheirauthorizedcarrierswouldbeharmfultoconsumers.Ourruleoperatesto 0 protectconsumersfromtheabusivepracticesofslammingcarriersbydeprivingsuchcarriersof w slammingprofits.Thereforeenforcementofsection203(c)inthisparticularsituationisnot ? necessarytoprotectconsumers.    2   33  .3   ` Third,forbearancefromapplyingsection203(c)inthisinstanceisconsistentwith  thepublicinterest.    99      ׀Inmakingthisdetermination,section10(b)alsorequiresustoconsider _ whetherforbearancewillpromotecompetitivemarketconditions,includingtheextenttowhich ' forbearancewillenhancecompetitionamongprovidersoftelecommunicationsservices.@    100      ׀We p concludethatpermittingthesubscribertopaytheauthorizedcarrierforchargesimposedby 8 slammingcarriersafterthe30dayabsolutionperiodisconsistentwiththepublicinterest.    Slammingdistortscompetitioninthemarketplacebecauseitrewardscarrierswhoemployfraud G!! anddeceitovercarriersthatareconductinglawfulactivities.Slammingalsodeprivesaconsumer "" ofchoice.Becauseourruledetersslammingbymakingslammingunprofitable,itpromotesthe  publicinterest,includingenhancingcompetitionfortelecommunicationsservices. G   2. ` WhentheSlammedSubscriberPaystheUnauthorizedCarrier   X   2 !  34  .3   ` Weconcludedabovethataslammedsubscriberisnotliableforchargesincurred g  duringthefirst30daysafteranunauthorizedcarrierchange.   101      ׀Intheeventthatasubscriber /  neverthelesspaystheunauthorizedcarrierforslammingcharges,tworulesshallgovern.First,the  x unauthorizedcarrierisobligatedtoremittotheauthorizedcarrierallchargespaidbythe  @ subscriber.Second,afterreceivingthisamountfromtheunauthorizedcarrier,theauthorized   carriershallprovidethesubscriberwitharefundorcreditforanyamountsthesubscriberpaidin O  excessofwhatheorshewouldhavepaidtheauthorizedcarrierabsenttheunauthorizedchange.      ` a. LiabilityoftheUnauthorizedCarrier  (    2 "  35  .3   ` WeadopttheruleproposedintheFurtherNoticeandOrdertoprovidethatany 7  telecommunicationscarrierthatviolatestheCommission'sverificationproceduresandthat   collectschargesfortelecommunicationsservicefromasubscribershallbeliabletothesubscriber's H  properlyauthorizedcarrierinanamountequaltoallchargespaidbysuchsubscriberaftersuch  violation.Thisremedyisdirectedspecificallybythelanguageinsection258(b)oftheAct._8   102      _ԀAll W ofthepartiescommentingontheproposedrulesupportthisapproach._   103      _ԀConsistentwiththe  discussionabove,thisrulewillapplyinsituationsinwhichthesubscriberhaspaidchargestoan h unauthorizedcarrier. 0   2 #  36  .3   ` Wealsoimposecertainadditionalpenaltiesonunauthorizedcarriers.Asproposed ? intheFurtherNoticeandOrder,wealsorequiretheunauthorizedcarriertopayforreasonable  billingandcollectionexpenses,includingattorneys'fees,incurredbytheauthorizedcarrierin P collectingchargesfromtheunauthorizedcarrier._   104      _ԀSeveral_commenters_Ԁsupporttheimposition  oftheseadditionalpenalties._    105      _ԀAlthoughsection258onlyrequirestheunauthorizedcarrierto _ remittotheauthorizedcarrierallchargescollectedfromtheslammedsubscriber,weconclude ' thatwehaveauthoritytogranttheauthorizedcarrieradditionalremedies._    106      _ԀRequiringthe p unauthorizedcarriertopayforexpensesincurredbytheauthorizedcarrierincollectingcharges 8 fromtheunauthorizedcarrierensuresthattheauthorizedcarrierdoesnotsufferfurthereconomic  lossbecauseoftheunauthorizedchange,andaddsaneconomicincentivefortheauthorized G carriertoseekreimbursementforslamming.Additionally,sincetheruleincreasesthepenaltyfor   slamming,theunauthorizedcarriermayfacilitatereimbursementtotheauthorizedcarrierinorder  X toavoidpaymentofanyadditionalexpensesforbillingandcollection.Althoughseveral   _commenters_Ԁsupportthisrule,_   107      _Ԁseveralother_commenters_Ԁobject,arguingthatsuchexpenses g  wouldbedifficulttodetermine.8   108      ׀Wedisagreebecausewefindthatcarriersaresophisticated /  businessentitiesthatarewellawareoftheexpensesofcollection,includinglitigationcosts.  x Moreover,webelievethatcollectionexpenseslikelywillbecomestandardizedamongcarriersin  @ therelativelynearfuture.Moreimportantly,weconcludethatanunscrupulouscarriershould   bearfullfinancialresponsibilityforthecostsofitsunlawfulactions. O    2 $  37  .3   ` Wealsorequiretheunauthorizedcarriertopayfortheexpensesofrestoringthe `  subscribertohisorherauthorizedcarrier._   109      _ԀWehavepreviouslystatedthatwherean (  interexchangecarriersubmitsarequestthatisdisputedbyasubscriberandtheinterexchange o  carrierisunabletoproduceverificationofthatsubscriber'schangerequest,theLECmustassess 7  theapplicablechangechargeagainstthatinterexchangecarrier._   110      _ԀWecodifyandexpandour   priorrequirementtoencompassanycarrier,notjustaninterexchangecarrier,thatisunableto H  provideverificationofasubscriber'schangerequest.Byrequiringtheunauthorizedcarriertopay  thechangechargetotheauthorizedcarrier,weensurethatneithertheauthorizedcarriernorthe W subscriberincursadditionalexpensesinrestoringthesubscribertohisorherpreferredcarrier.  Furthermore,requiringtheunauthorizedcarriertopaytheseadditionalchargeswillserveasa h furtherdeterrenttounauthorizedchanges. 0   0 ` b. SubscriberRefundsorCredits ?` (#` (#   2 %  38  .3   ` Ournewruleswillenablesubscriberstopreventcarriersfromprofitingby P absolvingthemofliabilityforthefirst30daysafteranunauthorizedchange.Weconclude,  however,thatthespecificprovisionsofsection258(b)appeartopreventusfromabsolving _ consumersofliabilitytotheextentthattheyhavealreadymadepaymentstotheirunauthorized ' carriers._0   111      _ԀWeconcludethatCongressintendedthatsubscriberswhopayforslammingcharges p shouldpaynomorethantheywouldhavepaidtotheirauthorizedcarriersforthesameservice 8 hadtheynotbeenslammed._    112      _ԀIndeed,thelegislativehistoryreflectsCongressionalintentthat    "theCommission'srulesshouldalsoprovidethatconsumersbemadewhole."   113      ׀Thereforeour  ruleswillrequiretheauthorizedcarriertorefundorcreditthesubscriberforanychargescollected G fromtheunauthorizedcarrierinexcessofwhatthesubscriberwouldhavepaidtheauthorized   carrierabsenttheswitch.ThisapproachisconsistentwiththeCommission'scurrentrulesthat  X ensurethattheslammedsubscriberpaysnomoreforservicethanheorshewouldhavepaid   beforetheunauthorizedswitch.Furthermore,weconcludethatrequiringarefundoftheexcess g  amountspaidbythesubscriberdoesnotharmtheauthorizedcarrierwhohasinfactreceived /  paymentforservicethatitdidnotprovidetothesubscriber.Shouldtheauthorizedcarrier  x concludethatitissufferingsomefinancialharm,nothinginourruleswouldprecludethecarrier  @ fromfilingaclaimagainsttheunauthorizedcarrierforlostprofitsorotherdamages.P   114           2 &  39  .3   ` Werequiretheauthorizedcarriertorefundorcreditthesubscriberwithany   amountsthesubscriberpaidinexcessoftheauthorizedcarrier'srates,aftertheauthorizedcarrier `  hasreceivedfromtheslammingcarrierallamountspaidbythesubscribertotheslamming (  carrier.h   115      ׀Thiswillpreventtheslammedconsumerfrombeingfinanciallyharmedbythe o  unauthorizedchange,inaccordancewiththeCommission'sbelief,asstatedintheFurtherNotice 7  andOrder,thataslammedsubscribershouldreceivepromptandfullreparationforharmsuffered   asaconsequenceofunauthorizedcarrierchanges._   116      _ԀWenotethatsection258onlyrequiresthat H  theunauthorizedcarrierremittotheauthorizedcarrierallchargespaidbythesubscriberafterthe  unauthorizedchange.H    117      ׀Weconcludethatwehaveauthoritytoimposetheserequirementson W authorizedcarrierstopreventsubscribersfromsufferingfurtherharmfromslamming._    118      _Ԁ  Moreover,thelegislativehistory,whichmentionsrestoringlostpremiumstoslammedsubscribers, h demonstratesCongressionalconcernthatsubscribersdonotsufferlossesduetobeing 0 slammed.    119      ׀Theauthorizedcarriermaykeeptheamountthatitwouldhaveearnedabsentthe w unauthorizedswitchandrefundorcreditthedifferencetothesubscriber. ?   2 '  40  .3   ` Iftheauthorizedcarrierfailstocollectthechargespaidbythesubscriberfromthe P unauthorizedcarrier,theauthorizedcarrierisnotrequiredtoprovidearefundorcredittothe  subscriber.   120      ׀Theauthorizedcarrier,whohasdonenowrong,shouldnotbepenalizedbyhaving  toprovidethesubscriberwitharefundpaidoutoftheauthorizedcarrier'spocket.The G authorizedcarrier,however,hasanaffirmativeobligationtonotifythesubscriberinatimely   fashionofitsfailuretocollectthechargespaidbythesubscribertotheunauthorizedcarrier.We  X requiretheauthorizedcarriertonotifythesubscriberwithin60daysafterthesubscriberhas   notifiedtheauthorizedcarrierofanunauthorizedchange,iftheauthorizedcarrierhasfailedto g  collectfromtheunauthorizedcarrierthechargespaidbytheslammedsubscriber.8   121      ׀Thisfailure /  tocollectmaybeduetotheslammingcarrier'srefusaltocooperate,oritmaystemfromthe  x authorizedcarrier'sdecisionnottopursueitsclaimsagainsttheslammingcarrier.Uponreceiptof  @ thenotification,thesubscriberwillhavetheopportunitytopursueaclaimagainsttheslamming   carrierforafullrefundofallamountspaidtotheslammingcarrier.Thesubscriberisentitledto O  theentireamountpaid,ratherthanmerelyarefundorcreditofchargespaidinexcessofthe   authorizedcarrier'srates.Thisisbecauseitisthesubscriberwhoiscollectingthechargesfrom `  theslammingcarrierratherthantheauthorizedcarrier.Thelanguageofsection258(b)generally (  preventsthesubscriberfrombeingabsolvedofliabilityforchargespaidbecauseitindicatesthat o  theauthorizedcarriermaymakeaclaimfor,andkeep,amountspaidtotheslammingcarrier.   122      ׀ 7  Wheretheauthorizedcarrierhasfailedincollectingchargesfromtheslammingcarrier,however,   thelanguageofsection258(b)wouldnotapply.Thereforethesubscriber,whoisnotboundby H  thecarrierremedyinsection258(b),wouldbeentitledtoarefundfromtheslammingcarrierofall  slammingchargespaid.Ifthesubscriberhasdifficultyinobtainingthisrefundfromtheslamming W carrier,thesubscriberhastheoptionoffilingacomplaintwiththeCommissionpursuantto  section208.   123      ׀Weanticipatethat,withcontinuedconsumerawarenessandeducationaboutour h slammingliabilityrules,fewerandfewerconsumerswillfindthemselvesinthesituationofhaving 0 paidtheirslammingcarriers.Weareconfidentthateventuallyslammingcarrierswillbe w completelyunabletoprofitbecauseconsumerswillrefusetopaythem. ?  0  3. ` InvestigationandReimbursementProcedures P(#(#   0 ` a.0 ` (#` (#WhentheSubscriberHasNotPaidtheUnauthorizedCarrier _ (# (#   2 (  41  .3   ` Asubscribermayrefusetopayanychargesimposedbytheslammingcarrierfor30 p daysaftertheunauthorizedchangeoccurred.x    124      ׀Asstatedabove,weconcludethatthissimple 8 remedywillpreventslammingcarriersfromprofitingandwillalsocompensatetheconsumerfor    theconfusionandinconvenienceofbeingslammed.Therecordsupports,however,givingthe G!!  carrierwhohasbeendeprivedofchargestheopportunitytorefuteasubscriber'sslamming "" claim.   125      ׀Wethereforeimposethefollowingmechanismtolimittheabilityofsubscribersto   fraudulentlyclaimthattheyhavebeenslammed. G   2 )  42  .3   ` Afterthesubscriberhasreportedanallegedlyunauthorizedchangeandrequested  X tobeswitchedbacktotheauthorizedcarrier,theslammingcarriershallremovefromthe   subscriber'sbill,whetherbilledthroughaLECorotherwise,allchargesthatwereincurredforthe g  first30daysaftertheunauthorizedchangeoccurred.8   126      ׀Several_commenters_Ԁstatedthatthe /  carrierthatisaccusedofslammingmusthavetheopportunitytoprovideproofofverification.P   127      ׀  x Therefore,iftheallegedlyunauthorizedcarrierhasproofoftheconsumer'svalidverificationof  @ authorizationtochangetoit,however,thensuchcarriermaymakeaclaimtotheconsumer's   originallyauthorizedcarrier.Specifically,theallegedlyunauthorizedcarriershall,within30days O  ofthesubscriber'sreturntotheoriginallyauthorizedcarrier,submittotheoriginallyauthorized   carrieraclaimfortheamountofchargesforwhichtheconsumerwasabsolved,alongwithproof `  ofthesubscriber'sverificationofthedisputedcarrierchange.   128      ׀Theproofofverificationshould (  containclearandconvincingevidencethatthesubscriberknowinglyauthorizedthecarrier o  change,suchasawrittenLOAoraudiotapeofanindependentthirdpartyverification.The 7  authorizedcarriershallconductareasonableandneutralinvestigationoftheclaim,including,   whereappropriate,contactingthesubscriberandthecarriermakingtheclaim.0   129      ׀Within60days H  afterreceiptoftheclaimandtheproofofverification,theoriginallyauthorizedcarriershallissue  adecisiontothesubscriberandthecarriermakingtheclaim.   130      ׀Wenoteherethat,regardlessof W theoriginallyauthorizedcarrier'sdecisiononthevalidityofthedisputedchange,thatcarriershall  remainthesubscriber'sauthorizedcarrier,sincethesubscriberhasvalidlyswitchedbacktoit.If h theoriginallyauthorizedcarrierdecidesthatthesubscriberdidinfactauthorizeacarrierchange 0 tothecarriermakingtheclaim,itshallplaceonthesubscriber'sbillachargeequaltotheamount w ofchargesforwhichthesubscriberwaspreviouslyabsolved.    131      ׀Uponreceivingthisamount,the ? originallyauthorizedcarriershallforwardthisamounttothecarriermakingtheclaim.    132      ׀Ifthe  authorizedcarrierdeterminesthatthesubscriberwasslammedbythecarrierfilingtheclaim,the P subscribershallnotberequiredtomakeanypaymentsforthechargesforwhichheorshewas  absolved.    133      ׀Ifeitherthesubscriberorthecarriermakingtheclaimbelievesthattheauthorized _ carrier'sinvestigationoradjudicationofthedisputewasinanywayimproperorwrong,thenit ' hastheoptionoffilingasection208complaint.`   134       p Ї0   ` b. WhentheSubscriberHasPaidtheUnauthorizedCarrier(#(#    2 *  43  .3   ` Whenthesubscriberhaspaidchargestotheslammingcarrier,thefollowing   proceduresshallapply.First,werequiretheauthorizedcarriertosubmittotheallegedly  X unauthorizedcarrier,within30daysofnotificationofanunauthorizedchange,arequestforproof   ofverificationofthesubscriber'srequestedcarrierchange.   135      ׀Ourreimbursementprocedure,as g  originallyproposedintheFurtherNoticeandOrder,requiredtheauthorizedcarriertomake /  demandforpaymentontheunauthorizedcarrierwithintendaysofnotificationfromitssubscriber  x ofanunauthorizedchange._8   136      _ԀSome_commenters_Ԁcontend,however,thattheauthorizedcarrier  @ mayneedmoretimethantheproposedtendays.   137      ׀Weagreethat,undercertaincircumstances,a   carriermayneedmorethantendaystomakedemandonanallegedlyunauthorizedcarrier.Such O  circumstancescouldinclude,forexample,situationsinwhichtheauthorizedcarrierhasdifficulty   indeterminingtheidentityoftheunauthorizedcarrierorincontactingtheunauthorizedcarrier.   138      ׀ `  Therefore,werequiretheauthorizedcarriertomakedemandontheallegedlyunauthorized (  carrierwithin30days,whichgivestheauthorizedcarriersufficienttimetoprepareitsdemand o  whilestillenablingbothcarrierstoresolvethedisputeinatimelymanner,thuspermittingthe 7  authorizedcarriertoresolveissuesofoverchargesandlostpremiumsasquicklyaspossiblefor   thesubscriber. H    2 +  44  .3   ` Second,werequiretheallegedlyunauthorizedcarriertoprovideproofof W verification,suchasacopyofawrittenLOAoranaudiotaperecordingofanindependentthird  partyverifier,totheauthorizedcarrierwithintendaysoftheauthorizedcarrier'srequest.   139      ׀Ifthe h allegedlyunauthorizedcarrierdoesprovideproofofverification,consistentwiththe 0 Commission'sverificationprocedures,ofthedisputedcarrierchangerequest,thentheburden w shiftstotheauthorizedcarriertoprovethatanunauthorizedchangeoccurred.   140      ׀Theproofof ? verificationmustprovideclearandconvincingevidencethatthesubscriberprovidedknowing  authorizationofacarrierchange. P   2 ,  45  .3   ` Iftheallegedlyunauthorizedcarriercannotprovideproofofverification,thenit _ mustprovidetotheauthorizedcarrier,alsowithintendaysoftheauthorizedcarrier'srequestfor ' proofofverification,acopyofthesubscriber'sbill,anamountequaltoanychargerequiredto p returnthesubscribertohisorherauthorizedcarrier,andanamountequaltoanychargespaidby 8 thesubscriber,ifapplicable.    141      ׀Inadoptingtheserules,wetakeintoaccountseveralofthe     _commenters_'viewpoints.AT&Tsuggeststhattheunauthorizedcarrierberequiredtoprovide G!! proofofcompliancewiththeCommission'sverificationrulesbyacertaindeadline,   142      ׀while_TOPC_   andUSWestsuggestthattheunauthorizedcarrierberequiredtoforwardallbillsandmoney G paidbyacertaindeadline._8   143      _ԀWethereforeprovidetheallegedlyunauthorizedcarrierwiththe   opportunitytoprovethatitdidcomplywithourverificationrules.Wealsorequiretheallegedly  X unauthorizedcarriertorespondbyasetdeadline.Ifitisdeterminedthatanunauthorizedchange   hasoccurred,timelyreceiptbytheauthorizedcarrierofthesubscriber'sbillandanychargespaid g  willenabletheauthorizedcarriertoprovideaquickresolutionforthesubscriber.Intheevent /  thattheauthorizedcarrierisunabletoobtainanappropriateresponsefromtheslammingcarrier,  x theauthorizedcarriermaybringanactioninfederalorstatecourt,whereappropriate,orbefore  @ theCommission,againsttheslammingcarrier.   144      ׀Furthermore,asdiscussedabove,theauthorized   carriermustalsonotifythesubscriberofitsfailuretocollectchargeswithin60daysafterthe O  subscriberhasnotifiedtheauthorizedcarrierofanunauthorizedchange,sothatthesubscriber   mayalsoattempttocollectafullrefundofallamountspaidtotheslammingcarrierforcharges `  incurredduringthefirst30daysaftertheunauthorizedchange.   145       (    2 -  46  .3   ` Wenotethat_NAAG_Ԁsuggeststhattheunauthorizedcarrier'sdutytosend 7  informationandreimbursementtotheauthorizedcarriershouldbetriggeredadditionallyby   notificationfromtheLEC,anothercarrier,oragovernmentagency._0   146      _ԀACTAopposesexpanding H  thenumberofpartieswhocansetthereimbursementprocedureinmotionbecausetheonly  relevantpartiestothedisputearetheunauthorizedcarrier,theproperlyauthorizedcarrier,and W thesubscriber.   147      ׀Wefindthattheauthorizedcarriershouldbethepartytomakedemandonthe  unauthorizedcarrier,althoughtheauthorizedcarriermaydosouponnotificationbythe h subscriberortheexecutingcarrier.Wefindthatconfusioncouldresultifunauthorizedcarriers 0 arerequiredtorespondtoseveraldifferentpartieswithinthedeadlineswehaveset.Thisrule w doesnotnegateanyotherobligationsanunauthorizedcarriermayhavetorespondtoserviceofa ? complaint,suchastheobligationtorespondwithin30daystoanoticeofaconsumercomplaint  issuedbytheCommission,pursuanttosection208oftheAct.    148      ׀Wealsodonotpurportto P preempttheactivitiesofstateswhotakeactionagainstslammingcarriers.    149        0  3.0` (#(#RestorationofPremiums '` (#` (#   2 .  47  .3   ` Premiumsarebonuses,suchasfrequentfliermiles,thataregiventosubscribersas 8 rewardsforeachdollarspentontelecommunicationsservices.TheCommissionnotedinthe    FurtherNoticeandOrderthatalthoughsection258doesnotspecificallyaddresstherestoration G!! ofpremiums,thelegislativehistorystatesthat"theCommission'srulesshouldrequirethatcarriers  guiltyof'slamming'shouldbeliableforpremiums,includingtravelbonuses,thatwouldotherwise G havebeenearnedbytelephonesubscribersbutwerenotearnedduetotheviolationofthe   Commission'srules...."_   150      _ԀWefind,basedonthelegislativehistory,thatCongressintendedfor  X subscriberstobereinstatedintheirpremiumprogramsandreceiverestorationofpremiumsthat   werelostduetoslamming.8   151       g    2 /  48  .3   ` Werequireanauthorizedcarriertoreinstatethesubscriberinanypremium  x programinwhichthesubscriberwasenrolledpriortobeingslammed,ifthatsubscriber's  @ participationinthepremiumprogramwasterminatedbecauseoftheunauthorizedchange.P   152      ׀The   recordalsosupportsarequirementthattheauthorizedcarrierrestoretothesubscriberany O  premiumsthatthesubscriberlostduetoslammingifasubscriberhaspaidtheunauthorizedcarrier   forslammingcharges._   153      _ԀOnceanauthorizedcarrierreceivesfromtheslammingcarrierall `  chargesthatthesubscriberpaid,theauthorizedcarrierhasbeenmadewholeandisobligatedto (  restorethesubscriber'spremiums.Sincetheauthorizedcarrierinthiseventhasreceivedatleast o  whatitwouldhavebeenentitledtoabsenttheslam,theyarenoworseofffromhavingtoprovide 7  anypremiumsthatsubscriberswouldhavereceived.Weemphasizethattheauthorizedcarrieris   entitledtoreceivefromtheslammingcarrierchargespaidbytheslammedsubscriber,andwe H  expectthatauthorizedcarrierswillmakeeveryefforttopursuetheirclaimsagainstslamming  carriers.0   154      ׀Intheeventthatanauthorizedcarrierisunabletorecoverfromtheunauthorized W carrierchargesthatwerepaidbythesubscriber,however,theauthorizedcarrierisstillrequiredto  restorethesubscriber'spremiums._H    155      _ԀAsubscriberwhohaspaidslammingchargesdeservesto h receivethepremiumsthatwouldhaveaccompaniedsuchpaymentintheabsenceofthe 0 unauthorizedcarrierchange.Althoughthisrulemayresultinsomeauthorizedcarriershavingto w restorepremiumswithoutbeingcompensated,weconcludethatthisisnecessarytofulfillthe ? intentofCongressandtopreventthesubscriberfromsufferinganylossesfrombeingslammed.  Theauthorizedcarrieristheonlyentitythatisinapositiontocompensatesubscribersforlost P premiumsandwebelievethatacarrier'scostofprovidingpremiumsisminimal.Furthermore,an  authorizedcarrierthatknowsthatitmustrestorepremiumstosubscriberswhohavepaid _ slammingchargeswillmakegreatereffortstorecoversuchchargesfromtheunauthorizedcarrier. ' Encouragingcarrierstopursuetheirclaimsagainstunauthorizedcarrierswillincrease p enforcementeffortsagainstallcarrierswhomakeunauthorizedchanges.Ontheotherhand,an 8 authorizedcarrierisnotrequiredtorestoreanypremiumslostbythatsubscriberifthesubscriber     hasnotpaidforthechargesincurredafterbeingslammed.Several_commenters_Ԁagreewithour G!! viewthatpremiumsshouldnotberestoredtosubscriberswhodonotpayanycharges._   156      _ԀTodo   otherwisewouldgrantthesubscriberawindfall.XcXXXcXcXXXc      Itissufficientthatthesubscriberbereinstatedin G anypremiumprogramfromwhichheorshewasterminatedduetotheunauthorizedchange.     2 0  49  .3   ` AlthoughtheCommissionproposedintheFurtherNoticeandOrdertorequire   theunauthorizedcarriertoremittotheproperlyauthorizedcarrieranamountequaltothevalue g  ofpremiumstoberestoredtothesubscriber,_   157      _Ԁwefindthatthisisnotnecessarytoenablethe /  authorizedcarriertorestorepremiumstoitssubscribers.Iftheunauthorizedchangehadnever  x occurred,theauthorizedcarrierwouldhaveprovidedthepremiumtothesubscriberonthebasis  @ ofthesubscriber'spaymenttotheauthorizedcarrier.Thereforetheauthorizedcarrierisnoworse   offthanitwouldhavebeenifitisrequiredtorestoresubscriberpremiumsuponreceiptofthe O  amountpaidbythesubscribertotheunauthorizedcarrier.Inotherwords,webelievethat   chargesfortelephoneserviceincorporatethecostofanypremiumsthatmaybegivento `  subscribers.Theauthorizedcarrierdoesnotneedtocollectfromtheslammingcarrierboththe (  chargespaidbythesubscriberandanamountequaltothecostofthepremiumsbecausethecost o  ofthepremiumshasalreadybeenincorporatedintothechargespaidbythesubscriber.ߞprop    XcXhXcXcXhXc   7    4. ` LiabilityforInadvertentUnauthorizedChanges  H    2 1  50  .3   ` Wereiteratethatthestatuteandourrulesimposeliabilityforanyunauthorized W changeinasubscriber'spreferredcarrier,whetherintentionalorinadvertent._P   158      _ԀSection258ofthe  Actmakesitillegalforacarrierto"submitorexecuteachangeinasubscriber'sselectionofa h provideroftelephoneexchangeserviceortelephonetollserviceexceptinaccordancewithsuch 0 verificationproceduresastheCommissionshallprescribe."   159      ׀Althoughseveral_commenters_ w assertthatourrulesshouldapplyonlytointentionalactsthatresultinslamming,(    160      ׀thestatutory ? languagedoesnotestablishanintentelementforaviolationofsection258.Several_commenters_,  suchas_Ameritech_,BellSouth,andtheNorthCarolinaCommission,supporttheapplicationofa P strictliabilitystandard,inwhichacarrierwouldbeliableforslammingifitwasresponsibleforan  unauthorizedchange,regardlessofwhethertheunauthorizedcarrierdidsointentionally._    161      _ԀWe _ agreethatsuchastrictliabilitystandardisrequiredbythestatute. '   2 2  51  .3   ` _GTE_,Frontier,andUSWESTarguethatimposingliabilityforactionsthatarenot 8 intentionalorwillfulwouldabrogatecommoncarriers'limitedliabilitytariffprovisions._    162      _ԀWe    disagreebecausewecannotcondoneallowingcarrierstoprotectthemselvesfromliabilityfor  unlawfulorfraudulentconductthroughtheuseoftariffprovisions.Furthermore,thelanguageof G section258prohibitsallunauthorizedcarrierchangesanddoesnotimposeanyrequirementthat   suchcarrierchangebeintentional.   163      ׀ACTAcontendsthatdefiningslammingtoinclude  X inadvertentactsissovaguethatit"createsnumerousconstitutionalconcerns."8   164      ׀ACTA   contendsthatimposingliabilityoncarrierswhoaremerelynegligentmayinfringeuponFirst g  Amendmentrightsbecause"itisfearedthatregulatorsareconsciouslystretchingthedefinitionof /  slammingtoencompassthosecustomerswhoswitchcarriersbasedonallegedlymisleading  x marketingmaterials."   165      ׀Wedonotagreethat,byincludingunintentionalunauthorizedchanges,  @ weare"stretching"thedefinitionofslamming,sinceitisCongress,nottheCommission,thathas   concludedthatanyunauthorizedchangeinsubscriberselectionisconsideredtobeslamming.   166      ׀ O  Further,theFirstAmendmentdoesnotprovideabsoluteimmunityfornegligentorothernon   intentionalconductsimplybecausethatconductrelatestospeech.   167      ׀ACTAalsoarguesthat `  definingslammingtoincludeinadvertentactsissovaguethatitwillleadtoselective (  enforcement.    168      ׀Again,wedisagree.Weconclude,infact,thatdefiningslammingtoincludeall o  unauthorizedcarrierchanges,whetherinadvertentorintentional,isinfactabrightlinestandard 7  thatwillminimizethethreatofselectiveenforcementbecauseitdoesnotdependondiviningthe   subjectiveintentoftheviolator.Finally,ACTAcontendsthatrequiringacarrierwhoismerely H  negligenttoremitrevenuestotheformercarrierwouldconstituteatakinginviolationoftheFifth  Amendment,becausethatcarrierhasdonenowrong.`    169      ׀WedisagreewithACTAthatourrules W impactanytakingsissuesbecauseweconcludethataslammingcarrierhasnopropertyrightsin  thechargesforunauthorizedservicecollectedfromanothercarrier'ssubscribers.More h importantly,ACTA'sassertionissimplymistakeninassumingthatacarriercommittinga 0 negligentacthasnotcommitteda"wrong."Negligentconductgivesrisetoliabilityandinthis w context,carriershaveanaffirmativeobligationtobothobtainauthorizationfromtheconsumer ? andtoverifythatauthorization.Anyfailuretofullyandaccuratelycomplywiththese  requirementsisnotacceptableundereitherthestatuteorourrules. P   2 3  52  .3   ` Weconcludethatholdingcarriersliableforbothinadvertentandintentional _ unauthorizedchangestosubscribers'preferredcarrierswillreducetheoverallincidenceof ' slammingandisconsistentwithsection258.Wefindthattherightsoftheconsumerandthe p authorizedcarriertoremediesforslammingshouldnotbeaffectedbywhethertheslamwasan 8 intentionaloraccidentalact.Regardlessoftheintent,orlackthereof,behindtheunauthorized    change,theconsumerandtheauthorizedcarrierhavesufferedinjury.Weagreewiththose G!! _commenters_Ԁwhoassertthatimposingliabilityforbothinadvertentandintentionalcarrierchanges "" willmakeallcarriersmorevigilantinpreventingunauthorizedcarrierchangesandprovide  carrierswithincentivetocorrecterrorsinaspeedyandefficientmanner.   170      ׀Weconcludethat G holdingcarriersliableforallunauthorizedchangesprovidesappropriateincentivesforcarriersto   obtainauthorizationproperlyandtoimplementtheirverificationproceduresinatrustworthy  X manner.Werecognize,however,thatevenwiththegreatestcare,innocentmistakeswilloccur   andmayresultinunauthorizedchanges.Insuchcases,wewilltakeintoconsiderationinany g  enforcementactionthewillfulnessofthecarriersinvolved. /    4.  ` DeterminingLiabilityBetweenCarriers  @    2 4  53  .3   ` Section258requiresboththesubmittingandexecutingtelecommunications O  carrierstoensurethatacarrierchangecomportswithproceduresestablishedbytheCommission   toprotectconsumersandpromotefaircompetition.8   171      ׀Hence,totheextentthatasubmissionor `  executionfailstocomportwithestablishedprocedures,theActcontemplatesthateitherorboth (  telecommunicationscarrierscouldbeliableforanunauthorizedchangeinasubscriber's o  telecommunicationsservice.Inordertoavoidorminimizedisputesoverthesourceorcauseof 7  unauthorizedcarrierchanges,oroverliabilityforsuchcarrierchanges,wedelineatethedutiesand   obligationsofthesubmittingandexecutingcarriers. H    2 5  54  .3   ` AsproposedintheFurtherNoticeandOrder,weadoptthefollowing"butfor" W liabilitytest:(1)wherethesubmittingcarriersubmitsacarrierchangerequestthatfailstocomply  withourrulesandtheexecutingcarrierperformsthechangeinaccordancewiththesubmission, h onlythesubmittingcarrierisliableasanunauthorizedcarrier;   172      ׀(2)wherethesubmittingcarrier 0 submitsachangerequestthatconformswithourrulesandtheexecutingcarrierfailstoexecute w thechangeinconformancewiththesubmission,onlytheexecutingcarrierisliableforthe ? unauthorizedchange;`   173      ׀and(3)finally,wherethesubmittingcarriersubmitsacarrierchange  requestthatfailstocomplywithourrulesandtheexecutingcarrierfailstoperformthechangein P accordancewiththesubmission,onlythesubmittingcarrierisliableasanunauthorizedcarrier._    174      _Ԁ  Themajorityofpartiescommentingonthisissuesupporttheadoptionoftheproposedliability _ test._   175      _ԀTheyagreethatthistestnotonlyproperlyallocatesliabilityforunauthorizedcarrier ' changes,butalsoestablishesclearstandardsforwhenliabilitywillbeimposed.Withtheseclear  standards,carrierscantakeappropriatemeasurestoprotectthemselvesagainstliabilityand G thereforereduceallinstancesofslamming,whetherintentionalorinadvertent._   176      _Ԁ    B.0  ThirdPartyAdministratorforDisputeResolution  (#(#   2 6  55  .3   ` WehaveformulatedseveralmechanismsinthisOrderthatrelyontheauthorized /  carriertoproviderelieftoitsslammedsubscribersandtodeterminewhetheritssubscriberwas  x slammed.8   177      ׀Webelievethattheserequirementsformanecessarybaselineforensuringthat  @ consumerproblemsarisingfromslammingareaddressedadequately.Werecognize,however,   thatsomecarriersmayfindittobeintheirinteresttomakeothermutuallyagreeable O  arrangementsthatmightbetterservetoaddressourconcerns.Forinstance,severalcarriers,   particularlyMCI,haveindicatedthattheyarewillingandabletocreatequicklyasystemusingan `  independentthirdpartyadministratortodischargecarrierobligationsforresolvingdisputes (  amongcarriersandsubscriberswithregardtoslamming,includingreratingsubscribertelephone o  billsandreturningthesubscribertothepropercarrier._   178      _ԀWeagreethatthisconcepthasmerit. 7  Consumerswouldbenefitbyhavingonepointofcontacttoresolveslammingproblems.Carriers   wouldbenefitbyhavinganeutralbodytoresolvedisputesregardingslammingliability._LECs_ H  wouldnolongerbetherecipientsofangryphonecallsfromconsumerswhohavebeenslammed  bylongdistancecarriers,while_IXCs_Ԁwouldbeabletodiverttheirresourcestopreventing W slammingratherthanresolvingslammingdisputes.Althoughthisapproachholdspromise,wedo  notbelievethatweshouldabandontherulesadoptedhereinbecausetheyprovideanappropriate h mechanismforallcarrierstorenderappropriatereliefanddisputeresolutiontoslammed 0 consumersandcarriers.Wedo,however,encouragecarrierstoworkoutsucharrangementsand w wewillbeopentoreceivingrequestsforwaiveroftheliabilityprovisionsofourrulesforcarriers ? thatagreetoimplementanacceptablealternative.    2 7  56  .3   ` Toaffordcarrierstimetodevelopandimplementanindustryfundedindependent  disputeresolutionmechanismandtofilewaiverrequestsasdescribedabove,wedelaythe _ effectivedateoftheliabilityrulessetforthaboveuntil90daysafterFederalRegisterpublication ' ofthisOrder.    179      ׀Wenotethatthisisnotasubstantialdelayinlightofthefactthat,dueto p statutoryconstraints,therulesadoptedinthisOrder,asidefromtheliabilityrules,willnotbe  effectiveuntil70daysafterpublicationintheFederalRegister.0   180      ׀Anywaiverrequestmustbe G filedinatimelymannersothattheCommissionmayevaluateandgrantordenysuchrequestin   enoughtimetoenablecarrierstoimplementandutilizethemechanismbytheeffectivedateofthe  X liabilityrules.Insubmittingwaiverrequests,carriersshouldbearinmindthatwewouldbe   inclinedtograntawaiveronlyifwearesatisfiedthatanysuchneutralentitywouldfulfillthe g  obligationsimposedbyourruleswithregardtoliability,inthe_timeframes_Ԁspecifiedintherules.    181      ׀ /  Therefore,forexample,withregardtochargesimposedonslammedsubscribers,theneutral  x administratorwouldbechargedwithensuringthatsubscribersareabsolvedofliabilityforunpaid  @ chargesassessedbyslammingcarriersforthefirst30daysafteranunauthorizedcarrierchange   hasoccurredandthatsuchchargesareremovedfromthesubscribers'telephonebills.Any O  chargesassessedbytheslammingcarrierafterthis30dayperiodwouldbereratedtothe   authorizedcarrier'srates,iflower,toenablethesubscribertopaytheauthorizedcarrier.Ifthe `  subscriberpaystheslammingcarrier,theneutraladministratoralsowouldbechargedwith (  ensuringthattheslammingcarrierremitsallsuchamountstotheauthorizedcarrier,aswellas o  reasonablebillingandcollectionexpensesandanyapplicablechangecharges.Theadministrator 7  shouldalsoensurethat,underappropriatecircumstances,thesubscriberreceivesarefundor   creditofanyamountspaidinexcessofwhattheauthorizedcarrierwouldhavecharged,aswellas H  premiumsifapplicable.Iftheadministratorfailstocollectanyamountsfromtheslamming  carrier,itwouldberesponsibleforinformingthesubscriberofhisorherrightswithrespectto W chargespaid.Thethirdpartyadministratorshouldbetheinvestigatorandarbiterforresolving  disputeswheretheslammingcarrierclaimsthatithadproperauthorizationandverificationofthe h subscriber'srequesttochangecarriers.WenotethatnothingintheCommission'sliabilityrulesor 0 theuseofthethirdpartyadministratorshallprecludeaconsumerorcarrierfromfilingasection w 208complaintorotheractioninstateorfederalcourt.    182       ?   2 8  57  .3   ` Weencouragecarrierstodevelopaplanthatideallyenablestheconsumerto P resolvehisorherslammingproblemwithasinglecontact.Wefindthatitwouldbegreatly  beneficialtoprovidetheconsumerwiththeabilitytocalloneentitytoexplaintheslamming _ problem,andhavethatentityswitchtheconsumerbacktothepropercarrier,reratebills,provide ' refunds,anddeterminewhetheraslamhasoccurredintheeventthatacarrierclaimsthata p changewasauthorized.Thiswouldprovidetheconsumerwithaconvenientwaytoundothe 8 damagecausedbyslamming.Furthermore,havingoneneutralpartyadministerthesenumerous  andcomplicatedtaskswouldlessenanyconfusionthatmightbecausedifseveralpartiesthe G consumer,theslammingcarrier,theLEC,andtheauthorizedcarrierattempttoresolvethe   sameproblematthesametime.   X  C.0  VerificationRulesg (#(# 0  1.0` (#(#TheWelcomePackage  x` (#` (#   0 ` a. Background ` (#` (#    2 9  58  .3   ` OneoftheverificationproceduresavailabletocarriersundertheCommission's   rulesisthe"welcomepackage."Assetforthinsection64.1100(d),afterobtainingthe `  subscriber'sauthorizationtomakeacarrierchange,theIXCmaysendtheconsumerawelcome (  packagecontaininginformationandaprepaidpostcard,whichthecustomercanusetodeny, o  cancel,orconfirmthechangeorder.Section64.1100(d)(8)providesthatthepackagemust 7  containastatementthatifthesubscriberdoesnotreturnthepostcard,thesubscriber'slong   distanceservicewillbeswitchedwithin14daysafterthedatethepackagewasmailed._   183      _ԀInits H  petitionforreconsiderationofthe1995ReportandOrder,theNationalAssociationofAttorneys  General(_NAAG_)askedtheCommissiontoeliminatetheautomaticswitchingofconsumerswho W donotreturnapostcardtotheIXCbecausethisaspectofthewelcomepackagewasa"negative  option"LOA._8   184      _ԀAnegativeoptionLOA,whichisprohibitedundersection64.1150(f),isan h unsolicitednoticeofapendingcarrierchangethatrequiresaconsumertotakesomeactionto 0 avoidthechange._   185      _ԀIntheFurtherNoticeandOrder,theCommissionsoughtcommenton w whetherthewelcomepackageverificationoptionshouldbeeliminatedbecauseitcouldbeusedin ? thesamemannerasanegativeoptionLOA.   186        0   ` b. Discussion(#(#    2 :  59  .3   ` Therecord,aswellasourexperiencewithconsumercomplaints,supportsour ' decisiontoeliminatethewelcomepackageasaverificationoption._   187      _ԀThewelcomepackagehas p beenasignificantsourceofconsumercomplaintsregardingslamming.Asmanyofthe 8 _commenters_Ԁnote,consumersoftenfailtoreceivethewelcomepackage,ortheythrowitawayas    junkmail,ortheyhavetheirserviceswitcheddespitethefactthattheyreturnedpostcards G!! requestingthattheirservicenotbechanged._   188      _ԀThewelcomepackagebecomesaparticularly "" ineffectiveverificationmethodwhenusedincombinationwithamisleadingtelemarketingscript. "X# Ifasubscriberdoesnotevenrealizethatheorshehasagreedtochangehisorherservicebecause # $ thetelemarketingsolicitationwassomisleading,thatsubscriberwouldreasonablyconcludethat  thewelcomepackageisasolicitation,notaconfirmation,andthusdiscarditwithout G examination.   189      ׀Inallinstances,however,wefindthatthewelcomepackageisanineffective   verificationmethodbecauseitdoesnotprovideevidence,suchasawrittensignatureor  X recording,thatthesubscriberhasinfactauthorizedacarrierchange.Moreover,evenwherethe   subscriberactuallyreceivesandreadstheinformationinawelcomepackage,thisapproachplaces g  anaffirmativeburdenonthesubscribertoavoidhavinghisorherpreferredcarrierswitched.As /  withnegativeoption_LOAs_,wedonotthinkconsumersshouldhavetotakeaffirmativeactionto  x avoidbeingslammed.  @   2 ;  60  .3   ` Despitetheseconsumerproblems,manyofthe_IXCs_Ԁcontendthatthewelcome O  packageoptionshouldbekeptbecauseitisaneconomicalmethodofverification._   190      _ԀThese   _commenters_ԀarguethatthewelcomepackagedoesnotworklikeanegativeoptionLOAbecause `  thewelcomepackageconfirmsconsentalreadygiven.   191      ׀AlthoughweagreedintheFurther (  NoticeandOrderthatthereisadistinctionbetweenapostsaleverificationandanegativeoption o  LOA,westatedthat,inpractice,thisdistinctioniseasilyblurredbecauseawelcomepackagecan 7  beusedtoswitchasubscriberwhohasnotpreviouslyconsentedtoacarrierchange._h   192      _ԀWehave   seenmanyinstanceswhereunscrupulouscarriersusedthewelcomepackageasanegativeoption H  LOAbysendingittoconsumersfromwhomtheyhavenotobtainedpriorconsent,andwhere  suchoralconsentwasobtainedbasedonfalseormisleadingtelemarketingpitches._   193      _ԀThus,the W argumentthatthewelcomepackageisabenignformofverificationbecauseitmerelyconfirms  consentalreadygivenbegsthequestionofwhetherconsentinfacthasbeengiven.Also,like h negativeoption_LOAs_,thereisnoevidenceaftertheswitchthatthewelcomepackagewasever 0 received,ormailedforthatmatter,bythecorrectpartyorthatthepartytowhomitwassentwas w infactauthorizedtochangethepreferredcarrierforthattelephoneline. ? ̀  2 <  61  .3   ` Wedeclinetoadoptmodificationstothewelcomepackage,ratherthaneliminate P theoption,assuggestedbyseveral_commenters_,_    194      _Ԁbecausewedonotbelievethatanyofthe  proposedchangeswoulddecreasesignificantlythefraudulentpotentialofthewelcomepackage _ withoutalsodecreasingitsutility.Forexample,several_commenters_,including_NYSDPS_Ԁand ' _WorldCom_,suggestthatifthewelcomepackageisnoteliminated,thenitshouldcontaina p  positiveoptionpostcard,sothatacarrierchangewouldnotbeconsideredverifieduntilthe 8 customersignedandreturnedthepostcard._   195      _ԀAlthoughrequiringapositiveoptionpostcard   requirementmightminimizeoneofthefraudulentaspectsofthewelcomepackage,weagreewith G AT&TthatsucharequirementmerelytransformsthewelcomepackageintoawrittenLOA   requirement,whichisalreadyaverificationoptionunderourrules._8   196      _ԀACTAstatesthatcarriers  X couldprovethatconsumersreceivedawelcomepackagebyusingcertifiedmail,orbymaintaining   mailingmanifests.   197      ׀Wedeclinetoadopttheseproposals.Althoughsuchproposalsmayprove g  thatacustomerreceivedawelcomepackage,theywouldnotpreventcarriersfromsending /  welcomepackagestoconsumerswithwhomtheyhaveneverspokenorfromwhomtheyhavenot  x obtainedvalidconsent.Norwouldsuchproposalsaddresstheproblemofconsumersthrowing  @ awaywelcomepackagesasjunkmail.Weconcludethatitisbettertoeliminatethewelcome   packageentirely,ratherthanattemptto"fix"itwithmodificationsthatfailtoprovideadequate O  protectionagainstfraudorthatcurtailitsusefulness.      2.  ` ApplicationoftheVerificationRulestoInBoundCalls (      ` a. Background 7     2 =  62  .3   ` TheCommissionconcludedinthe1995ReportandOrderthatitshouldextend H  ourverificationprocedurestoconsumerinitiated"inbound"calls._   198      _ԀOnitsownmotionthe  Commissionstayedtheapplicationoftheverificationrulestoinboundcallspendingitsdecision W onseveralpetitionsforreconsiderationbyAT&T,MCI,andSprint._   199      _ԀIntheFurtherNoticeand  Order,theCommissiondeniedthepetitionsforreconsiderationtotheextentthattheyrequested h thattheCommissiondeclinetoapplyitsverificationrulestoinboundcalls,butcontinuedthe 0 stay._    200      _ԀIntheFurtherNoticeandOrder,theCommissionstateditsbeliefthatitservesthepublic w interesttoofferconsumerswhoinitiatecallstocarriersthesameprotectionundertheverification ? rulesasthoseconsumerswhoarecontactedbycarriersandtentativelyconcludedthatverification  ofinboundcallsisnecessarytodeterslamming.`    201      ׀ P    ` b. Discussion  _   2 >  63  .3   ` Wefindthatverificationofinboundcallsisnecessarytodeterslammingand, p  accordingly,weliftthestayimposedintheInboundStayOrder.Ourdecisionissupportedby 8 statecommissionsandsome_IXCs_,includingMCIandAT&T._   202      _ԀThese_commenters_Ԁargue,and   weagree,thattheopportunityforslammingisasgreatwithinboundcallsaswithoutbound G calls._   203      _ԀEquallyimportant,werecognizethatexcludinginboundcallsfromourverification   requirementswouldopenaloopholefor_slammers_._    204      _ԀThroughthisloophole,unscrupulous  X carrierscouldslamnotonlyconsumerswhoinitiatecallsforreasonsotherthantochangecarriers,   butalsoconsumerswhohavesimplynevercalledin.Consumersslammedinthiswaywouldhave g  difficultyprovingthattheyhadneverinitiatedcallstoacarrier.Wefindthatthe_commenters_Ԁwho /  opposedverificationofinboundcallsfailedtoofferanysolutionstotheproblemthatnorecordis  x createdduringaninboundcallthatcanadequatelydemonstrateboththatthesubscribercalledin  @ andthatthecallwasforthepurposesofauthorizingacarrierchange.    205           2 ?  64  .3   ` Furthermore,wefindthatexemptinginboundcallsfromtheverification   requirementswouldunderminethepolicyunderlyingsection258,whichweconcludewas `  intendedtoprovideprotectionforallchangestoasubscriber'stelecommunicationsservice, (  regardlessofthemannerofsolicitation._    206      _ԀWealsodisagreewiththeargumentsofsome o  _commenters_Ԁwhoclaimthatcustomerswillbecomefrustratediftheirinboundcarrierchange 7  requestsareverified._0   207      _ԀSlamminghasbeenamuchpublicizedissueandwereceivemanycalls   andlettersandcomplaintsonadailybasisfromconsumersregardingslamming.Webelievethat H  consumerswillwelcomeadditionaleffortstocombatslammingfromallofitssources.    2 @  65  .3   ` Several_commenters_Ԁstatethatslammingfrominboundcallscurrentlyisnota  significantproblem._   208      _ԀWeconclude,however,thatconsumerswhocallcarriersarejustas h vulnerabletobeingslammedasconsumerswhoarecalledbycarriersandareentitledtothesame 0 protectionundersection258.   209      ׀Wefurtherconcludethat,withtheimpositionofthemore w stringentverificationrulesthatweareadoptinginthisOrder,unscrupulouscarrierswillattempt  todeviseotherschemestomakeunauthorizedcarrierchanges.Ifinboundcallswerenot G requiredtobeverified,theywouldbecomeaneasyopportunityforslammingcarrierstotake   advantageofconsumers.Forexample,acarriermayadvertiseasweepstakesforwhicha  X consumermustcallacertainnumbertoregisterforthedrawing.Thecarriercouldusethisin   boundcalltoslamconsumers,whowouldnothavethebenefitofsubsequentverificationto g  preventthemselvesfrombeingslammed.Ourexperienceswithslammingcarriersdemonstratethe /  vitalimportanceofforeclosingpotentialsourcesoffraudbeforetheybecomeamajorsubjectof  x consumercomplaints.Inaddition,weconcludethatslammingusinginboundcallingwillbecome  @ evenmoreprevalentwhencarriersbegintocombineservicestomarkettoconsumers,e.g.,   combining_intraLATA_Ԁand_interLATA_Ԁtollservicestogether.Forexample,ifaconsumercallsan O  unscrupulouscarriertoorder_interLATA_Ԁtollservice,thatcarriercouldmakeanunauthorized   changetotheconsumer's_intraLATA_Ԁtollserviceaswell.Byimposingverificationrequirements `  onsalesmadefrominboundcalls,wetakeanaggressiveapproachtocombatingslammingbefore (  itoccurs.ThemagnitudeoftheslammingproblemrevealsthattheCommissioncannotsimply o  waitforproblemstoappearbeforeattemptingtofixthem.TheCommissionmusttakeapro 7  activeapproachtoslammingandforecloseopportunitiesforslammingbeforeunscrupulous   carriersusethem. H    2 A  66  .3   ` Ourverificationruleswillapplytoallcarrierswhoreceivecallsthatresultinthe W submissionofacarrierchangerequestonasubscriber'sbehalf.Wedeclinetoapplyour  verificationrequirementsonlytocertaincarriers,basedontheir_ILEC_Ԁstatusorthefactthatthey h conductcontestsorsweepstakes,assuggestedbysome_commenters_._   210      _ԀAllcallsthatgeneratethe 0 submissionofacarrierchangeonasubscriber'sbehalf,regardlessofthecarrierreceivingitor w howtherequestwasreceived,mustbeverified.Thisuniformrulewilleaseadministrationby ? eliminatinganypossibleconfusionordisputesregardingtheapplicabilityofcallverification.We  agree,forexample,withUSWESTthatifverificationofinboundcallsisappliedonlytocarriers P usingcontestsorsweepstakes,itmaybedifficulttodeterminewhetheranyparticularpromotional  campaignisacontestorsweepstakes.   211      ׀Wealsofindthatuniformapplicationoftheverification _ requirementstoallinboundandoutboundcallswilldecreaseconsumerconfusionaboutwhatto ' expectwhenmakingchangestotheirtelecommunicationsservices.Wenotethatseveral p _commenters_Ԁappeartobelievethatverificationwouldberequiredonlyofcallsmadetoacarrier's 8 salesdepartmentoronlyforpurposesofinquiryconcerningapossiblechangerequest._P   212      _ԀWe    clarifythattheinboundcallverificationrequirementappliestoanycallmadetoacarrierthat G!! resultsinacarrierchangerequestbeingsubmittedonbehalfofasubscriber._   213      _ԀInthisway,our "" verificationruleswillprotectthoseconsumerswhomaycallacarrierforreasonsotherthanto "X# changeservice,butenduphavingtheirservicechanged. # $   2 B  67  .3   ` Weapplythesameverificationrequirementstoinboundandoutboundcalls. /%& Thiswillenablecarrierstoadoptuniformverificationproceduresforallcalls.Weconcludethat %x' theverificationrulesforoutboundcallswillsufficientlyprotectconsumersfrominboundcall  slamming.Wenotethatseveral_commenters_Ԁproposethatlessburdensomeverification G proceduresapplytoinboundtelemarketing.ACTAand_RCN_,forexample,suggestthatthe   telemarketerbepermittedtoconfirmtheorderverbally,justasamailordertelemarketer  X would._   214      _ԀBellSouth,_GTE_,IXCLongDistance,and_TOPC_Ԁproposetoallowcarrierstomake   audiorecordingsofinboundcalls._8   215      _ԀWedeclinetoadopttheseproposalsbecausewefindthat g  theyofferlittleprotectiontoaconsumeragainstanunscrupulouscarrier.Wehavepreviously /  rejectedinhouseverificationproceduresasprovidingcarrierswithtoomuchincentiveand  x opportunitytocommitfraud._P   216      _ԀBecauseweconcludethatconsumersdeservethesame  @ protectionfrominboundcallslammingastheydofromoutboundcallslamming,wecannot   permitcarrierstouselesssecureprocedurestoverifysalesgeneratedfrominboundcalls. O  Furthermore,wefindthatourrulesprovideacarrierwithsufficientflexibilitytochoosea   verificationmethodthatisappropriateforthatcarrier. `    2 C  68  .3   ` USWESTincludedinitscommentsaPetitionforReconsiderationofthatportion o  ofthe1995ReportandOrderthatappliedtheCommission'sverificationrulestoinboundcalls.   217      ׀ 7  USWESTstatesthatbecausethe1995ReportandOrderpertainedonlytointerexchange   servicesand_IXCs_,aLECsuchasUSWESTwouldnothavebeenexpectedtoseek H  reconsiderationofthoserulesatthattime.0   218      ׀WefindthatUSWEST'sPetitionfor  ReconsiderationoftheCommission's1995ReportandOrderisuntimelyfiled._   219      _ԀNevertheless, W inmakingourdecisionregardinginboundverificationinthisOrder,wehavetakeninto  considerationthecommentsregardinginboundverificationsubmittedbyUSWESTinits h PetitionforReconsideration.Basedontheevidenceintherecord,theadditionalcomments 0 soughtandreceived,andtheanticipatedcompetitiveclimate,weconcludethatimposing w verificationrulesoninboundcallsisinthepublicinterestandthatUSWEST'srequesttothe ? contraryshouldbedenied.WenoteadditionallythatwehaveconcludedearlierinthisOrderthat,  inaccordancewiththemandateofsection258,theCommission'sverificationrulesapplytoall P telecommunicationscarriersthatsubmitorexecutecarrierchanges,including_LECs_._    220      _   0  3. ` IndependentThirdPartyVerification '(#(#   2 D  69  .3   ` Several_commenters_Ԁsubmittedproposalsregardingtheindependentthirdparty 8  verificationmethodinresponsetotheCommission'srequestintheFurtherNoticeandOrderfor    additionalmechanismsforreducingslamming._   221      _ԀBasedonsomeoftheseproposals,andalsoto   addresssomeoftheproblemswehaveseeninconjunctionwiththeuseofthisverification G method,wemodifyourrulestosetforthexplicitcriteriatomeettherequirementofindependence   foranindependentthirdpartyverifier.Wealsoseekcommentonadditionalmodificationstoour  X rulesregardingindependentthirdpartyverificationinourFurtherNoticeofProposed   _Rulemaking_._   222      _Ԁ g    2 E  70  .3   ` Ourexistingrulesprovideforverificationbyusingan"appropriatelyqualifiedand  x independentthirdpartyoperatinginalocationphysicallyseparatefromthetelemarketing  @ representative"whoobtainedthecarrierchangerequest._P   223      _ԀWhenweadoptedindependentthird   partyverificationasaverificationoptioninthePICVerificationOrder,westatedthatthis O  verificationprocedureshouldcreateevidencethatis"totallyindependentoftheIXC'smarketing   operations."_   224      _ԀWehaveseenmanyinstancesinwhichcarriersusethirdpartyverificationina `  mannerthatiscalculatedtoconfuseandmisleadconsumers.Thesecarriersslamconsumersby (  firstusingmisleadingtelemarketingtoinduceconsumerstochangecarriers,forexample,by o  tellingthemthattheirlocalandlongdistancebillswillbeconsolidated.Thenthirdpartyverifiers 7  closethedealfortheseslammingcarriersbyassuringtheconsumersthattheyhavemerely   authorizedbillingconsolidation,notanycarrierchanges._0   225      _ԀWeemphasizethatourexistingrules H  mandatethatathirdpartyverificationmustbetrulyindependentofboththecarrierandthe  telemarketerinordertoconstituteavalidverification.Inparticular,athirdpartyverifierthathas W anyincentive,financialorotherwise,toapproveacarrierswitchwouldviolateourrulesandsuch  verificationwouldnotserveasevidencetorebutasubscriber'sallegationofanunauthorized h switch. 0   2 F  71  .3   ` Wesetforththefollowingspecificcriteriatodetermineathirdpartyverifier's ? independence.Thesecriteriaarenotintendedtobeexhaustive,butrathertheCommissionwill  evaluatetheparticularcircumstancesofeachcase.First,thethirdpartyverifiershouldnotbe P owned,managed,controlled,ordirectedbythecarrier._H    226      _ԀOwnershipbythecarrierwouldgive  thethirdpartyverifierincentivetoaffirmcarrierchanges,ratherthantodeterminewhetherthe _ consumerhasgivenauthorizationforacarrierchange.Second,thethirdpartyverifiershouldnot ' begivenfinancialincentivestoapprovecarrierchanges._    227      _ԀForexample,anindependentthird p partyverifiershouldnotreceivecommissionsfortelemarketingsalesthatareconfirmedbecause 8 suchacompensationschemeprovidesthethirdpartyverifierwithincentivetofalselyconfirm    sales.Asanotherexample,acarriershouldnotrequireanindependentthirdpartyverifierto G!! agreetoanexclusivecontractwiththecarrier,suchthattheindependentverifieriswholly "" dependentonthatparticularcarrierforrevenue.Third,wereiteratethatthethirdpartyverifier  mustoperateinalocationphysicallyseparatefromthecarrier.Wenotethatourrulesalready G requirethis,butwehighlightthisrequirementbecausewefindittobeanimportantone._   228      _Ԁ   Requiringthirdpartyverifierstobeindifferentphysicallocationsfromcarriersreinforcesthe  X armslengthnatureoftheirrelationship.     2 G  72  .3   ` Several_commenters_Ԁalsoproposedisclosurerequirementsforthescriptsusedby /  thirdpartyverifiers._NAAG_,forexample,suggeststhatthirdpartyverificationshouldincludethe  x disclosureofallmaterialinformation,suchastheinformationdisclosuresrequiredforwritten  @ _LOAs_._8   229      _Ԁ_TPV_ԀServicesalsostatesthattheverifiershouldonlyconfirmthatthesubscriber   understandsthetransactionandshouldrefrainfromtelemarketingforthecarrier._   230      _ԀBasedonthe O  record,weconcludethatthescriptsusedbytheindependentthirdpartyverifiershouldclearlyand   conspicuouslyconfirmthatthesubscriberhaspreviouslyauthorizedacarrierchange.Thescript `  shouldnotmirroranycarrier'sparticularmarketingpitch,norshoulditmarketthecarrier's (  services.Instead,itshouldclearlyverifythesubscriber'sdecisiontochangecarriers.Wenote o  thatweseekadditionalcommentonproposalsforscriptrequirementsintheFurtherNoticeof 7  Proposed_Rulemaking_._   231      _     4.0 ` OtherVerificationMechanisms ` (#` (#   2 H  73  .3   ` TheCommissionsoughtcommentintheFurtherNoticeandOrderonadditional  mechanismsforreducingslamming._   232      _ԀWereceivedmultipleproposalsandhaveevaluatedthem h accordingly.Weadoptaproposalmadebycertain_commenters_Ԁtorequirearetentionperiodfor 0 proofofverificationanddeclinetoadoptseveralotherproposalsmadeby_commenters_.Wealso w highlightorclarifycertainaspectsofourverificationrules,includingtheapplicationofour ? verificationrulestoallcarrierchanges,andourLOArequirements.    2 I  74  .3   ` Weadoptarulerequiringcarrierstoretain_LOAs_Ԁandotherverificationrecords  fortwoyears.   233      ׀Previously,werequired_LOAs_Ԁtoberetainedforoneyear h    234      ׀andwedidnot _ imposeanyretentionperiodforothermethodsofverification._NAAG_Ԁsuggeststhatcarriersbe ' requiredtoretain_LOAs_Ԁandverificationrecordsforthreeyears._     235      _ԀWeconcludethatrequiring p carrierstoretainverificationrecordsforgreaterthantwoyearswouldbeanunnecessaryburden 8 forcarriersandinsteadwillrequireverificationrecordstoberetainedforaperiodoftwoyears.    Wechoosearetentionperiodoftwoyearsbecauseanypersondesiringtofileacomplaintwith G!! theCommissionallegingaviolationoftheActmustdosowithintwoyearsofthealleged "" violation.    236      ׀Atwoyearretentionperiodwillenablecarrierstoproducedocumentationto  supporttheirclaimsregardinganallegedunauthorizedchange.Anycarrierwhoisunableto G provideevidenceofverificationduringthisperiodwillbesubjecttoa_rebuttable_Ԁpresumptionin   anyactionbeforetheCommissionthatthecarrierhasfailedtoobtainauthorizationbeforemaking  X acarrierchange.     2 J  75  .3   ` Other_commenters_Ԁmakeothersuggestionsthat,althoughtheymightbehelpfulin /  preventingslamming,areimpracticaltoimplement.Forexample,_NCL_Ԁsuggeststhatall  x subscribersbeassignedapersonalidentificationnumber(PIN)bytheirinterexchangecarriersto  @ usewhenauthorizingcarrierchanges._ 8   237      _ԀWeconcludethat,atthistime,suchproposalwouldbe   impractical.Allowingoneparty,theIXC,tocontrolconfirmationofPINnumberscoulddeter O  competition.Furthermore,becausesuch_PINs_Ԁwouldbeinfrequentlyused,mostsubscribers   wouldprobablyforgettheir_PINs_,resultinginconsiderableinconveniencetothem. `    2 K  76  .3   ` Several_commenters_Ԁsuggestlimitingourverificationoptionstoonlywritten (  _LOAs__    238      _Ԁortoindependentthirdpartyverification,   239      ׀whileothersproposetoaddmoreoptions, o  suchasaudiorecording._   240      _ԀMany_commenters_Ԁobjecttoanyproposalsthatwouldlimitthe 7  verificationoptionsavailable,arguingthatcarriersshouldbegrantedflexibilityintheirverification   procedures._   241      _ԀWedeclinetofurtherlimittheverificationoptions.Arangeofverificationoptions H  ЄwrittenLOA,electronicauthorization,andindependentthirdpartyverification    242      ׀isnecessary  tocontinuetogivecarriersthemaximumflexibilitytochooseaverificationmethodappropriate W fortheirneeds.Furthermore,theverificationrules,aswehavemodifiedtheminthisOrderwill  provideconsumerswithprotectionagainstslammingwhilestillprovidingthemwiththeabilityto h changecarrierswithoutunnecessaryburdens. 0   2 L  77  .3   ` Some_commenters_ԀproposethattheCommissionadoptregulationstoprohibit ? directlydeceptiveorabusivesalestactics._    243      _Ԁ_NAAG_ԀstatesthatsomecarriersclaimthatFederal  TradeCommissionregulationsprohibitingdeceptivesalespracticesdonotapplytocommon P carriers._    244      _Ԁ_FLS_Ԁstatesthatsomecarriersclaimthatstateconsumerprotectionlawsdonotapply  tocommoncarriers._`   245      _ԀWedeclinetoadoptanyspecificregulationsatthistime.Wenotethatthe _  Commissionhasauthorityundersection201(b)toprohibitallcarrierpracticesthatareunjustand ' unreasonable,   246      ׀includingdeceptiveorabusivesalestactics.Forexample,recentlywetook   enforcementactionagainstacarrierbecauseitsfraudulentrepresentationofitselfasabilling G consolidationservice,ratherthanasaninterexchangecarrier,aswellasitseffortstoobscurethe   truenatureofitsserviceoffering,appearedtoconstituteunjustandunreasonablepracticesin  X violationofSection201(b)._8   247      _     2 M  78  .3   ` Weclarifythat,regardlessofthesolicitationmethodused,allcarrierchangesmust /  beverified.Wemodifyourrulestomakeclearthatacarriermustuseofoneofourthree  x verificationoptions(writtenLOA,electronicauthorization,andindependentthirdparty  @ verification)toverifyanycarrierchange.Specifically,thecurrentrulesappeartocreatea   dichotomybetweenverificationmethodstobeusedwhenacarrierchangeisobtainedthrough O  telemarketing,andwhenothermarketingmethodsareused.Astrictreadingoftheruleswould   indicatethat,pursuanttocurrentsection64.1100,atelemarketingcarrierhasseveralverification `  options,butthatacarrierthatdoesnot_telemarket_ԀmustobtainawrittenLOApursuanttocurrent (  section64.1150.Thiswouldseemtopenalizecarriersthatusemethodsotherthantelemarketing, o  suchasinpersonsolicitationsorInternetsignups,   248      ׀bydenyingthemflexibilityintheir 7  verificationmethods.Wearealsoawarethatsomecarriershaveinterpretedthedifference   betweencurrentsections64.1100and64.1150toarguethattheyarenotrequiredtoverifytheir H  carrierchangerequestsbecausesuchchangeswerenotobtainedthroughtelemarketing.Thisis  incorrect,astheCommission'spreviousordershaveclearlystatedthatallcarrierchangesmustbe W authorizedandverified._   249      _ԀBecausesomeconfusionappearstoexistamongcarriersregardingthis  subject,wemodifyourrulesaccordingly. h   2 N  79  .3   ` Withregardto_LOAs_,wehaveseenadisturbingtrendinthepracticesofcertain w carriersandtheiragentsofmarketingtelecommunicationsservicesinconjunctionwith ? sweepstakesandcontestsateventssuchasfairsandotherpublicgatherings.Suchcarriers  encouragepeopletofilloutandsigncontestformsthatalsocontainLOAlanguageprintedinan P inconspicuousmanner,andtodroptheformsintoaboxinordertowinaprizethatwillbe  awardedonthebasisofanentrydrawnfromthebox._   250      _ԀSuchpracticesareinviolationofthe _ Commission'srules.OurrulesstatethattheLOA"shallbeaseparatedocument...whosesole ' purposeistoauthorizeaninterexchangecarriertoinitiateaprimaryinterexchangecarrier p change."_    251      _ԀInsituationssuchastheonewehavedescribed,theLOAisnotbeingusedforthe 8 solepurposeofauthorizingachangeincarriers.TheLOAisbeingusedfortwopurposesto  changeasubscriber'slongdistanceserviceandtoenteracontestorsweepstakes.Weadopted G thisrulespecificallytoaddressthesituationinwhichaconsumeris"deceivedbyanLOAthatis   disguisedasacontestentry,prizeclaimform,orcharitablesolicitation."_8   252      _ԀWeemphasizethat  X carrierswhoutilizesuchpracticesareviolatingtheCommission'srulesandmaybesubjecttothe   fullrangeofsanctionsattheCommission'sdisposal,includingforfeituresandrevocation g  proceedings.   253       /  0  5. ` UseoftheTerm"Subscriber"  @(#(#   2 O  80  .3   ` Wemodifycurrentsection64.1100tousetheterm"subscriber"inplaceof O  "customer,"asproposedintheFurtherNoticeandOrder.   254      ׀Wealsoamendcurrentsection   64.1150(e)(4)tochangetheword"consumer"to"subscriber."_0   255      _ԀBecausesection258usesthe `  term"subscriber"ratherthan"customer,"thiswillmakethelanguageinourrulesconsistentwith (  thestatutorylanguage._    256      _ o   D.  ExtensionoftheCommission'sVerificationRulestotheLocalMarket    0  1. ` ApplicationoftheVerificationRulestotheLocalMarket (#(#    2 P  81  .3   ` IntheFurtherNoticeandOrder,theCommissionsoughtcommentonwhetherthe  currentverificationrules,whichapplyonlyto_IXCs_,shouldbeappliedtothelocalmarket(i.e., h localexchangeserviceand_intraLATA_Ԁtollservice)._    257      _ԀWeconcludethatCongresshasexpressed 0 itsintentinsection258tohavetheCommissionadoptverificationrulesapplicabletochangesin w bothlocalexchangeandtelephonetollservice.!   258      ׀Accordingly,allchangestoasubscriber's ?  preferredcarrier,includinglocalexchange,_intraLATA_Ԁtoll,and_interLATA_Ԁtollservices,mustbe  authorizedbythatsubscriberandverifiedinaccordancewithourprocedures."   259      ׀Theslamming   complaintswehavereceivedthusfararealmostexclusivelycomplaintsaboutunauthorized G changesininterexchangecarriers.Withtheadventofcompetitionintheprovisionoflocal   exchangeand_intraLATA_Ԁtollservices,however,weanticipateanevengreaterincidenceof  X slamminggenerallyifeffectiverulesarenotputintoplace.Statecommissionsarealready   receivingcomplaintsconcerninglocalserviceslamming.#   260      ׀TheCommissionprocessed g  approximately80complaintsregardinglocalserviceslammingin1997and129localservice /  slammingcomplaintsfromJanuarythroughOctober1998.$    261      ׀Weagreewiththemajorityof  x _commenters_Ԁthatthecurrentrules,withthemodificationsadoptedinthisOrder,%    262      ׀shouldbe  @ effectiveinpreventingslamminginthelocalmarket._&   263      _Ԁ     2 Q  82  .3   ` Wealsorequirecarrierstoidentifyspecificallythetypesofserviceorservices   beingoffered(e.g.,_interLATA_Ԁtoll,_intraLATA_Ԁtoll,localexchange)inanypreferredcarrier `  solicitationorletterofagency,andtoobtainseparateauthorizationandverificationforeach (  servicethatisbeingchanged._'   264      _ԀTheseparateauthorizationandverificationmaybereceivedand o  conductedduringthesametelemarketingsolicitationorobtainedinseparatestatementsonthe 7  sameLOAform.Wemerelyrequirethateachservicebeidentifiedanddelineatedclearlytothe   subscriber.Forexample,acarrierthatcallsasubscribertomarketboth_intraLATA_Ԁtolland H  _interLATA_Ԁtollservicesmustexplaintothesubscriberthedifferencebetweenthetwoservices.  Thenthecarriermustobtainseparateauthorizationforeachservice.Thesubscriber's W authorizationstochange_intraLATA_Ԁtolland_interLATA_Ԁcarriersmustalsobeverifiedseparately.  Weadoptthisruleinresponsetotheconcernsofcarrierssuchas_Ameritech_ԀandCBTthat h consumersmayexperienceconsiderableconfusionaboutthedifferencesamong 0 telecommunicationsservices,especiallythedistinctionbetween_intraLATA_Ԁtolland_interLATA_  toll._(   265      _ԀByrequiringcarrierstodescribefullytheservicestheyoffer,andobtainseparate G authorizationandverificationfordifferentservices,carrierswillbepreventedfromtaking   advantageofconsumerconfusionandchangingthepreferredcarriersforallofasubscriber's  X telecommunicationsserviceswherethesubscribermerelyintendedtochangeone.Wenotethat   thisrulebuildsontheexistingrequirementinsection64.1150(e)(4)ofourrulesthatanLOAmust g  containseparatestatementsregardingthesubscriber'schoiceofinterexchangecarrierswherea /  jurisdictionallowstheselectionofadditionalprimaryinterexchangecarriers(e.g.,forintrastate  x tollorinternationalcalling)._)8   266      _ԀOurdecisiontodayexpandstherequirementofsection  @ 64.1150(e)(4)toencompassalltelephoneexchangeandtelephonetollservicesandestablishesthe   samerequirementfortheverificationofallcarrierchanges. O    2 R  83  .3   ` Theverificationrulesareintendedtodeterslammingandprotectconsumersfrom `  unauthorizedchangesintheirpreferredcarriers.Several_commenters_,however,supporttargeted (  proposals,ratherthanthegeneralapplicationofmorerigorousverificationrules,purportedlyto o  avoidunnecessarycostsandharmtocompetition._*   267      _ԀForexample,_Ameritech_,_SBC_,andUS 7  WESTproposesystemsthatwouldimposefinesormorestringentverificationrequirementson   carrierswithahistoryofslamming,asdeterminedbytheLECorotherwise._+   268      _ԀInlightofthehigh H  incidenceofslammingviolationswecurrentlyface,weprefertoadopttheapproachtakeninthe  rulesinthisOrderbecausetheywillhelptopreventcarriersfromslammingconsumersinthefirst W place.Furthermore,suchproposalscouldpermit_LECs_Ԁtotargetcertaincarriers,includingthose  thatareofferingcompetingservices.Consideringthat_LECs_Ԁmaynolongerbeneutralpartiesin h thecarrierchangeprocessasaresultoftheirentryorexpectedentryintotheinregionlong 0 distancemarketandtheadventoflocalcompetition,wedonotbelievethatitwouldbeprudentto w provide_LECs_Ԁwithincentivetoactanticompetitively.Wenotethat_Ameritech_Ԁstatesthat,rather ? thanpermitting_LECs_Ԁtodeterminewhichcarriersshouldbesubjecttofinesormorestringent  verificationrequirements,carrierscouldbetargetedusingamoreneutralsourceofnumbersof P carrierchangedisputes,suchastheCommission'sCommonCarrierScorecard,whichshowsthe  numberofdisputedcarrierchangesforcarriers._,    269      _ԀWeshare_TRA_'sconcern,however,about _ imposingdisparatetreatmentbeforeacarrierhastheopportunitytoprovethatitdidnotslama ' consumer._-    270      _ p 0  2.0` (#(#ApplicationoftheVerificationRulestoAllTelecommunicationsCarriers   ` (#` (# Ї  2 S  84  .3   ` IntheFurtherNoticeandOrder,theCommissionproposedtoincorporatethe  specificlanguageofsection258(a)oftheActintoitsrulestoreflectthestatutoryprohibitionon G slammingbyanytelecommunicationscarrier,andnotjust_IXCs_Ԁasisthecaseunderthecurrent   rules..   271      ׀Weadopttheproposedrulerequiringthatnotelecommunicationscarriershallsubmitor  X executeachangeonbehalfofasubscriberinthesubscriber'sselectionofaproviderof   telecommunicationsserviceexceptinaccordancewiththeCommission'sverificationprocedures, g  consistentwiththelanguageofsection258./8   272      ׀WenotethattheCommission'sverification /  procedureswouldnotapplytoasituationinwhichacarrierdropsasubscriberfromitsservice,  x resultinginthesubscribernothavingany_presubscribed_Ԁcarrier,becausesuchachangewouldnot  @ resultinthesubscriberbeing_presubscribed_Ԁtoanothercarrier.The_commenters_Ԁsupportour   findingthatincorporatingthebroadlanguageofsection258intoourrulewillappropriately O  implementCongressionalintent._0   273      _     2 T  85  .3   ` Basedontherecord,however,wecreateanexceptionfor_CMRS_Ԁproviders.1   274      ׀ (  Weconcludethat_CMRS_Ԁprovidersshouldnotbesubjecttoourverificationrulesatthistime o  becauseslammingdoesnotoccurinthepresent_CMRS_Ԁmarket.20   275      ׀_CMRS_Ԁprovidersarenot 7  currentlysubjecttoequalaccessrequirements._3   276      _ԀInotherwords,a_CMRS_Ԁproviderisfreeto   designateanytollcarrierforitssubscribersunlessithasvoluntarilychosennottodoso.We H  believethatmany_CMRS_Ԁprovidersoffertheirsubscriberstelecommunicationsservicepackages  thatincludelocalexchange,_intraLATA_Ԁtoll,and_interLATA_Ԁtollservicesusingparticularcarriers, W andthereforeanyconsumerwhohasagreedtosubscribetosuchapackageasofferedbya_CMRS_  providermayhaveagreedtouseonlythosecarriers._4    277      _ԀWherea_CMRS_Ԁproviderdoesnotoffer h itssubscribersanychoicesintollcarriers,verificationofsubscriberauthorizationtochangetoll 0 providerswouldbeinapplicable.Weareaware,however,thatsome_CMRS_Ԁprovidersdoprovide w theirsubscriberswithchoicesintollcarriers.Itisourunderstandingthatthe_CMRS_Ԁcarrier, ? whichhasmadecontractualarrangementswiththetollcarriers,isincontrolofthisselection  processandmustbecontactedbythesubscriberinorderforanychangeintollcarrierstooccur. P Furthermore,BellAtlanticMobileand_CTIA_Ԁstatethat,atthistime,a_CMRS_Ԁcarriercannot  changeacustomer'swirelesslocalexchangeservicewithoutthatcustomer'sexpressapproval, _ becausethecustomermusttypicallyphysicallyreprogramthehandsettoinitiateservicewitha ' newcarrier._5   278      _ԀInlightoftheseconsiderations,webelievethatunauthorizedchangesaremuch  lesslikelytooccurandwearenotawareofanyslammingcomplaintsinthisarea._68   279      _ԀAccordingly, G intheabsenceofevidencethatslammingisaprobleminthisarea,wedeclinetoapplyour   verificationproceduresto_CMRS_Ԁcarriersatthistime.7   280      ׀Wemayrevisitthisissueshould  X slammingbecomeaprobleminthe_CMRS_Ԁmarket.   0  3.0` (#(#TheStates'Role / ` (#` (#   2 U  86  .3   ` Section258chargestheCommissionwiththeresponsibilityforestablishing  @ verificationproceduresforcarrierswho"submitorexecuteachangeinasubscriber'sselectionof   aprovideroftelephoneexchangeserviceortelephonetollservice."8h   281      ׀Therefore,section258 O  explicitlygrantstheCommissionauthoritytocreateverificationproceduresforbothinterstateand   intrastateservices,andourruleshereindeedapplytobothsetsofservices.Manycarriersurgeus `  generallytopreemptstateregulationofslammingbylocalexchangeandintrastateinterexchange (  carriersinordertocreateuniformrules.9   282      ׀CarrierssuchasAT&T,BellSouth,andExcelstate o  thatcompliancewithmultiplesetsoffederalandstateruleswouldbeexpensive,delay 7  competition,andconfuseconsumers.:H    283      ׀Theissueoffederalpreemptionofslammingregulation   bystateshasalsobeenraisedinotherfora._;    284      _ H    2 V  87  .3   ` Wedeclinetopreemptgenerallystateregulationofcarrierchanges.Thestates W andtheCommissionhavealonghistoryofworkingtogethertocombatslamming,andwe  concludethatstateinvolvementisofgreaterimportancethaneverbefore.Weconcludethatthe h Commissionmustworkhandinhandwiththestatesforthecommonpurposeofeliminating 0 slamming.Inthecontextofthispartnership,weexpectthestatesandtheCommissionto w continuesharinginformationaboutslammingandtodeveloptogethernewandcreativesolutions ? tocombatslamming.Weconcludethat,althoughastatemustacceptthesameverification  proceduresasprescribedbytheCommission,astatemayacceptadditionalverification P proceduresforchangestointrastateserviceifsuchstateconcludesthatsuchactionisnecessary  basedonitslocalexperiences. _   2 W  88  .3   ` Inotherwords,absentaspecificpreemptiondetermination,astatemayprovide p carrierswithfurtheroptionsforverifyingcarrierchangestointrastateservice,inadditiontothe 8 Commission'sthreeverificationoptions,ifthestatefeelsthatsuchprocedureswouldpromote    consumerprotectionand/orcompetitioninthatstate'sparticularregion.Inthisregard,weagree G!! withtheMarylandCommission,whichcontendsthatstatesmayhavevaluableinsightbecause "" theyhavesubstantialcontactwithconsumersandareneartotheslammingproblem.<   285      ׀Weagree  withtheOklahomaCommission,whichstatesthata"onesizefitsallapproach,"asrecommended G bythecarriers,wouldnottakeintoconsiderationthespecificexperiencesandconcernsof   individualstatesintheslammingarea.=8   286      ׀Wefurthernotethatnothinginourrulesprohibitsstates  X fromdeterringslammingthroughmeansotherthanregulationofverificationprocedures,suchas   generalconsumerprotectionrequirementsordirectregulationoftelemarketingsales._>   287      _Ԁ g    2 X  89  .3   ` Statesmust,however,writeandinterprettheirstatutesandregulationsinamanner  x thatisconsistentwithourrulesandorders,aswellassection258.Forexample,astatemaynot  @ adoptthewelcomepackageasanadditionalverificationmethodbecausewehavedeterminedthat   thewelcomepackagefailstoprotectconsumers.Furthermore,weareobligatedandwillingto O  examinestaterulesonacasebycasebasisifitappearsthattheyconflictwiththepurposeofour   rules,forinstance,byprohibitingorhavingtheeffectofprohibitingtheabilityofanyentityto `  providetelecommunicationsservice.?   288      ׀Withregardtotheissueofpreemptionofstate (  verificationprocedures,theCommissionwillnotmakeapreemptiondeterminationintheabsence o  ofanadequaterecordclearlydescribingthestatelaworactiontobepreemptedandpreciselyhow 7  thatstatelaworactionconflictswithfederallaworobstructsfederalobjectives._@    289      _ԀTherecordin   thisproceedingdoesnotcontainanycomprehensiveidentificationoranalysisofwhichparticular H  statelawswouldbeinconsistentwithourverificationrulesorwouldobstructfederalobjectives.  Some_commenters_ԀreferencestatelawsthatdifferfromtheCommission'srules,suchas W California'slawthatrequirescarrierstousethirdpartyverificationforchangestoresidential  service.A   290      ׀These_commenters_,however,donotaskforpreemptionofthesespecificstatutes h alone,butratherforwholesalepreemptionofallstatestatutesthatmaybeinconsistentwiththe 0 Commission'sverificationrequirements._BH   291      _ԀThe_commenters_Ԁdonotprovideanydetailed w explanationofhowaparticularstate'sverificationrequirementsdifferfromthoseofthe ? Commission,norhowanystaterequirementsareinconsistentwithourrulesorobstructfederal  objectives.The_commenters_Ԁmerelyallegegenerallythatcarrierswillfinditeasiertocomplywith  oneuniformsetoffederalrulesratherthanwithfederalrulesandmultiplesetsofstaterules._C   292      _Ԁ G Accordingly,therecorddoesnotcontainsufficientinformationaboutvariousstaterequirements   toallowustoassesstheabilityofcarrierstocomplywithbothfederalandstateantislamming  X mechanisms.Totheextent,however,thattheselawsrequireaverificationprocedurethatis   acceptableunderourrules,theywouldappeartobeincompliancewithsection258andwould g  notbepreempted. /    2 Y  90  .3   ` Section258expresslygrantstothestatesauthoritytoenforcetheCommission's  @ verificationprocedureruleswithrespecttointrastateservices.D8   293      ׀Astatethereforemay   commenceproceedingsagainstacarrierforviolationoftheCommission'srulesgoverning O  changestoasubscriber'sintrastateservice.Weconcludethatenforcementisanotherareain   whichthestatesandtheCommissionmayworktogethertoeradicateslamming.Asingle `  unauthorizedchangemayresultintheswitchingofbothasubscriber'sintrastateandinterstate (  serviceinviolationoftheCommission'sverificationprocedures.Inthecaseofanunauthorized o  changethatresultsinchangestointrastateandinterstateservice,astate'sproceedingtoenforce 7  theCommission'sruleswithrespecttotheintrastateviolationwillyieldfactualfindingsregarding   theinterstateviolationaswell.Thestate'sfactualfindinginsuchacasewillbegivengreatweight H  intheCommission'sproceedingtodeterminewhetherthecarrierviolatedtheCommission's  interstateverificationprocedures.Thiswillhelptodeterslammingbyexpeditingtheresolutionof W slammingcomplaintsonanationwidebasis.Weconcludethatstateregulationofcarrierchanges  intheintrastatemarketthatiscompatiblewithourrules,alongwithstateenforcementofour h rulesregardingcarrierchangesintheintrastatemarket,willenablestatestoplayavaluableand 0 essentialroleinthepartnershipwiththeCommissiontocombatslammingandprotectconsumers. w  E.0  SubmittingandExecutingCarriers(#(# 0  1. ` Definitionof"Submitting"and"Executing"Carriers (#(#   2 Z  91  .3   ` IntheFurtherNoticeandOrder,theCommissiontentativelyconcludedthata ' submittingcarrierisanycarrierthatrequeststhataconsumer'stelecommunicationscarrierbe p changed,andthatanexecutingcarrierisanycarrierthateffectssucharequest._E   294      _ԀThe 8 Commissionsoughtcommentonthesedefinitions,andonwhethertheyweresufficientlybroadin    scopetoholdaccountableallcarriersinvolvedincarrierchangetransactions.F   295      ׀ G!!   2 [  92  .3   ` Weadoptamodificationtoourproposeddefinitionofasubmittingcarrierinorder "X# totakeintoaccounttherolesofunderlyingcarriersandtheirresellers.Many_commenters_, # $ includingBellAtlantic,Frontier,theNorthCarolinaCommission,andSprint,notethatour g$% proposeddefinitionsdidnottakeintoaccounttheroleshiftingthatoccurswhenafacilitiesbased /%& LECorIXCsellsservicetoa_switchless_Ԁreseller.G   296      ׀Forexample,theresellerthatgenerates %x' carrierchangesforinterexchangeservicegenerallysubmitsthechangerequeststothefacilities  basedIXCfromwhichitpurchasesservice.ThefacilitiesbasedIXCthensubmitsthechange G requeststotheexecutingLEC.These_commenters_Ԁgenerallysupportredefiningasubmitting   carriersothatthereseller,ratherthanitsunderlyingfacilitiesbasedcarrier,wouldhavethe  X obligationsofbeingthesubmittingcarrier.H   297      ׀Therulesweadoptbuildonsuggestionsmadeby   _WorldCom_Ԁfordefiningasubmittingcarrier._I   298      _ԀUndertherulesweadopt,asubmittingcarrierwill g  begenerallyanycarrierthat(1)requestsonthebehalfofasubscriberthatthesubscriber's /  telecommunicationscarrierbechanged;and(2)seekstoprovideretailservicestotheenduser  x subscriber.JP   299      ׀Wenote,however,thateithertheresellerorthefacilitiesbasedcarriermaybe  @ treatedasasubmittingcarrierifitisresponsibleforanyunreasonabledelaysinthesubmissionof   carrierchangerequestsorifitisresponsibleforsubmittingunauthorizedcarrierchangerequests, O  includingfraudulentauthorizations.If,forexample,aresellersubmitsacarrierchangerequestto   itsunderlyingcarrier,andthatunderlyingcarrierchangesthatcarrierchangerequestsothatthe `  subscriberendsupbeingsubjecttoanunauthorizedcarrierchange,theunderlyingcarrierwould (  beliableasasubmittingcarrierfortheunauthorizedchange.Theunderlyingcarrierwouldnotbe o  liableasasubmittingcarrier,however,ifitinnocentlysubmittedtotheexecutingcarrierachange 7  requestthatwasnotverifiedproperlybyitsreseller.     2 \  93  .3   ` Wenotethatinsituationsinwhichacustomerinitiatesorchangeslongdistance  servicebycontactingtheLECdirectly,verificationofthecustomer'schoicewouldnotneedtobe W verifiedbyeithertheLECorthechosenIXC.Inthissituation,neithertheLECnortheIXCis  thesubmittingcarrieraswehavedefinedit.TheLECisnotprovidinginterexchangeserviceto h thatsubscriber.TheIXChasnotmadeanyrequestsithasmerelybeenchosenbythe 0 consumer.Furthermore,becausethesubscriberhaspersonallyrequestedthechangefromthe w executingcarrier,theIXCisnotrequestingachangeonthesubscriber'sbehalf.IfaLEC'sactions ? inthissituationresultedinthesubscriberbeingassignedtoadifferentinterexchangecarrierthan  theoneoriginallychosenbythesubscriber,however,thenthatLECcouldbeliableforviolations P ofitsdutiesasanexecutingcarrier.    2 ]  94  .3   ` WeadoptthedefinitionproposedintheFurtherNoticeandOrderforan ' executingcarrier,sothatanexecutingcarrierisgenerallyanycarrierthateffectsarequestthata p subscriber'stelecommunicationscarrierbechanged.K   300      ׀Thisrulewillapplyevenwhereareseller 8 competitivelocalexchangecompany(_CLEC_)receivescarrierchangesandsubmitssuchchanges    toitsunderlyingfacilitiesbasedLEC.Some_commenters_Ԁarguethat,insuchacase,thereseller G!! _CLEC_ԀshouldbeconsideredtheexecutingcarrierratherthanthefacilitiesbasedLEC.L0   301      ׀ "" BellSoutharguesthatboththe_CLEC_ԀandthefacilitiesbasedLECshouldbeconsideredexecuting "X# carriersinthisscenario.M   302      ׀Weconcludethattheexecutingcarriershouldbethecarrierwhohas # $ actualphysicalresponsibilityformakingthechangetothesubscriber'sservice,ratherthana g$% carrierthatismerelyforwardingacarrierchangerequestonbehalfofasubscriber.Forexample,  ifaconsumerwhoissubscribedtoareseller_CLEC_Ԁforlocalexchangeservicerequestsachange G ininterexchangecarriers,theexecutingcarrieristhefacilitiesbasedLECthatmakesthesoftware   changeatitsswitch,notthe_CLEC_ԀthatreceivesthechangeorderfromtheIXCandforwardsthat  X changeordertothefacilitiesbasedLEC.Forachangefromafacilitiesbasedlocalexchange   carriertoareseller_CLEC_,theexecutingcarrierwouldbethefacilitiesbasedlocalexchange g  carrierwhomakesthechangeinitsbillingrecordssothatthesubscriberisbilledbythe_CLEC_ /  ratherthanthefacilitiesbasedLEC.Inacarrierchangesituation,thereseller_CLEC_Ԁmayhave  x littleresponsibilityexcepttoforwardthechangerequesttothefacilitiesbasedLECthatactually  @ makesthechange.Definingtheexecutingcarrierasthecarrierthatactuallymakesthechangeis   thereforemostappropriate.Wenotethat,whereasubscriberischangingtoafacilitiesbased O  localexchangecarrier,thatfacilitiesbasedlocalexchangecarrierwillboth"submit"thechange,   albeittoitself,andalsoexecutethatchange.Wealsoemphasize,however,thateitherthereseller `  orthefacilitiesbasedcarriermaybetreatedasanexecutingcarrierifitisresponsibleforany (  unreasonabledelaysintheexecutionofcarrierchangesorfortheexecutionofunauthorized o  carrierchanges,includingfraudulentauthorizations.If,forexample,areseller_CLEC_Ԁforwardsto 7  itsfacilitiesbasedcarrierafalsifiedrequestforachangeininterexchangecarriers,inorderto   benefitthereseller'saffiliate,thatresellermaybeliableasanexecutingcarrierandbesubjectto H  thesamesanctionsthatwouldbeimposedonanyexecutingcarrierthatfailstocomplywithour  rules.N   303       W   2 ^  95  .3   ` WealsonotethatourdefinitionofanexecutingcarriercouldalsoincludeanIXC h inthecurrentenvironment.WhenafacilitiesbasedIXCresellsservicetoa_switchless_Ԁreseller, 0 the_switchless_Ԁresellerusesthesamecarrieridentificationcode(_CIC_)asthefacilitiesbasedIXC. w SubscribersofboththefacilitiesbasedIXCandthe_switchless_Ԁresellerwouldthereforebeonthe ? networkofthefacilitiesbasedIXC,withthesame_CIC_._CICs_Ԁareusedby_LECs_Ԁtoidentify  different_IXCs_Ԁsothat_LECs_Ԁwillknowtowhichcarriertheyshouldrouteasubscriber's P interexchangetraffic._O8   304      _ԀWhereasubscriberchangesfromafacilitiesbasedIXCtoaresellerof  thatfacilitiesbasedIXC'sservices,theresellersubmitsacarrierchangeordertothefacilities _ basedIXC.ThatfacilitiesbasedIXCdoesnotsubmitthatchangeordertothesubscriber'sLEC ' because,asfarastheLECisconcerned,theroutingofcallsforthatsubscriberhasnotchanged p duetothefactthatthe_CIC_Ԁremainsthesame(i.e.,theLECwillstillsendinterexchangecalls 8 fromthatsubscribertothesamefacilitiesbasedcarrier).ThefacilitiesbasedIXCusesthecarrier    changerequesttoprocessthechangeinitsownsystem,whichenablestheresellertobeginbilling G!! thesubscriber.Therefore,inthisverylimitedsituation,theexecutingcarrieristhefacilitiesbased "" IXC,nottheLEC.Infact,thefacilitiesbasedIXCwouldbetheexecutingcarrierforallcarrier "X# changesinwhichthesubscriberremainsonthefacilitiesbasedIXC'snetwork,regardlessof # $ whetherthesubscriberhaschangedfroma_switchless_Ԁresellertothereseller'sfacilitiesbasedIXC, g$% fromthefacilitiesbasedIXCtoa_switchless_ԀresellerofthatIXC'sservice,orfroma_switchless_ /%& resellerofthefacilitiesbasedIXC'sservicetoanother_switchless_ԀresellerofthatsameIXC's %x' service. &@(   2 _  96  .3   ` BasedonBellSouth'srecommendation,PP   305      ׀weclarifythatabillingagenthasno ' ) liabilityunderourverificationrulesifitisneitheranexecutingorsubmittingcarrier,asdefinedby O( * ourrules. )!+ Ї0  2.0` (#(#ApplicationofVerificationRulestoSubmittingandExecutingCarriers ` (#` (#   2 `  97  .3   ` IntheFurtherNoticeandOrder,theCommissiontentativelyconcludedthatthe   submittingcarrier'scompliancewithourverificationruleswouldfacilitatetimelyandaccurate  X executionofanycarrierchange,andthatanexecutingcarrierwouldnotberequiredtoduplicate   thecarrierchangeverificationeffortsofthesubmittingcarrier._Q   306      _ԀTheCommissionsought g  commentonanyspecificadditionalorseparateverificationproceduresthatshouldapplyto /  telecommunicationscarriersthat"execute"carrierchanges,andthepossibleeffectsofsuch  x proceduresoncompetitionandconsumerprotection.R8   307        @   2 a  98  .3   ` Weconcludethatexecutingcarriersshouldnotverifycarrierchangespriorto O  executingthechange.S   308      ׀Weagreewithseveral_commenters_Ԁthatrequiringsuchverification   wouldbeexpensive,unnecessary,and_duplicative_Ԁofthesubmittingcarrier'sverification._T   309      _Ԁ `  Althoughexecutingcarriersdonothaveverificationobligationsunderourrules,theydohavea (  responsibilitytoensurethatsubscribers'carrierchangesareexecutedassoonandasaccuratelyas o  possible,usingthemosttechnologicallyefficientmeansavailable.Executingcarriersarerequired 7  toexecutepromptlyandwithoutanyunreasonabledelay_U   310      _Ԁchangesthathavebeenverifiedbythe   submittingcarrier.V   311      ׀Inotherwords,executingcarriersmaybeliableforfailuretocomplywith H  ourrulesiftheiractionsresultinanyunreasonabledelayofexecutionofcarrierchangesorin  unauthorizedcarrierchanges.Wh    312       W   2 b  99  .3   ` Some_LECs_Ԁbelievethatadditionalverificationofcarrierchangesbyexecuting h carrierswouldfurtherreducetheincidenceofslamming._X(    313      _ԀThesepartiesstatethatLEC 0 verificationhasprovedeffectiveinavoidingunauthorizedPICchangeswhichmaybecostlyin w termsoftimedevotedtoresolutionofconsumercomplaintsandinalossofconsumerconfidence ? intheLEC.Y   314      ׀Incontrast,several_commenters_Ԁstatethatanexecutingcarriercoulduse  verificationasanopportunitytodelayordenycarrierchangesinordertogainacompetitive P advantageforitselforforaffiliatedcarriers._Z   315      _ԀAlthoughweagreethatverificationbyexecuting  carriersofcarrierchangescouldhelptodeterslamming,wefindthatpermittingexecutingcarriers G toverifyindependentlycarrierchangesthathavealreadybeenverifiedbysubmittingcarrierscould   have_anticompetitive_Ԁeffects.Wehaveconcernsthatexecutingcarrierswouldhaveboththe  X incentiveandabilitytodelayordenycarrierchanges,usingverificationasanexcuse,inorderto   benefitthemselvesortheiraffiliates.Furthermore,wefindthatanexecutingcarrierthatattempts g  toverifyacarrierchangerequestwouldbeactinginviolationofsection222(b),whichstatesthat /  acarrierthat"receivesorobtainsproprietaryinformationfromanothercarrierforpurposesof  x providinganytelecommunicationsserviceshallusesuchinformationonlyforsuchpurpose[.]"[   316      ׀  @ Theinformationcontainedinasubmittingcarrier'schangerequestisproprietaryinformation   becauseitmustsubmitthatinformationtotheexecutingcarrierinordertoobtainprovisioningof O  serviceforanewsubscriber.Therefore,pursuanttosection222(b),theexecutingcarriermay   onlyusesuchinformationtoprovideservicetothesubmittingcarrier,i.e.,changingthe `  subscriber'scarrier,andmaynotattempttoverifythatsubscriber'sdecisiontochangecarriers.\   317       (    2 c  100  .3   ` Wealsohaveconcernsthatanexecutingcarrier'sverificationofanalreadyverified 7  carrierchangecouldserveasadefactopreferredcarrierfreeze,eveninsituationsinwhichthe   subscriberhasnotrequestedsuchafreeze.]h   318      ׀Preferredcarrierfreezesrequiresubscribersto H  contacttheirexecutingcarrierstoliftsuchfreezesbeforeanycarrierchangesmaybemadeto  theiraccounts.Theverificationofacarrierchangerequestbyanexecutingcarrierissimilartoa W preferredcarrierfreezebecauseitwouldrequirethesubscriberfirsttoconfirmwiththesubmitting  carrierthatheorshewishestomakeacarrierchange,andthentocontacttheexecutingcarrierto h confirmthatsuchachangewasauthorized.Byrequiringconsumerstotakeaffirmativeactionin 0 ordertochangetheircarriers,preferredcarrierfreezesprovideconsumerswithadditional w protectionfromslamming.Butbecausepreferredcarrierfreezesbytheirverynatureimpose ? additionalburdensonsubscribers,freezesshouldonlybeplacedasaresultofconsumerchoice.  Thepreferredcarrierfreezeworkstopreventslammingbecauseitgivesaconsumercontrolover P carrierchanges.Theimpositionofan"unauthorizedpreferredcarrierfreeze"byanexecuting  carrierwouldtakeawaycontrolfromtheconsumer.Wethereforefindthat,evenwhere _ verificationbyanexecutingcarrierwouldnotresultinunduedelayordenialofacarrierchange, ' suchverificationisprohibited. p   2 d  101  .3   ` Notwithstandingourprohibitiononverificationofcarrierchangesbyexecuting    carriers,wefindthatexecutingcarriersmaystillprovideasimilarlevelofprotectiontotheir G!! customersinwaysthatdonotraise_anticompetitive_Ԁconcerns.Executingcarriersmaymake "" preferredcarrierfreezesavailableforsubscriberswhohaveconcernsaboutslamming.Inthis "X# way,thesubscriberwhohaschosentohaveapreferredcarrierfreezeplacedonhisorheraccount # $ willbeprotectedfromunauthorizedchangestotheaccount.Weemphasizethattheimpositionof g$% apreferredcarrierfreezemustbeauthorizedbytheconsumertominimizeany_anticompetitive_ /%& effectsandtomaintainflexibilityfortheconsumer.Executingcarriersalsohaveavarietyof %x' methodstonotifytheirsubscribersthattheircarriershavechanged.Forexample,asdiscussedin &@( theTruthinBilling_NPRM_,carriersmaychoosetoincludeaseparatesectionintheirsubscriber  billstohighlightanychangesthathaveoccurredonasubscriber'saccount,includingchangesto G preferredcarriers._^   319      _ԀWenotethatmostofthetelephonebillsissuedbyUSWESThighlight   changesthathaveoccurredtoasubscriber'saccount,includingchangesinpreferredcarrier  X selections.Finally,weconcludethatthe_LECs_Ԁthatwanttoverifycarrierchangesshould   experiencelessconcernoverslamminginthefuturebecauseournewrules,especiallythe g  absolutionremedy,shoulddecreaseconsumerharmfromslamming._   320       /  0  3.0` (#(#ConcernswithCertainExecutingCarriers  @` (#` (#    ` a.0 InterferencewiththeExecutionProcessO  (# (#    2 e  102  .3   ` TheCommissionsoughtcommentintheFurtherNoticeandOrderonwhether `  _ILECs_Ԁshouldbesubjecttodifferentrequirementsandprohibitionsbecausetheymayhavethe (  incentiveandtheabilitytodelayorrefusetoprocesscarrierchangeordersinordertoavoid o  losinglocalcustomers,orinordertofavoranaffiliatedIXC._`   321      _ԀWefindthat_ILECs_Ԁmayvery 7  wellhaveincentivetoact_anticompetitively_,aswouldanycarrierthatexecuteschangesforitself   oranaffiliateandforcompetingcarriers.Forexample,aLECthatexecuteschangesinlocal H  exchangeservicefor_CLECs_Ԁmightbetemptedtodelaytheexecutionofsuchchangesinorderto  retainitslocalexchangecustomers. W   2 f  103  .3   ` Weagreewiththe_ILECs_,however,thattheabilityofanexecutingcarriertoact h _anticompetitively_Ԁbydelayingexecutionofcarrierchangesislimitedbyseveralstatutory 0 provisionsintheAct._ah   322      _ԀForexample,section251requiresincumbent_LECs_Ԁtoprovidefacilities w andservicestorequestingtelecommunicationscarriersinanondiscriminatorymanner._b   323      _ԀAny ? carrierthatunreasonablyfailstoexecutecarrierchangesforitself(oranaffiliate)andfor  competingcarrierswithinthesame_timeframe_Ԁwillbeinviolationofthespecificnondiscrimination P requirementsofsection251ifitisaLEC,aswellasinviolationofsection201(b)'sprohibition  againstunjustandunreasonablepractices,andsection202(a)'sprohibitionagainstunjustand _ unreasonablediscrimination.c    324      ׀Furthermore,anycarrierthatimposesunreasonabledelaysin '  executingcarrierchanges,bothforitselfandothers,willbeinviolationofourverification p proceduresd   325      ׀oractingunreasonablyinviolationofsection201(b),e8   326      ׀evenifitisnotactingin   violationofanondiscriminationrequirement.Apartythatbelievesthatacarrierisdelaying G executionofcarrierchangesinviolationofanyofthesestatutoryorregulatoryprovisionsshould   fileacomplaintintheappropriateforum.f   327      ׀Wewouldconsiderallthefactsandcircumstances  X presentedinasection208complaintproceeding,forexample,andtakeremedialactionas   appropriate.g   328      ׀Inthisway,werequirecarrierstoprovideparityinexecutingcarrierchangesfor g  competitorsandpromptnessinexecutingcarrierchangesgenerally. /     ` b. _Timeframe_ԀforExecutionofCarrierChanges   @   2 g  104  .3   ` Several_commenters_Ԁalsosupportimposingspecificdeadlinesforexecutionof O  carrierchangesinordertopreventcarriersfromdelayingexecution._h0   329      _ԀForexample,_commenters_   suggestthatcarriersthatexecutecarrierchangesforthemselvesandforothercarriersberequired `  toimplementchangeswithinestablisheddeadlinesrangingfromthreetosevendays.i   330      ׀We (  declineatthistimetoadoptanysuchdeadlines.Weagreewithmany_commenters_Ԁthatarguethat o  mandatingaspecificdeadlineforexecutionofallcarrierchangescouldbeproblematicbecause 7  theremaybemanylegitimatereasonsforadelayintheexecutionofacarrierchange,suchasa   consumerrequestforadelayinimplementation,ortheadministrativeburdenofprocessingalarge H  numberofchangeorders._j    331      _ԀWealsofindthatitwouldnotbefeasibletoestablishaspecific  deadlineforexecutionofchangesthatwouldaccommodatetheneedsofthewidevarietyof W carriersinthemarketplace,includingsmallercarriers.Some_commenters_Ԁproposethatwealso  requireacarrierthatexecuteschangesforitselfandforothercarrierstosubmitareport h comparingtheexecutiontimesforchangessubmittedbyitselforitsaffiliatesagainstchanges 0 submittedbycompetingcarriers._k(    332      _ԀWedeclinetodosoatthistimebecauseweconcludethatthe w nondiscriminationrequirementsofsections202(a)and251l    333      ׀alreadyprohibitexecutingcarriers ? fromimposingdiscriminatorydelaysontheircompetitors._m   334      _Ԁ  Ї  2 h  105  .3   ` Althoughwedeclinetoadoptspecificexecution_timeframes_Ԁforthereasonsstated  above,webelievethatsubscribersshouldbeinformedofhowlongitwilltakeforacarrierchange G tobecomeeffectivebecausetheyhavetherighttoknowwhentheywillbeabletousetheirnew   service.Westronglyencourageasubmittingcarriertoinformsubscribersoftheexpected  X _timeframe_Ԁforimplementingthecarrierchange,ifitisabletoobtainsuchinformationfromthe   executingcarrier.Suchinformationletsthesubscriberknowwhattoexpectandallowsthe g  subscribertoplanhisorhercallingpatternsaccordingly.Suchinformationalsowouldgive /  carriersandsubscribersalikeastandardbywhichtodetermineifadelayisunreasonable.  x Althoughwedonotestablishanyspecificstandardforexecutionofchangesinthisproceeding,  @ wemayrevisitthisissueinalaterproceeding.Inthemeantime,weexpectcarrierstofulfill   subscriberrequestsasquicklyaspossible,usingthemosttechnologicallyefficientmeansavailable O  toimplementchangestosubscribers'telecommunicationsservices.Noncompliancewiththis   standardcouldbeconsideredunreasonabledelay. `  0  0` (#(# c. MarketingUseofCarrierChangeInformation o ` (#` (#   2 i  106  .3   ` IntheFurtherNoticeandOrder,theCommissionvoicedconcernthatan   incumbentLECmightattempttoengageinconductthatwouldblurthedistinctionbetweenits H  roleasaneutralexecutingcarrieranditsobjectivesasamarketplacecompetitor._n0   335      _ԀSpecifically,  theCommissionstatedthatanexampleofthistypeofconductcouldoccurifanincumbent W executingcarriersendsasubscriberwhohaschosenanewcarrierapromotionalletter(_winback_  letter)inanattempttochangethesubscriber'sdecisiontoswitchtoanothercarrier.o   336      ׀We h concludethatthisisavalidconcernandthereforefindthatanexecutingcarriermaynotuse 0 informationgainedfromacarrierchangerequestforanymarketingpurposes,includingany w attemptstochangeasubscriber'sdecisiontoswitchtoanothercarrier.p   337      ׀Many_commenters_ ? supportthisdecision._q   338      _ԀAsexplainedabove,wefindthatcarrierchangeinformationiscarrier  proprietaryinformationr    339      ׀and,therefore,pursuanttosection222(b),theexecutingcarrieris P prohibitedfromusingsuchinformationtoattempttochangethesubscriber'sdecisiontoswitchto  anothercarrier.sX    340      ׀Morespecifically,section222(b)statesthat"[a]telecommunicationscarrier _ thatreceivesorobtainsproprietaryinformationfromanothercarrierforpurposesofproviding ' anytelecommunicationsserviceshallusesuchinformationonlyforsuchpurpose,andshallnot  usesuchinformationforitsownmarketingefforts."t   341      ׀Thesubmittingcarrier'schangerequestis G proprietaryinformationbecauseitmustsubmitthatinformationtotheexecutingcarrierinorder   toobtainprovisioningofserviceforanewsubscriber.Inthe_CPNI_ԀOrder,westatedthat  X Congress'goalofpromotingcompetitionandpreservingcustomerprivacywouldbefurtheredby   protectingthecompetitivelysensitiveinformationofothercarriersfromnetworkprovidersthat g  gainaccesstosuchinformationthroughprovisionofwholesaleservice._u8   342      _ԀSimilarly,inthe /  situationofexecutingcarriersandcarrierchangerequests,section222(b)workstoprevent  x _anticompetitive_Ԁconductonthepartoftheexecutingcarrierbyprohibitingmarketinguseof  @ carrierproprietaryinformation.Theexecutingcarrierotherwisewouldhavenoknowledgeatthat   timeofaconsumer'sdecisiontochangecarriers,wereitnotfortheexecutingcarrier'spositionas O  aproviderofswitchedaccessservices.Therefore,whenanexecutingcarrierreceivesacarrier   changerequest,section222(b)prohibitstheexecutingcarrierfromusingthatinformationto `  marketservicestothatconsumer. (    2 j  107  .3   ` _GTE_ԀandUSWESTcontendthat,becausecustomersolicitationsareprotectedby 7  theFirstAmendment,theCommissionshouldnotprohibitexecutingcarriersfrom_winback_   solicitationsaslongassuchsolicitationsarebasedontheexecutingcarriers'owninformation,do H  notinterferewithexecutionprocessing,andarenotmadeinconjunctionwithnotificationto  customersofcarrierchanges._v   343      _ԀAsstatedabove,weconcludethatsection222(b)onlyprohibits W anexecutingcarrierfrommarketingusinginformationfromacarrierchangerequestbecausethe  executingcarrierisnotusingitsowninformation,butratherthesubmittingcarrier'sproprietary h information,which_GTE_ԀandUSWESTagreeisareasonablelimitation.Furthermore,section 0 222(b)doesnotprohibitall_winback_Ԁattempts,butonlythosethatarebasedoncarrierproprietary w information.Finally,becauseourrulemerelyimplementssection222(b),anypossibleFirst ? AmendmentconcernswouldneedtobeaddressedtothefederalcourtsandCongress,notthe  Commission.Nonetheless,weconcludethatsection222(b)anditsapplicationtothissituation P areentirelylawfulanddonotimpermissiblyinfringeoncarriers'FirstAmendmentrights.Itis  truethattheFirstAmendmentprotectscommercialspeechfromunwarrantedgovernmental _ intrusion.w   344      ׀Thegovernmentmay,however,regulatecommercialspeechthatisnotmisleadingor ' unlawfulif:(1)theassertedgovernmentalinterestissubstantial;(2)iftheregulationdirectly p advancestheassertedgovernmentalinterest;and(3)iftheregulationisnotmoreextensivethanis 8 necessarytoservethatinterest.x0   345      ׀Inthiscase,wefindthatprohibitingexecutingcarriersfrom    usingcarrierproprietaryinformationformarketingpurposesinviolationofsection222(b)does G!! notimpermissiblyinfringeuponFirstAmendmentrights.    2 k  108  .3   ` First,theCommission'sinterestinpromulgatingtheruleissubstantial.Section   222(b)isintendedtoadvancecompetitionand,aspartofthatgoal,toprotectconsumerchoices.  X TheSupremeCourthasrecognizedthateliminatingrestraintsoncompetitionisa"substantial"   governmentinterest._y   346      _ԀFurthermore,thefactthatthe1996Actwasenactedinordertoopen"all g  telecommunicationsmarketstocompetition"z   347      ׀alsodemonstratesthatthegovernmentalinterest /  inpromotingcompetitionisverysubstantial.InfulfillingtheCongressionalmandatetopromote  x competitioninalltelecommunicationsmarkets,theCommissionhelpstoensurethattheAmerican  @ publicderivesthefullbenefitofsuchcompetitionbygivingthemtheopportunitytochoosenew   andbetterproductsandservicesataffordablerates,andbygivingeffecttosuchchoices. O    2 l  109  .3   ` Second,theruledirectlyadvancesthegovernmentalinterest.Therule,governed `  bysection222(b),promotescompetitionandprotectsconsumerchoicesbyprohibitingexecuting (  carriersfromusinginformationgainedsolelyfromthecarrierchangetransactiontothwart o  competitionbyusingthecarrierproprietaryinformationofthesubmittingcarriertomarketthe 7  submittingcarrier'ssubscribers.Theruleplacesalimitedprohibitiononexecutingcarriers   becauseanexecutingcarriershouldbeaneutralpartywithoutanyinterestinthechoiceofcarriers H  madebyasubscriber.Becauseofitspositionasamonopolyserviceprovider,however,itmay  gainaccessthroughthecarrierchangeprocesstoasubmittingcarrier'sproprietaryinformation, W i.e.,thatthesubmittingcarrierneedsserviceprovisioningforanewsubscriber.Therulewe  adoptensuresthattheexecutingcarrierremainsinitsroleasaneutraladministratorofcarrier h changes,andpreventstheexecutingcarrierfromshiftingintoacompetitiveroleagainstthe 0 submittingcarrierusingcarrierproprietaryinformation. w   2 m  110  .3   ` Third,theruleisnotmoreextensivethanisnecessarytoservethegovernmental  interest.Theruleisnarrowlytailoredsothatitonlyprohibitsthemarketinguseofcarrier P proprietaryinformationgainedfromthecarrierchangerequest.Accordingly,therulewouldnot  prohibitageneralmarketingschemethatmaycoincidentallytargetasubscriberwhohasrequested _ acarrierchangebecausesuchactivitywouldnotentailtheuseofinformationgainedsolelybya ' carrierfromacarrierchangetransaction. p   2 n  111  .3   ` Basedontheaboveanalysis,weconcludethatprohibitingtheuseofcarrier    proprietaryinformationgainedfromacarrierchangerequestformarketingpurposes,pursuantto G!! section222(b),doesnotimpermissiblyinterferewithcarriers'FirstAmendmentrights.Wehave "" shownthattheCommission'sinterestinpromulgatingthisrule,topromotecompetition,is "X# substantialbecausecompetitionwillgivetheAmericanpeopleaccesstonew,better,andmore # $ affordabletelecommunicationsservices.Wealsohaveshownthattheruledirectlyadvancesthe g$% interestofpromotingcompetitionbypreventingtheexecutingcarrierfromthwartingcompetition /%& byusingcarrierproprietaryinformationgainedfromthecarrierchangerequesttointerferewith %x' subscriberdecisions.Finally,wehaveshownthattheruleisnotmoreextensivethannecessaryto &@( serveourinterestinpromotingcompetitionbecausetheprohibitionislimitedonlytomarketing ' ) useofcarrierproprietaryinformationgainedfromthecarrierchangerequest. O( *  XcXXXcXcXXXc      5if:    XcXhXcXcXhXc  F.  UseofPreferredCarrierFreezes  )`", Ї0  1. ` Background(#(#   2 o  112  .3   ` IntheFurtherNoticeandOrder,theCommissionsoughtcommentonwhetherit   shouldadoptrulestoaddresspreferredcarrierfreezepractices._{   348      _ԀTheCommissionnotedthat,  X althoughneithertheActnoritsrulesandordersspecificallyaddresspreferredcarrierfreeze   practices,_|   349      _ԀconcernsaboutcarrierfreezesolicitationshavebeenraisedwiththeCommission._}   350      _Ԁ g  TheCommissionnoted,moreover,thatMCIfiledaPetitionfor_Rulemaking_ԀonMarch18,1997, /  requestingthattheCommissioninstitutea_rulemaking_Ԁtoregulatethesolicitation,byanycarrier  x oritsagent,ofcarrierfreezesorothercarrierrestrictionsonaconsumer'sabilitytoswitchhisor  @ herchoiceofinterexchange(_interLATA_Ԁor_intraLATA_Ԁtoll)andlocalexchangecarrier._~    351      _ԀThe   CommissiondeterminedthatitwasappropriatetoconsiderMCI'spetitionintheFurtherNotice O  andOrderand,therefore,incorporatedMCI'spetitionandallresponsivepleadingsintotherecord   ofthisproceeding._   352      _ `   &    2. ` OverviewandJurisdiction  o    2 p  113  .3   ` Weadoptrulestoclarifytheappropriateuseofpreferredcarrierfreezesbecause   webelievethat,althoughpreferredcarrierfreezesofferconsumersanadditionalandbeneficial H  levelofprotection'#againstslamming,theyalsocreatethepotentialforunreasonableand  _anticompetitive_Ԁbehaviorthatmightaffectnegativelyeffortstofostercompetitioninallmarkets. W Thus,inadoptingrulestogoverntheuseofpreferredcarrierfreezemechanisms,weappropriately  balanceseveralfactors,includingconsumerprotection,theneedtofostercompetitioninall h markets,andourdesiretoaffordcarriersflexibilityinofferingtheircustomersinnovativeservices 0 suchaspreferredcarrierfreezeprograms.(   353      ׀Moreover,insodoingwefacilitatecustomerchoice w ofpreferredcarrierselectionsandadoptandpromoteproceduresthatpreventfraud. ?   2 q  114  .3   ` Whileweareconfidentthatourcarrierchangeverificationrules,asmodifiedin P thisOrder,willprovideconsiderableprotectionforconsumersagainstunauthorizedcarrier  changes,werecognizethatmanyconsumerswishtoutilizepreferredcarrierfreezesasan G additionallevelofprotectionagainstslamming._   354      _ԀAsnotedintheFurtherNoticeandOrder,a   carrierfreezepreventsachangeinasubscriber'spreferredcarrierselectionuntilthesubscriber  X givesthecarrierfromwhomthefreezewasrequestedhisorherwrittenororalconsent._   355      _ԀThe   recorddemonstratesthat_LECs_Ԁincreasinglyhavemadeavailablepreferredcarrierfreezestotheir g  customersasameansofpreventingunauthorizedconversionofcarrierselections._   356      _ԀThe /  Commission,inthepast,hassupportedtheuseofpreferredcarrierfreezesasameansofensuring  x thatasubscriber'spreferredcarrierselectionisnotchangedwithouthisorherconsent._X    357      _ԀIndeed,  @ themajorityof_commenters_Ԁinthisproceedingassertthattheuseofpreferredcarrierfreezescan   reduceslammingbygivingcustomersgreatercontrolovertheiraccounts._    358      _ԀOurexperience,thus O  far,hasdemonstratedthatpreventingunauthorizedcarrierchangesenhancescompetitionby   fosteringconsumerconfidencethattheycontroltheirchoiceofserviceproviders.Thus,we `  believethatitisreasonableforcarrierstooffer,attheirdiscretion,preferredcarrierfreeze (  mechanismsthatwillenablesubscriberstogaingreatercontrolovertheircarrierselection. o    2 r  115  .3   ` IntheFurtherNoticeandOrder,however,westatedthatpreferredcarrierfreezes   mayhavetheeffectoflimitingcompetitionamongcarriers._0   359      _ԀWeshare_commenters_'concerns H  thatinsomeinstancespreferredcarrierfreezesarebeing,orhavethepotentialtobe,implemented  inanunreasonableor_anticompetitive_Ԁmanner._   360      _ԀIndeed,wenotethatanumberofstate W commissionshavedetermined,_`   361      _Ԁandcertain_LECs_Ԁconcede,_   362      _Ԁthatunregulatedpreferredcarrier  freezesaresusceptibletosuchabuses.Bydefinition,preferredcarrierfreezescreateanadditional  step(namely,thatsubscriberscontactdirectlytheLECthatadministersthepreferredcarrier G freezeprogram)thatcustomersmusttakebeforetheyareabletoobtainachangeintheircarrier   selection._   363      _ԀWherecustomersfailtotaketheadditionalstepofliftingapreferredcarrierfreeze,  X theirotherwisevalidattemptstoeffectuateachangeincarrierselectionwillbefrustrated.   Observingthisprocess,some_commenters_Ԁarguethatcertainpreferredcarrierfreezeprogramsare g  soonerousastocreateanunreasonablehurdleforsubscribersandsubmittingcarriersseekingto /  processacarrierchange._h   364      _ԀOther_commenters_,primarilyinterexchangecarriers,suggestthat  x _LECs_Ԁareusingdeceptivepreferredcarrierfreezesolicitationpracticesto"lockup"consumers,  @ withouttheirunderstanding,aspartofanefforttostiflecompetitionintheirmarkets._   365      _     2 s  116  .3   ` Particularlygiventhemarketstructurechangescontemplatedinthe1996Act,_    366      _   wearepersuadedthatincentivesforunreasonablepreferredcarrierfreezepracticesexist.With `  theremovaloflegalandregulatorybarrierstoentry,carriersarenoworsoonwillbeabletoenter (  eachother'smarketsandprovidevariousservicesincompetitionwithoneanother.   367      ׀Incumbent o  _LECs_Ԁhave,orwillhaveintheforeseeablefuture,authorizationtocompeteinthemarketfor 7  _interLATA_Ԁservices.Similarly,incumbent_LECs_Ԁarepreparingtofaceorarefacingcompetitionin   thelocalexchangeand_intraLATA_Ԁtollmarkets.Giventhesechangesinmarketstructure, H  incumbent_LECs_Ԁmayhaveincentivestomarketpreferredcarrierfreezesaggressivelytotheir  customersandtousedifferentstandardsforplacingandremovingfreezesdependingonthe W identityofthesubscriber'scarrier._p   368      _ԀDespitethesemarketchanges,itappearsthat,atthistime,  facilitiesbased_LECs_Ԁmostofwhichareincumbent_LECs_Ԁareuniquelysituatedtoadminister h preferredcarrierfreezeprograms.Thus,othercarriersaredependentonthe_LECs_Ԁtooffer 0 preferredcarrierfreezeservicestotheircustomers. w   2 t  117  .3   ` Weconclude,contrarytotheassertionsofBellAtlantic,thatwehaveauthority   undersection258toaddressconcernsabout_anticompetitive_Ԁpreferredcarrierfreezepracticesfor P intrastate,aswellasinterstate,services.   369      ׀Congress,insection258oftheAct,hasgrantedthis   Commissionauthoritytoadoptverificationrulesapplicabletobothsubmissionandexecutionof G changesinasubscriber'sselectionofaprovideroflocalexchangeortelephonetollservices.   370      ׀   PreferredcarrierfreezesdirectlyimpacttheverificationprocedureswhichCongressinstructedthe  X Commissiontoadoptbecausetheyrequiresubscriberstotakeadditionalstepsbeyondthose   describedintheCommission'sverificationrulestoeffectuateacarrierchange.Moreover,wherea g  preferredcarrierfreezeisinplace,asubmittingcarrierthatcomplieswithourverificationrules /  mayfindthatitsotherwisevalidcarrierchangeorderisrejectedbytheLECadministeringthe  x freezeprogram.Sincepreferredcarrierfreezemechanismscanessentiallyfrustratethe  @ Commission'sstatutorilyauthorizedproceduresforeffectuatingcarrierchanges,weconcludethat   theCommissionhasauthoritytosetstandardsfortheuseofpreferredcarrierfreezemechanisms. O    2 u  118  .3  Ԁ ` Basedonthisauthority,weprescriberulestoensurethefairandefficientuseof `  preferredcarrierfreezesforintrastateandinterstateservicestoprotectcustomerchoiceand, (  correspondingly,topromotecompetition.Specifically,inthefollowingsections,weadoptrules o  thatapply,onagoingforwardbasis,toallcarriersandthatprovideforthenondiscriminatory 7  solicitation,implementation,andliftingofpreferredcarrierfreezes.   &     3. ` NondiscriminationandApplicationofRulestoAllLocalExchangeCarriers     2 v  119  .3   ` Weconclude,andcodifyinourrulesimplementingsection258oftheAct,that  preferredcarrierfreezesshouldbeimplementedonanondiscriminatorybasissothat_LECs_Ԁdo' not h usefreezesasatooltogainanunreasonablecompetitiveadvantage.Giventhat_LECs_Ԁare 0 uniquelypositionedtoofferpreferredcarrierfreezes,asdescribedabove,webelievethata w nondiscriminationrequirementisnecessarytopreventunreasonablepractices,suchasdenying ? freezestothecustomersoftheircompetitors.Accordingly,localexchangecarriersmustmake  availableanypreferredcarrierfreezemechanismtoallsubscribers,underthesametermsand P conditions,regardlessofthesubscribers'carrierselection._   371      _ԀWenotethatanumberof_LECs_,  including_Ameritech_Ԁand_GTE_,indicatethattheyalreadyofferpreferredcarrierfreezesto _ customersonanondiscriminatorybasis._   372      _ԀSimilarly,westateourexpectationthat_LECs_Ԁshould ' notbeabletoimposediscriminatorydelayswhenliftingfreezes._    373      _ԀSincetheCommissionhas p  longrecognizedthatincumbent_LECs_Ԁmayhavetheincentivetodiscriminateintheprovisionof 8 servicetotheircompetitors,_   374      _Ԁwebelievethatarticulatingthisnondiscriminationrequirementwill   ensurethatthesamelevelofprotectionisavailabletoallsubscribers. G   2 w  120  .3   ` Atthesametime,weconcludethatourrulesforpreferredcarrierfreezesshould  X applytoalllocalexchangecarriers.Werejectthoseproposalstoplaceadditionalrequirementson   incumbent_LECs_,totheexclusionofcompetitive_LECs_._0   375      _ԀWhereacompetitiveLECoffersa g  preferredcarrierfreezeprogram,thatcompetitiveLECmustcomplywithourpreferredcarrier /  freezerules,assetoutinthisOrder.Thispolicyisappropriatebecauseweexpectthata  x competitiveLECmayfacethesameincentivestodiscriminateintheprovisionofpreferredcarrier  @ freezeservicetothecustomersofitscompetitors.Inaddition,subscribersofcompetitive_LECs_   havethesamerighttoexpectthatpreferredcarrierfreezeprogramswillbenondiscriminatoryand O  notdeceptiveormisleading,asdosubscribersofincumbent_LECs_.   &     4. ` SolicitationandImplementationofPreferredCarrierFreezes  (    2 x  121  .3   ` Weadoptminimumstandardstogovernthesolicitationandimplementationof 7  preferredcarrierfreezesinordertodeter_anticompetitive_Ԁapplicationoffreeze' Gpracticesandto   ensurethatconsumersareabletomakemoreinformeddecisionsonwhethertoutilizeafreeze. H  Weshareconcernsofsome_commenters_Ԁthatcertaincarriersmaysolicitpreferredcarrierfreezes  inamannerthatisunreasonableundertheAct._   376      _ԀTherecordindicatesthepotentialforcustomer W confusion.Itappearsthatmanyconsumersareunclearaboutwhetherpreferredcarrierfreezes  arebeingplacedontheircarrierselectionsandaboutwhichservicesorcarriersaresubjectto h thesefreezes._   377      _ԀWefindthatthemosteffectivewaytoensurethatpreferredcarrierfreezesare 0 usedtoprotectconsumers,ratherthanasabarriertocompetition,istoensurethatsubscribers w fullyunderstandthenatureofthefreeze,includinghowtoremoveafreezeiftheychoseto ? employone.Wethusconcludethat,inordertobeajustandreasonablepractice,anysolicitation  andothercarrierprovidedinformationconcerningapreferredcarrierfreezeprogramshouldbe P clearandnotmisleading.   378      ׀Moreover,weadoptthetentativeconclusion,assetforthinthe  FurtherNoticeandOrder,thatanysolicitationforpreferredcarrierfreezesshouldprovidecertain _ basicexplanatoryinformationtosubscribersaboutthenatureofthepreferredcarrierfreeze._    379      _Ԁ ' Ourdecisiontoadoptrulesgoverningthesolicitationofpreferredcarrierfreezesissupportedby p thevastmajorityof_commenters_,includingstatecommissionsandanumberofincumbent 8 _LECs_._`    380      _     G!!   2 y  122  .3   ` Wespecificallydecidethat,ataminimum,carrierssolicitingpreferredcarrier  freezesmustprovide:1)anexplanation,inclearandneutrallanguage,ofwhatapreferredcarrier G freezeisandwhatservicesmaybesubjecttoapreferredcarrierfreeze;2)adescriptionofthe   specificproceduresnecessarytoliftapreferredcarrierfreezeandanexplanationthatthesesteps  X areinadditiontotheCommission'sregularverificationrulesforchangingsubscribers'carrier   selectionsandthatthesubscriberwillbeunabletomakeachangeincarrierselectionunlessheor g  sheliftsthefreeze;and3)anexplanationofanychargesassociatedwiththepreferredcarrier /  freezeservice.   381      ׀Wedecline,atthistime,tomandatespecificlanguagetodescribepreferred  x carrierfreezesbecausewebelievethatourruleswillprovidecarrierswithsufficientguidanceto  @ formulatescriptsthatinformcustomersaboutpreferredcarrierfreezesinaneutralmannerwhile   preservingcarrierflexibilityinthemessage._8   382      _ O    2 z  123  .3   ` Wealsoconcludethatpreferredcarrierfreezeprocedures,includingany `  solicitation,mustclearlydistinguishamongtelecommunicationsservicessubjecttoafreeze,i.e., (  betweenlocal,_intraLATA_Ԁtoll,_interLATA_Ԁtoll,andinternationaltollservices.P   383      ׀Thisrulewill o  addressconcernsraisedby_commenters_,includingMCIand_NAAG_,thatconsumersmay 7  experienceconfusionaboutthedifferencesbetweentelecommunicationsserviceswhenemploying   freezes._   384      _ԀItwillalsoservetopreventunscrupulouscarriersfromplacingfreezesonallofa H  subscriber'sserviceswhenthesubscriberonlyintendedtoauthorizeafreezeforaparticular  serviceorservices._   385      _ԀWethusconcludethat"accountlevel"freezesareunacceptableandthat, W instead,carriersmustexplainclearlythedifferenceinservicesandobtainseparateauthorization  foreachserviceforwhichapreferredcarrierfreezeisrequested.H    386      ׀Wenotethatabroadrangeof h _commenters_,includingmanyincumbent_LECs_,agreethatcustomersshouldhavetheabilityto 0 placeindividualfreezesontheir_interLATA_,_intraLATA_Ԁtoll,andlocalservices._    387      _ԀWhilesome w membersofthepublicmaystillbeunclearaboutthedistinctionsbetweendifferent ? telecommunicationsservices,particularlythedifferencebetween_intraLATA_Ԁtolland_interLATA_  tollservices,weexpectthatcarrierscanhelpcustomerstodevelopabetterunderstandingof P theseservices.    2 {  124  .3   ` Wedeclinethosesuggestionsthatweprohibit_LECs_Ԁfromtakingaffirmativesteps ' tomakeconsumersawareofpreferredcarrierfreezesbecausewebelievethatpreferredcarrier p freezesareausefultoolinpreventingslamming.Nordowedrawdistinctionsbetween 8 "solicitation"and"educationalmaterials"thatsome_commenters_Ԁurgeustoadopt.    388      ׀Weinstead    believethatthestandardsadoptedhereinwillprovidesufficientguidanceforconsumers.Atthe  sametime,wedeclinethesuggestionsofthosepartieswhowouldhaveusrequire_LECs_ G affirmativelytodistributeliteraturedescribingtheirpreferredcarrierfreezeprograms._   389      _ԀShould   stateswishtoadoptsuchrequirements,webelievethatitiswithintheirpurviewtodoso.  X   2 |  125  .3   ` Weadoptourproposaltoextendourcarrierchangeverificationproceduresto g  preferredcarrierfreezesolicitationsandnotethatthisproposalwassupportedbyawiderangeof /  carriers,statecommissions,andconsumerorganizations._   390      _ԀByrequiring_LECs_Ԁthatadminister  x preferredcarrierfreezeprogramstoverifyasubscriber'srequesttoplaceafreeze,weexpectto  @ reducecustomerconfusionaboutpreferredcarrierfreezesandtopreventfraudintheir   implementation.Accordingtoanumberof_commenters_,customerconfusionoverpreferred O  carrierfreezesoftenresultsinvalidcarrierchangeordersbeingrejectedby_LECs_._H   391      _ԀIn   combinationwithourrequirementthatcarriersobtainseparateauthorizationforeach `  telecommunicationsservicesubjecttothefreeze,theseverificationprocedureswillfurtherensure (  thatsubscribersunderstandwhichserviceswillbesubjecttoapreferredcarrierfreeze.    392      ׀ o  Requiring_LECs_ԀthatofferpreferredcarrierfreezestocomplywiththeCommission'sverification 7  ruleswillalsominimizetheriskthatunscrupulouscarriersmightattempttoimposepreferred   carrierfreezeswithouttheconsentofsubscribers.    393      ׀Wefindsuchapracticetobeunreasonable H  becauseitfrustratesconsumers'choiceincarriersbymakingitmoredifficultfortheconsumerto  switchcarriers. W   2 }  126  .3   ` Ourverificationrulesaredesignedtoconfirmasubscriber'swisheswhileimposing h theminimumnecessaryburdenoncarriers.WeagreewithBellSouththatapplyingthe 0 Commission'sverificationrulestopreferredcarrierfreezeswillenablesubscriberstoobtain w preferredcarrierfreezeprotectionwithaminimumofeffort.0   394      ׀Byadoptingthesameverification ? proceduresforbothcarrierchangesandpreferredcarrierfreezes,weexpectthattheprocessof  implementingpreferredcarrierfreezeswillbelessconfusingforsubscribersandadministratively P  moreefficientforcarriers.Werejectother_commenter_Ԁproposals,suchasAT&T'sproposalto  requirethat_LECs_Ԁconfirmpreferredcarrierfreezesinwriting.   395      ׀Wethinkthatourverification   ruleswillbeadequatetoensurethatsubscribers'choices,whetherforcarrierchangesorpreferred G carrierfreezes,arehonored.     5.0 ` ProceduresforLiftingPreferredCarrierFreezes  ` (#` (#   2 ~  127  .3   ` Weconcludethat_LECs_Ԁofferingpreferredcarrierfreezeprogramsmustmake /  availablereasonableproceduresforliftingpreferredcarrierfreezes.Basedontherecordbefore  x us,weareconcernedthatsomeproceduresforliftingpreferredcarrierfreezesmayplacean  @ unreasonableburdenonsubscriberswhowishtochangetheircarrierselections._8   396      _ԀInaddition,   andasnotedabove,weareconcernedthatconsumersarenotbeingfullyinformedabouthow O  freezeswork,andthereforeoftenfailtoappreciatethesignificanceofimplementingafreezeatthe   timetheymakethechoice.Thisconcernisparticularlyacuteinmarketswherecompetitionhas `  notyetfullydevelopedsothatconsumersareawareofthechoicestheyhaveorwillhaveinthe (  future.Weconcludethatadoptingbaselinestandardsfortheliftingofpreferredcarrierfreezes o  willappropriatelybalancetheinterestsofCongressinopeningmarketstocompetitionby 7  protectingconsumerchoice,preventing_anticompetitive_Ԁpractices,andprovidingconsumersa   potentiallyvaluabletooltoprotectthemselvesfromfraud.Thus,carriersmustoffersubscribersa H  simple,easilyunderstandable,butsecure,wayofliftingpreferredcarrierfreezesinatimely  manner._   397      _Ԁ W   2   128  .3   ` Withtheseconcernsforpromotingcustomerchoiceinmind,weconcludethata h LECadministeringapreferredcarrierfreezeprogrammustacceptthesubscriber'swrittenand 0 signedauthorizationstatinganintenttoliftapreferredcarrierfreeze.   398      ׀Suchwritten w authorizationlikethe_LOAs_Ԁauthorizedforuseincarrierchangesandtoplaceapreferred ? carrierfreezeshouldstatethesubscriber'sbillingnameandaddressandeachtelephonenumber  tobeaffected.Inaddition,thewrittenauthorizationshouldstatethesubscriber'sintenttoliftthe P preferredcarrierfreezefortheparticularserviceinquestion.Wethinkthatthisprocedureis  clearlyconsistentwiththepurposeofthepreferredcarrierfreezebecauseitpermitsthesubscriber _ tonotifytheLECdirectlyofherorhisintentiontoliftapreferredcarrierfreeze._   399      _ԀByrequiring ' _LECs_Ԁtoacceptsuchauthorization,weensurethatsubscriberswillhaveasimpleandreliableway p ofliftingpreferredcarrierfreezes,andthusmakingacarrierchange. 8     2   129  .3   ` Wesimilarlyconcludethat_LECs_Ԁofferingpreferredcarrierfreezeprogramsmust G!! acceptoralauthorizationfromthecustomertoremoveafreezeandmustpermitsubmitting "" carrierstoconductathreewayconferencecallwiththeLECandthesubscriberinordertolifta "X# freeze.   400      ׀Inthisregard,weagree,forexample,withtheTexasOfficeofPublicUtilityCounsel # $  thatthreewaycallingisaneffectivemeansofhavingapreferredcarrierfreezeliftedduringan g$% initialconversationbetweenasubscriberandasubmittingcarrier._   401      _ԀSpecifically,threeway   callingallowsasubmittingcarriertoconductathreewayconferencecallwiththeLEC G administeringthefreezeprogramwhiletheconsumerisstillontheline,e.g.,duringtheinitial   telemarketingsession,sothattheconsumercanpersonallyrequestthataparticularfreezebe  X lifted.Wearenotpersuadedbycertain_LECs_'claimsthatthreewaycallingisundulyburdensome   orraisestheriskoffraud._   402      _ԀWedonotanticipatethatthevolumeofsubscribersseekingtolift g  theirpreferredcarrierfreezeswillbeoverlyburdensomeforthesecarriers'customersupportstaff. /  Further,weexpectthat_LECs_Ԁadministeringpreferredcarrierfreezeprogramswillbeableto  x recoveraspartofthecarrierchangechargethecostofmakingsuchthreewaycallingavailable.P   403      ׀  @ Wealsobelievethatthreewaycallingwilleffectivelypreventfraudbecauseathreewaycall   establishesdirectcontactbetweentheLECandthesubscriber.WeexpectthattheLEC O  administeringthepreferredcarrierfreezeprogramwillhavetheopportunitytoaskreasonable   questionsdesignedtodeterminetheidentityofthesubscriberduringanoralauthorization,suchas `  athreewaycall,toliftafreeze.h   404      ׀Finally,thethreewaycallproceduremerelyliftsthepreferred (  carrierfreeze.Inaddition,asubmittingcarriermustfollowtheCommission'sverificationrules o  beforesubmittingacarrierchange.Forexample,aninterexchangecarrierwishingtosubmita 7  carrierchangeforacustomerwithapreferredcarrierfreezewouldcomplywithourverification   rulesforcarrierchanges,perhapsbyusingthirdpartyverification,andthen,ifnecessary,could H  performathreewaycallwiththeLECadministeringthepreferredcarrierfreezeprogramtolift  thefreezeallbeforesubmittingitscarrierchangeordertotheexecutingcarrier. W   2   130  .3   ` Wedeclinetoenumerateallacceptableproceduresforliftingpreferredcarrier h freezes.Rather,weencouragepartiestodevelopnewmeansofaccuratelyconfirminga 0 subscriber'sidentityandintenttoliftapreferredcarrierfreeze,inadditiontoofferingwrittenand w oralauthorizationtoliftpreferredcarrierfreezes.Othermethodsshouldbesecure,yetimpose ? onlytheminimumburdensnecessaryonsubscriberswhowishtoliftapreferredcarrierfreeze._   405      _Ԁ  Thus,wedonotadoptIXCLongDistancesproposaltorequirethat_LECs_Ԁgivecustomersa P uniquepasswordorpersonalidentificationnumber.H    406      ׀Whilesome_LECs_Ԁmayfindsucha  proposaluseful,weneednotmandateitsuse,givenourdecisiontoadopttheproceduresfor _ liftingpreferredcarrierfreezesdescribedabove. '   2   131  .3   ` Weagreewith_Ameritech_Ԁandthose_commenters_Ԁwhosuggestthattheessenceof 8 thepreferredcarrierfreezeisthatasubscribermustspecificallycommunicatehisorherintentto    requestorliftafreeze._    407      _ԀBecauseourcarrierchangerulesallowcarrierstosubmitcarrierchange G!! requestsdirectlytothe_LECs_,thelimitationonliftingpreferredcarrierfreezesgivesthefreeze "" mechanismitsprotectiveeffect.WedisagreewithMCIthatthirdpartyverificationofacarrier  changealoneshouldbesufficienttoliftapreferredcarrierfreeze._   408      _ԀWerewetoallowthirdparty G verificationofacarrierchangetooverrideapreferredcarrierfreeze,subscriberswouldgainno   additionalprotectionfromtheimplementationofapreferredcarrierfreeze.Sincewebelievethat  X subscribersshouldhavethechoicetoimplementadditionalslammingprotectionintheformof   preferredcarrierfreezemechanisms,wedonotadoptMCIsproposal. g    2   132  .3   ` Weexpectthat,inthreewaycallsplacedtoliftapreferredcarrierfreeze,carriers  x administeringfreezeprogramswillaskthosequestionsnecessarytoascertaintheidentityofthe  @ callerandthecaller'sintentiontoliftherorhisfreeze,suchasthecaller'ssocialsecuritynumber   ordateofbirth.Several_commenters_Ԁstatethatwhensubscriberscontactcertain_LECs_Ԁtolifttheir O  preferredcarrierfreezes,those_LECs_Ԁgofurtherandattempttoretaincustomersbydissuading   themfromchoosinganothercarrierastheirpreferredcarrierselection._8   409      _ԀIndeed,_SNET_Ԁstates `  thatthereisnoreasonforincumbent_LECs_Ԁtotreattheliftingofpreferredcarrierfreezes"as (  ministerialandnotasanopportunitytomarkettheservicesofitsaffiliates."_   410      _ԀWedisagreewith o  _SNET_Ԁandbelievethat,dependingonthecircumstances,suchpracticeslikelywouldviolateour 7  rule,discussedabove,thatcarriersmustofferandadministerpreferredcarrierfreezesona   nondiscriminatorybasis.Indeed,weareawareofstatesthathavemadesimilarfindingsthata H  carrierthatisaskedtoliftafreezeshouldnotbepermittedtoattempttochangethesubscriber's  decisiontochangecarriers._h   411      _ԀInaddition,suchpracticescouldalsoviolatethe"justand W reasonable"provisionsofsection201(b).    412      ׀Muchasinthecontextofexecutingcarriersand  carrierchangerequests,wethinkitisimperativetoprevent_anticompetitive_Ԁconductonthepartof h executingcarriersandcarriersthatadministerpreferredcarrierfreezeprograms.8    413      ׀Carriersthat 0 administerfreezeprogramsotherwisewouldhavenoknowledgeatthattimeofaconsumer's w decisiontochangecarriers,wereitnotforthecarrier'spositionasaproviderofswitchedaccess ? services.Therefore,_LECs_Ԁthatreceiverequeststoliftapreferredcarrierfreezemustactina  neutralandnondiscriminatorymanner.Totheextentthatcarriersusetheopportunitywiththe P customertoadvantagethemselvescompetitively,forexample,throughovertmarketing,such  conductlikelywouldbeviewedasunreasonableunderourrules.   414       _  ' & X   6.0 ` InformationaboutSubscriberswithPreferredCarrierFreezes ` (#` (#   2   133  .3   ` Wedonotrequire_LECs_Ԁadministeringpreferredcarrierfreeze'X2Wprogramstomake   subscriberfreezeinformationavailabletoothercarriersbecauseweexpectthat,particularlyin  X lightofournewpreferredcarrierfreezesolicitationrequirements,moresubscribersshouldknow   whetherornotthereisapreferredcarrierfreezeinplaceontheircarrierselection._   415      _ԀGivenour g  requirementthat_LECs_Ԁmakeavailableathreewaycallingmechanismtoliftpreferredcarrier /  freezes,ifasubscriberisuncertainaboutwhetherapreferredcarrierfreezehasbeenimposed,the  x submittingcarriermayusethethreewaycallingmechanismtoconfirmthepresenceofafreeze.  @ Thus,weexpectthatcarrierswillnottypicallyneedtorelyonsuchinformationtodetermine   whetherafreezeisinplace.   416      ׀Ontheotherhand,weseebenefittotheconsumerintermsof O  decreasedconfusionandinconveniencewherecarrierswouldbeabletodeterminewhethera   freezeisinplacebeforeorduringaninitialcontactwithaconsumer.Asonealternative,we `  encourage_LECs_Ԁtoconsiderwhetherpreferredcarrierfreezeindicatorsmightbeapartofany (  operationalsupportsystemthatismadeavailabletonewprovidersoflocaltelephoneservice. o    7.0 ` WhenSubscribersChange_LECs_  ` (#` (#   2   134  .3   ` Basedontherecorddevelopedonthisissue,wedonotadopttheCommission's  tentativeconclusionthat_LECs_Ԁwouldautomaticallyestablishexistingpreferredcarrierfreezes W thatwereimplementedwiththepriorLECwhenasubscriberswitcheshisorherprovideroflocal  service._   417      _ԀRather,weconcludethatwhenasubscriberswitches_LECs_,heorsheshouldrequest h thenewLECtoimplementanydesiredpreferredcarrierfreezes,evenifthesubscriberpreviously 0 hadplacedafreezewiththeoriginalLEC.WearepersuadedbythesubstantialnumberofLEC w _commenters_Ԁassertingthatitwouldbetechnicallydifficultorimpossibletotransferinformation ? aboutexistingpreferredcarrierfreezesfromtheoriginalLECtothenewLEC._   418      _ԀItisour  understandingthatthesedifficultiesareaccentuatedbecauseeachLEChasdifferentprocedures P formanagingpreferredcarrierfreezemechanisms.Moreover,becauseourruleswillallow  carrierstohavedifferentmeansforliftingfreezes,itwillbeimportantforsubscriberstobe _ informedofthenew_LECs_'proceduresbeforedecidingwhethertorenewafreeze.Intheabsence ' ofsucharequirement,weexpectthat_LECs_Ԁwilldevelopprocedurestoensurethatnew p subscribersareabletoimplementanydesiredpreferredcarrierfreezesatthetimeofsubscription, 8 thusavoidingpotentialconfusionforsubscribers.    & X   8.0 ` PreferredCarrierFreezesofLocalandIntraLATAServices ""` (#` (#   2   135  .3   ` Wedeclinethesuggestionofanumberof_commenters_Ԁthatweprohibit'X+ hincumbent # $ _LECs_Ԁfromsolicitingorimplementingpreferredcarrierfreezesforlocalexchangeor_intraLATA_ g$% servicesuntilcompetitiondevelopsinaLEC'sservicearea._   419      _ԀInsodoing,however,we  recognize,asseveral_commenters_Ԁobserve,thatpreferredcarrierfreezescanhaveaparticularly G adverseimpactonthedevelopmentofcompetitioninmarketssoontobeornewlyopento   competition._   420      _ԀThese_commenters_Ԁinessencearguethatincumbent_LECs_Ԁseektousepreferred  X carrierfreezeprogramsasameanstoinhibittheabilityorwillingnessofcustomerstoswitchto   theservicesofnewentrants.Weshareconcernsabouttheuseofpreferredcarrierfreeze g  mechanismsfor_anticompetitive_Ԁpurposes.Weconcurwiththose_commenters_Ԁthatassertthat, /  wherenoorlittlecompetitionexists,thereisnorealopportunityforslammingandthebenefitto  x consumersfromtheavailabilityoffreezesissignificantlyreduced._P   421      _ԀAggressivepreferredcarrier  @ freezepracticesundersuchconditionsappearunnecessaryandraisetheprospectof   _anticompetitive_Ԁconduct._   422      _ԀWeencouragepartiestobringtoourattention,ortotheattentionof O  theappropriatestatecommissions,instanceswhereitappearsthattheintendedeffectofacarrier's   freezeprogramistoshieldthatcarrier'scustomersfromanydevelopingcompetition. `    2   136  .3   ` Despiteourconcernsaboutthepossible_anticompetitive_Ԁaspectsofpermitting o  preferredcarrierfreezesoflocalexchangeand_intraLATA_Ԁtollservicesinmarketswherethereis 7  littlecompetitionfortheseservices,webelievethatitisnotnecessaryfortheCommissionto   adoptanationwidemoratorium.Indeed,weremainconvincedofthevalueofpreferredcarrier H  freezesasanantislammingtool.Wedonotwishtolimitconsumeraccesstothisconsumer  protectiondevicebecausewebelievethatpromotingconsumerconfidenceiscentraltothe W purposesofsection258oftheAct.Aswithmostoftheotherrulesweadopttoday,theuniform  applicationofthepreferredcarrierfreezerulestoallcarriersandservicesshouldheighten h consumers'understandingoftheirrights.Wenotethestrongsupportofthoseconsumer 0 advocatesthatstatethattheCommissionshouldnotdelaytheimplementationofpreferredcarrier w freezes._(    423      _ԀWealsoexpectthatourrulesgoverningthesolicitationandimplementationof ? preferredcarrierfreezes,asadoptedherein,willreducecustomerconfusionandtherebyreduce  thelikelihoodthat_LECs_Ԁwillbeabletoshieldtheircustomersfromcompetition. P   2   137  .3  Ԁ ` Wemakeclear,however,thatstatesmayadoptmoratoriaontheimpositionor _ solicitationofintrastatepreferredcarrierfreezesiftheydeemsuchactionappropriatetoprevent ' incumbent_LECs_Ԁfromengagingin_anticompetitive_Ԁconduct.Wenotethatanumberofstateshave p imposedsomeformofmoratoriumontheimplementationofpreferredcarrierfreezesintheir 8 nascentmarketsforlocalexchangeand_intraLATA_Ԁtollservices._@    424      _ԀWefindthatstatesbasedon    theirobservationoftheincidenceofslammingintheirregionsandthedevelopmentof  competitioninrelevantmarkets,andtheirfamiliaritywiththoseparticularpreferredcarrierfreeze G mechanismsemployedby_LECs_Ԁintheirjurisdictionsmayconcludethatthenegativeimpactof   suchfreezesonthedevelopmentofcompetitioninlocaland_intraLATA_Ԁtollmarketsmay  X outweighthebenefittoconsumers.     9.0 ` &   LimitationonFreezeMechanismsforResoldServices / ` (#` (#   2   138  .3  Ԁ ` Anumberof_commenters_Ԁindicatethatpreferredcarrierfreezemechanismswillnot  @ preventallunauthorizedcarrierchanges._   425      _ԀSpecifically,andasdescribedabove,whena   subscriberchangestoanewcarrierthathasthesame_CIC_Ԁastheoriginalcarriersuchasa O  changefromafacilitiesbasedIXCtoaresellerof' *thatfacilitiesbasedIXCtheexecutionofthe   changeorderisperformedbythefacilitiesbasedIXC,notthesubscriber'sLEC.P   426      ׀Wheresucha `  changeismadewithoutthesubscriber'sauthorization,itisreferredtoasa"softslam."Inasoft (  slam,theLECdoesnotmakeanychangesinitssystembecauseitwillcontinuetosend o  interexchangecallsfromthatsubscribertothesamefacilitiesbasedIXC,usingthesame_CIC_. 7  SincethesoftslamexecutionisnotperformedbytheLECandtheLECmaynotevenbenotified   ofthechange,theLEC'spreferredcarrierfreezemechanismwouldnotpreventsuchachange. H  WeseekcommentintheattachedFurtherNoticeofProposed_Rulemaking_Ԁaboutissues  concerningresellersand_CICs_,includingalternativemethodsforpreventing_switchless_Ԁresellers W fromcircumventingasubscriber'spreferredcarrierfreezeprotectionthroughsoftslams._   427      _ԀWe  encourage_commenters_Ԁtoaddresstheseissuesindetail. h @ $ IV.FURTHERNOTICEOFPROPOSED_RULEMAKING_  w   2   139  .3   ` TheframeworkwehaveestablishedinthisOrderisaimedateliminatingslamming  byattackingtheproblemonseveralfronts,includingkeepingprofitsoutofthepocketsof P slammingcarriers,imposingmorerigorousverificationprocedures,andbroadeningthescopeof  ourrulestoencompassallcarriers.Weseekadditionalcommentonseveralissuesthateither _ werenotraisedsufficientlyintheFurtherNoticeandOrderorthatrequireadditionalcomment ' forresolution.Specifically,weseekcommenton(1)requiringunauthorizedcarrierstoremitto p authorizedcarrierscertainamountsinadditiontotheamountpaidbyslammedsubscribers;(2) 8 requiringresellerstoobtaintheirowncarrieridentificationcodes(_CICs_)topreventconfusion    betweenresellersandtheirunderlyingfacilitiesbasedcarriers;(3)modifyingtheindependentthird G!! partyverificationmethodtoensurethatthisverificationmethodwillbeeffectiveinpreventing "" slamming;(4)clarifyingtheverificationrequirementsforcarrierchangesmadeusingtheInternet; "X# (5)definingtheterm"subscriber"todeterminewhichpersonorpersonsshouldbeauthorizedto # $ makechangesintheselectionofacarrierforaparticularaccount;(6)requiringcarrierstosubmit g$% totheCommissionreportsonthenumberofslammingcomplaintsreceivedbysuchcarriersto /%& alerttheCommissionassoonaspossibleaboutcarriersthatpracticeslamming;(7)imposinga %x' registrationrequirementtoensurethatonlyqualifiedentitiesenterthetelecommunications &@( market;(8)implementingathirdpartyadministratorforexecutionofpreferredcarrierchanges ' ) andpreferredcarrierfreezes.   A.  RecoveryofAdditionalAmountsfromUnauthorizedCarriers      2   140  .3   ` Asexplainedabove,becausesection258specificallymandatesthatthe   unauthorizedcarrierremittotheauthorizedcarrierallamountspaidbytheconsumer,we g  concludethatCongressintendedthattheauthorizedcarriershouldbeentitledtoretainthese /  payments,atleastintheamountthattheauthorizedcarrierwouldhavechargedthesubscriber  x absenttheunauthorizedchange.   428      ׀Inlightofthisstatutoryrestriction,wehaveestablishedinthis  @ Orderrulesthattreatdifferentlysubscriberswhodiscoveranunauthorizedchangebeforethey   paytheirbillsandthosesubscriberswhodonotdiscoverthattheyhavebeenslammeduntilafter O  theyhavepaidtheirbills.Conversely,theauthorizedcarrierreceivespaymentonlyifthe   subscriberfirstpaystheslammingcarrier.Theruleswehaveadoptedabovereflectoureffortsto `  balancetheinterestsofconsumersandcarriersconsistentwiththeprovisionsofthestatute.We (  seekfurthercomment,however,concerningpossiblemechanismsthatwouldrelievethetension o  betweencompensatingconsumersandcompensatingauthorizedcarriers,whilemaintaininga 7  strongdeterrenteffectagainstslamming.Wespecificallyseekcommentonwhethertheproposals   discussedbelowarewithinourjurisdictionandconsistentwithCongress'intentembodiedin H  Section258oftheAct.    2   141  .3   ` Whereasubscriberhaspaidchargestotheunauthorizedcarrier,weproposethat  theauthorizedcarriercollectfromtheunauthorizedcarrierdoubletheamountofchargespaidby h thesubscriberduringthefirst30daysaftertheunauthorizedchange.8   429      ׀Thisproposalwould 0 enabletheauthorizedcarrierto:(1)provideacompleterefundorcredittoasubscriberfor w chargespaidafterbeingslammed,sothatthesubscriberwould,ineffect,beabsolvedforthefirst ? 30daysofslammingcharges;   430      ׀and(2)retainanamountequaltothechargesincurredbythe  subscriberaftertheunauthorizedchange,inaccordancewiththespecificlanguageofsection P 258(b).Forexample,ifasubscriberwhohasbeenslammedhaspaidtheslammingcarrier$30.00  forchargesincurredduringthefirst30daysafteranunauthorizedchange,theslammingcarrier _ mustpaytheauthorizedcarrier$60.00.Theauthorizedcarrierthenwouldgivethesubscribera ' refundorcreditof$30.00andkeep$30.00foritself.Ifthesubscriberhaspaidtheunauthorized p carrierforadditionalchargesbeyondthefirst30daysaftertheunauthorizedchange,the 8 authorizedcarrierwouldbeentitledtocollectandkeepthatamountfromtheunauthorized    carrier. G!!   2   142  .3   ` Wherethesubscriberhasnotpaidchargestotheunauthorizedcarrier,wepropose "X# topermittheauthorizedcarriertocollectfromtheunauthorizedcarriertheamountthatwould # $ havebeenbilledtothesubscriberduringthefirst30daysaftertheunauthorizedchange.This g$% proposalwouldenablethesubscribertobeabsolvedofliabilityforthefirst30daysafterthe /%& unauthorizedchange,asprovidedbytherulesweadoptinthisOrder,andatthesametime %x' providefortheauthorizedcarriertoreceivechargesequaltotheamountforwhichthesubscriber &@( wasabsolved.Forexample,ifasubscriberwhohasbeenslammedwouldhavepaidthe ' ) unauthorizedcarrier$30.00,butdidnotpaysuchcharges,theunauthorizedcarriermustpaythe O( * authorizedcarrier$30.00.Alternatively,weseekcommentonwhethertheauthorizedcarrier's  recoveryunderthisproposalshouldequaltheamountthattheauthorizedcarrierwouldhave G billedthesubscriberduringthat30daytimeperiodabsenttheunauthorizedchange.The   authorizedcarrierwouldthenreceivepaymentstowhichitwouldhavebeenentitledifthe  X unauthorizedchangehadnotoccurred.Undereitherapproach,theslammingcarrierwouldbe   liableforchargestotheauthorizedcarrierregardlessofwhetherthesubscriberhaspaidthe g  unauthorizedcarrierforsuchcharges.WenotethattherulesadoptedinthisOrderrequirethat /  anychargesimposedbytheunauthorizedcarrierafterthe30dayabsolutionperiodbepaidbythe  x subscribertotheauthorizedcarrierattheauthorizedcarrier'srates.   431      ׀  @   2   143  .3   ` Wetentativelyconcludethattheseproposalswouldappropriatelyimpose O  additionalpenaltiesonslammingcarriers.Moreover,bymakingtheunauthorizedcarrierliableto   theauthorizedcarrierfortheseadditionalamounts,theseproposalswouldprovidefurther `  economicdisincentiveforcarriersthatengageinslammingandextraincentiveforauthorized (  carrierstopursuetheirclaimsagainstunauthorizedcarriers.Theeffectofthefirstproposal, o  furthermore,wouldbetoabsolveallsubscribersofliabilityforchargesincurredafterbeing 7  slammedwhilestillgivingauthorizedcarriersincentivetopursuetheirclaimsagainstunauthorized   carriers.Underthefirstproposal,evenasubscriberwhoalreadyhaspaidtheunauthorizedcarrier H  wouldreceivethebenefitofbeingabsolvedofliabilityforslammingcharges,thuscompensating  allconsumersfortheintrusionandinconvenienceofbeingslammed. W   2   144  .3   ` WetentativelyconcludethattheCommissionhastheauthoritytopermitthese h additionalpaymentsbyslammingcarriers,basedonthelanguageofsection258,whichprovides 0 that"theremediesprovidedbythissubsectionareinadditiontoanyotherremediesavailableby w law."8   432      ׀TheCommissionhasadditionalauthorityundersection201(b)to"prescribesuchrules ? andregulationsasmaybenecessaryinthepublicinteresttocarryouttheprovisionsof[the]Act,"  aswellasundersection4(_i_)to"performanyandallacts,makesuchrulesandregulations,and P issuesuchorders,notinconsistentwith[the]Act,asmaybenecessaryintheexecutionofits  functions."_   433      _ԀWetentativelyconcludethatpermittinganauthorizedcarriertocollecttheabove _ describedamountsfromtheunauthorizedcarrierwouldhelptodeterslammingbymaking ' slammingsounprofitablethatcarrierswillceasepracticingit.Weseekcommentonthese p tentativeconclusions. 8  B.  Resellersand_CICs_  G!!   2   145  .3   ` Thepracticeofresellingtelecommunicationsservicefromfacilitiesbasedcarriers "X# tononfacilitiesbased(_switchless_)carriersisamajordevelopmentthathasenabledmanycarriers # $ tocompeteeffectivelyinthelongdistancemarket.Resellinghasgivenconsumersawidervariety g$% ofservicesandcarriers,aswellasareductioninthecostoftelecommunicationsservice.As /%& competitiondevelopsfurther,however,sodoestheneedtoensurethatconsumersarereceiving %x' accurateandsufficientinformationabouttheassortmentoftelecommunicationsservicesand &@( carriersinordertoavoidconsumerconfusion.Confusionovercarriersandtheservicesthey ' ) providecannegatecompetitionbecauseconfusedconsumerscannotmakeinformedchoices. O( * Furthermisunderstandingsmayariseduetotheuseofcarrieridentificationcodes(_CICs_),which )!+ areusedby_LECs_Ԁtoidentifydifferent_IXCs_.Because_CICs_ԀareissuedbytheNorthAmerican  NumberingPlanAdministrator(_NANPA_)tofacilitiesbased_IXCs_Ԁonly,_switchless_Ԁresellersdonot G havetheirown_CICs_,butratherusethe_CICs_Ԁoftheirunderlyingfacilitiesbasedcarriers.Thefact   thatresellersdonothavetheirown_CICs_Ԁresultsintwoslammingrelatedproblems:(1)the"soft  X slam;"and(2)themisidentificationofaresellerastheunderlyingcarrier.     2   146  .3   ` Asdescribedabove,the"softslam"occurswhenasubscriberischanged,without /  authorization,toacarrierthatusesthesame_CIC_Ԁashisorherauthorizedcarrier.   434      ׀Thiscan  x occurwhenasubscriberischangedfroma_switchless_Ԁresellertothereseller'sfacilitiesbasedIXC,  @ fromthefacilitiesbasedIXCtoa_switchless_ԀresellerofthatIXC'sservice,orfroma_switchless_   resellerofthefacilitiesbasedIXC'sservicetoanother_switchless_ԀresellerofthatsameIXC's O  service.Inallsuchcases,thesubscriber's_CIC_Ԁremainsthesameeventhoughtheidentityofthe   carrierhaschanged.Asexplainedearlier,whenasubscriberchangesfromafacilitiesbasedIXC `  toaresellerofthatfacilitiesbasedIXC'sservices,orinanysituationinwhichasubscriber (  changestoanothercarrierthathasthesame_CIC_Ԁasthepreviouscarrier,theexecutionofthe o  changeisperformedbythefacilitiesbasedIXC,nottheLEC.8   435      ׀Itisthefacilitiesbasedcarrier 7  thatprocessesthecarrierchangeinitssystemtoenabletheresellertobeginbillingthesubscriber.   TheLECdoesnotmakeanychangesinitssystembecauseitwillcontinuetosendinterexchange H  callsfromthatsubscribertothesamefacilitiesbasedcarrier,usingthesame_CIC_.Infact,the  LECmaynotevenbenotifiedofanychanges. W   2   147  .3   ` ThesoftslamisthereforeparticularlyproblematicbecauseitbypassestheLECand h enablesaslammingresellertobypassasubscriber'spreferredcarrierfreezeprotection.   436      ׀ 0 Preferredcarrierfreezeprotection,wheretheLECwillchangeasubscriber'scarrieronlyafterit w receivesexpresswrittenororalconsentfromthatsubscribertoliftthefreeze,willnotbe ? triggeredbyasoftslam.ThisisbecausetheLECisnottheexecutingcarrierandmaynotevenbe  awareoftheunauthorizedchange.Furthercomplicationsarisebecausethenameofthefacilities P basedcarriermaycontinuetoappearonthesubscriber'sbill,givingthesubscribernoindication  thathisorherpreferredcarrierhasbeenchanged._   437      _ԀIftheslammingreseller'sretailratesare _ higherthanthoseofthecarrieritreplaced,however,thesubscribermaybecomesuspicious. '   2   148  .3   ` Anotherproblemthatresultsfromresellersusingthesame_CICs_Ԁastheir 8 underlyingfacilitiesbasedcarriersisthatofmisidentification.Forexample,althoughaconsumer    issubscribedtoa_switchless_Ԁreseller,theLECwillidentifythesubscriber'scarrierasthefacilities G!! basedcarrierbecausetheLEC'srecordsshowthatthereseller's_CIC_Ԁisthesameasthatofthe "" facilitiesbasedcarrier.Subscribersalsomayexperiencedifficultyindetectingwhenan "X# unauthorizedchangehasoccurred.Whenasubscriberofaresellerreceivesthemonthlybillfor # $ longdistanceservices,theidentityofthecarrierontheportionofthesubscriber'sbillthatliststhe g$% _presubscribed_Ԁcarriermaynotbethereseller,butthefacilitiesbasedcarrierprovidingthe /%& underlyingwholesaleservice.Theidentityoftheresellermay,however,appearonaseparate %x' billingpageunderthereseller'sname,oronan_aggregator_'sbillingpage.Thus,ifareseller &@( switchesasubscribertoitsnetworkwithoutfirstobtainingthesubscriber'spermission,the ' ) subscribermayonlyseetheidentityofthefacilitiesbasedcarrieronthemonthlytelephonebill, O( * andnottheidentityoftheresellerthatcommittedtheslamming,unlessthesubscriberlooksfor  thereseller'sidentityamongtheotherpagesofthetelephonebill.Becausethefacilitiesbased G carrierappearsonthebill,subscriberswhohavebeenslammedbytheunidentifiedreseller   reasonablymightassumethatthefacilitiesbasedcarrieristheculprit.Subscriberscouldthen  X bringslammingcomplaintsagainstthefacilitiesbasedcarriersinnumerousfora,whenthereal   culpritistheunidentifiedreseller. g    2   149  .3   ` Weseekcommentontheissueofwhether_switchless_Ԁresellersshouldberequired  x tohavetheirown_CICs_Ԁorsomeotheridentifierthatwoulddistinguishthemfromtheunderlying  @ facilitiesbasedcarriersandallowtheconsumertoensurethatslamminghasnotoccurred.We   seekcommentonthreeoptions:1)requireeachresellertoobtaina_CIC_;2)requirethecreation O  foreachresellerofa"pseudo_CIC_,"thatis,digitsthatwouldbeappendedtotheunderlying   carrier'sown_CIC_Ԁforidentificationofthereseller;or3)requireunderlyingfacilitiesbasedcarriers `  tomodifytheirsystemstopreventunauthorizedchangesfromoccurringifasubscriberhasa (  freezeontheaccountandtoallowidentificationofresellersontheconsumer'sbill.Wealsoseek o  commentonotherbenefits,unrelatedtoslamming,thatmayresultfromadoptionofanyofthese 7  options.      1.0 ` BackgroundCarrierIdentificationCodes ` (#` (#   2   150  .3   `  _CICs_Ԁarenumericcodesthatenable_LECs_Ԁprovidinginterstateinterexchange  accessservicestoidentifytheIXCthattheoriginatingcallerwishestousetotransmitits h interstatecall._   438      _Ԁ_LECs_Ԁusethe_CICs_ԀtoroutetraffictotheproperIXCandtobillforthe 0 interstateaccessserviceprovided._CICs_Ԁfacilitatecompetitionbyenablingcallerstousethe w servicesoftelecommunicationsserviceprovidersbothby_presubscription_Ԁandbydialingacarrier ? accesscode,orCAC,whichincorporatesthatcarrier'suniqueFeatureGroupD_CIC_._(   439      _Ԁ  Originally,_CICs_Ԁwereuniquethreedigitcodes(XXX),and_CACs_Ԁwerefivedigitcodes P incorporatingthe_CIC_Ԁ(10XXX).Later,whendemandforecastsexceededthenumberofthree  digit_CICs_,theCommission:(1)implemented_CIC_Ԁconservationmeasuresin1995thatstopped _ assigningthreedigit_CICs_Ԁandstartedassigningfourdigit_CICs_ԀinasevendigitCACformat ' (101XXXX),_   440      _Ԁand(2)approvedatransitionperiodthatwouldallowsubscriberstouseeither p theoriginalfivedigit_CACs_Ԁrequiredbythethreedigit_CICs_,orthenewsevendigit_CACs_ 8  (101XXXX)requiredbythefourdigit_CICs_._    441      _ԀThetransitionperiodendedonJuly1,1998,and    allsubscribersmustnowusethesevendigitCACformat._   442      _ԀAftertheCommissionissatisfied   thatalloftheNation'scarriershavecompliedwiththerequirementtoendthetransitionperiod, G wewillconsidermakingavailableforassignmenttocarrierstheremainderoftheapproximately   10,000_CICs_Ԁcontainedinthefourdigit_CIC_Ԁformat.  X   2   151  .3   ` Asnotedabove,_CICs_Ԁarealsousedtobillcustomersfortheaccessandtransport g  servicesprovidedbymultiplecarriers.Mostcallsbetweenlocalaccessandtransportareas /  (_interLATA_)involveatleasttwocarriers:theLECandtheIXC.TheLECtranslatesthedigits  x dialedbythesubscriber,whouseseitherthe_presubscribed_Ԁcarrier(1+)ora"dialaround"  @ carrier,_0   443      _ԀusingaCAC.TheLECknowswhichcarrierthesubscriberchosebyeitheraccessing   thedatabasetodiscovertheidentityofthecarriertowhichthesubscriberis_presubscribed_,orby O  translatingtheCACdialedbythesubscriber.TheLECthenroutesthecalltotheIXCchosenby   thesubscriber.Carriersthatsharethetransportofcallsbilleachotherforthetotalminutesof `  useincurredontheirrespectivenetworks,using_CICs_Ԁtoidentifythespecificcarriersthat (  generatedthecalls.Toobtaina_CIC_,however,_NANPA_ԀrequirescarrierstofirstobtainFeature o  GroupDaccessfromthe_LECs_Ԁthatservetheircustomerbases._   444      _ԀThetranslationservices 7  providedbythe_LECs_ԀarebundledtogetherwiththeFeatureGroupDaccesspurchasedbythe   IXC,andarenotsoldseparately.    445      ׀Asaresult,most_CIC_Ԁholdersarefacilitiesbasedcarriers H  because,unlikemostresellers,theyhaveaswitchthatneedstobeconnectedwiththeLECovera  FeatureGroupDaccessfacility. W   2   152  .3   ` _Switchless_Ԁresellersmakeaprofitbybuyingthefacilitiesbasedcarrier'sserviceat h awholesalerate,andresellingittosubscribersataretailrate.Asnotedabove,resellersmarket 0 thetelephoneservicesprovidedbyfacilitiesbasedcarriers,butdonotpossesstheirownunique w _CICs_. ?   2.0 ` Jurisdiction P` (#` (#   2   153  .3   ` WetentativelyconcludethatCommissionregulationsrequiringresellerstobe _ identifiedontheirsubscribers'monthlybillswouldbeconsistentwithourauthorityundersections ' 201(b)and4(_i_).TheCommissionhasauthorityundersection201(b)to"prescribesuchrulesand p regulationsasmaybenecessaryinthepublicinteresttocarryouttheprovisionsof[the]Act,"as 8 wellasundersection4(_i_)to"performanyandallacts,makesuchrulesandregulations,andissue    suchorders,notinconsistentwith[the]Act,asmaybenecessaryintheexecutionofits G!! functions."_    446      _ԀMoreover,wetentativelyconcludethattheplainlanguageofsection251(e)(1) "" givestheCommissionauthoritytopromulgateregulationsofthetypeproposedbelowfor  changingtheNorthAmericanNumberingPlan(_NANP_).Wealsotentativelyconcludethatthe G Commission'sauthoritytochangethe_NANP_Ԁincludeschangestosuchdocumentsasthe_CIC_   AssignmentGuidelinesasmightberequiredbytheCommissioninthisproceeding.Werequest  X commentsonthesetentativeconclusions.     3.0 ` Option1:RequireResellerstoObtainIndividual_CICs_ / ` (#` (#   2   154  .3   `  Asnotedabove,the_NANPA_ԀcurrentlyrequiresresellerstofirstobtainFeature  @ GroupDaccessfromaLECbeforeitwillassigntheresellera_CIC_.Ifresellersweretoobtain   _CICs_ԀwithoutFeatureGroupDaccess,resellerswouldnotneedtheirownphysicalaccesstothe O  publicswitchedtelephonenetworkbecausethatwouldbeprovidedtothembyfacilitiesbased   carriers.Instead,resellerswouldneed"translation"access,ortheabilityofthe_LECs_Ԁtoroute `  subscribercallstotheresellerseventhoughthefacilitiesusedtoroutethosecallswereprovided (  totheresellerbythefacilitiesbasedcarrier.UndertheauspicesoftheNorthAmerican o  NumberingCouncil(_NANC_),the_CIC_ԀAdHocWorkingGrouprecommendedtothe_NANC_Ԁthat 7  thecurrentFeatureGroupDaccessrequirementbedropped:   8  [_a]ssignment_Ԁof[FeatureGroupD]_CICs_Ԁwithouttheneedforthepurchaseof  [FeatureGroupD]trunk(i.e.,"translationsaccess")couldhelpalleviatesome W difficultiesassociatedwithresale.Specifically,translationsaccesswillfacilitatethe  assignmentof_CICs_Ԁtoresellers,andtherebyalloweasieridentificationofthese h typeserviceproviders,enhancingtheabilitytoresolveconflicts,includingdisputes 0 whichinvolveslamming._   447      _w     2   155  .3   `  Asourfirstoption,weseekcommentonrequiringeachresellertoobtainan  individual_CIC_Ԁandonanychangestothe_NANP_Ԁthatwouldberequiredtomakesucha P requirementeffective.First,werequestcommentonwhetherweshouldmakethepurchaseof  translationsaccessbyresellersmandatoryinordertodeterslamming.Wenotethatifeach _ resellerhadaunique_CIC_,thepreferredcarrierfreezemechanismwouldbeeffectiveagainstsoft ' slammingbecauseeveryinterexchangecarrierchangewouldinvolvea_CIC_Ԁchange,andtherefore p triggerLECpreferredcarrierfreezeprotection.Wealsoaskcommentingpartiestoaddresshow 8 effectivethisoptionwouldbeinallowingconsumersandcarrierstodetectslamming.Further,we    seekcommentonwhetherthisoptionhasadvantagesbecauseitdoesnotrequirefacilitiesbased G!! carrierstomodifytheirexistingbillingandcollectionsystemsandwillnotcausea_CIC_Ԁshortage "" nowthattheCommissionhasendedthetransitionperiodtofourdigit_CICs_.Werequest "X# commentonthe_CIC_ԀAdHocWorkingGroup'srecommendationtoallowresellerstopurchase # $ translationsaccessinsteadofFeatureGroupDtrunkaccess.Wenotethatsection251(e)(2)of g$% the1934Actstates:"[_t]he_Ԁcostofestablishingtelecommunicationsnumberingadministration /%& arrangementsandnumberportabilityshallbebornebyalltelecommunicationscarriersona %x' competitivelyneutralbasisasdeterminedbytheCommission."   448       &@(   2   156  .3   ` Werequestfurthercommentonthisoption'simpactonthe"competitivelyneutral" O( * requirementsofsection251(e)(2),inlieuofthefactthattranslationsaccessiscurrentlybundled )!+ togetherwithFeatureGroupDtrunkaccess.Specifically,shouldresellerspaythefullFeature )`", GroupDtrunkaccessratesfortranslationsaccessinorderto"leveltheplayingfield"with  facilitiesbasedcarriers?Howlongofatransitionperiodshouldwerequire?Shouldresellersbe G requiredtoadheretothesame_CIC_ԀAssignmentGuidelinesasfacilitiesbasedcarriers?Whatwill   betheeffecton_CIC_ԀconservationiftheCommissionrequiresallresellerstoobtain_CICs_?  X Commentingpartiesareencouragedtoincludeempiricalinformationwiththeircomments.     4.0 ` Option2:RequiretheUseof"Pseudo_CICs_"forResellers / ` (#` (#   2   157  .3   `  Theterm"pseudo_CIC_"referstothecreationofacodedsuffixthatfollowsa  @ facilitiesbasedcarrier's_CIC_._   449      _ԀAfacilitiesbased_CIC_Ԁwouldassignathreeorfourdigitsuffix   codetoeachresellerofthefacilitiesbasedcarrierthatcouldbeusedtoidentifyaparticular O  reselleronaconsumer'sbill.Forexample,the_NANPA_ԀassignedAT&Tthefourdigit_CIC_Ԁ0288.   Underthepseudo_CIC_Ԁsystem,resellersofAT&T'sserviceswouldbeassignedsuffixesto0288 `  beginningwith0001,assumingthepseudo_CICs_Ԁarefourdigits.Thus,reseller"A"wouldbe (  assignedthepseudo_CIC_Ԁ"02880001." o    2   158  .3   `  Weseekcommentonuseofthepseudo_CIC_Ԁtoprevent_switchless_Ԁresellersfrom   circumventingasubscriber'spreferredcarrierfreezeprotectionthroughsoftslams.Aswith H  Option1,ifeachresellerhadaunique_CIC_,thepreferredcarrierfreezemechanismwouldbemore  effectiveagainstslammingperpetratedbyresellersbecauseeveryinterexchangecarrierchange W wouldinvolvea_CIC_Ԁchange,andthereforetriggeranyLECprovidedpreferredcarrierfreeze  protectionmechanisms.Wealsorequestcommentontheviabilityofthepseudo_CIC_Ԁoptionasa h methodtoidentifyparticularresellersofafacilitiesbasedcarrier'sservicessothatconsumerscan 0 detectslammingifitoccurs. w   2   159  .3   ` Werequestcommentonrecoveringthecostofimplementingthepseudo_CIC_  option,whichwouldbeborneprimarilyby_ILECs_Ԁandothercarriersorentitiesthatprovide P billingandcollectionservicestoresellers.Werequestfurthercommentontheneedto  standardizepseudo_CIC_Ԁassignments,particularlyincaseswherearesellerresellsservicesfrom _ multiplefacilitiesbasedcarriers.Shouldasinglepseudo_CIC_Ԁsuffixbeusedbyallfacilitiesbased ' carrierstoidentifythesamereseller,sothatthe0001suffixappliestoreseller"A"regardlessof p thefacilitiesbasedcarrier's_CIC_?Shouldthe_NANPA_Ԁberequiredtoadministratepseudo_CICs_, 8 toensureuniformity?Finally,werequestcommentontheimpactofpseudo_CIC_Ԁimplementation    onsection251(e)(2)'srequirementforcompetitiveneutrality,whendeterminingthecostofits G!! administration.  ""   5.0 ` Option3:RequireFacilitiesBasedCarrierstoModifyTheirSystems # $` (#` (#   2   160  .3   ` Facilitiesbasedcarriersmaintainthenetworksystemswhichenablethemto /%& executecarrierchangeswhenasubscriberchangestoacarrierwhose_CIC_Ԁisthesameasthe %x' previouscarrier.Theyalsomaintainrecordsoftelephoneservicesalesgeneratedbyeachreseller, &@( inordertobillresellersfortheservicesconsumedbytheresellers'subscribers,ortopassthat ' ) informationtotheentityprovidingtheresellerswithbillingandcollectionservices.Weseek O( * commentonimposingadditionaldutiesonfacilitiesbasedcarrierstoutilizetheirsystemstohelp )!+ preventsoftslamsandtohelpsubscribersidentifyresellersontheirbills. )`",   2   161  .3   ` Weseekcommentonrequiringafacilitiesbasedcarriertomodifyitssystemto o+#. enableittoexecutepreferredcarrierfreezeprotectiononlyforsubscriberswhoare_presubscribed_  totheservicesofeitherthefacilitiesbasedcarrieroroneofits_switchless_Ԁresellers.Wepropose G that_LECs_ԀberequiredtoprovidetoeachfacilitiesbasedIXCcertainfreezeinformationabout   subscribersofthefacilitiesbasedcarrierorsubscribersofanyofthefacilitiesbasedcarriers'  X resellers.Thiscommunicationwouldcontaininformationaboutwhichofthosesubscribershave   preferredcarrierfreezeprotectionontheiraccounts,aswellasinformationaboutwhich g  subscribershaveliftedtheirfreezes.Eachfacilitiesbasedcarrierthenwouldhavetheinformation /  necessarytoenableittorejectcarrierchangeorders,insoftslamsituations,forthosesubscribers  x whohavepreferredcarrierfreezeprotection.TheLECwouldcontinuetoberesponsiblefor  @ acceptingsubscriberrequestsforpreferredcarrierfreezeprotection,formaintainingsuchfreeze   protectionforthesubscriberagainstallotherunauthorizedchanges,andforliftingfreezesupon O  receivingnotificationfromsubscribers.Weseekcommentonthisproposal.Wealsoseek   commentonhowfrequentlythefacilitiesbasedIXCwouldneedtoreceiveinformationfromthe `  LECinordertopreventsoftslams,aswellasunduedelaysinlegitimatecarrierchanges.We (  seekcommentontheburdenthisproposalwouldimposeonbothfacilitiesbased_IXCs_Ԁand_LECs_. o    2   162  .3   `  Wealsoseekcommentonwhetherfacilitiesbasedcarriersshouldberequiredto   modifytheirbillingrecordstoallowidentificationofresellersontheconsumer'sbill,whethersuch H  billisissuedfromthereseller,theLEC,orabillingagent.Wealsoseekcommentonwhether,if  thesubscriber'scarrierhasbeenchangedbutthe_CIC_Ԁremainsthesame,suchsubscriber'sbill W shouldincludeinformationonhowtocontacttheunderlyingfacilitiesbasedcarrierifthe  subscriberbelievesthatanunauthorizedchangehasoccurred.Thiswouldenablethesubscriber h tocontactthefacilitiesbasedIXC,ratherthantheLEC.Inthisparticularsituation,theLEChas 0 noabilitytoproperlyidentifythecarrier,noranyabilitytochangethesubscriberbacktothe w properlyauthorizedcarrier,becausethesubscriber's_CIC_Ԁhasnotchanged.Onlythefacilities ? basedIXChastheabilitytoperformthesefunctions.Weseekcommentonwhetherfacilities  basedcarrierspossesstheinformationneededtodistinguishresellersoftheirserviceson P subscribers'monthlytelephonebills.Weaskforcommentonthecostandeffortassociatedwith  placingonconsumers'billsinformationbasedontheresellerusageinformationalreadymaintained _ byfacilitiesbasedcarriers.Specifically,howexpensiveanddifficultwoulditbeforfacilities ' basedcarrierstomodifytheirexistingbillingrecordstoprovidethemeanstoidentifyonthe p subscribers'monthlybillsthespecificresellersresponsiblefortheservice?Finally,werequest 8 commentontheimpactofthisproposedoptiononsection251(e)(2)'srequirementfor    competitiveneutrality,whendeterminingthecostofitsadministration. G!!   2   163  .3   ` Wealsoseekcommentonanyotherproposalsthatwouldhelptodistinguishthe "X# identitiesofresellersfromtheirfacilitiesbasedcarriers,bothforpurposesofidentificationon # $ subscriberbillsandtopreventsoftslams.Weseekcommentonadditional_CIC_Ԁproposals,aswell g$% asonmethodsthatwouldnotinvolve_CICs_,ifsuchproposalswouldattainbothgoalsofproperly /%& identifyingresellersandpreventing_switchless_Ԁresellersfromslammingsubscribers. %x'   6.0 ` OtherPotentialBenefits ' )` (#` (#   2   164  .3   ` Wealsoseekcommentonotherbenefitsunrelatedtoslammingremediesthatmay )!+ resultfromtheadoptionofanyoftheseoptions.Forexample,weask_commenters_Ԁtodescribe )`", howtheenhancedidentificationofresellersmayallowmoreefficientbillingorroutingofcalls.In *(#- addition,weseekcommentonwhethersuchidentificationwouldpromotecompetitionbygiving o+#. greateremphasistotheidentityofresellersthatprovideservice. 7,$/  C.  IndependentThirdPartyVerification  -H&1  .'2   2   165  .3   ` Asnotedpreviously,theCommissionhasseenmanyinstancesofabuseconcerning  ourexistingrequirementsforindependentthirdpartyverification.Weclarifyabove,forexample, G thattheverifiermustbetrulyindependentofboththecarrierandanytelemarketingagent,thatthe   thirdpartyverifiermustnotbecompensatedinamannerthatcreatesincentivestoengagein  X deceptiveverificationpractices,andmostimportantly,thatthethirdpartyverificationmustclearly   andconspicuouslyconfirmthepreviouslyobtainedauthorization.Severalparties,however,have g  requestedfurtherguidanceregardingindependentthirdpartyverification._   450      _ԀBasedonthenumber /  andbreadthofcommentswereceivedaskingforclarificationoftheindependentthirdparty  x verificationoption,wetentativelyconcludethatweshouldreviseourrulesforindependentthird  @ partyverification.     2   166  .3   ` _NAAG_Ԁsuggestsinitscommentsthatindependentthirdpartyverificationshouldbe   separatedcompletelyfromthesalestransaction,sothatacarrierwouldnotbepermittedto `  conductathreewaycalltoconnectthesubscribertothethirdpartyverifier._8   451      _Ԁ_NAAG_Ԁargues (  thataverificationcallinitiatedbythecarrierisnottrulyindependentbecausethesubscriberwould o  remainundertheinfluenceofthecarrier'stelemarketerduringtheverification.   452      ׀Wenote, 7  however,thatusingathreewaycallisoftenthemostefficientmeansbywhichtoaccomplish   thirdpartyverification.   453      ׀Weseekcommentonwhether,ifatelemarketingcarrierispresent H  duringthethirdpartyverification,suchverificationcanbeconsidered"independent."    2   167  .3   ` Weseekcommentontheuseofautomatedthirdpartyverificationsystems,as  opposedto"live"operatorverifiers.Althoughdifferentautomatedthirdpartyverification h systemsoperateinvariousways,suchsystemsgenerallyworkasfollows:afterobtainingacarrier 0 changerequestfromasubscriberthroughtelemarketing,thetelemarketingcarriersetsupathree w waycallbetweenthesubscriber,thecarrier,andtheautomatedverificationrecordingsystem. ? Therecordingsystemthenplaysrecordedquestionsandrecordsthesubscriber'sanswerstothose  questions.Presumablythesystemwouldrecordboththequestionsaskedbythesystemandthe P answersgivenbythesubscriber.Withsomesystems,thetelemarketingcarrierremainsonthecall  duringtheverification,whileinothersystemsthetelemarketingcarriermayhanguponthecall _ afterconnectingthesubscribertothethirdpartyverifier.Weseekcommentonwhether ' automatedthirdpartyverificationsystemsasdescribedabovewouldcomplywithourrules p concerningindependentthirdpartyverification,aswellaswiththeintentbehindourrulesto 8 produceevidenceindependentofthetelemarketingcarrierthatasubscriberwishestochangehis    orhercarrier.Wealsonotethatone_commenter_,_VoiceLog_,offersanadditionalsystemcalleda G!! "livescripted"version._   454      _ԀInthis"livescripted"version,afterthetelemarketingcarrier's "" representativesetsupthethreewaycallbetweenthesubscriber,thecarrier'srepresentative,and "X# theautomatedrecordingsystem,thesystembeginsrecording,atwhichpointthecarrier's # $ representativeasksscriptedquestionstoconfirmthenecessaryinformationaboutthesubscriber's g$% accountandthatthesubscriberwishestochangehisorhercarrier.   455      ׀Weseekcommenton /%& whethersucha"livescripted"automatedverificationsystemwouldbeatoddswithourrules  becauseitpermitsthecarrieritself,whoisnotanindependentpartylocatedinaseparatephysical G location,tosolicitthesubscriber'sconfirmation.Wealsoseekcommentontheadvantagesand   disadvantagesofusingautomatedthirdpartyverificationandliveoperatorthirdpartyverification.  X Wenotethatsome_commenters_Ԁarguethatautomatedthirdpartyverificationismoreeconomical   tousethanliveverifiers,andthatautomatedsystemsproviderecordingsthat,byrecordingthe g  subscriber'stoneofvoice,mayalsoindicatethesubscriber'sstateofmind._   456      _ԀOther_commenters_ /  maintainthatliveverifiersaremoreeffectivethanautomatedverifiersbecausealiveoperatorcan  x answerquestionsaskedbythesubscriber,whereasanautomatedsystemmayonlybeableto  @ record"yes"or"no"answers.8   457      ׀Weseekcommentontheseviewpointsandonanyother   advantages,disadvantages,oralternativestousingautomatedthirdpartyverificationsystems. O    2   168  .3   ` Weseekcommentonthecontentofthethirdpartyverificationitself.For `  example,shouldtheindependentthirdpartyverifierberequiredorpermittedtoprovidecertain (  informationinadditiontoconfirmingasubscriber'scarrierchangerequest?_NAAG_Ԁproposesthat o  theCommissionshoulddefinetheformatandcontentofthethirdpartyverification._   458      _ԀQuick 7  Responsestatesthatitsverifiershavecarrierprovidedinformationsheetswithwhichtoanswer   subscribers'questionsduringtheverificationprocess.   459      ׀Wealsoseekcommentonwhether H  independentthirdpartyverifiersshouldbepermittedtodispenseinformationonpreferredcarrier  freezeprocedures.Several_commenters_Ԁarguethatrequiringathirdpartyverifiertoprovide W additionalinformationisunnecessary,timeconsuming,andwouldputthethirdpartyverifierin  theroleoftelemarketingforthecarrier._   460      _ԀWeseekcommentonanybenefitsthatmightbe h gainedfrompermittingorrequiringthirdpartyverifierstoprovideadditionalinformation.We 0 alsoseekcommentonwhethersucharequirementwouldcompromisetheindependentnatureof w theverification,oronwhethersucharequirementisnecessary.Finally,weseekcommentonany ? otherproposalsthatwouldimprovethequalityofthethirdpartyverification.   D.  CarrierChangesUsingtheInternet     2   169  .3   ` ManycarriershavebeguntoutilizetheInternetasamarketingtooltogainnew ' subscribers.Consumersmaylogontoacarrier'swebsiteandfileformselectronicallytoswitchto p thatcarrier'stelecommunicationsservice.WerecognizethatusingtheInternetisaquickand 8 efficientmethodofsigningupnewsubscribersandshouldbemadewidelyavailable.Such    availability,however,shouldbeaccompaniedbymeasurestoensurethatconsumersareprovided G!! thesamesafeguardstopreventslammingaswehavemandatedforotherformsofsolicitation.It "" istheveryeasewithwhichasubscribermaychangecarriersusingtheInternetthatalsomakesthe "X# Internetfertilegroundforslamming.Forexample,wecanenvisionscenariosinwhicha # $ consumerwhois"surfing"theInternetinadvertentlysignsupforaswitchinlongdistanceservice, g$% orismisledintosigningupforacontestthatactuallyresultsinaswitchoftelecommunications /%& provider. %x'  &@(   2   170  .3   ` AsstatedinthisOrder,allcarrierchangesmustbeconfirmedinaccordancewith  oneofthethreeverificationmethodsinourrules:writtenLOA,electronicauthorization,or G independentthirdpartyverification.   461      ׀Itappears,however,thatcarriershavewidelydiffering   interpretationsoftheapplicabilityoftheCommission'sverificationrulestoInternetcarrier  X changes.Forexample,somecarriers'_websites_Ԁstatethatthesubscriber'scarrierchangerequest   willbeverifiedseparatelyaftertheconsumersends,byelectronicsubmission,thecarrierchange g  request.Othercarriers'_websites_Ԁindicatethatverificationwilloccuronlyifthesubscriberlivesin /  certainspecifiedstates.Somecarriers'_websites_Ԁdonotofferelectronicsubmissionofanyforms,  x statingthattheycannotchangeanysubscriber'sservicewithoutthatsubscriber'ssignedwritten  @ agreement.These_websites_Ԁofferthesubscriberthechoiceofdownloadingapaperformor   receivingthepaperforminthemail,statingthatthecarrierwillonlychangethesubscriber's O  serviceafterthesubscribersubmitsasignedpaperform.     2   171  .3   ` WeseekcommentonwhetheracarrierchangesubmittedovertheInternetcould (  beconsideredavalidLOAunderourverificationrules.Whencarriersobtainwritten_LOAs_Ԁfrom o  subscribers,such_LOAs_Ԁserveasbothauthorizationtochangeasubscriber'scarrierand 7  verificationofthatsubscriber'sdecisiontochangecarriers.Weseekcommentontheextentto   whichcurrentcarrierchangerequestssubmittedovertheInternetcontainalltherequired H  elementsofavalidLOAinaccordancewithourrules.Wehaveparticularconcernsabouthowan  Internetsignupsystemsatisfiesthesignaturerequirement,whichisoneofthemostimportant W identificationrequirementsofthewrittenLOA._8   462      _ԀTheelectronicformsthatwehaveseen  generallycontainasectioncalledthe"electronicsignature"thatservesasasubstituteforthe h consumer'swrittensignature.Someelectronicsignaturesconsistoftheconsumertypinghisor 0 hernameintothebox.Otherelectronicsignaturesconsistoftheconsumersubmittingtheform w electronicallytothecarrier.WetentativelyconcludethatelectronicsignaturesusedinInternet ? submissionsofcarrierchangeswouldnotcomplywiththesignaturerequirementfor_LOAs_.We  believethattheelectronicsignaturefailstoidentifythe"signer"astheactualindividualwhose P namehasbeen"signed"totheInternetform.Wealsobelievethattheelectronicsignaturefailsto  identifythe"signer"asanindividualwhoisactuallyauthorizedtomaketelecommunications _ decisions.Forexample,thereappeartobefewsafeguardstopreventsomeonefromsimply ' typinganotherperson'snameintothefieldfortheelectronicsignature.Therewouldbenotelltale p variationsinhandwritingtodistinguishoneelectronicsignaturefromanother.Weseekcomment 8 onthesetentativeconclusions,andseekcommentgenerallyonhowcarriersaredealingwiththe    aboveidentifiedproblemsorhowourrulesshouldbemodifiedtoaccountforthesedifferences. G!!   2   172  .3   ` Wealsoseekcommentonwhatadditionalinformationwouldprovidesufficient "X# consumerprotectionfromanunscrupulouscarrier.Forexample,somecarrierswillacceptcarrier # $ changesusingtheInternetifsubscriberssubmittheircreditcardnumbersforbillingpurposes.We g$% seekcommentonwhetherobtainingasubscriber'screditcardnumberwouldprovidesufficient /%& proofthatasubscriberauthorizedacarrierchangeandthatthesubmittingpersonisactuallythe %x' subscriber.Weseekcommentontheextenttowhichasubscriberwouldbeprotectedbythe &@( consumerprotectionaspectsthataccompanytheuseofcreditcards.Wealsoseekcommenton ' ) whethercarrierchangessubmittedovertheInternetshouldrequireasubscribertoincludecertain O( * personalinformation,suchassocialsecuritynumberormother'smaidenname,toensurethatonly )!+ thesubscribermaychangehisorherowncarrier.Weseekcommentonwhetherrequiringthe )`", submissionofthesetypesofinformationwouldbesufficienttopreventslammingusingthe *(#- Internet,withoutjeopardizingthesubscriber'sprivacyandotherinterests.    2   173  .3   ` TotheextentthatacarrierchangeusingtheInternetisnotavalidLOA,thenata   minimum,acarrierusingsuchamethodofsolicitationmustverifyinaccordancewithourrules.  X Thatis,thecarriermusteitherobtainavalidwrittenLOA,orconfirmthesalewithelectronic   authorizationorindependentthirdpartyverification.Weseekcommentonwhetheradditional g  methodsofverificationmightbeparticularlyappropriateforusebycarrierswhosolicit /  subscribersovertheInternet.  x   2   174  .3   ` Wealsohavegeneralconcernsaboutthecontentofthesolicitationusingthe   Internet.Forexample,someIXC_webpages_ԀstatethatinchangingtothatIXC'slongdistance O  service,theconsumeralsoagreestochangetotheIXC's_intraLATA_Ԁtollservicewhereapplicable.   Thesecarriersdonotgiveconsumerstheoptionofchoosingonly_interLATA_Ԁservicebythat `  carrier,butinsteadrequiretheconsumertoacceptboth_interLATA_Ԁand_intraLATA_Ԁtollservice (  fromthatIXC.Wetentativelyconcludethatsuchstatementswouldbeinviolationofourrule o  thatrequires_LOAs_Ԁtocontainseparatestatementsregardingchoicesof_interLATA_Ԁand 7  _intraLATA_Ԁtollservice._   463      _ԀWeseekcommentonthistentativeconclusionandonanyother   problemsthatmayresultfromcarrieruseoftheInternettochangesubscribers'carriers. H    2   175  .3   ` Finally,weseekcommentonotherusesoftheInternetinthecarrierchange W context.Forexample,weseekcommentontheextenttowhichsubscribersmayusetheInternet  torequestorliftpreferredcarrierfreezes.Wehavethesamegeneralabovementionedconcerns h aboutwhetherthismethodwouldidentifythesubmittingpartyastheactualsubscriberwhose 0 servicewouldbeaffectedbytheimpositionorliftingofthepreferredcarrierfreeze.Wealsoseek w commentontheverificationproceduresthatshouldapply.Shouldsubscribersrequesting ? preferredcarrierfreezesovertheInternetverifytheirrequestsinthesamemannerasrequests  givendirectlybytelephonetoaLEC?Westateabovethat_LECs_Ԁshould,ataminimum,provide P subscriberswiththeoptiontoliftfreezesusingeitherawrittenLOAorathreewaycall,butthat  theymayofferadditionaloptions.Could_LECs_Ԁprovideasimpleandsecuremethodfor _ subscriberstoimposeandlifttheirfreezesusingtheInternet?Weseekcommentonanyother ' usesoftheInternetthatwouldpromoteefficiencyandconvenienceforbothcarriersand p consumersinchangingtelecommunicationscarriersandotherrelatedactivities. 8  E.  Definitionof"Subscriber"  G!!   2   176  .3   ` Section258oftheActandourimplementingrulesrequirethatthecarrierobtain "X# authorizationfromasubscriberbeforemakingaswitch.NeithertheActnorourrulesdefinethe # $ term"subscriber"forthispurpose.Weseekcommentonhowasubscribershouldbedefined,in g$% lightofourgoalsofconsumerprotectionandpromotionofcompetition._SBC_Ԁsuggeststhatthe /%& term"subscriber"shouldinclude"anyperson,firm,partnership,corporation,orlawfulentitythat %x' isauthorizedtoordertelecommunicationsservicessuppliedbyatelecommunicationsservices &@( provider,"sothatcarrierscouldobtainauthorizationfromwhomeveratthebusinessorresidence ' ) isauthorizedtomakethepurchasingdecision._8   464      _ԀInthe1995ReportandOrder,wedetermined O( *  thattheonlyindividualqualifiedtoauthorizeachangeincarrierselectionisthe"telephoneline )!+ subscriber,"althoughwedidnotspecificallydefinetheterm._   465      _ԀWebelievethatallowingthe   namedpartyonthebilltodesignateadditionalpersonsinthehouseholdtomake G telecommunicationsdecisionscouldpromotecompetitionbecausecarrierswouldbeabletosolicit   morethanonepersoninahousehold.Wealsobelievethatconsumerswouldfindsuchan  X arrangementconvenientbecauseitwouldallowmorethanonepersontomake   telecommunicationsdecisions,whilestillgivingthenamedpartycontroloverwhichmembersof g  thehouseholdmaymakechangestotelecommunicationsservice.Aspousenamedonthebill /  couldthereforedesignatetheotherspouseasbeingauthorizedtomakedecisionsregarding  x telecommunicationsservice,althoughtheirminorchildrenwouldnotbeauthorizedtomakesuch  @ decisions.     2   177  .3   ` Ontheotherhand,weareconcernedthatadoptionofsuchaproposalcouldlead   toanincreaseinslamming.Itisunclear,forexample,howamarketingcarrierwouldknowifthe `  personwhohasauthorizedacarrierchangeisinfactauthorizedtoordertelecommunications (  services.Weareconcernedthataslammingcarriercouldsimplysubmitchangesrequestedby o  unauthorizedpersonsandclaimthatitthoughtthatthosepersonswereauthorized.Ifthe 7  definitionofasubscriberislimitedtothepartynamedonthebill,however,acarrierwouldknow   conclusivelythatitmayonlysubmitchangesauthorizedbypersonsnamedonthebill. H  Furthermore,suchaproposalpresumablywouldrequireexecutingcarrierstonotonlymaintain  listsofpersonsotherthanthenamedpartywhoareauthorizedtomaketelecommunications W decisions,butalsotocheckeachcarrierchangerequestagainsttheseliststodetermineifthe  personwhoauthorizedthecarrierchangeisalsoauthorizedtomakedecisions.Webelievethat h thiscouldbeanunreasonableburdenontheexecutingcarrier. 0   2   178  .3   ` Wealsoseekcommentonthecurrentpracticesofcarrierswithregardtowhich ? membersofahouseholdarepermittedtomakechangestotelecommunicationsservice.Carriers  whosubmitproposalsshouldincludeanexplanationofhowtheirpresentsystemsoperateandthe P advantagesanddisadvantagesoftheirproposals,asopposedtotheircurrentprocedures.We  seekcommentonthisandotherproposalstodefinetheterm"subscriber"inordertomaximize _ consumerprotection,provideconsumerconvenience,andpromotecompetitionin ' telecommunicationsservices. p  F.  SubmissionofReportsbyCarriers       2   179  .3   ` Weseekcommentonwhetherweshouldrequireeachcarriertosubmittothe "" Commissionareportonthenumberofcomplaintsofunauthorizedchangesintelecommunications "X# providersthataresubmittedtothecarrierbyitssubscribers.8   466      ׀Thisconceptisbasedona # $ provisionintheSenate'santislammingbill.   467      ׀Webelievethatareportingrequirementcould g$% servetoalerttheCommissionassoonaspossibleaboutcarriersthatpracticeslamming.Because /%& mostsubscribersinitiallycomplainaboutslammingtotheirlocalexchangeorlongdistance %x' carriers,theCommissionmaynotlearnofacarrier'sslammingpracticesuntilasubscriberhas &@( beenunabletoresolvethematterandthenfilesaconsumercomplaintwiththeCommission. ' ) EarlywarningaboutslammingcarrierswillenabletheCommissiontotakeinvestigativeaction, O( * wherewarranted,tostopslammingassoonaspossible.Weseekcommentonthepotential )!+ benefitsofthisreportingrequirementandonwhethersuchbenefitsoutweightheburdenson  carriers.IftheCommissionweretoadoptareportingrequirement,weseekcommentonthe G frequencyoffilingsuchareport.    G.  RegistrationRequirement      2   180  .3   ` WeseekcommentonwhethertheCommissionshouldimposearegistration /  requirementoncarrierswhowishtoprovideinterstatetelecommunicationsservice.Sucha  x registrationrequirementcouldhelptoprevententryintothetelecommunicationsmarketplaceby  @ entitiesthatareeitherunqualifiedorthathavetheintenttocommitfraud._   468      _ԀWeproposethatany   telecommunicationscarrierthatprovidesorseekstoprovideinterstatetelecommunications O  serviceshouldregisterwiththeCommission.(   469      ׀Weseekcommentontheinformationthatthe   registrationshouldcontain.Weproposethattheregistrationshouldcontain,ataminimum,the `  carrier'sbusinessname(s);thenamesandaddressesofallofficersandprincipals;verificationthat (  suchofficersandprincipalshavenopriorhistoryofcommittingfraud;andverificationofthe o  financialviabilityofthecarrier.TotheextentthattheCommissionalreadypossessessomeofthis 7  information,weseekcommentonwhethertheCommissionshouldconsolidatethecollectionof   theabovedescribedinformationwithotherexistingcollectionmechanisms,inordertolessenthe H  burdenoncarriers._   470      _ԀWedonotwishtoimposeanyunnecessarybarriersonentitiesseekingto  enterthetelecommunicationsmarket,butwebelievethatrequiringcarrierstoregisterwiththe W Commissionwillprevententitieswithahistoryoffraudfromofferingtelecommunications  services.ItalsowillprovidetheCommissionwithaccurateinformationastotheidentityofall h entitiesthatareprovidingtelecommunicationsservices,aswellasprovideameansoftrackingand 0 contactingtheseentities.   471      ׀Wetentativelyproposethatthisregistrationrequirementapplynot w justtonewentrantsbuttoallentitiesthatoffertelecommunicationsservices.Wealsoseek  commentontheCommission'sjurisdictiontorequirecarrierstofilearegistrationinorderto G provideinterstatetelecommunicationsservice.     2   181  .3   ` WetentativelyconcludethattheCommissionshouldrevokeorsuspend,after   appropriatenoticeandopportunitytorespond,theoperatingauthorityofthosecarriersthatfailto g  filearegistrationorthatprovidefalseormisleadinginformationintheirregistration.Manystates /  haveauthoritytorevokecarriers'operatinglicenseswithregardtotheprovisionofintrastate  x services.Thesestates'revocationpowersarelimitedtoprohibitingcarriersfromoperatingwithin  @ onestate,whichpermitsunscrupulouscarrierstomovetoadifferentstatetoofferservice.The   revocationpowerproposedhereinwouldenabletheCommissiontopreventanunscrupulous O  interstateinterexchangecarrierfromoperatingnationwide.Weseekcommentonwhethersuch   penaltyisappropriateinthesesituations,aswellasinsituationswheretheCommissionfindsthat `  theprovisionoftelecommunicationsservicebyaparticularcarrierwouldbecontrarytothepublic (  interest. o    2   182  .3   ` Wealsotentativelyconcludethatacarrierhasanaffirmativedutytoascertain   whetheranothercarrierhasfiledaregistrationwiththeCommissionpriortoofferingserviceto H  thatcarrier.Forexample,webelievethatafacilitiesbasedcarriershouldverifythata_switchless_  resellerhasregisteredwiththeCommissionbeforeagreeingtosellservicetothatentity.This W wouldfurtherchecktheabilityofunscrupulouscarrierstoenterthemarketplace.Ifwewereto  adoptthisrequirement,wewouldcertainlyfacilitatetheabilityofacarriertocheckthe h registrationstatusofanothercarrier.8   472      ׀WeseekcommentonwhatpenaltytheCommission 0 shouldimposeoncarriersthatfailtodeterminetheregistrationstatusofothercarriersbefore w providingthemwithservice.Webelievethatthepenaltyshouldnotbeassevereasthepenaltyto ? beimposedoncarriersthatfailtofilevalidregistrations.Wetentativelyconcludethatthese  penaltieswillprotectconsumersbyensuringthatunqualifiedandunscrupulouscarriersdonot P profitfromtheprovisionoftelecommunicationsservices.Weseekcommentonwhetherthe  consumerbenefitsoftheseproposalswouldoutweightheburdenoncarriersoffiling _ registrations.Weseekcommentontheseproposalsandonotherproposalsthatwouldprevent ' carriersthathaveahistoryoffraudorareotherwiseunqualifiedfromproviding p telecommunicationsservices. 8  H.0  ThirdPartyAdministratorforPreferredCarrierChangesandPreferredCarrier G!! Freezes ""(#(#   2   183  .3   ` Weseekfurthercommentontheimplementationbytheindustryofa # $ comprehensivesysteminwhichanindependentthirdpartywouldadministercarrierchanges, g$% verification,andpreferredcarrierfreezes,aswellasthedisputeresolutionfunctionsmentioned /%& above.P   473      ׀IntheFurtherNoticeandOrdertheCommissionsoughtcommentontheuseofan %x'  independentthirdpartytoexecutecarrierchangesneutrallyinordertoreducecarrierchange &@( disputesthatmightariseif_ILECs_Ԁcontinuetoexecutechanges._   474      _ԀMany_commenters_Ԁresponded   insupportofanindependentthirdpartyadministratorforcarrierchangesandevenverification G becausesuchapartywouldhaveincentivetoadministercarrierchangesinaneutralandaccurate   manner._   475      _ԀAlthoughweagreethatmanyofthe_commenters_'contentionshavemerit,weconclude  X thattherecordbeforeusisnotfullydevelopedtosupportthecreationofanewandindependent   agenttohandleexecutionfunctionsatthistime._   476      _ԀThereforeweseekfurthercommentonthe g  developmentandimplementationofathirdpartyadministratorforthesefunctions.Wenotethat /  anyindustrysupportedneutralpartymustadministercarrierchangefunctionsinaccordancewith  x theCommission'srulesandseekcommentonhowtoensurethattheindustry'simplementationof  @ suchaneutralthirdpartyforthesefunctionswouldbeconsistentwiththeCommission'srules,   policies,andpractices. O    2   184  .3   ` Anindependentthirdpartywithbroaderresponsibilities,suchasadministrationof `  carrierchanges,verification,andpreferredcarrierfreezes,maybeusefulinaddressingconcerns (  raisedbythe_commenters_Ԁaboutpotential_anticompetitive_Ԁpracticesinthisarea.Althoughwe o  haveconcludedthattheabilityofthe_LECs_Ԁtoact_anticompetitively_Ԁwhileexecutingcarrier 7  changesislimited,    477      ׀wefindthattheconceptofanindependentthirdpartyforadministrationof   carrierchangesandpreferredcarrierfreezesispotentiallyviable.Mostofthe_commenters_Ԁwho H  supportsuchasystem,however,arenotspecificabouthowsuchasystemmightwork,nordo  theyofferconcreteproposalsforfundingsuchanadministrativescheme.    478      ׀Thesecommentsfail W toprovidesufficientdetailabouttheactualimplementationandfundingforathirdparty  administratorsystemnecessaryfortheCommissiontomandateatthistime.Furthermore,the h _commenters_Ԁwereunabletocometoaconsensusastotheactualdutiesoftheindependentthird 0 partyadministrator.Severalcarriersstatethatthethirdpartyadministratorwouldneedelectronic w interconnectionswitheverycarriertobeabletoreceiveandprocesscarrierchangesandpreferred ? carrierfreezes.    479      ׀Ontheotherhand,_TRA_Ԁsuggeststhatthethirdpartyadministratorshouldonly  monitorcomplianceanddocumentexecutionofcarrierchangesandpreferredcarrierfreezes,but P thatitshouldnotactuallyexecutecarrierchangesandpreferredcarrierfreezes._   480      _ԀWeseek  commentonconcretesuggestionsfortheimplementationofathirdpartyadministratorthatare _ workableandcosteffective.Proposalsforsuchthirdpartyadministrationshouldincludespecific ' anddetailedinformationregardingthecostofsettingupsuchasystem. p Ї   IV.CONCLUSION       2   185  .3   ` InthisOrder,weadoptrulestoimplementSection258,whichprohibitsall   telecommunicationscarriersfrommakingchangestosubscribers'preferredcarrierselections  X exceptinaccordancewithourverificationprocedures.Weadoptrulestoremovetheeconomic   incentivetoslambygenerallyabsolvingconsumersofliabilityforslammedchargesfor30days g  afteranunauthorizedchange,subjecttoa90daystayofsuchliabilityrules.Westrengthenour /  verificationrulesbyeliminatingthewelcomepackageasaverificationoptionandbyapplyingour  x rulestocarrierchangesresultingfromconsumerinitiatedcallstocarriers.Wealsobroadenthe  @ applicationofourverificationprocedurestoalltelecommunicationscarriers,excluding_CMRS_   carriersatthistime,   481      ׀inordertopreventslamminginalltelecommunicationsmarkets,including O  localexchange,_intraLATA_,and_interLATA_Ԁservices.Finally,weadoptrulestoregulatethe   preferredcarrierfreezeprocesstoensurethatitwillprotectconsumersfromslammingwithout `  preventingthemfromchangingcarrierswhentheywishtodoso.Weconcludethattheruleswe (  adoptinthisOrderwillbothsafeguardconsumerchoiceandpromotecompetitioninthelocal o  exchange,_intraLATA_,and_interLATA_Ԁtelecommunicationsmarkets.IntheFurtherNoticeof 7  Proposed_Rulemaking_ԀportionofthisOrder,weseekcommentonseveralproposalstofurther   strengthenourslammingrules,includingaproposaltorequireunauthorizedcarrierstoremitto H  authorizedcarrierscertainamountsinadditiontotheamountpaidbyslammedsubscribers,as  wellasproposalsforpreventingtheconfusionandslammingthatresultsfromresellersusingthe W same_CICs_Ԁastheirfacilitiesbasedcarriers.   @,VI.PROCEDURALMATTERS  0  A.  FinalRegulatoryFlexibilityAnalysis  ?   2   186  .3   ` AsrequiredbytheRegulatoryFlexibilityAct(_RFA_),_8   482      _ԀanInitialRegulatory P FlexibilityAnalysis(_IRFA_)wasincorporatedintheFurtherNoticeofProposedRuleMakingand  MemorandumOpinionandOrderonReconsideration(FurtherNoticeandOrder)inPoliciesand _ RulesConcerningUnauthorizedChangesofConsumers'LongDistanceCarrier._   483      _ԀThe ' CommissionsoughtwrittenpubliccommentontheproposalsintheFurtherNoticeandOrder, p includingcommentonthe_IRFA_.Thecommentsreceivedarediscussedbelow.ThispresentFinal 8 RegulatoryFlexibilityAnalysis(_FRFA_)conformstothe_RFA_.h   484            1.0 ` NeedforandObjectivesofthisOrderandtheRulesAdoptedHerein ""` (#` (#   2   187  .3   ` Section258oftheActmakesitunlawfulforanytelecommunicationscarrier"to # $ submitorexecuteachangeinasubscriber'sselectionofaprovideroftelephoneexchangeservice g$%  ortelephonetollserviceexceptinaccordancewithsuchverificationproceduresasthe /%& Commissionshallprescribe."   485      ׀Accordingly,theCommissionadoptsinthisOrderrulesthat:(1)   applytheCommission'sverificationrulestolocaltelecommunicationsserviceandto G telecommunicationscarriersthatsubmitcarrierchanges;8   486      ׀(2)eliminatethewelcomepackageas   averificationoption; P   487      ׀(3)applytheCommission'sverificationrulestosalesgeneratedfromin  X boundtelemarketing;    488      ׀(4)requirecarrierstomaintainandpreserveverificationrecordsfortwo   years; 0   489      ׀(5)absolvesubscribersofliabilityforslammedchargesforaperiodoftime,provided g  thatsubscribersdonotpayanychargestotheirunauthorizedcarriers;    490      ׀(6)requirean /  unauthorizedcarriertoremittotheauthorizedcarrieranamountequaltoallchargesthatmay  x havebeenpaidbyasubscriberfromthetimetheslamoccurred,anychargerequiredtoreturnthe  @ subscribertohisorherauthorizedcarrier,andexpensesofbillingandcollection;     491      ׀(7)wherea   subscriberhaspaidslammingchargestoanunauthorizedcarrierandtheauthorizedcarrierhas O  recoveredsuchamountfromtheunauthorizedcarrier,requiretheauthorizedcarriertoprovidea   refundorcredittoasubscriberforanypaymentsmadeinexcessoftheauthorizedcarrier's `  rates;    492      ׀(8)requireanauthorizedcarriertorestorepremiumstoanysubscriberswhohavepaid (  slammingchargestotheirunauthorizedcarriers;    493      ׀(9)prescribeproceduresforsolicitationand o  implementationofcarriersfreezes.`   494      ׀TheCommissionstaystheeffectoftheliabilityrulesfor90 7  daystoenablecarrierstoimplementavoluntarydisputeresolutionmechanismtobeadministered   byanindependentthirdparty.TheobjectivesoftherulesadoptedinthisOrderaretoimplement H  theprovisionsofsection258andprovidefurthersafeguardstoprotectconsumersfrom  unauthorizedswitchingoftheirtelecommunicationsserviceproviders,aswellastoencouragefull W andfaircompetitionamongtelecommunicationscarriersinthemarketplace.     2.0 ` SummaryoftheSignificantIssuesRaisedbythePublicCommentsin 0 Responsetothe_IRFA_ w` (#` (#   2   188  .3   ` Inthe_IRFA_,theCommissionfoundthattherulesitproposedtoadoptinthis  proceedingmayhaveasignificantimpactonasubstantialnumberofsmallbusinessesasdefined P by5U.S.C.601(3)._   495      _ԀSpecifically,undertheActandproposedrules,smallentitiesthatviolate  theCommission'scarrierchangeverificationrulesbyslammingsubscribersshallbeliabletothe _ subscriber'sproperlyauthorizedcarrierforallchargespaidbytheslammedconsumer.   496      ׀  Furthermore,theCommissionsoughtcommentonwhetherthewelcomepackagedescribedin G section64.1100(d)shouldbeeliminated,onthecostsandbenefitsassociatedwithinbound   verificationprocedures,aswellasonconsumertocarrier,carriertocarrier,andcarrierto  X consumerliability.8   497      ׀The_IRFA_Ԁsolicitedcommentonthenumberofsmallbusinessesthatwould   beaffectedbytheproposedregulationsandonalternativestotheproposedrulesthatwould g  minimizetheimpactonsmallentitiesconsistentwiththeobjectivesofthisproceeding.   498      ׀ /    2   189  .3   ` America'sCarriersTelecommunicationsAssociation(ACTA)hassubmitted  @ commentsdirectlyinresponsetothe_IRFA_._   499      _ԀACTA,whichisanonprofittradeassociation   comprisedofmostlysmallbusinessentities,_   500      _ԀstatesthattheCommissionviolatedthe_RFA_Ԁinits O  _IRFA_Ԁbynotaddressingsufficientlythe"impactofthevagueand_standardless_Ԁenvironment   surroundingenforcementoftheantislammingcampaignonsmallcarriers."   501      ׀ACTAassertsthat `  becausetheproposedrulesdefineslammingtoincludeunintentionalacts,smallcarrierswillsuffer (  disproportionately.h    502      ׀ACTAstatesthattheonlyproposaltheCommissionmadetominimizethe o  impactofitsproposedrulesonsmallcarrierswastheproposaltorequireprivatesettlement 7  negotiationsregardingthetransferofchargesarisingduetosection258liability.    503      ׀ACTAstates   thatthisproposalisinadequatebecauseliabilityforinadvertentslamsshouldnotbeimposedin H  thefirstplace.H    504      ׀ACTAsubmitsthatimposingliabilityforinadvertentslamswillallowdishonest  customerstoclaimfalselythattheywereslammedinordertoavoidpaymentforlegitimate W services.    505      ׀Evenwhenacomplaintisnotprosecutedtoaformaldecision,ACTAstates,handling  allegationsofslammingareexpensiveandtimeconsumingforsmallcarriers.(   506      ׀ACTAalso h claimsthattheCommissionisprejudicedagainstsmallcarriers   507      ׀andthatthisattitudeisreflected 0  inunbalancedproposalsthatwillallowlargecarriersandtheCommissiontosubjectsmallcarriers w tomisdirectedenforcementeffortsandmonetarylossesandfines,aswellasskewcompetition.   508      ׀   ACTAalsoobjectstothefollowingasbeingharmfultosmallcarriers:(1)eliminationofthe G welcomepackagebecauseitisaneconomicalverificationmethodforsmallcarriers;8   509      ׀(2)   imposingthesameverificationproceduresforinboundandoutboundcallsbecausethatwould  X overburdensmallcarriers;    510      ׀(3)nonpreemptionofstateregulationbecausesmallcarrierswould   havedifficultyinmeetingtherequirementsofdifferentstates._!   511      _ g    2   190  .3   ` WedisagreewithACTA'scontentionthatwedidnotconductasufficient_IRFA_  x becauseweignoredthe"impactofthevagueand_standardless_"antislammingenvironment  @ createdbytheinclusionofinadvertentactsasslammingviolations.Wedonotbelievethat   imposingliabilityforallintentionalandunintentionalunauthorizedchangesisvague.Infact,we O  believethatitissoclearastoeliminateanydoubtsastothecircumstancesthatwouldconstitutea   slam.ThebrightlinestandardthatweadoptinthisOrdershouldhelpallcarriers,includingsmall `  carriers,toavoidmakingunauthorizedchangestoasubscriber'sselectionoftelecommunications (  provider.WealsodisagreewithACTA'scontentionthatdefiningslammingtoincludeaccidental o  slamswoulddisproportionatelyaffectsmallcarriers.Section258prohibitsslammingbyany 7  telecommunicationscarrieranddoesnotdistinguishbetweenintentionalandinadvertent   conduct."   512      ׀Regardlessofitssize,nocarrierhastherighttocommitunlawfulacts.Webelieve H  thatholdingcarriersliableforintentionalandinadvertentunauthorizedchangestosubscribers'  preferredcarrierswillreducetheoverallincidenceofslamming.First,webelievethattherights W oftheconsumerandtheauthorizedcarriertoremediesforslammingshouldnotbeaffectedby  whethertheslamwasanintentionaloraccidentalact.Regardlessoftheintent,orlackthereof, h behindtheslam,theyhavesufferedinjury.Second,weagreewiththose_commenters_Ԁwhoassert 0 thatimposingliabilityforallslammingoccurrenceswillmakeallcarriersmorevigilantin w preventingunauthorizedcarrierchanges,whethersuchchangesareinadvertentorintentional.#   513       ?   2   191  .3   ` WedisagreewithACTA'sallegationthattheCommissionisbiasedagainstsmall P carriersandthatthisbiasisevidentintherulesweproposedintheFurtherNoticeandOrder,  suchaseliminationofthewelcomepackageandapplicationoftheverificationrulestoinbound _ calls.Therulesweadoptrequireallcarriers,regardlessofsize,totakeprecautionstoguard ' againsttheharmtoconsumersthatiscausedbyslamming.Whiletherulesweadoptmayimpose p somecostsonallcarriers,thesearenecessarycosts.Wecannotlowerthecostsforcarriersin 8 ordertopromotecompetitionattheexpenseoftheconsumer.Aconsumercanonlytake    advantageofthebenefitsofcompetitionifhisorherchoiceofcarrierscanbeguaranteed.Finally, G!! regardingthepreemptionofstatelaw,wedeclinetoexerciseourpreemptionauthorityatthistime "" becausethe_commenters_Ԁhavefailedtoestablisharecorduponwhichaspecificpreemption "X# findingcouldbemade.Therecordinthisproceedingdoesnotcontainanyanalysisofwhich # $ particularstatelawswouldbeinconsistentwithourverificationrulesorwouldobstructfederal g$% objectives. /%& Ї  3.0 ` DescriptionandEstimatesoftheNumberofSmallEntitiestoWhichthe  RulesAdoptedintheOrderinCCDocketNo.94129WillApply G` (#` (#   2   192  .3   ` The_RFA_Ԁdirectsagenciestoprovideadescriptionofand,wherefeasible,an  X estimateofthenumberofsmallentitiesthatmaybeaffectedbytheadoptedrules.$   514      ׀The_RFA_   generallydefinestheterm"smallentity"ashavingthesamemeaningastheterms"smallbusiness," g  "smallorganization,"and"smallgovernmentaljurisdiction."%8   515      ׀Inaddition,theterm"small /  business"hasthesamemeaningastheterm"smallbusinessconcern"undertheSmallBusiness  x Act._&   516      _ԀAsmallbusinessconcernisonewhich:(1)isindependentlyownedandoperated;(2)is  @ notdominantinitsfieldofoperation;and(3)satisfiesanyadditionalcriteriaestablishedbythe   SmallBusinessAdministration(SBA).'   517       O    2   193  .3   ` Themostreliablesourceofinformationregardingthetotalnumbersofcertain `  commoncarrierandrelatedprovidersnationwide,aswellasthenumbersofcommercialwireless (  entities,appearstobedatatheCommissionpublishesannuallyinitsTelecommunicationsIndustry o  Revenuereport,regardingtheTelecommunicationsRelayService(TRS).((    518      ׀Accordingtodatain 7  themostrecentreport,thereare3,459interstatecarriers.)   519      ׀Thesecarriersinclude,interalia,   localexchangecarriers,_wireline_Ԁcarriersandserviceproviders,interexchangecarriers, H  competitiveaccessproviders, operatorserviceproviders,paytelephoneoperators ,providersof  telephonetollservice,providersoftelephoneexchangeservice,andresellers.  W    2   194  .3   ` TheSBAhasdefinedestablishmentsengagedinproviding"Radiotelephone h Communications"and"TelephoneCommunications,ExceptRadiotelephone"tobesmall 0 businesseswhentheyhavenomorethan1,500employees._*   520      _ԀBelow,wediscussthetotal w estimatednumberoftelephonecompaniesfallingwithinthetwocategoriesandthenumberof ? smallbusinessesineach,andwethenattempttorefinefurtherthoseestimatestocorrespondwith  thecategoriesoftelephonecompaniesthatarecommonlyusedunderourrules. P Ї  2   195  .3   ` Althoughsomeaffectedincumbentlocalexchangecarriers(_ILECs_)mayhave  1,500orfeweremployees,wedonotbelievethatsuchentitiesshouldbeconsideredsmallentities G withinthemeaningofthe_RFA_Ԁbecausetheyareeitherdominantintheirfieldofoperationsorare   notindependentlyownedandoperated,andthereforebydefinitionnot"smallentities"or"small  X businessconcerns"underthe_RFA_.Accordingly,ouruseoftheterms"smallentities"and"small   businesses"doesnotencompasssmall_ILECs_.Outofanabundanceofcaution,however,for g  regulatoryflexibilityanalysispurposes,wewillseparatelyconsidersmall_ILECs_Ԁwithinthis /  analysisandusetheterm"small_ILECs_"torefertoany_ILECs_Ԁthatarguablymightbedefinedby  x theSBAas"smallbusinessconcerns."_+   521      _  @   2   196  .3   ` TotalNumberofTelephoneCompaniesAffected. TheU.S.Bureauofthe O    Census("CensusBureau")reportsthat,attheendof1992,therewere3,497firmsengagedin   providingtelephoneservices,asdefinedtherein,foratleastoneyear.,0   522      ׀Thisnumbercontainsa `  varietyofdifferentcategoriesofcarriers,includinglocalexchangecarriers,interexchangecarriers, (  competitiveaccessproviders,cellularcarriers,mobileservicecarriers,operatorserviceproviders, o  paytelephoneoperators,personalcommunicationsservicesproviders,coveredspecializedmobile 7  radioproviders,andresellers.Itseemscertainthatsomeofthose3,497telephoneservicefirms   maynotqualifyassmallentitiesorsmall_ILECs_Ԁbecausetheyarenot"independentlyownedand H  operated."-H   523      ׀Forexample,aPCSproviderthatisaffiliatedwithaninterexchangecarrierhaving  morethan1,500employeeswouldnotmeetthedefinitionofasmallbusiness.Itisreasonableto W concludethatfewerthan3,497telephoneservicefirmsaresmallentitytelephoneservicefirmsor  small_ILECs_Ԁthatmaybeaffectedbytheproposedrules,ifadopted. h   2   197  .3   ` _Wireline_ԀCarriersandServiceProviders. TheSBAhasdevelopedadefinition w ofsmallentitiesfortelephonecommunicationscompaniesexceptradiotelephone(wireless) ? companies.TheCensusBureaureportsthattherewere2,321suchtelephonecompaniesin  operationforatleastoneyearattheendof1992..   524      ׀AccordingtotheSBA'sdefinition,asmall P businesstelephonecompanyotherthanaradiotelephonecompanyisoneemployingnomorethan  1,500persons._/(    525      _ԀAllbut26ofthe2,321nonradiotelephonecompanieslistedbytheCensus _ Bureauwerereportedtohavefewerthan1,000employees.Thus,evenifall26ofthose ' companieshadmorethan1,500employees,therewouldstillbe2,295non-radiotelephone p companiesthatmightqualifyassmallentitiesorsmall_ILECs_.Wedonothavedataspecifyingthe 8 numberofthesecarriersthatarenotindependentlyownedandoperated,andthusareunableat    thistimetoestimatewithgreaterprecisionthenumberof_wireline_Ԁcarriersandserviceproviders G!! thatwouldqualifyassmallbusinessconcernsundertheSBA'sdefinition.Consequently,we "" estimatethatfewerthan2,295smalltelephonecommunicationscompaniesotherthan "X# radiotelephonecompaniesaresmallentitiesorsmall_ILECs_Ԁthatmaybeaffectedbytheproposed # $ rules,ifadopted.    2   198  .3   ` LocalExchangeCarriers. 󀀀NeithertheCommissionnortheSBAhasdeveloped   adefinitionforsmallprovidersoflocalexchangeservices(_LECs_).Theclosestapplicable  X definitionundertheSBArulesisfortelephonecommunicationscompaniesotherthan   radiotelephone(wireless)companies.0   526      ׀AccordingtothemostrecentTelecommunications g  IndustryRevenuedata,1,371carriersreportedthattheywereengagedintheprovisionoflocal /  exchangeservices.18   527      ׀Wedonothavedataspecifyingthenumberofthesecarriersthatareeither  x dominantintheirfieldofoperations,arenotindependentlyownedandoperated,orhavemore  @ than1,500employees,andthusareunableatthistimetoestimatewithgreaterprecisionthe   numberof_LECs_ԀthatwouldqualifyassmallbusinessconcernsundertheSBA'sdefinition. O  Consequently,weestimatethatfewerthan1,371providersoflocalexchangeservicearesmall   entitiesorsmall_ILECs_Ԁthatmaybeaffectedbytheproposedrules,ifadopted. `    2   199  .3   ` InterexchangeCarriers .NeithertheCommissionnortheSBAhasdevelopeda o  definitionofsmallentitiesspecificallyapplicabletoprovidersofinterexchangeservices(_IXCs_). 7  TheclosestapplicabledefinitionundertheSBArulesisfortelephonecommunicationscompanies   otherthanradiotelephone(wireless)companies._2   528      _ԀAccordingtothemostrecent H  TelecommunicationsIndustryRevenuedata,143carriersreportedthattheywereengagedinthe  provisionofinterexchangeservices.3   529      ׀Wedonothavedataspecifyingthenumberofthese W carriersthatarenotindependentlyownedandoperatedorhavemorethan1,500employees,and  thusareunableatthistimetoestimatewithgreaterprecisionthenumberof_IXCs_Ԁthatwould h qualifyassmallbusinessconcernsundertheSBA'sdefinition.Consequently,weestimatethat 0 therearefewerthan143smallentity_IXCs_Ԁthatmaybeaffectedbytheproposedrules,ifadopted.. w   2   200  .3   ` CompetitiveAccessProviders. NeithertheCommissionnortheSBAhas P   developedadefinitionofsmallentitiesspecificallyapplicabletocompetitiveaccessservices  providers(_CAPs_).TheclosestapplicabledefinitionundertheSBArulesisfortelephone _ communicationscompaniesotherthanexceptradiotelephone(wireless)companies._4   530      _ԀAccording ' tothemostrecentTelecommunicationsIndustryRevenuedata,109carriersreportedthatthey p wereengagedintheprovisionofcompetitiveaccessservices.5   531      ׀Wedonothavedataspecifying 8 thenumberofthesecarriersthatarenotindependentlyownedandoperated,orhavemorethan    1,500employees,andthusareunableatthistimetoestimatewithgreaterprecisionthenumberof G!! _CAPs_ԀthatwouldqualifyassmallbusinessconcernsundertheSBA'sdefinition.Consequently, "" weestimatethattherearefewerthan109smallentity_CAPs_Ԁthatmaybeaffectedbytheproposed "X# rules,ifadopted. # $ Ѐ g$%   2   201  .3   ` Resellers(includingdebitcardproviders). NeithertheCommissionnorthe /%& SBAhasdevelopedadefinitionofsmallentitiesspecificallyapplicabletoresellers.Theclosest  applicableSBAdefinitionforaresellerisatelephonecommunicationscompanyotherthan G radiotelephone(wireless)companies._6   532      _ԀAccordingtothemostrecentTelecommunications   IndustryRevenuedata,339reportedthattheywereengagedintheresaleoftelephoneservice.78   533      ׀  X Wedonothavedataspecifyingthenumberofthesecarriersthatarenotindependentlyownedand   operatedorhavemorethan1,500employees,andthusareunableatthistimetoestimatewith g  greaterprecisionthenumberofresellersthatwouldqualifyassmallbusinessconcernsunderthe /  SBA'sdefinition.Consequently,weestimatethattherearefewerthan339smallentityresellers  x thatmaybeaffectedbytheproposedrules,ifadopted.  @   2   202  .3   ` CellularLicensees .NeithertheCommissionnortheSBAhasdevelopeda O  definitionofsmallentitiesapplicabletocellularlicensees.Therefore,theapplicabledefinitionof   smallentityisthedefinitionundertheSBArulesapplicabletoradiotelephone(wireless) `  companies.Thisprovidesthatasmallentityisaradiotelephonecompanyemployingnomore (  than1,500persons._8   534      _ԀAccordingtotheBureauoftheCensus,onlytwelveradiotelephonefirms o  outofatotalof1,178suchfirmswhichoperatedduring1992had1,000ormoreemployees.9   535      ׀ 7  Therefore,evenifalltwelveofthesefirmswerecellulartelephonecompanies,nearlyallcellular   carriersweresmallbusinessesundertheSBA'sdefinition.Inaddition,wenotethatthereare H  1,758cellularlicenses;however,acellularlicenseemayownseverallicenses.Inaddition,  accordingtothemostrecentTelecommunicationsIndustryRevenuedata,804carriersreported W thattheywereengagedintheprovisionofeithercellularserviceorPersonalCommunications  Service(PCS)services,whichareplacedtogetherinthedata.:   536      ׀Wedonothavedataspecifying h thenumberofthesecarriersthatarenotindependentlyownedandoperatedorhavemorethan 0 1,500employees,andthusareunableatthistimetoestimatewithgreaterprecisionthenumberof w cellularservicecarriersthatwouldqualifyassmallbusinessconcernsundertheSBA'sdefinition. ? Consequently,weestimatethattherearefewerthan804smallcellularservicecarriersthatmaybe  affectedbytheproposedrules,ifadopted. P   4.0 ` SummaryofProjectedReporting,_Recordkeeping_ԀandotherCompliance _ Requirements '` (#` (#   2   203  .3   ` Below,weanalyzetheprojectedreporting,_recordkeeping_,andothercompliance 8 requirementsthatmayaffectsmallentitiesandsmallincumbent_LECs_.      2   204  .3   ` Verificationrules.TheCommission'sverificationrulesshallapplytoallcarriers, "" excludingforthepresenttime_CMRS_Ԁcarriers,thatsubmitorexecutecarrierchangesonbehalfof "X# asubscriber.Thisruleimplementsthemandateofsection258thattheCommission'sverification # $ rulesapplytoallcarrierswhosubmitorexecutechangesinasubscriber'sselectionofaprovider g$% oftelephoneservice.;   537      ׀Webelievethatapplicationoftheverificationrulestoallcarriersisthe /%& bestwaytopreventslammingfromoccurringinthefirstinstance.    2   205  .3   ` Eliminationofthewelcomepackage.Carriersmaynotusethewelcomepackage   asaverificationmethod.Althoughsmallercarriersmayhaveutilizedthewelcomepackageasan  X economicalwaytoverifytelemarketingsales,_<   538      _Ԁweconcludethatthewelcomepackagehasbeen   asignificantsourceofslamming.Weconcludethatunscrupulouscarrierscouldusethewelcome g  packageasanegativeoptionLOAifcarrierssendittoconsumersfromwhomtheyhavenot /  obtainedconsent,oriftheoralconsentobtainedwasbasedonfalseormisleadingtelemarketing  x efforts.Becauseofourresponsibilitytosafeguardconsumerchoices,wecannotcontinueto  @ allowcarrierstousethismethodofverification.     2   206  .3   ` Verificationofinboundtelemarketingsales.Carriersmustcomplywithour   verificationrulesforallcallsthatresultincarrierchangesthataresubmittedonbehalfof `  subscribers,whetherthosecallsareconsumerinitiatedorcarrierinitiated.Consumerswhocall (  carriersarevulnerabletobeingslammedanddeservethesamelevelofprotectionasconsumers o  whoreceivecallsfromcarriers.Excludinginboundcallsfromourverificationrequirements 7  wouldopenaloopholefor_slammers_.Throughthisloophole,unscrupulouscarrierscouldslam   notonlyconsumerswhocallinforreasonsotherthantochangecarriers,butalsoconsumerswho H  donotcallinatall.Consumersslammedinthiswaywouldhavedifficultyprovingthattheyhad  nevercalledinbecausetherewouldbenorecordofanyallegedtransaction.Wenote, W furthermore,that_TRA_Ԁstatesthattheverificationrulesshouldapplytoinboundcallsinorderto  balancetheverificationburdenbetweensmallandlargecarriers._=8   539      _Ԁ_TRA_Ԁexplainsthatbecausethe h largecarrierscanlaunchmassivecampaignstoencouragecustomerstocall,exemptingthemfrom 0 verificationwouldgivelargecarriersanadvantageoversmallcarriers,whogenerallymustinitiate w callstoconsumersandthenverifyanysalesmadethroughsuchcalls.>   540       ?   2   207  .3   ` IndependentThirdPartyVerification.TheCommissionadoptscriteriato P determinetheindependentstatusofathirdpartyverifier.Thiswillprovidecarriersand  independentthirdpartyverificationcompanieswithguidelinesfordeterminingindependence. _   2   208  .3   ` VerificationRecords.Carriersmustmaintainandpreserveverificationrecordsfor p aperiodoftwoyears.AnypersondesiringtofileacomplaintwiththeCommissionalleginga 8 violationoftheActmustdosowithintwoyearsoftheallegedviolation.?   541      ׀Atwoyearretention    periodwillenablecarrierstoproducedocumentationtosupporttheirclaimsregardinganalleged G!! unauthorizedchange. ""   2   209  .3   ` Liabilityrules.TheCommission'srulespermitaslammedsubscribertobe # $ absolvedofliabilityforslammingchargesfor30daysaftertheunauthorizedchange.Charges g$% fromaslammedcarrieronanysubsequentbillsshallbepaidtotheauthorizedcarrieratthe /%& authorizedcarrier'srates.Ifasubscriberpaystheunauthorizedcarrier,however,the %x' unauthorizedcarriershallremitanamountequaltoallchargespaidbythesubscriberfromthe &@( timetheslamoccurred,anychargerequiredtoreturnthesubscribertohisorherauthorized ' ) carrier,andbillingandcollectionexpenses.Uponreceiptofsuchamount,theauthorizedcarrier O( * shallprovidearefundorcredittothesubscriberforanyamountsthesubscriberpaidinexcessof  theauthorizedcarrier'srates.Theauthorizedcarriershallkeeptheremainingamount.The G authorizedcarriermustalsorestorepremiumstoanysubscribersthathavepaidslammingcharges   totheirunauthorizedcarriers.Suchrulesarenecessarytoeliminatetheeconomicincentiveto  X slamandtocompensateconsumersforthefraudthathasbeenperpetrateduponthem.Theeffect   oftheseliabilityrulesisstayedfor90days,however,toenablecarrierstoimplementancarrier g  supportedindependentdisputeresolutionmechanism. /    2   210  .3   ` ThirdPartyAdministratorforDisputeResolution.Theeffectivedateofthe  @ Commission'sliabilityrulesisdelayeduntil90daysafterpublicationintheFederalRegisterto   enablecarrierstodevelopandimplementanalternativecarrierdisputeresolutionmechanism O  involvinganindependentadministrator.Ifcarrierssuccessfullyimplementsuchaplan,the   Commissionwillentertaincarriers'requestsforwaiveroftheadministrativerequirementsofour `  liabilityruleswheresuchcarriersvoluntarilyagreetousetheindependentadministrator.An (  independentadministratorcouldenableconsumerstoresolveaslammingincidentbydealingwith o  oneentity,whilecarrierswouldbenefitfromhavinganeutralpartyexecutetheprocedural 7  requirementsoftheliabilityrules.     2   211  .3   ` PreferredCarrierFreezeProcedures.TheCommission'srulesrequirecarriers  whoofferpreferredcarrierfreezeprotectiontofollowcertainprocedures.Preferredcarrier W freezesolicitationsmustmakeclearthedifferentservicesthatmaybefrozenandensurethe  subscriberunderstandshowtoliftafreeze.Carriersmustverifysubscriberrequestsforpreferred h carrierfreezes.Subscribersmustbeabletolifttheirfreezesusing,ataminimum,threeway 0 callingandwrittenauthorization.Theserequirementsarenecessarytoprovideconsumerswith w protectionagainstslammingandtoprevent_anticompetitive_Ԁconduct. ?   5.0 ` StepsTakentoMinimizetheSignificantEconomicImpactofThisOrderon P SmallEntitiesandSmallIncumbent_LECs_,IncludingtheSignificant  AlternativesConsidered_` (#` (#    2   212  .3   ` Verificationrules.SomecarriersstatethattheCommission'srulesshouldnot p burdentheentireindustrybutrathertargettheunscrupulouscarriers,soastoavoidimposing 8 unnecessarycostsonsmallercompetitors._@   542      _Ԁ_Ameritech_,_SBC_,andUSWESTproposesystems    thatwouldimposefinesormorestringentverificationrequirementsoncarrierswithahistoryof G!! slamming,asdeterminedbytheLECorotherwise._A8   543      _ԀWedeclinetoadoptsuchproposals "" becausetheywouldimposemorestringentverificationrequirementsoncarriersonlyaftersuch "X# carriershaveslammedsignificantnumbersofconsumers.Applicationofourruleswillhelpto # $ preventcarriersfromslammingconsumersinthefirstplace.Furthermore,wefindsuchproposals g$% tobeproblematicbecausetheycouldpermit_LECs_Ԁtotargetcertaincarriersfor"punishment." /%& Consideringthefactthat_LECs_Ԁwillnolongerbeneutralpartiesinthecarrierchangeprocess,we %x' concludethatitwouldnotbeprudenttoprovide_LECs_Ԁwithincentivetoactanticompetitively.  Wenotethat_Ameritech_Ԁdidstatethatpunishmentcouldbeimposedusingamoreneutralsource G ofnumbersofcarrierchangedisputes,suchastheCommonCarrierScorecard,whichshowsthe   numberofdisputedcarrierchangesforcarriers._B   544      _ԀWeshare_TRA_'sconcern,however,about  X imposingdisparatetreatmentbeforeacarrierhastheopportunitytoprovethatitdidnotslama   consumer._C8   545      _Ԁ g    2   213  .3   ` Eliminationofthewelcomepackage.Several_commenters_Ԁproposemodifications  x tothewelcomepackage,ratherthaneliminationofitentirely,becausethewelcomepackageisan  @ inexpensiveverificationoptionthatissuitableforusebysmallercarriers.Forexample,the   OklahomaCommissionand_WorldCom_Ԁsuggestthatthewelcomepackagecontainapositive O  optionpostcard,sothatacarrierchangewouldnotbeconsideredverifieduntilthecustomer   signedandreturnedthepostcard._D   546      _ԀAT&T,however,opposestheconceptofapositiveoption `  postcardbecauseitarguesthatitwouldtransformthewelcomepackageintoasignedLOA (  requirement,whichisdifficulttoobtainfromconsumers.E   547      ׀Wedeclinetoadoptthisproposal o  becausesuchmodificationwouldnotincreasetheutilityofthewelcomepackageforcarriers. 7  Althoughwefeelthatrequiringapositiveoptionpostcardrequirementwouldminimizeoneofthe   fraudulentaspectsofthewelcomepackage,weagreewithAT&Tthatsucharequirementmerely H  transformsthewelcomepackageintoawrittenLOArequirement,whichisalreadyaverification  optionunderourrules._F   548      _ԀACTAstatesthatcarrierscouldprovethatconsumersreceiveda W welcomepackagebyusingcertifiedmail,orbymaintainingmailingmanifests.G   549      ׀Wedeclineto  adopttheseproposals.Althoughtheymayhelptoprovethatacustomerreceivedawelcome h package,theywillnotpreventcarriersfromsendingwelcomepackagestoconsumerswithwhom 0 theyhaveneverspokenorfromwhomtheyhavenotobtainedconsent.Weconcludethatitis w bettertoeliminatethewelcomepackageentirely,ratherthanattemptto"fix"itwithmodifications ? thatfailtoprovideadequateprotectionagainstfraudorcurtailitsusefulness.    2   214  .3   ` Verificationofinboundtelemarketing.Several_commenters_Ԁproposethatless  burdensomeverificationproceduresapplytoinboundtelemarketing.ACTAand_RCN_,for _ example,suggestthatthetelemarketerbepermittedtoconfirmtheorderverbally,justasamail ' ordertelemarketerwould._Hh    550      _ԀBellSouth,_GTE_,IXCLongDistance,and_TOPC_Ԁproposetoallow p carrierstomakeinexpensiveaudiorecordingsofinboundcalls._I    551      _ԀWedeclinetoadoptthese 8 proposalsbecausewefeelthattheyofferlittleprotectiontoaconsumeragainstanunscrupulous    carrier.Inpreviousorders,wehaverejectedinhouseverificationproceduresasproviding G!! carrierswithtoomuchincentiveandopportunitytocommitfraud._J   552      _ԀBecauseweconcludethat  consumersdeservethesameprotectionfrominboundcallslammingastheydofromoutbound G callslamming,wecannotpermitcarrierstouselesssecureprocedurestoverifysalesgenerated   frominboundcalls.Furthermore,ourrulesprovideacarrierwithsufficientflexibilitytochoosea  X verificationmethodthatisappropriateforthatcarrier.Finally,asnotedabove,_TRA_Ԁbelievesthat   exemptinginboundcallsfromverificationfavorslargecarriersoversmallcarriersbecauseitis g  thelargecarriersthatareabletolaunchmassivecampaignstoencouragecustomerstocalland /  avoidverificationcosts.K8   553        x   2   215  .3   ` IndependentThirdPartyVerification.Several_commenters_Ԁsubmittedproposals   fordeterminingtheindependenceofathirdpartyverifier._L   554      _ԀThese_commenters_Ԁsupportthe O  criteriathattheCommissionhasadoptedinthisOrder.Wefindthattheadoptionofthesecriteria   willbenefitallcarriers,includingsmallcarriers,becauseitprovidescertaintyandguidancein `  choosinganappropriateindependentthirdpartyverifier.Therulesalsoprovideguidancefor (  smallentitiesthatareindependentthirdpartyverifiers. o    2   216  .3   ` VerificationRecords.Several_commenters_,including_NAAG_Ԁand_NYSDPS_,   supportarequirementthatcarriersretainverificationrecordsforacertainperiodoftime._M   555      _Ԁ H  _NAAG_Ԁsuggestedthatcarriersretainrecordsforthreeyears,_N   556      _Ԁwhile_NYSDPS_Ԁsuggesteda  periodofninemonths._O   557      _ԀWechoosearetentionperiodoftwoyearsbecauseanypersondesiring W tofileacomplaintwiththeCommissionallegingaviolationoftheActmustdosowithintwo  yearsoftheallegedviolation.Ph    558      ׀Althoughthisrulemayplaceaburdenonsmallercarriersto h retaintheirrecords,theywillbenefitfromthisrequirementbecauseitwillenablethemtoproduce 0 documentationtosupporttheirclaimsregardinganallegedunauthorizedchange. w   2   217  .3   ` Liabilityrules.Althoughsomecarriersstatethatliabilityforslammingshouldnot  beimposedoncarrierswhoinadvertentlyslamsubscribers,_Q    559      _Ԁweconcludethattherightsofthe P consumerandtheauthorizedcarriertoremediesforslammingshouldnotbeaffectedbywhether  theunauthorizedchangewasanintentionaloraccidentalact.Regardlessoftheintent,orlack _ thereof,behindtheunauthorizedchange,theyhavesufferedinjury.Wealsoconcludethatholding ' carriersliableforallslammingoccurrenceswillmakeallcarriersmorevigilantinpreventing p unauthorizedcarrierchanges,whethersuchchangesareinadvertentorintentional.Toaddress 8 concernsthatsmallercarriersmaysufferfromtheimpositionofourliabilityrules,wenotethata    carrieraccusedofslamminghastheopportunitytoprovideevidenceofverification,inorderto G!! provethatitdidnotslamasubscriber,beforehavingtoremitanyrevenuestoanauthorized "" carrier.    2   218  .3   ` Additionally,severalcarriersobjecttoabsolvingsubscribersofliabilitybecause   theyarguethatauthorizedcarriersshouldnotbedeprivedofrevenue._R   560     _Althoughourrulesdo  X absolvesubscribersofliabilityforslammedchargesforalimitedperiodoftime,ifasubscriber   doespaytheunauthorizedcarrier,theauthorizedcarrierisentitledtodemand,andkeep,all g  chargespaidbythesubscribertotheunauthorizedcarrier.Whileauthorizedcarriers,including /  smallercarriers,maybedeprivedofsomerevenuebecausemanysubscriberswillnotpayfor  x chargesincurredafterbeingslammed,allcarrierswillultimatelyreceivegreaterbenefitsfromthe  @ overalldecreaseinslammingthatwillresultfromourrules.Anyotherliabilityrulewouldstill   enableslammingcarrierstokeeptheirprofitsandwouldnotgiveconsumersthesameincentiveto O  policetheirtelephonebillscarefullyandquickly.Furthermore,becausetheauthorizedcarrierhas   notincurredanycostsforprovidingservice,theauthorizedcarrierwouldreceiveawindfallifit `  weretoreceive,ineveryinstance,therevenuesforchargesimposedbyanunauthorizedcarrier. (  Wealsonotethatwearedelayingtheeffectivedateoftheseliabilityrulesfor90daystoenable o  carrierstoimplementanalternativemechanismtoresolveslammingdisputes. 7    2   219  .3   ` ThirdPartyAdministratorforDisputeResolution.Thisprovisionwillbenefit H  smallercarriersbyprovidingthemwithanalternativemeansofcompliancewithourliabilityrules.  Carriersaregivenachoiceofcomplyingwithourliabilityrulesinwholebyadministeringthe W requirementsthemselves,orofcomplyingbyusinganindependentthirdpartytoadministerthe  requirements. h   2   220  .3   ` PreferredCarrierFreezeProcedures.Somecarriers,includingsmallercarriers, w objecttoallowingpreferredcarrierfreezesoflocalexchangeand_intraLATA_Ԁservicespriortothe ? adventofcompetitionforthoseservices._S8   561      _ԀWeagreethatpreferredcarrierfreezeshavethe  potentialtolockoutcompetitioninamonopolymarket,butwefindthatconsumersshouldnotbe P deprivedofthisvaluableprotectiononanationwidebasis.Accordingly,statesarefreetoimpose  restrictionsontheuseofpreferredcarrierfreezesforlocalexchangeand_intraLATA_Ԁtollservices _ iftheydeterminethatsuchstepsarenecessaryinlightoftheavailabilityoflocalcompetitionina ' particularmarket.Furthermore,weimposecertainrequirementsthatwillpreventcarriersfrom p usingpreferredcarrierfreezesinan_anticompetitive_Ԁmanner,suchaseasyprocedurestolift 8 freezes.Inthisway,theexistenceofpreferredcarrierfreezeprogramswillnotimpedecarriers    wishingtocompeteinlocalservices,especiallysmallercarriers. G!!   2   221  .3   ` TheCommissionwillsendacopyoftheOrder,includingthis_FRFA_,inareportto "X# besenttoCongresspursuanttotheSmallBusinessRegulatoryEnforcementFairnessActof # $ 1996.T   562      ׀Inaddition,theCommissionwillsendacopyoftheOrder,includingthe_FRFA_,toUthe g$% ChiefCounselforAdvocacyoftheSmallBusinessAdministration.AcopyoftheOrderand /%& _FRFA_Ԁ(orsummariesthereof)willalsobepublishedintheFederalRegister.V   563       %x'  B.  InitialRegulatoryFlexibilityAnalysis  ' )  O( * Ud UX U    2   222  .3   ` AsrequiredbytheRegulatoryFlexibilityAct(_RFA_),_W   564      _ԀtheCommissionhas  preparedthispresentInitialRegulatoryFlexibilityAnalysis(_IRFA_)ofthepossiblesignificant G economicimpactonsmallentitiesbythepoliciesandrulesproposedinthisSecondReportand   OrderandFurtherNoticeofProposed_Rulemaking_Ԁ(Order).Writtenpubliccommentsare  X requestedonthis_IRFA_.Commentsmustbeidentifiedasresponsestothe_IRFA_Ԁandmustbefiled   bythedeadlinesforcommentsontheOrderprovidedbelowintheCommentFilingProcedures g  section.TheCommissionwillsendacopyoftheOrder,includingthis_IRFA_,totheChief /  CounselforAdvocacyoftheSmallBusinessAdministration.X   565      ׀Inaddition,theOrderand_IRFA_  x (orsummariesthereof)willbepublishedintheFederalRegister.Y   566        @    1.0 ` Needfor,andObjectives,ofProposedRules O ` (#` (#   2   223  .3   ` TheCommission,initseffortstoprotectconsumersfromunauthorizedswitching `  ofpreferredcarriers,andtoimplementprovisionsoftheTelecommunicationsActof1996 (  pertainingtoillegalchangesinsubscribercarrierselections,isissuingthisOrdercontaininga o  FurtherNoticeofProposed_Rulemaking_.TheCommissionseekscommenton:(1)requiring 7  unauthorizedcarrierstoremittoauthorizedcarrierscertainamountsinadditiontotheamount   paidbyslammedsubscribers;(2)howtomodifyandclarifytheindependentthirdparty H  verificationmethodintheCommission'srules_Zh   567      _Ԁinordertoensurethatthisverificationmethod  willbeeffectiveinpreventingslamming;(3)proposalsforverifyingcarrierchangesmadeby W subscribersusingtheInternet;(4)howtheterm"subscriber"shouldbedefined,inorderto  determinewhichpersonorpersonsshouldbeauthorizedtomakechangesintheselectionofa h carrier;(5)requiringcarrierstosubmittotheCommissionreportsonthenumberofslamming 0 complaintsreceivedbysuchcarriers,inordertoalerttheCommissionassoonaspossibleabout w carriersthatpracticeslamming;(6)imposingaregistrationrequirementtoensurethatonly ? qualifiedentitiesenterthetelecommunicationsmarket;and(7)whetherresellersshouldbe  assignedtheirowncarrieridentificationcodes(_CICs_)topreventconfusionbetweenresellersand P theirunderlyingfacilitiesbasedcarriers.    2   224  .3   ` UndertheActandtheproposedrules,asmallentitythatviolatestheCommission's ' carrierchangeverificationrulesmaybeliabletoanauthorizedcarrierfordoubletheamountof p chargespaidtotheslammingentitybyaslammedsubscriberorfortheamountforwhichthe 8 slammedsubscriberwasabsolved.Smallentitiesmaybeaffectedbytheproposalsformodifying    theindependentthirdpartyverificationprocess;verifyingcarrierchangesmadeontheInternet; G!! adoptingadefinitionof"subscriber;"requiringcarrierstosubmittotheCommissionareporton "" thenumberofslammingcomplaintsreceivedbythem;imposingaregistrationrequirement;and "X# modificationsofthe_CIC_Ԁprocess. # $  g$%   2.0 ` LegalBasis` (#` (# Ѐ  G   2   225  .3   ` ThisOrdercontainingaFurtherNoticeofProposed_Rulemaking_Ԁisadopted   pursuanttosections1,4(_i_),4(j),201205,258,and303(r)oftheCommunicationsActof1934,  X asamended,47U.S.C.151,154(_i_),154(j),201205,258,303(r).     3.0 ` DescriptionandEstimatesoftheNumberofSmallEntitiestoWhichRules /  WillApply  x` (#` (#   2   226  .3   ` Intheassociated_FRFA_,supra,wehaveprovidedadetaileddescriptionofsmall   entities.[   568      ׀Thoseentitiesinclude_wireline_Ԁcarriers,localexchangecarriers,smallincumbentlocal O  exchangecarriers,interexchangecarriers,competitiveaccessproviders,resellers,andwireless   carriers.Weherebyincorporatethosedetaileddescriptionsbyreference. `  0  4.0` (#(#SummaryofProjectedReporting,_Recordkeeping_,andOtherCompliance o  Requirements 7 ` (#` (#   2   227  .3   ` Liability.Theproposedruleswouldrequirepermitauthorizedcarrierstorecover H  fromunauthorizedcarriersdoubletheamountofchargespaidbyslammedsubscribers,orthe  amountforwhichthesubscriberwasabsolved._\   569      _ԀThiswouldenableauthorizedcarriersto W providearefundorcredittoslammedsubscriberswhilekeepingtheamounttheywouldhave  receivedintheabsenceofanunauthorizedchange.Thiscouldaffectsmallentitiesthatengagein h slamming. 0   2   228  .3   ` Resellersand_CICs_.TheCommissionproposestorequire_switchless_Ԁresellersto ? obtaintheirowncarrieridentificationcodes(_CICs_),toobtainpseudo_CICs_,ortohavethe  facilitiesbasedresellermodifyitsbillingsystems.Theseproposalsareintendedtoaddressthe P confusionthatoccursbecause_switchless_Ԁresellershavethesamecarrieridentificationcode(_CIC_)  astheirunderlyingfacilitiesbasedcarriers.Whenasubscriberisslammed,theunauthorized _ changemaynotappearonthesubscriber'sbilliftheslammingcarrierisaresellerusingthe_CIC_Ԁof ' itsfacilitiesbasedcarrier.Furthermore,subscriberswhohavepreferredcarrierfreezeprotection p ontheiraccountsmaystillbeslammedbecausethefreezeprotectionisnottriggeredwhenthe 8 slammingcarrierisaresellerusingthe_CIC_Ԁofitsfacilitiesbasedcarrier.Theseproposalswould    probablyimposeadditionalcostson_switchless_Ԁresellers,mostofwhomaresmallentities. G!!   2   229  .3   ` IndependentThirdPartyVerification.Althoughspecificrulesarenotproposedto "X# modifytheindependentthirdpartyverificationprocess,whichcouldbeusedbysmallcarriers,the # $ Commissionseekscommentonthedefinitionofanindependentthirdpartyverifierandonthe g$% contentoftheindependentthirdpartyverification.Thiswasinresponsetomany_commenters_ /%& whoindicatedaneedforfurtherguidanceonindependentthirdpartyverification. %x'   2   230  .3   ` InternetCarrierChanges.Althoughspecificrulesarenotproposed,the ' ) CommissionseekscommentontheextenttowhichtheelectronicallysubmittedInternetform  couldbeconsideredavalidLOAinaccordancewiththeverificationprocedures.The G CommissionalsoseekscommentonotherproceduresthatmightbeappropriatetoverifyInternet   carrierchanges.ThisisinresponsetotheneedforstandardsamongthewidelyvaryingInternet  X solicitationandverificationpracticesbeingutilizedbycarriers,includingsmallentities.     2   231  .3   ` Definitionof"Subscriber."Althoughnospecificproposalsweremade,the /  Commissionseekscommentonhowtheterm"subscriber"shouldbedefined,whichmayaffect  x themarketingpracticesofsmallentities.Asetdefinitionwouldpreventcarrierchangesby  @ personswhoarenotauthorizedtochangecarriersinahousehold.     2   232  .3   ` CarrierReports.Theproposedruleswouldalsorequireeachcarriertosubmitto   theCommissionareportonthenumberofslammingcomplaintsthataresubmittedtothatcarrier `  bysubscribers.Smallcarrierswouldnotbeexemptfromfilingthisreport.Thiswouldenablethe (  Commissiontolearnaboutslammingentitiesasquicklyaspossible. o    2   233  .3   ` RegistrationRequirement.Thisruleproposestorequireallinterstatecarriersto   registerwiththeCommission.TheCommissionseekscommentonrequiringtheregistrationto H  containthecarrier'sbusinessname(s);thenamesandaddressesofallofficersandprincipals;  verificationthatsuchofficersandprincipalshavenopriorhistoryofcommittingfraud;and W verificationofthefinancialviabilityofthecarrier.TheCommissionalsoproposestorevokeor  suspendtheoperatingauthorityofanycarrierswhofailtoregisterorwhoprovidefalseor h misleadinginformationintheirregistration.Thiswouldapplytoallcarriers,includingsmall 0 entities.Theproposalsaredesignedtoprevententryintothetelecommunicationsmarketplaceby w entitiesthatareeitherunqualifiedorhavetheintenttocommitfraud. ?   2   234  .3   ` ThirdPartyAdministratorforPreferredCarrierChangesandPreferredCarrier P Freezes.Althoughspecificrulesarenotproposed,theCommissionseekscommentonthe  implementationofacomprehensivesysteminwhichanindependentthirdpartywouldadminister _ carrierchanges,preferredcarrierfreezes,andverification.Several_commenters_Ԁsupporttheuseof ' anindependentadministrator,butfailedtoprovidesufficientdetailonthescopeofitsfunctions, p howsuchasystemwouldwork,andhowitwouldbefunded. 8   5.0 ` StepsTakentoMinimizeSignificantEconomicImpactonSmallEntitiesand G!! SignificantAlternativesConsidered ""` (#` (#   2   235  .3   ` LiabilityProposal.Giventhatslammingisbecominganincreasinglyprevalent # $ practice,webelievethatourliabilityproposalisnecessarytodiscouragecarriersfromslamming g$% consumers.Permittingauthorizedcarrierstorecovertheadditionalamountsproposedwillmake /%& slammingunprofitableforcarriers.Ifthecarrierprovidesproofthatitdidnotviolatethe %x' Commission'srules,thenitisnotrequiredtopayanypenalty.Allcarriers,includingsmall &@( carriers,willbenefitbythereductioninslammingthatwillresultfromtheimplementationofour ' ) proposals. O( *   2   236  .3   ` CarrierReports.Inordertoreducetheburdenoncarriers,weseekcommenton )`", requiringthereporttobefiledonlywhencomplaintsreachathresholdlevel,ratherthanrequiring *(#- thereporttobefiledonaregularbasis.Filingthereportonlywhencomplaintsreachathreshold o+#. levelcouldpermitcarrierstofileamorelimitedamountofinformationonlywhennecessaryto 7,$/ stopapatternorpracticeofslamming.Webelievethattheresultinginvestigationsintoslamming  willreduceslammingandbebeneficialtoallcarriers,includingthosecarriersthataresmall G entities.     2   237  .3   ` RegistrationRequirement.Theregistrationrequirementproposalisnotoverly   burdensome.Theregistrationdoesnotrequirecarrierstoobtaindifficultinformation,unlesssuch g  carriershavepreviouslybeeninvolvedinfraudulentactivities.Thisrequirementshouldonly /  burdencarrierswhohaveahistoryoffraud,inordertokeepthemfromoffering  x telecommunicationsservices.Assuch,theproposalisnarrowlytailoredtoimposeonlyminimal  @ burdensonothercarriers.     2   238  .3   ` Resellersand_CICs_.TheCommissionoffersseveraloptionstoresolvethe   problemswithidentificationbetween_switchless_Ԁresellersandtheirfacilitiesbasedcarriers.They `  rangeinexpenseandburdenoncarriers,sosmallcarrierswillhavetheopportunitytoendorsethe (  optionthatbestsuitstheirneeds. o    2   239  .3   ` Weinvitepartiescommentingonthisregulatoryanalysistoprovideinformationas   tothenumberofsmallbusinessesthatwouldbeaffectedbyourproposedregulationsandidentify H  alternativesthatwouldreducetheburdenontheseentitieswhilestillensuringthatconsumers'  telecommunicationscarrierselectionsarenotchangedwithouttheirauthorization.Furthermore, W intheeventofadisputebetweencarriersunderourliabilityprovisions,thecarriersinvolvedin  suchdisputesmustpursueprivatesettlementnegotiationspriortofilingaformalcomplaintwith h theCommission._]   570      _ԀAswestatedinthe_IRFA_ԀoftheFurtherNoticeandOrder,webelievethat 0 theadoptionofsuchadisputemechanismwilllessentheeconomicimpactofadisputeonsmall w entities. ? 0  6.0` (#(#FederalRulesthatMayOverlap,Duplicate,orConflictwiththeProposed P Rules ` (#` (#   2   240  .3   ` None. '  C.  InitialPaperworkReductionActof1995Analysis  8   2   241  .3   ` TheFurtherNoticeofProposed_Rulemaking_ԀportionofthisOrdercontainseither G!! aproposedormodifiedinformationcollection.Aspartofitscontinuingefforttoreduce "" paperworkburdens,weinvitethegeneralpublicandtheOfficeofManagementandBudget "X# (OMB)tocommentontheinformationcollectionscontainedintheFurtherNoticeofProposed # $ _Rulemaking_ԀportionofthisOrder,asrequiredbythePaperworkReductionActof1995,Pub.L. g$% No.10413.Publicandagencycommentsaredueatthesametimeasothercommentsonthe /%& FurtherNoticeofProposed_Rulemaking_;OMBcommentsaredue60daysfromdateof %x' publicationofthisOrderintheFederalRegister.Commentsshouldaddress:(a)whetherthe &@( proposedcollectionofinformationisnecessaryfortheproperperformanceofthefunctionsofthe ' ) Commission,includingwhethertheinformationshallhavepracticalutility;(b)theaccuracyofthe O( * Commission'sburdenestimates;(c)waystoenhancethequality,utility,andclarityofthe )!+ informationcollected;and(d)waystominimizetheburdenofthecollectionofinformationonthe )`", respondents,includingtheuseofautomatedcollectiontechniquesorotherformsofinformation  technology. G  D.  FinalPaperworkReductionActof1995Analysis   X   2   242  .3   ` ThedecisionhereinhasbeenanalyzedwithrespecttothePaperworkReduction g  Actof1995,Pub.L.10413,andtheOfficeofManagementandBudget(OMB)hasapproved /  someofitsrequirementsinOMBNo.3060-0787.Someoftheproposalshavebeenmodifiedor  x added,however,andthereforesomeoftheinformationcollectionrequirementsinthisitemare  @ contingentuponapprovalbytheOMB.    E.0  ExPartePresentations  (#(#   2   243  .3   ` Thismattershallbetreatedasa"permitbutdisclose"proceedinginaccordance (  withtheCommission'sexparterules._^   571      _ԀPersonsmakingoralexpartepresentationsarereminded o  thatmemorandasummarizingthepresentationsmustcontainsummariesofthesubstanceofthe 7  presentationsandnotmerelyalistingofthesubjectsdiscussed.Morethanaoneortwosentence   descriptionoftheviewsandargumentspresentedisgenerallyrequired.__   572      _ H   F.0  PetitionsforReconsideration W(#(#   2   244  .3   ` PartiesmustfileanypetitionsforreconsiderationofthisOrderwithinthirtydays h frompublicationintheFederalRegister.Partiesmayfileoppositionstothepetitionsfor 0 reconsiderationpursuanttosection1.429(f)oftherules._`P   573      _ w   2   245  .3   ` Tofileapetitionforreconsiderationinthisproceeding,partiesmustfileanoriginal  andtencopiesofallpetitionsandoppositions.Petitionsandoppositionsshouldbesenttothe P OfficeoftheSecretary,FederalCommunicationsCommission,44512thSt.,_S.W._,TWA204,  Washington,D.C.20554.IfpartieswanteachCommissionertohaveapersonalcopyoftheir _ documents,anoriginalplusfourteencopiesmustbefiled.Inaddition,participantsshouldsubmit ' twoadditionalcopiesdirectlytotheCommonCarrierBureau,EnforcementDivision,Room p 6008,2025MStreet,_N.W._,Washington,D.C.20554.Thepetitionsandoppositionswillbe 8 availableforpublicinspectionduringregularbusinesshoursintheDocketsReferenceRoom    (Room239)oftheFederalCommunicationsCommission,1919MStreet,_N.W._,Washington, G!! D.C.20554.Copiesofthepetitionandanysubsequentlyfileddocumentsinthismattermaybe "" obtainedfromInternationalTranscriptionServices,123120thStreet_N.W._,WashingtonD.C. "X# 20036,(202)857-3800. # $    2   246  .3   ` Petitionsforreconsiderationmustcomplywithsection1.429andallother /%& applicablesectionsoftheCommission'srules._a   574      _ԀPetitionsalsomustclearlyidentifythespecific   portionofthisOrderforwhichreliefissought.Ifaportionofaparty'sargumentsdoesnotfall G underaparticulartopiclistedintheoutlineofthisOrder,suchargumentsshouldbeincludedina   clearly_labelled_Ԁsectionatthebeginningorendofthefiling.  X  G.  CommentFilingProcedures  g    2   247  .3   ` Pursuanttoapplicableproceduressetforthinsections1.415and1.419ofthe  x Commission'srules,47_C.F.R._Ԁ1.415,1.419,interestedpartiesmayfilecommentsonorbefore  @ 30daysfrompublicationintheFederalRegister,andreplycommentsonorbefore45daysfrom   publicationintheFederalRegister.CommentsmaybefiledusingtheCommission'sElectronic O  CommentFilingSystem(_ECFS_)orbyfilingpapercopies._b   575      _     2   248  .3   ` Commentsfiledthroughthe_ECFS_ԀcanbesentasanelectronicfileviatheInternet (  to.Generally,onlyonecopyofanelectronicsubmission o  mustbefiled.Ifmultipledocketor_rulemaking_Ԁnumbersappearinthecaptionofthisproceeding, 7  however,_commenters_Ԁmusttransmitoneelectroniccopyofthecommentstoeachdocketor   _rulemaking_Ԁnumberreferencedinthecaption.Incompletingthetransmittalscreen,_commenters_ H  shouldincludetheirfullname,PostalServicemailingaddress,andtheapplicabledocketor  _rulemaking_Ԁnumber.PartiesmayalsosubmitanelectroniccommentbyInternetemail.Toget W filinginstructionsforemailcomments,_commenters_Ԁshouldsendanemailtoecfs@fcc.gov,and  shouldincludethefollowingwordsinthebodyofthemessage,"getform>PARTIESFILINGREPLYCOMMENTSTOFURTHERNOTICEANDORDER  @/RESPONSIVEPLEADINGS  W  @/CCDOCKETNO.94129      America'sCarriersTelecommunicationsAssociation(ACTA) 0 _Ameritech_ w AT&T ? BellAtlantic  BellSouthCorp.(BellSouth) P CableandWireless,Inc.(_CWI_)  CellularTelecommunicationIndustryAssociation(_CTIA_) _ CitizensCommunications(Citizens) ' DirectMarketingAssociation(_DMA_) p ExcelCommunications,Inc.(Excel) 8 _GTE_ԀServiceCorp.(_GTE_)    IXCLongDistance,Inc.(IXCLongDistance) G!! LCIInternationalTelecomCorp.(LCI) "" MCITelecommunicationsCorp.(MCI) "X# NewYorkStateConsumerProtectionBoard(_NYSCPB_) # $ OhioConsumers'Counsel(_OCC_) g$% OklahomaCorp.Commission(OklahomaCommission) /%& PeopleoftheStateofCaliforniaandthePublicUtilitiesCommissionoftheStateof  %x' California(CaliforniaCommission) &@( _RCN_ԀCorp.TelecomServices,Inc.(_RCN_) ' ) SouthernNewEnglandTelephoneCompany(_SNET_) O( * SprintCorp.(Sprint) )!+ TelecommunicationsResellersAssociation(_TRA_) )`", _Telco_ԀCommunicationGroup(_Telco_) *(#- TexasOfficeofPublicUtilityCounsel(_TOPC_) o+#. _TPV_ԀServices,Inc.(_TPV_) 7,$/ UnitedStatesTelephoneAssociation(_USTA_)  USWEST,Inc.(USWEST) G _VoiceLog_ԀLLC(_VoiceLog_)   _WorldCom_,Inc.(_WorldCom_)  X @ PARTIESFILINGCOMMENTSTOMCIPETITIONFOR_RULEMAKING_Ԉ g  @bb._CCB_/_CPD_ԀFILENO.9719  /  _ALLTEL_ԀTelephoneServicesCorporation(_ALLTEL_)  @ _Ameritech_   AssociationforLocalTelephoneService(_ALTS_) O  AT&T   BellAtlanticandNYNEX `  BellSouthTelecommunications,Inc.(BellSouth) (  CitizensCommunications(Citizens) o  CompetitiveTelecommunicationsAssociation(_CompTel_) 7  CoxCommunications,Inc.(Cox)   _GTE_ԀServiceCorporation(_GTE_) H  _MIDCOM_ԀCommunications,Inc.(_MIDCOM_)  SouthernNewEnglandTelephoneCompany(_SNET_) W SouthwesternBellTelephoneCompany,PacificBell,andNevadaBell(_SBC_)  SprintCommunicationsCompany,L.P.(Sprint) h TelecommunicationsResellersAssociation(_TRA_) 0 UnitedStatesTelephoneAssociation(_USTA_) w _Worldcom_,Inc.(_Worldcom_) ? @ PARTIESFILINGREPLYCOMMENTSTOMCIPETITIONFOR_RULEMAKING_Ԉ  @bb._CCB_/_CPD_ԀFILENO.9719  _ _Ameritech_ p AT&T 8 BellSouthTelecommunications,Inc.(BellSouth)    CitizensCommunications(Citizens) G!! _GTE_ԀServiceCorporation(_GTE_) "" MCITelecommunicationsCorporation(MCI) "X# PuertoRicoTelephoneCompany(_PRTC_) # $ SouthernNewEnglandTelephoneCompany(_SNET_) g$% SprintCommunicationsCompany,L.P.(Sprint) /%& TelecommunicationsResellersAssociation(_TRA_) %x' USWEST,Inc.(USWEST) &@(   )!+ |     4  `       p     December17,1998  @0 SeparateStatement  X @8of   @.CommissionerSusanNess  g  Re:0  ImplementationoftheSubscriberCarrierSelectionChangesProvisionsofthe  @ TelecommunicationsActof1996,CCDocketNo.94129 (#(# ThisCommissionreceivesmorecomplaintsaboutslammingthananyothertelephonerelated   complaint,anddespitepasteffortsbythisCommissionandstatecommissionsthenumberof `  complaintsisstillrising.WiththisOrderandFurtherNoticeofProposed_Rulemaking_,wetake (  strongmeasuresbothtoempowerconsumersandtopunishcarriersthatengageinslamming o  practices. 7  _Slammers_Ԁarenothingifnotbold.Victimsofslammingcutacross_socio_Ԅeconomiclinesand H  politicalparties,andinclude_CEOs_,grandmothers,andmembersofmyownstaff.Iknowhow  outragedconsumersarewhentheyareslammed.Theyfeelviolated.Ihavereceivedinnumerable W emailsexpressingconsumers'frustration,andIamcertainmycolleagueshavehadthesame  experience.Threetimesinthepastseveralyears,Ihavetestifiedonslammingatfieldhearings h beforeSenatecommittees,andIhaveheardtheoutrageloudandclearfromlegislatorsandtheir 0 constituents. w Thereisnodoubtthatwemusttakeadditionalstepstoactswiftlyandpunishwrongfulcarriers  severely. P Therulesweadopttodayareaboutempoweringthevictimtheconsumerandpreventing _ slammingcarriersfromeverreceivingpaymentfortheirwrongfulactions.Onceapaymententers ' thehandsofawrongfulcarrier,thereisalwaysthechancethatthewrongfulcarrierwilldisappear p orfileforbankruptcy,aswehavenowlearnedfromexperience."Absolution"permittingthe 8 customernottopayforservicereceivedfromaslammingcarriershouldmakeitlesslikelythat    carrierswillengageinslamminginthefirstplace. G!! Isharetheconcernthatunlimitedabsolutionmightleadtofalseclaimsofslamming.Butwehave "X# followedtheleadofCongressinlimitingabsolutiontoaperiodof30days.Ialsowouldhave # $ entertainedestablishingadollarcapontheamountofabsolution,soastodissuadethosewho g$% mightbetemptedtoabusetheprocess.Tothosewhoobjecttoanyruleprovidinganabsolution /%& remedy,Iask:whypenalizeallconsumersforfearthatsomemightgamethesystem?Should %x' suchabusearise,theCommissioncanalwaysmodifythisrule.Fornow,ourprimaryfocusison &@( deterringinjurytoconsumers,andprovidingameaningfulremedywhenitoccurs.  ' ) Ѐ O( *  Ofcourse,itisnotjusttheconsumerbuttherightfulcarrierthatisinjuredbyslamming.During )`", thisinterimperiod,beforewecanadoptevenstrongerantislammingrulesproposedinthe *(#- FurtherNotice,wearefacedwithadifficultdecision:whennopaymenthasbeenmade,wecan o+#. giveprioritytocompensatingtheauthorizedcarrierortocompensatingtheconsumer.Ichoose 7,$/ theconsumer.  Itistheconsumerwhosechoicehasbeentakenaway;itistheconsumerwhohasbeentroubled   andinconvenienced;itistheconsumeruponwhomwerelytonoticetheproblemandtoregister  X thecomplaint.Iamconfidentthatwewilladoptfurthermeasurestoensurethatauthorized   carriersarealsocompensated,andthat_slammers_Ԁaredoublypenalized.Butintheinterimourfirst g  concernmustbetheconsumer.Limitedabsolutionisaformofcompensation,notawindfall.  /  Inadditiontoharmingtheconsumerandtheauthorizedcarrier,slammingalsothreatens  @ competition.Thecenterpieceofcompetitionisconsumerchoice.Ifconsumerschooseacarrier   andtheirselectionischangedagainsttheirwill,thenconsumersarenotreapingthebenefitsof O  competition.Wearecommittedtomakingcompetitionasuccess.So,inadditiontoadopting   proconsumerrules,wearealsoincreasingourenforcementeffortsandinstitutingnew `  proceduresthatwillmakeitquickerandeasierforconsumerstofileandresolveslamming (  complaints. o  Congresshassentusaclearmessage:stopcarriersfromslamming.Inturn,wearesending   _slammers_Ԁaclearmessage:wehavezerotoleranceforsuchpractices. H    W   SeparateStatementof G CommissionerGloria_Tristani_       X Re:0  ImplementationoftheSubscriberCarrierSelectionChangesProvisionsofthe g  TelecommunicationsActof1996;PoliciesandRulesConcerningUnauthorizedChanges /  ofConsumers'LongDistanceCarriers. x(#(#   IenthusiasticallysupporttherulesadoptedtodaybytheCommissiontocombatslamming. O  Theproblemofslamminghasbecomerampant,anditistheFCC'sjobtostopit.Ibelieveour   newantislammingrulesareamajorvictoryformillionsofconsumers.Iexpectthatthesenew `  rules,inconcertwithouraggressiveenforcementactionsagainst_slammers_,willdrasticallyreduce (  thefrequencyofslamming. o  Ѐ  ThehighlightoftheCommission'snewrulesisthatacustomerwhoisslammedneednotpay   theslammer.Thisisgoodpublicpolicyfortworeasons.First,allowingconsumerstowithhold H  paymentfromtheslammerhelpstakestheprofitoutofslamming.Thatshouldsubstantially  reducethefrequencyofslamming.Second,allowingaslammedcustomertowithholdpayment W compensatestheslammingvictimforthetroubleandaggravationofhavingbeenslammed.  Anyonewhohasexperiencedthefrustrationandinconvenienceofbeingslammedknowsthat h somecompensationisappropriate. 0   Forthisnewapproachtowork,however,consumersmustreadtheirtelephonebillscarefully. ? Whenacustomerreceivesabillandnoticesthathisorherpreselectedcarrierhasbeenchanged  withoutconsent,thecustomershouldimmediatelycallthecarriertheyhadpreviouslyselectedand P getswitchedbacktothatcarrier.Atthatpoint,thecustomerlikelyhasaccumulatedchargesfrom  theslammerforonemonth,orpartofamonth.Ournewrulessaythatthecustomerneednotpay _ thosecharges. ' ]=X4` hp x (#%'X,X]    If,however,thecustomerdoesnotrealizethathisorherpreselectedcarrierhasbeen 8 changedandendsuppayingtheslammer,thecustomerisstillrelievedofpaymenttotheslammer    forthefirstmonthofserviceoncetheslamisdiscovered.Aftertheonemonthperiod,the G!! customer'spaymentstotheslammercanberecoveredbythecustomer'sauthorizedcarrier.The "" authorizedcarriermustrefundtothecustomeranyamountpaidbythecustomerthatexceeds "X# whatthatcustomerwouldhavebeenchargedundertheauthorizedcarrier'srates.Thus,totake # $ fullestadvantageoftheCommission'snewslammingrules,consumersneedtouncoverslamsthe g$% firsttimetheslammingcarrier'snameappearsonthebill. /%&   Z=X` hp x (#%'0*X4` XZ  Thisnewapproachtopreventingslammingreliesonthecustomerrealizingthatheorshehas &@( beenslammed.Becausetelephonebillstodayarenotalwaysclear,itispossibleforthecustomer ' ) nottobeawareofachangein_presubscribed_Ԁcarriers.Todealwithmisleadingorunclearbilling O( * information,theFCCrecentlyproposedrequiringcarrierstoorganizetheirbillsmoreclearly.I )!+ expecttheCommissionwilltakeupconsiderationofthoserulesshortly.Adoptionofthoserules )`", wouldgreatlyfacilitatediscoveryofanunauthorizedchangein_presubscribed_Ԁcarriers,thereby *(#- ensuringthatthecustomerdoesnotpaytheslammingcarrier. o+#.  7,$/   Thus,withtheadoptionofthecustomerabsolutionpolicy,theimpositionoftwomore  significantfinesagainst_slammers_Ԁandcrammers,andthesimplificationofcomplaintfilings,it G shouldbeclearthatthisCommissionisseriousaboutbringingslammingandcrammingtoanend.     `     4    <      D     December17,1998c    STATEMENTOFCOMMISSIONERMICHAELK.POWELL,  X CONCURRINGINPARTANDDISSENTINGINPART     Re:0 4 SecondReportandOrderandFurtherNoticeofProposed_Rulemaking_, /  ImplementationoftheSubscriberCarrierSelectionChangesProvisionsofthe  x TelecommunicationsActof1996andPoliciesandRulesConcerningUnauthorized  @ ChangesofConsumers'LongDistanceCarriers(CCDocketNo.94129). 4(#4(#   IwriteseparatelytoexplainthebasesuponwhichIpartiallydissentfromandpartiallyconcur `  inthisaction. (    Asaninitialmatter,IwishtoexpressmyfirmsupportfortheCommissiontakingsteps, 7  pursuanttosection258ofthe1996Act,toestablishpoliciesandrulesdesignedtocombat   unauthorizedchangesofconsumers'longdistancecarriers("slamming").TheActmandatesthat H  weturntheshipoffederaltelecommunicationsregulationsmartlyinthedirectionofcompetitive  marketsandawayfromthetraditionalcentralplanningmodel.Itiscriticaltothefunctioningof W competitivemarketsthatconsumersmakeeffectivechoicesinthemarketplace,asthesechoices  tellselfinterestedfirmswhattosell,howmuchandwhere.Slammingrobsconsumersofchoices h theyhavemade,andthusIammorethanpleasedtosupportitspreventionandvigorous 0 prosecution. w   Ihavesomenaggingconcerns,however,aboutthemannerinwhichthisactioncombats  slamming,whichIdescribebrieflyhere.Iagreethatanimportantwaytocombatslammingisto P preventcarriersfromreapingthefinancialbenefitsofslamming.Further,Igenerallysupport  makingslammingcarrierspayforwhattheyhavedone,totheextentwehaveauthoritytorequire _ suchremedies. '   ButIamconcernedthatsomeofthestepstakeninthisitemmaynotadequatelycompensate 8 authorizedcarriers,whicharenomoreresponsibleforaparticularincidentofslammingthanthe    slammedsubscriber.Therearetwodimensionstomyconcernsinthisregard. G!!   First,Imustrespectfullyandreluctantlydissentfromthenarrowpartofthisactionthat "X# requiresauthorizedcarrierstoforwardtothesubscriberchargesthesubscriberhaspaidtothe # $ slammingcarrier(whichtheauthorizedcarrierthencollectsfromtheslammer)totheextentthose g$% moniesexceedtheamountthesubscriberwouldnormallyhavepaidtheauthorizedcarrier.While /%& Iagreethatitisaworthyendforustodowhatwecantorestoreslammedsubscriberstotheir %x' originalpositions,Ifeelstronglythatthemeansforachievingthisendmustcomport,asalways, &@( withtheexpresslanguageoftheAct.Section258(b)couldnotbemoreclearthataslamming ' ) carrierisliabletotheauthorizedcarrierfortheentireamounttheslammedsubscriberhaspaidto O( * theslammer: )!+ 8  Anytelecommunicationscarrierthatviolatestheverificationproceduresdescribedin *(#- subsection(a)andthatcollectschargesfortelephoneexchangeserviceortelephonetoll o+#. servicefromasubscribershallbeliabletothecarrierpreviouslyselectedbythesubscriber 7,$/ c c8cXXdXXd8 c  inanamountequaltoallchargespaidbysuchsubscriberaftersuchviolation...d   576      !! Thestatuteprovidesfornoexceptiontothisallinclusivelanguageregardingchargespaidtothe   subscriber,andIrespectfullyrejectthesuggestionthatwecantrumptheexpresslanguageof  X section258(b)byrelyingontidbitsfromthelegislativehistory,commentsdetailingtheparties'   preferencesorinferencesregardingwhatCongressmusthavemeantinenactingtheprovisionin g  thecontextofexistingCommissionrules. /    Ialsorejectthesuggestionthatsimpleadherencetothestatutorylanguagewouldleadtoan  @ anomalouspolicyresult.Forexample,allowingtheauthorizedcarriertokeepallofthemoneyit   collectsfromslammingcarrierswouldtendtomaximizetheincentiveauthorizedcarriershaveto O  collectfrom_slammers_.Moreover,inlightofthepublicoutcryagainstslamming,itseemslikely   thatmanyauthorizedcarrierswouldhavefreelychosentorefundchargesinexcessofwhatthe `  subscribernormallywouldhavepaid,justtokeeptheirsubscribershappyandretaintheminan (  increasinglycompetitivemarket.Bymandatingthisremedy,wehaveoversteppedourlegal o  authorityandprecludedpotentialmarketbasedremediesthatcouldhaveachievedthesame 7  purpose.     Giventheseobjections,Iwouldhavepreferredtomakeuseofotherexpresslanguagein  section258(b),whichprovidesthat"[_t]he_Ԁremediesprovidedbythissubsectionareinadditionto W anyotherremediesavailablebylaw."e8   577      ׀Inparticular,Iwouldhavepreferredtoconsider  alternativelegalmeansbywhichtheslammedsubscribercouldcollectanamountequaltothe h "excess"itpaidfromtheslammingcarrier,providedthatsuchmeansdidnotunderminethe 0 statutoryremedyavailabletotheauthorizedcarrier.Ifsuchmeanscouldnotbeimplementedin w thisactionIwouldhavebeenopentoconsideringtheminthenextphaseofthisproceeding,in ? whichwewillconsideradditionalfinancialpenaltiesforslammingcarriers.    Second,Iamconcernedthatourrulesdonotprovideforcompensationtotheauthorized  carrier(eitherfromtheslammingcarrierorthesubscriber)whenthesubscriberdoesnotpaythe _ slammer.Iworrythatthisshortcomingdoesnotaffordtheauthorizedcarrierthebenefitofthe ' bargainitstruckwiththesubscriber. p   Authorizedcarriersgenerallyhavearelationshipofindefinitedurationwiththeirsubscribers,    accordingtowhichtheauthorizedcarrierexpectstoprofitfromdoingbusinesswiththat G!! subscriber.Theauthorizedcarrierreliesonthatexpectationincraftingitspricingpoliciesand "" otherwiserunningitsbusiness,atleastuntilthesubscriberactstoseverhisrelationshipwiththe "X# authorizedcarrier.Withoutfurtherinformationontherecord,Iamnotpreparedtosaythat # $ authorizedcarriersarenotharmedwhenthisexpectationisnotsatisfied.f   578      ׀Ialsowouldpointout g$% thatthispotentialharmwouldtendtodisfavorsmallerauthorizedcarrierswhoarenowentering  themarkettobringconsumersthebenefitsofadditionalcompetition.Bydecliningtocompensate G authorizedcarrierforthispotentialharm,Ibelieveourrulesfallshortofkeepingtheauthorized   carrierwhole.  X   Incontrast,ourrulesaremorefavorabletoslammedsubscribers.Iagreethatsubscribersmay g  sufferharmsandincurcostsasaresultofbeingslammed,andIwouldsupportpenalizing /  _slammers_Ԁinawaythatforcesthemtocompensatesubscribersforsuchharmsandcosts.Butthe  x factgenerallyremainsthataslammedsubscriberexpectedtobeabletomakecalls,expectedto  @ payforthosecallsandactuallymadethecalls.Theprimarydifferenceisthattheslamming   carrier,ratherthantheauthorizedcarrier,actuallyservedthesubscriberafactwhichwill O  generallygounnoticeduntilthesubscriberseesanewcarrieronhisbill.Thus,inmanycases,the   subscriberwillprettymuchreceivethebenefitofhisbargain,albeitbasedontheperformanceofa `  substitutecarrier. (    Whileinprinciple,Idonotobjecttoourrulescompensatingslammedsubscribers,Idowish 7  weweredoingmoreinthisactiontocompensateauthorizedcarriers.Thisviewisconsistentwith   theplainlanguageofthesection258,whichappearstoprovidearemedyfortheauthorized H  carrier.Indeed,asIhavesaid,section258specificallyallowstheauthorizedcarriertocollectall  moniespaidbythesubscribertotheslammer,withoutreferencetowhetherornottheamount W paidtotheslammerisgreaterthantheamounttheauthorizedcarrierwouldnormallyreceivefrom  thesubscriber.Thus,underthestatute,theauthorizedcarriercould,insomecases,receivemore h thanitwouldhavereceivedhadtheslamnotoccurred. 0   Inlightoftheseconcerns,Iwouldhavepreferredtodeferconsideringrulestofreeslammed ? subscribersfrompayingeithertheslammingorauthorizedcarrieruntilthenextphaseofthis  proceeding,inwhichwewillconsideradditionalfinancialpenaltiesforslammingcarriers.By P imposingtheseadditionalpenaltieson_slammers_,Ibelievewecouldmoreadequatelycompensate  authorizedcarrierswithoutnecessarilyreducingcompensationtoslammedsubscribers.Ido, _ however,takesomecomfortinknowingthat(1)asolutionthatwouldprovidemore ' compensationtoauthorizedcarriers(basedonharsherpenaltiesto_slammers_)canstillbe p implementedafterreviewingthesubmissionsrespondingtothisaction;and(2)authorizedcarriers 8 thatfeeltheyhavenotbeenadequatelycompensatedunderourrulesmayhaveadditional    remediesavailableinstateorfederalfora._g   579      _ԀTheseconsiderationsmitigatemyconcerns G!! sufficientlythatIfeelcomfortableconcurringintheremainderofthisaction. ""   Havingexpressedtheseconcerns,Ilookforwardtoworkingwithmycolleaguesinthenext # $ phaseofthisproceedingtoensurethatalloftheinnocentpartiesassociatedwithslamming g$% violationsbothsubscribersandauthorizedcarriershavefullopportunitytobecompensated /%& forsuchviolations.Mycolleaguesand,inparticular,ourdedicatedCommonCarrierBureaustaff  aretobecommendedfortheirtirelessworkinaddressingthisimportantconsumerprotection G issue.     g     4    <      D     December17,1998h    DISSENTINGSTATEMENTOF  X COMMISSIONERHAROLD_FURCHTGOTT_ԄROTH     Re:0 4 SecondReportandOrderandFurtherNoticeofProposed_Rulemaking_, /  ImplementationoftheSubscriberCarrierSelectionChangesProvisionsofthe  x TelecommunicationsActof1996andPoliciesandRulesConcerningUnauthorized  @ ChangesofConsumers'LongDistanceCarriers(CCDocketNo.94129). 4(#4(#   Theunauthorizedchangeofacustomer'slongdistancecarrier("slamming")isagrowing   concernforconsumersandthisagency,andIcongratulatetheCommissionontakingstepsto `  reduceit.Iappreciatethatwemusttakeactiontocombatslamming,butwecannotandshould (  notdosoinamannerthatconflictswiththesafeguardsandincentivesestablishedintheAct. o  Withthatinmind,IwriteseparatelytoexplainwhyImustdissentfromtheregulationsoutlinedin 7  today'sOrder.     BeforeIbegin,letmenotethateveryonehereattheCommissionsharesthesamegoal  significantlyreducingandeventuallyeliminatingslamming.Iexpressmyfirmsupportforthe W Commission,pursuanttosection258ofthe1996Act,toenactrulesandregulationsdesignedto  eliminatetheseunauthorizedchanges.Ihaveseriousreservations,however,aboutthemethodof h achievingthesegoalsthattheCommissionadoptsinthisOrder.Specifically,Ibelievethatthe 0 consumerabsolutionschemecreatedherewilllessentheincentivesofthepartymostabletotake w appropriateactiontocombatslammingi.e.theauthorizedcarrierandmayalsoinadvertently ? leadtoanincreaseinfraudulentclaimsofslamming.    First,Iamconcernedthattheabsolutionofconsumerliabilityproposedhereisnotfoundin  thestatuteandevenconflictswiththestatutorygoals.Section258seemstoanticipatethatit _ wouldbetheauthorizedcarrierwhowouldhavethegreatestincentivetopoliceagainstslamming, ' asthatcarrierwouldbeentitledtorecoverthechargespaidtotheslammingcarrier._i   580      _ԀTherules p adoptedtoday,however,donotprovideforanycompensationtotheauthorizedcarrierwhenthe 8 subscriberdoesnotpaytheslammingcarrier.Inthismanner,theadoptionofconsumer    absolutionmayacttodiscouragetheauthorizedcarrierfrompolicingthesepracticesbecause G!! frequentlytherewillbenopaymentsbytheconsumertotheslammingcarrieravailableforthem "" tocollect. "X#   IagreewithCommissionerPowellthatweshouldbeandindeedthestatuteenvisioned g$% doingmoretocompensatetheauthorizedcarriers.Thesecarriersarealsoharmedbyslamming, /%& astheylosethecompensationthatwouldhavebeenduetothemhadoneoftheircustomersnot %x' beentakenawayinanunauthorizedmanner.Indeed,theauthorizedcarriermaysufferagreater &@( harm.Thesubscriberwasstillabletomaketelephonecallsusingtheserviceoftheslamming ' ) carrier.Theauthorizedcarrier,however,willbeunabletorecoupthepaymentsthatshouldhave O( * beenmadebytheircustomer. )!+  )`", h h8cXXdXXd8 h    Inaddition,atleastinoneregard,theCommission'srulesdirectlyconflictwiththestatute.  Section258statesthattheauthorizedcarriershouldbeentitledto"anamountequaltoallcharges G paidbysuchsubscriberaftersuchviolation."_l   581      _ԀTheOrder,however,requiresthatauthorized   carriers,onceobtainingmoniespaidbythesubscribertotheslammer,mustrefundanyexcessof  X whatthesubscriberwouldnormallyhavepaid.Sucharequirementisnotwhatthestatute   requiresandisespeciallytroublinginconcertwiththeconsumerabsolutionprovisions. g    Atbottom,thestatuteseemedtoensurethattheauthorizedcarrierwouldbemadeatleast  x whole,maximizingtheirincentivetocollectfrom_slammers_.Byabsolvingconsumerliabilityfor  @ thefirst30daysandrequiringtheauthorizedcarrierstorefundanyexcessthattheydocollect   fromaslammingcarrier,theCommissionisevisceratingtheincentivesthatCongressprovidedto O  theauthorizedcarries.     Finally,Ifearthattheconsumerabsolutionmechanismadoptedtodaymayaddfurther (  complicationsbyencouragingfalseclaimsofslamming.WhileIappreciatetheexpedited o  industrydrivenprocessforevaluatingslammingclaims,informingcustomersthattheymayhave 7  30daysoffreeservicewiththemereallegationofaslamwillonlyencouragefraudulentclaimsof   slamming.Moreover,itwillnecessitateincreasedcoststobebornebyallconsumersforeither H  adjudicatingthoseclaimsorprovidingfreeservicetothoseclaimingtobeslammed.Icannot  endorsesuchanoutcome. W   TherearecountlessmarketsintheUnitedStatesthatworkwellforbothconsumersand h businessesalike.Thevastmajorityofthesemarketsworkonacommonlawbasis,withoutthe 0 strikinglevelofgovernmentinterventionfoundinthisitem.TheCommission'sdecisiontoday w presentstheextraordinarysituationinwhichconsumersrecognizethataservicehasaprice, ? willinglypurchasethatservice,aresatisfiedwiththeserviceitself,andyetthefederalgovernment  interferestoinstructtheconsumernottopayforthatservice.Indeed,Icanthinkofnoother P industryinwhichafederalagencyhasdecreedsuchanoutcomebyrule.    Thisformofsupposedlyfreeserviceisnotcostless.Thesecostsarebornebylegitimate ' carriersinthetelephoneindustry.Thelongdistanceindustryisextremelycompetitiveand, p accordingtooneofthebasicprinciplesofeconomics,additionalcostsinacompetitiveindustry 8 arealwaysreflectedinhigherprices.Andthesehigherpriceswillbepaidbyalltelephone    consumers.ThatisanoutcomethatIseeinconflictwiththeTelecommunicationsActof1996. G!! nXcXXXc