[Federal Register Volume 77, Number 101 (Thursday, May 24, 2012)]
[Proposed Rules]
[Pages 30972-30976]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12670]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket Nos. 11-116 and 09-158; CC Docket No. 98-170; FCC 12-42]
Empowering Consumers to Prevent and Detect Billing for
Unauthorized Charges (``Cramming''); Consumer Information and
Disclosure; Truth-in-Billing Format
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission or FCC) proposes additional rules to help consumers prevent
and detect the placement of unauthorized charges on their telephone
bills, an unlawful and fraudulent practice commonly referred to as
``cramming.'' Several commenters in this proceeding support additional
measures to prevent cramming, including requiring wireline carriers to
obtain a consumer's affirmative consent before placing third-party
charges on telephone bills (i.e. ``opt-in''). There also is support for
adopting anti-cramming rules for Commercial Mobile Radio Service (CMRS)
and Voice over Internet Protocol (VoIP) service. The Commission seeks
further comment on whether it should take additional steps to prevent
wireline cramming, including ``opt-in'', possible solutions to CMRS
cramming, and any developments of VoIP cramming.
DATES: Interested parties may file comments on or before June 25, 2012,
and reply comments on or before July 9, 2012.
ADDRESSES: You may submit comments, identified by CG Docket No. 11-116,
by any of the following methods:
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the Commission's Electronic Comment
Filing System (ECFS), through the Commission's Web site http://fjallfoss.fcc.gov/ecfs2/. Filers should follow the instructions
provided on the Web site for submitting comments. For ECFS filers, in
completing the transmittal screen, filers should include their full
name, U.S. Postal service mailing address, and CG Docket No. 11-116.
Paper filers: Parties who choose to file by paper must
file an original and four copies of each filing. Filings can be sent by
hand or messenger delivery, by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail (although the
Commission
[[Page 30973]]
continues to experience delays in receiving U.S. Postal Service mail).
All filings must be addressed to the Commission's Secretary, Office of
the Secretary, Federal Communications Commission
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building.
Commercial Mail sent by overnight mail (other than U.S.
Postal Service Express Mail and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street SW., Washington, DC 20554.
[ssquf] In addition, parties must serve one copy of each pleading
with the Commission's duplicating contractor, Best Copy and Printing,
Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, or via
email to fcc@bcpiweb.com.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Lynn Ratnavale, Lynn.Ratnavale@fcc.gov
or (202) 418-1514, or Melissa Conway, Melissa.Conway@fcc.gov or (202)
418-2887, of the Consumer and Governmental Affairs Bureau, Consumer
Policy Division.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Further Notice of Proposed Rulemaking (FNPRM), FCC 12-42, adopted on
April 27, 2012, and released on April 27, 2012, in CG Docket Nos. 11-
116 and 09-158, and CC Docket No. 98-170. Simultaneously with the
FNPRM, the Commission also issued a Report and Order in CG Docket Nos.
11-116 and 09-158, and CC Docket No. 98-170. The full text of the FNPRM
and copies of any subsequently filed documents in this matter may also
be purchased from the Commission's duplicating contractor, Best Copy
and Printing, Inc., Portals II, 445 12th Street SW., Room CY-B402,
Washington, DC 20554. Customers may contact the Commission's
duplication contractor at its Web site, www.bcpiweb.com, or by calling
(202) 488-5300. Document can also be downloaded in Word or Portable
Document Format (PDF) at http://www.fcc.gov/guides/cramming-unauthorized-misleading-or-deceptive-charges-placed-your-telephone-bill.
Pursuant to 47 CFR 1.1200 et seq., this matter shall be treated as
a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. Persons making ex parte presentations must
file a copy of any written presentation or a memorandum summarizing any
oral presentation within two business days after the presentation
(unless a different deadline applicable to the Sunshine period
applies). Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentation must: (1) List all persons
attending or otherwise participating in the meeting at which the ex
parte presentation was made; and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with section 1.1206(b) of the Commission's rules.
In proceedings governed by section 1.49(f) or for which the Commission
has made available a method of electronic filing, written ex parte
presentations and memoranda summarizing oral ex parte presentations,
and all attachments thereto, must be filed through the electronic
comment filing system available for that proceeding, and must be filed
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf).
Participants in this proceeding should familiarize themselves with the
Commission's ex parte rules.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to fcc504@fcc.gov or call the
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice),
(202) 418-0432 (TTY).
Initial Paperwork Reduction Act of 1995
The FNPRM seeks comment on potential new information collection
requirements. If the Commission adopts any new information collection
requirement, the Commission will publish another notice in the Federal
Register inviting the public to comment on the requirements, as
required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44
U.S.C 3501-3520). In addition, pursuant to the Small Business Paperwork
Relief Act of 2002, the Commission seeks comment on how it might
``further reduce the information collection burden for small business
concerns with fewer than 25 employees.''
Synopsis
1. In the FNPRM, the Commission seeks comment on additional
potential measures to prevent cramming, including an ``opt-in''
requirement for wireline carriers. The FNPRM also seeks comment on
possible solutions to CMRS cramming and any developments on VoIP
cramming.
2. The record reflects significant concern that bill formatting
changes and greater transparency alone are not sufficient to deter the
widespread problem of cramming. Commenters suggest a number of stronger
measures, such as prohibiting all or most third-party charges from
being placed on telephone bills or requiring carriers to obtain a
consumer's affirmative consent before placing third-party charges on
their own bills to consumers (``opt-in''). Consumer groups argue that a
requirement for consumer consent or an affirmative opt-in to receive
third-party charges should apply to consumers' wireline, VoIP, and/or
CMRS bills and that any requirement to separate third-party charges on
the bills of those consumers who opt-in should apply across all
platforms. The Commission seeks additional comment on whether it should
adopt additional measures, such as an opt-in approach, and, if so, the
best way to implement them. To adequately evaluate an opt-in approach,
a more detailed record is needed, especially with respect to the
structure and mechanics of an opt-in approach and how opt-in could be
implemented for existing consumers whose carrier already may be placing
non-carrier third-party charges on their telephone bills. The
Commission also seeks to bolster the record with respect to its
authority to adopt additional anti-cramming measures.
3. The Commission seeks additional comment on whether an ``opt-in''
approach is warranted and how it should be structured. Should an opt-in
requirement apply only to new consumers or to all consumers? If ``opt-
in'' should only apply to new
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consumers or some other subset of existing consumers, then what is the
basis--both factual and legal--for such a distinction? What are the
distinguishing characteristics of each subset of consumers and their
respective risk of being crammed that may justify disparate treatment?
Should an opt-in requirement, if adopted, apply to all third-party
charges or should third-party charges for telecommunications services
be exempt? Should the exemption apply to all third-party
telecommunications services? Would consumers likely benefit from an
``opt-in'' mechanism with respect to non-telecommunications-related
third-party charges? Would consumers adequately anticipate the need for
third-party billing before they opt-in or opt-out? Are there any
analogous opt-in requirements that might inform our decisions here?
Would the benefits to consumers be different under one opt-in structure
versus another? Would an opt-in approach be more or less warranted if
it applied only to new consumers?
4. Assuming the Commission decides to adopt an ``opt-in'' approach,
the secondary set of issues revolves around how an ``opt-in'' measure
should be implemented from a practical standpoint. Should the
Commission adopt an all-or-nothing opt-in where the consumer has an
opportunity to opt-in or reject all third-party charges, including long
distance carrier charges? Should the consumer have the choice to opt-in
or reject carrier and non-carrier charges separately, or should the
consumer have an opportunity to indicate that they choose not to
receive third-party billing charges unless or until they are consulted
about specific individual charges from third parties?
5. With respect to procedure, there is the question of the best
format for implementing the ``opt-in'' mechanism. What would be the
best procedures to obtain a consumer's opt-in to third-party charges?
6. The Commission seeks comment on the specific costs of the
measures discussed in the FNPRM, and ways the Commission might mitigate
any implementation costs. Do smaller wireline carriers face unique
implementation costs and, if so, how might we address those concerns?
7. The Commission also seeks comment on where and when a consumer
should be made aware of the opportunity to opt-in to third-party
billing charges. Should carriers inform consumers at the point of sale,
such as during the telephone conversation between the consumer and the
carrier's customer service representative or while using online sign-up
procedures? Should notification of the option to opt-in also appear in
Web site, print, or in-store advertising? Should existing consumers be
informed on their bills? Should the consumer's current opt-in status be
disclosed on every bill so that he or she will know whether to be
looking for such charges on that bill? The Commission seeks comment
regarding the duration of each opt-in approval and what happens when a
consumer decides to revoke a prior opt-in approval or to give new opt-
in approval. What procedures should be required for a consumer to
change an opt-in election? Should a consumer be able to opt-in to
specific types of third-party charges, from a specific third party, or
for a specific period of time? Do carriers have the technical ability
to distinguish such charges today and, if not, what would be the cost
to obtain that ability? The Commission seeks comment on the level of
consumer interest in this type of ``opt-in'' approach, the potential
consumer benefits, as well as the complexity and costs such a scenario
poses for carriers.
8. Are there additional measures the Commission could take to
combat cramming? Are there measures beyond an ``opt-in'' approach or
alternative approaches that we should consider and might be more
effective at combating cramming?
9. Cramming appears to be less a problem for CMRS consumers than
for wireline consumers, but it may be on the rise. The Commission seeks
comment on potential regulatory and non-regulatory measures to address
the issue. Are there technological solutions that might help consumers,
such as apps for mobile phones? What steps has industry taken to date
and what steps might it take in the future to protect CMRS consumers?
Are there any steps the Commission should consider to help CMRS
consumers combat cramming? To the extent that cramming issues develop
for VoIP services, the Commission seeks comment about that issue and
answers to the above questions. The Commission requests that commenters
address implementation costs of any other proposed anti-cramming
measures and any questions of legal authority.
10. The Commission seeks comment on the respective roles of
carriers and billing aggregators in screening charges for purposes of
existing blocking options and how these roles might change if the
Commission adopts an ``opt-in'' requirement.
11. The Commission seeks comment on its authority to adopt an
``opt-in'' requirement. Would the Commission's section 201(b) authority
to regulate practices ``for and in connection with'' telecommunications
services support such requirements? Does the Commission's Title I
ancillary authority provide support for such requirements? Are there
other sources of authority? Would such measures present First Amendment
concerns, and, if so, how might the Commission address those concerns?
Initial Regulatory Flexibility Act Analysis
12. As required by section 603 of the Regulatory Flexibility Act of
1980, as amended (RFA), the Commission has prepared an Initial
Regulatory Flexibility Analysis (IRFA) of the possible significant
economic impact on a substantial number of small entities by the
policies and rules proposed in the FNPRM. Written public comments are
requested on the IRFA. Comments must be identified as responses to the
IRFA and must be filed by the deadlines indicated in the DATES section
of this document. The Commission will send a copy of the FNPRM,
including this IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration.
Need for, and Objectives of, the Proposed Rules
13. The FNPRM contains proposals that: (1) A carrier, if it already
offers blocking, ask all new subscribers whether they would like to
``opt-in'' to blocking of third-party charges on their bills and record
the subscriber's election for purposes of blocking or not blocking
third-party charges on that subscriber's bill; and (2) carriers that
already offer blocking include on all telephone bills and on their Web
sites for use by existing customers, information about the option to
block third-party charges from their telephone bills and record any
subsequent request by a current customer to block or not block third-
party charges on that subscriber's bill.
14. The record reflects that cramming primarily has been an issue
for wireline telephone consumers. The rules adopted in the Report and
Order do not address aspects of cramming which are being considered in
the FNPRM, including growth in CMRS cramming and how the Commission
should address any cramming issues that develop for VoIP services.
Adopting further requirements will provide consumers with additional
safeguards.
Legal Basis
15. The legal basis for any action that may be taken pursuant to
the FNPRM is contained in sections 1-2, 4, 201, 258, and 403 of the
Communications Act of 1934, as amended 47 U.S.C. 151-152, 154, 201,
258, and 403.
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Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
16. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that will be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. Under the Small Business Act, a ``small business concern'' is one
that: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) meets any additional criteria
established by the SBA. Nationwide, there are a total of approximately
29.6 million small businesses, according to the SBA. The FNPRM seeks
comment generally on mobile providers of voice, text, and data
services. However, as noted in Section IV of the FNPRM, the Commission
seeks comment on the scope of entities that should be covered by the
proposals contained therein.
17. Incumbent Local Exchange Carriers (``Incumbent LECs''). Neither
the Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The appropriate
size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. Census Bureau data for
2007, which now supersede data from the 2002 Census, show that there
were 3,188 firms in this category that operated for the entire year. Of
this total, 3,144 had employment of 999 or fewer, and 44 firms had had
employment of 1000 or more. According to Commission data, 1,307
carriers reported that they were incumbent local exchange service
providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or
fewer employees and 301 have more than 1,500 employees. Consequently,
the Commission estimates that most providers of local exchange service
are small entities that may be affected by the adopted rules and
policies. Thus, under this category and the associated small business
size standard, the majority of these incumbent local exchange service
providers can be considered small.
18. Competitive Local Exchange Carriers (``Competitive LECs''),
Competitive Access Providers (``CAPs''), Shared-Tenant Service
Providers, and Other Local Service Providers. Neither the Commission
nor the SBA has developed a small business size standard specifically
for these service providers. The appropriate size standard under SBA
rules is for the category Wired Telecommunications Carriers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. Census Bureau data for 2007, which now supersede data from
the 2002 Census, show that there were 3,188 firms in this category that
operated for the entire year.
19. Of this total, 3,144 had employment of 999 or fewer, and 44
firms had had employment of 1,000 employees or more. Thus under this
category and the associated small business size standard, the majority
of these Competitive LECs, CAPs, Shared-Tenant Service Providers, and
Other Local Service Providers can be considered small entities.
According to Commission data, 1,442 carriers reported that they were
engaged in the provision of either competitive local exchange services
or competitive access provider services. Of these 1,442 carriers, an
estimated 1,256 have 1,500 or fewer employees and 186 have more than
1,500 employees. In addition, 17 carriers have reported that they are
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500
or fewer employees. In addition, 72 carriers have reported that they
are Other Local Service Providers. Of the 72, seventy have 1,500 or
fewer employees and two have more than 1,500 employees. Consequently,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, Shared-Tenant Service
Providers, and Other Local Service Providers are small entities that
may be affected by the adopted rules.
20. Interexchange Carriers. Neither the Commission nor the SBA has
developed a small business size standard specifically for providers of
interexchange services. The appropriate size standard under SBA rules
is for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
Census Bureau data for 2007, which now supersede data from the 2002
Census, show that there were 3,188 firms in this category that operated
for the entire year. Of this total, 3,144 had employment of 999 or
fewer, and 44 firms had had employment of 1,000 employees or more. Thus
under this category and the associated small business size standard,
the majority of these Interexchange carriers can be considered small
entities. According to Commission data, 359 companies reported that
their primary telecommunications service activity was the provision of
interexchange services. Of these 359 companies, an estimated 317 have
1,500 or fewer employees and 42 have more than 1,500 employees.
Consequently, the Commission estimates that the majority of
interexchange service providers are small entities that may be affected
by rules adopted pursuant to the FNPRM.
21. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. For the category of Wireless
Telecommunications Carriers (except Satellite), Census data for 2007
show that there were 1,383 firms that operated that year. Of those,
1,368 firms had fewer than 100 employees, and 15 firms had more than
100 employees. Thus, under this category and the associated small
business size standard, the majority of firms can be considered small.
Similarly, according to Commission data, 413 carriers reported that
they were engaged in the provision of wireless telephony, including
cellular service, Personal Communications Service (PCS), and
Specialized Mobile Radio (SMR) telephony services. An estimated 261 of
these firms have 1,500 or fewer employees and 152 firms have more than
1,500 employees. Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, the Commission estimates that the majority
of wireless firms are small.
22. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite). Under the SBA small business size standard, a business is
small if it has 1,500 or fewer employees.
23. According to Commission data, 434 carriers report that they are
engaged in wireless telephony. Of these, an estimated 222 have 1,500 or
fewer employees, and 212 have more than 1,500 employees. Therefore, the
Commission estimates that 222 of these entities can be considered
small.
[[Page 30976]]
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
24. The FNPRM contains proposals that: (1) A carrier, if it already
offers blocking, ask all new subscribers whether they would like to
``opt-in'' to blocking of third-party charges on their bills and record
the subscriber's election for purposes of blocking or not blocking
third-party charges on that subscriber's bill; and (2) carriers that
already offer blocking include on all telephone bills and on their Web
sites for use by existing customers, information about the option to
block third-party charges from their telephone bills and record any
subsequent request by a current customer to block or not block third-
party charges on that subscriber's bill.
25. These proposed rules may necessitate that some carriers make
changes to their existing billing formats and/or disclosure materials
which would impose some additional costs to carriers. However, some
carriers may already be in compliance with many of these requirements
and therefore, no additional compliance efforts will be required.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
26. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
27. Any economic burden these proposed rules may have on carriers
is outweighed by the benefits to consumers. However, in the FNPRM, the
Commission specifically asks how to minimize the economic impact of our
proposals. For instance, the Commission seeks comment on the specific
costs of the measures discussed in the FNPRM, and ways the Commission
might mitigate any implementation costs. The Commission also
particularly asks whether smaller carriers face unique implementation
costs and, if so, how the Commission might address those concerns. In
addition, for example, the Commission seeks comment on alternatives for
how a carrier should obtain a consumer's opt-in to third-party charges,
if the Commission decides to adopt an ``opt-in'' approach. Finally, the
Commission seeks comment on the overall economic impact these proposed
rules may have on carriers because it seeks to minimize all costs
associated with these proposed rules.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
28. None.
Ordering Clauses
29. Pursuant to the authority contained in sections 1-2, 4, 201,
and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-
152, 154, 201, and 403, the FNPRM is adopted.
30. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of the FNPRM, including
the IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-12670 Filed 5-23-12; 8:45 am]
BILLING CODE 6712-01-P