FINAL Slamming Secretarial Letter - 12/1/99

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March 23, 2001

Re:Local Exchange Carrier (LEC) Obligations For Addressing Customer Complaints About LEC Slamming and LEC Adherence to the Federal Communications Commission (FCC) Slamming Liability Rules – M-00991322

To:All Local Exchange Carriers

With the recent implementation of the FCC's slamming liabilities rules[1], the Commission seeks to clarify LEC obligations for addressing customer complaints about LEC slamming. Given the significant number of local slamming complaints we have received over the last year, LEC adherence to both federal and state law is necessary to ensure the adequate provision of residential telephone service.

On December 1, 1999, the Commission issued a Secretarial Letter regarding “Procedures for Handling a Customer’s Grievance About an Unauthorized Switch of Local Exchange Carrier.” At that time we informed LECs, competitive and incumbent, that a dispute arising from the unauthorized change of a customer’s local residential service provider is a matter within the scope of 52 Pa. Code, Chapter 64. As stated in that letter, we expect all LECs to fulfill their obligations under Chapter 64 by treating local slamming complaints as disputes and apply the provisions covered under the Chapter 64 dispute provisions. Although the Commission has made a decision to not administer the FCC’s slamming liability rules codified at 47 C.F.R §§ 64.1100-1190, we will continue to enforce our Chapter 64 regulations, as they pertain to local service slamming.

Application of Dispute Provisions of 52 Pa. Code Chapter 64

The Commission considers LEC slamming to be a violation of the Public Utility Code as well as Section 258 of the Telecommunications Act of 1996. In our view, a customer’s complaint of alleged local exchange carrier slamming falls within the scope of Chapter 64 in that it involves, not only the provision of residential service, but also the improper termination of local service with the customer’s preferred carrier for local exchange service. The Statement of Purpose and Policy under 52 Pa. Code, Chapter 64.1 states that:

“the purpose of this chapter is to assure adequate provision of residential telephone service; to restrict unreasonable suspension or termination of or refusal to provide service; and to provide functional alternatives to suspension, termination or refusal to provide service.”

Chapter 64 sets forth in detail the procedures an LEC shall follow when a customer registers a dispute. Under §64.2, a dispute is defined as “a grievance of an applicant, customer or customer’s designee about a utility’s application of one or more provisions covered by this chapter....” The Commission expects all LECs, incumbent or competitive, to apply the Chapter 64 dispute procedures in cases where the customer alleges that his or her local service provider was changed without authorization. Moreover, it is imperative that customers do not lose their local service while attempting to have their slamming dispute resolved.

Any time a customer files an informal complaint with this Commission alleging slamming of local service, we will expect the LEC with which the customer first registered the slamming dispute to provide Commission staff with information regarding that dispute. We will also verify whether the LEC responded to the allegation in full compliance with §64.141 and §64.142. Finally, note that adherence to the dispute procedures also requires compliance with the record maintenance provisions of §64.192.

Adherence to Federal Communications Commission Anti-Slamming Rules

Section 258 of the 1996 Telecommunications Act makes it unlawful for any telecommunications carrier to “submit or execute a change in a subscriber’s selection of a provider of telephone service or telephone toll service except in accordance with such procedures as the Commission (FCC) shall prescribe.” FCC regulations require that carriers satisfy one of the following verification procedures before submitting carrier changes on behalf of customers: 1) obtain the subscriber’s written authorization; 2) obtain confirmation from the subscriber via a toll-free number provided exclusively for the purpose of confirming orders electronically; or 3) utilize an independent third party to verify the subscriber’s order. See 47 C.F.R § 64.1150. Furthermore, under Section 258 states have express authority to enforce the FCC’s verification procedures with respect to intrastate services.[2] Thus, federal and state law support obligating a LEC to determine, at a minimum, which, if any, of the FCC’s verification procedures the carrier complied with before submitting a change in a subscriber’s telephone service provider.

We also believe that LECs should inform the customer of the option of having the carrier place a preferred carrier freeze on the customer’s account to prevent slamming consistent with the FCC’s procedures for offering and administering preferred carrier freezes. See 47 C.F.R § 64.1190.

FCC Slamming Liability Rules & Complaint Resolution

As previously stated, the federal slamming liability rules became effective on November 28, 2000. The Commission expects all LECs to adhere to these rules. See 47 C.F.R. §§ 64.1100-1190. Moreover, we do not believe that these rules conflict with the LECs obligations under Chapter 64.

As explained by the FCC, a customer is not required to file a complaint with the Commission or the FCC where the unauthorized carrier resolves the customer’s dispute and the customer receives all the remedies entitled under the FCC’s rules.[3] If the customer is not satisfied with the resolution of his or her dispute, the LEC investigating the slamming complaint must inform the customer of the option of filing a complaint with the Commission and the FCC, along with providing information on the relevant filing requirements. In this way, the LEC fulfills its obligations under the both the FCC’s rules and our Chapter 64 regulations.

Finally, the Commission believes that the FCC is the appropriate government agency for addressing carrier-to-carrier liability disputes. Chapter 64 does not have remedies to resolve the matters addressed in these disputes.

Summary of LEC Obligations

When a customer contacts the unauthorized carrier or authorized carrier and alleges that an unauthorized change in local service providers has occurred, we expect the unauthorized carrier or authorized carrier to do the following:

1. Take the necessary action to return the customer to his or her authorized LEC at the rates the customer was paying to the authorized carrier at the time of the unauthorized change. This action is in accordance with the FCC’s amended anti-slamming rules at 47 C.F.R 64.11540 (b) (1).

1. Clearly explain to the customer that the company is setting aside any disputed charges pending resolution of the dispute. Inform the customer that he or she must pay the undisputed charges. See 52 Pa. Code §64.141(3). The authorized carrier should also advise the customer about the option of requesting a preferred carrier freeze in accordance with the FCC’s rules.

1. Investigate the matter using reasonable methods, which may include telephone contacts and personal contacts with the customer. See 52 Pa. Code §64.141(2). In order to comply with §64.141(5), the LEC investigating the slamming complaint must complete the dispute process within 30 days, and provide information on the method of verification used to confirm the customer’s authorization consistent with the FCC’s verification procedures. If the LEC investigating the matter is relying on the alleged unauthorized carrier to provide proof of verification, and the alleged unauthorized carrier fails to provide this proof within 20 days of receiving the request, then the investigating LEC is justified in concluding that there is no verification and justified in sustaining the customer’s allegation.

1. Within 20 days or less after notification of the complaint, the alleged unauthorized carrier is to provide a copy of any valid proof of verification of the carrier change. Failure by the carrier to respond or provide proof of verification will be presumed to be clear and convincing evidence of a violation.

1. Follow the FCC procedures for absolution of billing charges for the first 30 days and reimbursement of payments (as outlined at 47 C.F.R §§64.1160-1170) where appropriate.

1. Within 30 days of the registration of the dispute by the customer, review findings with the customer and clearly outline the results of the investigation as follows:

• If the customer is satisfied with the dispute resolution, the LEC utility report may be limited to the information required by §64.142(1) and (2), and if applicable, §64.142(7). See 52 Pa. Code §64.141(5)(ii))

• If the customer expresses satisfaction but requests a written report, a written report shall be provided. The report shall conform with all provisions of §64.142 (regulating content of written summary by the LEC).

1. If the customer is not satisfied with the dispute resolution, provide information to the customer that conforms to the utility report requirements at §64.142 (relating to contents of the LEC report). See 52 Pa. Code §64.141(5)(i). The company shall also explain the customer’s options and rights including the right to file an informal complaint with the Public Utility Commission and the right to file a complaint with the Federal Communications Commission.

Prosecution of Slammers

The Commission has authorized the Office of Trial Staff (OTS) to initiate Section 701 complaint proceedings involving, but not limited to, allegations of unlawful slamming in the telecommunications industry. The Commission’s OTS is prepared, with the technical assistance of BCS, to invoke that authority to stop slamming in Pennsylvania and to ensure compliance with the clarification set forth in this Secretarial Letter. The Commission may also refer any slamming matter to the Office of the Attorney General for additional enforcement action under Pennsylvania law as appropriate.

If you have any questions about this letter or about the procedures outlined herein, please contact Lenora Best at (717) 783-9090 (e-mail address is ) or Peggy Hartman at (717) 772-08306 (e-mail address is ), with the Commission's Bureau of Consumer Services.

Sincerely,

James J. McNulty

Secretary

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[1]Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996; Policies and Rules Concerning Unauthorized Changes of Consumers Long Distance Carriers; CC Docket No. 94-129 (First Order On Reconsideration) Released May 3, 2000. The new rules went into effect on November 28, 2000.

[2] Therefore, Section 258 supports the clarification of Chapter 64 set forth in this Secretarial Letter.

[3]See CC Docket No. 94-129, First Order on Reconsideration, Released May 3,2000 (¶¶ 33 and 34).