28580.mod.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE EXAMINATION WHETHER THE COMMISSION SHOULD ADMINISTER THE FEDERAL COMMUNICATION COMMISSION’S NEW SLAMMING RULES, 47 C.F.R. §§ 64.1100 et seq. )
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CASE NO. GNR-T-00-38

NOTICE OF MODIFIED PROCEDURE

ORDER NO. 28580

The Federal Communications Commission (FCC) recently promulgated new regulations that prohibit telecommunications carriers from submitting or executing an unauthorized change in a telephone customer’s selection of a local or long-distance carrier. This fraudulent practice is commonly referred to as “slamming.” The FCC has encouraged state commissions to administer the new slamming rules. Given this invitation, the Commission on its own Motion initiates this inquiry whether it should adopt and administer the FCC’s new slamming rules. If adopted, the Commission would investigate slamming complaints filed by Idaho customers and carriers regarding both intrastate and interstate telecommunication services. The slamming rules were published in the Federal Register at 65 Fed. Reg. 47,690-693 (August 3, 2000).
THE FCC’s SLAMMING RULES
A. State-Federal Partnership
On May 3, 2000, the FCC issued its First Order on Reconsideration implementing Section 258 of the federal Telecommunications Act of 1996. First Order on Reconsideration (hereinafter “First Order”) CC Docket No. 94-129, FCC 00-135 (May 3, 2000). Section 258 prohibits telecommunications carriers from submitting or executing an unauthorized change (i.e., slamming) in a customer’s selection of a provider of local or long-distance service. 47 U.S.C. § 258(a). In adopting the new slamming rules, the FCC recognized that its previous rules “had failed to deter carriers from engaging in slamming.” First Order, FCC 00-135 at ¶ 3. In the new rules, the FCC provided that slamming disputes between customers and carriers “be brought before appropriate state commissions, or [the FCC] in cases where the state has not opted to administer [the FCC] rules….” Id. at ¶ 1; 65 Fed. Reg. 47,678 (August 3, 2000).
In its amended slamming rules, the FCC found that it is in “the public interest to have state commissions . . . perform the primary administrative functions of our slamming liability rules.” 65 Fed. Reg. 47,681 at ¶ 20. The FCC observed that Section 258 of the federal Act “contemplates a state and federal partnership to deter slamming.” Id. The FCC noted that joint state-federal activity “have been very effective in protecting consumers against various types of telecommunications fraud.” “It is imperative that the states and the FCC continue to cooperate, and expand their interaction, in order to eradicate slamming.” Id.
In inviting state commissions to administer the new slamming rules, the FCC noted that state commissions have extensive experience in handling and resolving consumer complaints against telecommunications carriers. 65 Fed. Reg. 47,682 at ¶ 21. The FCC found that there are several advantages with partnering with the states to deter slamming. In particular, the FCC recognized that having state commissions enforce slamming rules will
provide consumers with a single point of contact for each state, thereby enabling slammed consumers to rectify their situations, receive refunds, and get appropriate relief with one phone call. State commissions will also be able to provide consumers and carriers with timely processing of slamming disputes. Finally, but of critical importance, states will provide a neutral forum for the resolution of slamming disputes.

Id. at ¶ 22. If state commissions decline or are unable to administer the new rules, customers may file a written slamming complaint with the FCC. Id. at ¶ 23. According to the National Association of Regulatory Utilities Commissions (NARUC), 31 state commissions have opted to administer the new slamming rules.
At the time the FCC issued its amended slamming rules in May 2000, several of its rules were suspended until the Office of Management and Budget (OMB) approved of the collection of certain information. On October 3, 2000, OMB issued its approval. Consequently, the FCC issued a Notice in the Federal Register on November 8, 2000, stating that its amended slamming rules will become effective on November 28, 2000. 65 Fed. Reg. 66,934 (November 8, 2000).
B. Resolving Slamming Complaints
In amending its slamming rules, the FCC noted that the amendments were to take the profit out of slamming by absolving subscribers of liability for some slamming charges. “These new liability rules were designed to ensure that carriers could not profit from slamming activities, as well as to compensate subscribers for the inconvenience and confusion experienced due to slamming.” First Order, FCC 00-135 at ¶ 3. The rules provide different remedies for customers depending whether customers have paid the slamming carrier.
If the customer has been slammed by an unauthorized carrier, the customer is absolved of all liability for calls made within the first 30 days of being slammed. For example, if a customer’s long-distance service is slammed, the customer does not have to pay the unauthorized carrier for long-distance services for up to 30 days after being slammed. First Order, FCC 00-135 at ¶¶ 3, 6-12; 65 Fed. Reg. at 47,679-80. Charges for calls made beyond the 30-day limit must be paid by customers to the authorized carrier at the authorized carrier’s rates, even though the service was provided by the slamming carrier.
If customers have paid their telephone bills and subsequently discover they have been slammed, the slamming company must pay the authorized carrier 150% of the charges it received from the customer. Out of this amount, the authorized carrier will then be allowed to retain 100% of the collected charges. The remaining 50% of the charges will be reimbursed to the customer. First Order, FCC 00-135 at ¶¶ 16-21; 65 Fed. Reg. at 47,680-81.
When an alleged unauthorized carrier is informed by a customer of an alleged slam, the carrier must remove all charges assessed for the first 30 days of service from the customer’s bill. The carrier shall notify the customer that he or she must file a complaint with the Commission within 30 days if the customer is not satisfied with the resolution of the dispute with the carrier. 65 Fed. Reg. 47,683 at ¶¶ 28-30.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that in light of the FCC’s authorization and encouragement that state commissions administer the new slamming rules, the Commission seeks comment regarding whether it should administer the FCC slamming rules. As the FCC recognized, state commissions are uniquely qualified to investigate and resolve consumer complaints against telecommunications carriers. If the FCC rules are adopted, the Commission contemplates that it would entertain slamming complaints in the same manner as it currently receives informal complaints regarding utility services: in person, by mail, by e-mail, or by telephone. When investigating slamming complaints filed by carriers or consumers, the Commission’s Consumer Assistance Staff would investigate the informal complaint.
When investigating slamming complaints, the federal rules require the alleged unauthorized carrier to provide to the appropriate state commission (or the FCC) a copy of the valid proof of verification of the carrier change. 65 Fed. Reg. 47,683 at ¶ 32. The Commission invites interested persons to submit comments whether other documents such as a copy of relevant telephone bill(s) showing the slammed calls and other relevant evidence should be submitted to the Commission’s Consumer Assistance Staff. The Commission also seeks comment on whether these documents should be submitted not later than 10 business days after notification that a complaint has been filed against the alleged unauthorized carrier. At the conclusion of its investigation, the Commission proposes that the Consumer Assistance Staff issue a written determination to the customer, alleged unauthorized carrier, and the authorized carrier.
The FCC rules provide that any challenges to the factual determination regarding a slamming complaint “be made in accordance with the relevant review provisions that are applicable to each state commission.” Id. at ¶ 33. As the case with informal complaints submitted to this Commission for resolution, the Commission envisions that appeals from the Consumer Assistance Staff’s determination of the slamming complaint be filed as a formal complaint with the Commission similar to the procedures outlined in the Commission’s Rules of Procedure, IDAPA 31.01.01.054 (Formal Complaints). The Commission seeks comment whether appeals from the Staff’s determination should be filed as formal complaints within 10 business days or some other suitable time limit.
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public interest may not require a formal hearing in this matter and will proceed under Modified Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules of Procedure, IDAPA 31.01.01.201 through -.204.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this matter or comment on the issues set out above may file a written comment in support or opposition with the Commission within twenty-one (21) days from the date of this Notice. The comment must contain a statement of reasons supporting the comment. Persons desiring a hearing must specifically request a hearing in their written comments. Written comments concerning this proceeding shall be mailed to the Commission at the address reflected below:

COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074

Street Address for Express Mail:
472 W WASHINGTON ST
BOISE, ID 83702-5983
All comments should contain the case caption and case number shown on the first page of this document.
YOU ARE FURTHER NOTIFIED that if no written comments are received within the time limit set, the Commission will consider this matter on its merits and enter its findings without a formal hearing. If written comments are received within the time limit set, the Commission will consider them and, in its discretion, may set the same for formal hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant to the Commission’s jurisdiction under Titles 61 and 62 of the Idaho Code and that the Commission may enter any final Order consistent with its authority under Titles 61 and 62 and specifically Idaho Code §§ 61-302, 61-507 and 62-622(5).
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted pursuant to the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
O R D E R
IT IS HEREBY ORDERED that the Commission initiates this proceeding on its own motion to examine the reasonableness of administering the FCC’s new slamming rules. Persons interested in submitting written comments regarding this matter and the questions specifically set out in the body of this Order are encouraged to submit written comments within 21 days of the date of this Order.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of November 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28580 1

Office of the Secretary
Service Date
December 4, 2000