*Pages 1--37 from Microsoft Word - 45154.doc* Federal Communications Commission DA 05- 19 Federal Communications Commission 2004 Biennial Regulatory Review Docket No. CG 04- 175 Consumer & Governmental Affairs Bureau Staff Report January 5, 2005 1 Federal Communications Commission DA 05- 19 I. OVERVIEW 1. This Staff Report summarizes the findings of a review by the Consumer & Governmental Affairs Bureau (CGB or the Bureau) of the Federal Communications Commission’s rules under CGB’s purview. Accompanying this report is a rule part analysis that identifies and explains the purpose of each applicable rule or rule part, discusses the impact of economic competition on the rule, summarizes and addresses comments filed, and where appropriate as the result of meaningful economic competition between telecommunications service providers, recommends modification or repeal of the rule or rule part. 2. This report and analyses are part of the Commission’s biennial regulatory review process, as required by section 11 of the Communications Act of 1934, as amended. 1 This report continues and builds upon the findings and recommendations made in the 2002 Biennial Regulatory Review. 2 The information herein represents staff findings and recommendations, and thus does not reflect formal Commission opinions or binding determinations. II. SCOPE OF REVIEW 3. The Consumer & Governmental Affairs Bureau was formed as part of the overall reorganization of the Commission that was approved by Congress on March 28, 2002. The Bureau advises the Commission on consumer policy concerning the Commission’s regulated entities, including common carrier, broadcast, wireless, satellite and cable companies. 4. In addition, the Bureau advises the Commission, through the Disability Rights Office, on issues relevant to persons with disabilities. The Bureau engages in rulemakings, and reviews rulemakings and orders originating in other Bureaus and Offices, to develop recommendations and propose policies to ensure that telecommunications services and technologies are accessible to persons with disabilities, in conformance with existing disability laws and policies, and consistent with the Commission's goal of increasing accessibility of telecommunications services and technologies for persons with disabilities. 5. The Bureau also provides informal mediation and resolution of individual informal consumer inquiries and complaints consistent with controlling laws and Commission regulations, and in accordance with the Bureau’s delegated authority. Additional functions of the Bureau include the development and implementation of consumer outreach and education initiatives and the performance of intergovernmental affairs on behalf of the Commission. 6. As part of the review process, the Consumer & Governmental Affairs Bureau has reviewed all of the rules within each of the following parts that apply to “the operations or activities of any provider of telecommunications service:” 3 1 47 U. S. C. § 161. 2 See 2002 Biennial Regulatory Review, Report, 18 FCC Rcd 4410 (2002)( 2002 Report). 3 See The Commission Seeks Public Comment in the 2004 Biennial Review of Telecommunications Regulations, Public Notice, 19 FCC Rcd 9090 (2004). 2 Federal Communications Commission DA 05- 19 1 Part 1 – Practice and Procedure – Sections 1.716 through 1.719 set forth rules for the filing of informal complaints. Part 6 – Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities – Outlines the obligations of manufacturers and providers of telecommunications services to ensure that their equipment and services are accessible to persons with disabilities. Part 7 – Access to Voicemail and Interactive Menu Services and Equipment by People with Disabilities – Outlines the obligations of providers of voicemail and interactive menu services and manufacturers of telecommunications equipment which performs a voicemail or interactive menu function to ensure that these services and functions are accessible to persons with disabilities. Part 64 – Miscellaneous Rules Relating to Common Carriers – Addresses a broad range of common carrier issues. Specifically: Subpart B (Indecent Telephone Message Services); Subpart F (Telecommunications Relay Services); Subpart G (Telephone Operator Services - sections 64.703- 705, 64.707- 710); Subpart K (Changing Long Distance Service); Subpart L (Restrictions on Telephone Solicitation); Subpart O (Interstate Pay- Per- Call and Other Information Services); Subpart P (Calling Party Telephone Number; Privacy); Subpart Y (Truth- in- Billing Requirements for Common Carriers). Part 68 – Connection of Terminal Equipment to the Telephone Network – Establishes conditions for direct connection to the network of registered terminal equipment to prevent network harm and ensure that telephones are compatible with hearing aids. (CGB is only responsible for the rules in this part relating to hearing aid compatibility and, in addition, section 68.318( c) (Line seizure by automatic telephone dialing systems) and section 68.318( d) (Telephone facsimile machines; Identification of the sender of the message)). III. RECENT ACTIVITIES 7. Telecommunications Relay Services. The Commission has taken several actions in its continuing efforts to ensure that telecommunications services are accessible to persons with disabilities. On June 17, 2003, the Commission released a Second Report and Order, Order on Reconsideration, and Notice of Proposed Rulemaking adopting new TRS services and features, and proposing additional TRS services and features, consistent with the goal of functional equivalency. 4 8. On June 30, 2003, CGB released the 2003- 2004 TRS rate Order, which adopted the per- minute compensation rates for traditional TRS and IP Relay, Speech- to- Speech, and Video Relay Service (VRS). 5 In this order, CGB examined the cost and demand data submitted by the providers, and determined that some of the costs submitted for the provision of VRS were 4 In the Matter of Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Second Report and Order, Order on Reconsideration, and Notice of Proposed Rulemaking, 18 FCC Rcd 12379 (2003). 5 In the Matter of Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Order, 18 FCC Rcd 12823 (2003). 3 Federal Communications Commission DA 05- 19 2 not allowable under the statute and cost recovery regulations. Therefore, CGB disallowed some costs for VRS, and as a result, did not adopt the National Exchange Carrier Association’s (NECA) proposed compensation rate for VRS of approximately $14 per minute, but instead adopted a rate of approximately $7 per minute. As a result, the size of the Interstate TRS Fund was decreased by over $15 million, money ultimately saved by consumers. 9. On August 1, 2003, the Commission released the captioned telephone voice carry over (VCO) service Declaratory Ruling, which recognized this service as another form of TRS eligible for compensation from the Interstate TRS Fund. 6 Captioned telephone VCO service uses a telephone that looks similar to a traditional telephone but also has a text display that allows the user, on one standard telephone line, to both listen to the other party speak and simultaneously read captions of what the other party is saying. This way, a typical user of this service, who has the ability to speak and some residual hearing, can both listen to what is said over the telephone and read captions for clarification. 10. On June 30, 2004, the Commission released a Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking that comprehensively addressed the provision, regulation, and compensation of the various forms of TRS. 7 That order generally affirmed the June 30, 2003, Bureau rate order, but revised upward the VRS compensation rate. In addressing cost recovery issues, that order clarified that determining the annual compensation rates is not “rate making,” that the “reasonable” costs for which providers may be compensated do not include profits or a markup on expenses, and that engineering and research and development costs that relate to providing services and features beyond the applicable mandatory minimum standards are not compensable. The order emphasized that the purpose of the cost recovery scheme is to permit providers to recovery their reasonable costs of providing TRS, which they are obligated to do as an accommodation for persons with certain disabilities. 11. Finally, also on June 30, 2004, the CGB released the 2004- 2005 TRS rate Order, which adopted NECA’s recommended per- minute compensation rates for traditional TRS and IP Relay, Speech- to- Speech, and Video Relay Service (VRS). 8 12. Slamming. In order to further aid consumers, on March 17, 2003, the Commission released a Third Order on Reconsideration and Second Further Notice of Proposed Rulemaking, Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996/ Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance in Docket No. 94- 129 amending the Part 64, Subpart K rules to clarify and strengthen its telephone slamming rules and ask for comment on whether to expand the minimum content requirements for third party verifications. The Commission clarified that local exchange carriers executing carrier change requests can be held liable for unauthorized carrier changes; modified the “drop- off” requirement to allow sales agents, in certain circumstances, to 6 In the Matter of Telecommunications Relay Services, and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Declaratory Ruling, 18 FCC Rcd 16121 (2003). 7 Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking, 19 FCC Rcd 12475 (2004). 8 Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Order, 19 FCC Rcd 12224 (2004). 4 Federal Communications Commission DA 05- 19 3 remain silent on the line during verification; and discontinued the requirement that carriers file FCC Form 478. These changes became effective on July 21, 2003. 13. On July 16, 2004, as part of the 2000 Biennial Review effort, the Commission released a First Order on Reconsideration in Docket 00- 257 and Fourth Order on Reconsideration in Docket 94- 129 amending the Part 64, Subpart K rules to address issues raised in petitions for reconsideration of our Streamlining Order and certain ancillary slamming issues relating to switchless resellers that were raised in these dockets, but had not yet been resolved. The Commission clarified that acquiring carriers will continue to pay switching fees for acquired customers unless a state regulatory agency has ordered the exiting carrier to pay, denied requests for modification of our notice requirements under our streamlined carrier change procedures, denied a request for a change to our carrier freeze rules, and denied a request that switchless resellers must obtain carrier identification codes. 14. In addition, on November 24, 2004, the Commission released a Fifth Order on Reconsideration in Docket 94- 129 which denied petitions filed by a number of independent LECs seeking reconsideration of the Commission’s verification requirement for in- bound carrier change request calls. 9 This Fifth Order on Reconsideration also granted in part a petition filed by AT& T which sought clarification that the slamming rules would not be triggered when a subscriber requests merely to add additional lines to existing service, or when requesting new service installation. Finally, the Fifth Order on Reconsideration denied a petition by MCI asking that credits made to consumers before a slamming complaint had been filed be considered “unpaid” when calculating liability, or be deducted from the amount owed the authorized carrier by a carrier found liable for slamming. 15. Restrictions on Telephone Solicitation. On September 18, 2002, the Commission released a Notice of Proposed Rulemaking seeking comment on whether any of its telemarketing rules need to be revised or additional rules need to be adopted to more effectively carry out Congress’s directives in the Telephone Consumer Protection Act (TCPA). 10 16. On June 26, 2003, the FCC adopted an Order updating its TCPA rules and establishing a national do- not- call registry for consumers who wish to avoid telemarketing calls. 11 The registry is nationwide in scope, includes all telemarketers (with the exception of certain non- profit organizations), and covers both interstate and intrastate telemarketing calls. 17. Industry estimates indicate that telemarketers may attempt as many as 104 million calls to consumers and businesses every day. The Commission also cited dramatic increases in telemarketer use of autodialers, which deliver prerecorded messages to thousands of potential customers every day, and predictive dialers, which initiate phone calls while telemarketers are 9 In the Matter of 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 94- 129, Fifth Order on Reconsideration, FCC 04- 214 (rel. November 24, 2004). 10 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, CC Docket No. 92- 90, Notice of Proposed Rulemaking and Memorandum Opinion and Order, FCC 02- 250 (rel. Sep. 18, 2002). 11 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Report and Order, 18 FCC Rcd 14014 (2003). 5 Federal Communications Commission DA 05- 19 4 talking to other consumers and which frequently abandon calls before a telemarketer is free to take the next call. The Commission has implemented the do- not- call registry in conjunction with the Federal Trade Commission (FTC). The national database is administered by the FTC and enforcement is being coordinated between the FCC, the FTC and the states. 18. In the Order, the FCC also adopted restrictions on the use of predictive dialers in an effort to reduce the number of “hang- up” and “dead air” calls consumers experience. In addition, it specified that telemarketers cannot block caller ID information and tightened its existing rules on unsolicited faxes to require that express permission be obtained in writing by companies before sending faxed advertisements to its customers. Finally, the Order establishes an exemption to permit calls by a marketer to friends, family members and acquaintances. 19. In addition, the Commission released on August 18, 2003, an Order on Reconsideration delaying the effective date of the written consent requirement for fax advertising until January 1, 2005. 12 The delay was intended to give parties additional time to obtain the recipients’ written permission, and to allow the Commission the opportunity to review the petitions for reconsideration filed on this issue. 20. On March 19, 2004, the Commission released an NPRM and FNPRM seeking comment on two issues relating to the TCPA. 13 Specifically, the Commission sought comment on whether to adopt a limited safe harbor period during which a telemarketer will not be liable for violating the rule prohibiting autodialed and prerecorded message calls to wireless numbers for calls made to numbers that have been recently ported from wireline to wireless service. On August 25, 2004, the Commission adopted an Order which: 1) created a limited safe harbor period from the TCPA’s prohibition on calls to wireless numbers. 14 Persons will not be liable for placing autodialed and prerecorded message calls where such calls are made to a wireless number ported from wireline service within the previous 15 days, provided the number is not already on the national do- not- call registry or the caller’s company- specific do- not- call list. A limited safe harbor will provide a reasonable opportunity for persons to identify numbers that have been ported from wireline service. 21. The Order also amends the existing national do- not- call registry safe harbor provision to require telemarketers to access the registry and scrub their call lists of those numbers on the registry every 31 days. The rule change will become effective on January 1, 2005. This amendment will benefit consumer privacy interests by reducing from three months to 31 days the maximum period within which telemarketers must update their database of numbers registered on the national do- not- call list in order to qualify for the safe harbor protections. We also believe this action is consistent with the intent of Congress, which directed the FTC in the Consolidated Appropriations Act of 2004 to amend its corresponding safe harbor rule in a similar 12 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Order on Reconsideration, 18 FCC Rcd 16972 (2003). 13 Rules and Regulations Implementing the Controlling the Assault of Non- Solicited Pornography and Marketing Act of 2003; Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 04- 53, CG Docket No. 02- 278, Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, 19 FCC Rcd 5056 (2004). 14 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Order, FCC 04- 204 (rel. September 21, 2004). 6 Federal Communications Commission DA 05- 19 5 manner. Absent action to amend our safe harbor rule, many telemarketers would face inconsistent standards since the FTC’s jurisdiction extends only to certain entities while our jurisdiction extends to all telemarketers. 22. On October 1, 2004, the Commission released an Order extending for a period of six months the effective date of the written consent requirement for sending unsolicited facsimile advertisements. 15 The Commission believes that the public interest will best be served by delaying the effective date of the written consent requirement to allow either Congress to act on pending legislation or the Commission to address the petitions for reconsideration filed on these issues. 23. Interstate Pay- Per- Call. In July, the Commission released a Notice of Proposed Rulemaking on its interstate pay- per- call rules, seeking comment on possible modifications to address circumvention of the rules. 16 24. Calling Party Telephone Number. In July of 2003, the Commission revised its rules under the Telephone Consumer Protection Act (TCPA) to address changes in the telemarketing marketplace. Among other things, the Commission adopted new rules at 64.1601( e) to require telemarketers to transmit caller identification (caller ID) information and, when available, by the telemarketer’s carrier, the name of the telemarketer. In addition, telemarketers are prohibited from blocking the transmission of caller ID information. The Commission determined that caller ID allows consumers to screen out unwanted calls and to identify companies that they wish to ask not to call again. 25. Connection of Terminal Equipment to the Telephone Network. In July of 2003, the Commission revised its rules under the Telephone Consumer Protection Act (TCPA) to address changes in the telemarketing marketplace. Among other things, the Commission amended the rule at 68.318( d) to address certain activities by facsimile broadcasters. The rules require that if a facsimile broadcaster demonstrates a high degree of involvement in the sender’s facsimile messages, such as supplying the numbers to which a message is sent, that broadcaster’s name, under which it is registered to conduct business with the State Corporation Commission (or comparable regulatory authority) must be identified on the facsimile along with the sender’s name. 26. In addition to these efforts, the Commission released on August 14, 2003, a Report and Order modifying the exemption for wireless phones under the Hearing Aid Compatibility Act of 1988 (HAC) to require that digital wireless phones be capable of being effectively used with hearing aids. The order found that requiring such phones to be accessible to hearing aids by requiring digital phone manufacturers and service providers to reduce the amount of interference from digital wireless phones would extend the benefits of wireless telecommunications to individuals with hearing disabilities, including emergency, business, and 15 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Order, FCC 04- 233 (rel. October 1, 2004). 16 Policies and Rules Governing Interstate Pay- Per- Call and Other Information Services Pursuant to the Telecommunications Act of 1996; Policies and Rules Governing Interstate Pay- Per- Call and Other Information Services, and Toll- free Number Usage; Truth- in- Billing and Billing Format; CC Docket Nos. 96- 146 and 98- 170, CG Docket No. 04- 244, Notice of Proposed Rulemaking, FCC 04- 162 (rel. July 16, 2004). 7 Federal Communications Commission DA 05- 19 6 social communications. 27. In conjunction with other Bureaus and Offices, CGB also continues to develop consumer alerts, consumer fact sheets, education campaigns and media outreach campaigns to give consumers information about telecommunications products and services, their rights, and information so that they can make informed choices and protect themselves against unscrupulous practices. 8 Federal Communications Commission DA 05- 19 1 APPENDIX: RULE PART ANALYSIS Part 1, Subpart E – Complaints, Applications, Tariffs, and Reports Involving Common Carriers, Informal Complaints, Sections 1.716- 1.719. Description 1. Part 1, Subpart E implements section 208 of the Communications Act of 1934, as amended. 1 Section 208 permits any person to lodge a complaint with the Commission against a common carrier alleging a violation of the Communications Act. Subpart E establishes the rules for the submission and treatment of two categories of complaints against common carriers. These are “Formal Complaints,” which are governed by sections 1.720 – 1.736, and “Informal Complaints,” which are governed by sections 1.716- 1.719. 2 The Informal Complaint rules emphasize ease of filing by consumers, and voluntary cooperative efforts by consumers and affected companies to resolve their differences informally. The Consumer & Governmental Affairs Bureau’s analysis of Part 1, Subpart E will be limited to “Informal Complaints” governed by sections 1.716 - 1.719. Purpose 2. Part 1, Subpart E, Informal Complaints, sections 1.716 -1.719, sets forth procedures for the receipt and review of informal complaints against common carriers. Such complaints include complaints against a common carrier submitted outside the formal section 208 common carrier complaint process. These rules are designed to facilitate the efficient and expeditious processing of complaints submitted pursuant to section 208 by consumers in order to promote maximum compliance with the requirements of the Communications Act, as amended, and the Commission’s rules and implementing orders. Analysis Status of Competition 3. Section 208 authorizes complaints against all common carriers involving any of their obligations. These essentially procedural rules facilitate consumer complaints against common carriers and have not been impacted by competition. 1 47 U. S. C. § 208. 2 Section 1.719 of the Commission’s rules governs the treatment of informal complaints filed pursuant to section 258 of the Telecommunications Act of 1996 (47 U. S. C. § 258). Section 258 prohibits “slamming,” the submission or execution of an unauthorized change in a subscriber’s selection of a provider of telecommunications service. 9 Federal Communications Commission DA 05- 19 2 Recent Efforts 4. No recent efforts. Comments 5. No comments received. Recommendation 6. The staff does not recommend any changes to the informal complaint rules as part of the Biennial Review. The informal complaint rules facilitate the efficient and expeditious processing of complaints submitted pursuant to section 208 by consumers in order to promote maximum compliance with the requirements of the Communications Act, as amended, and the Commission’s rules and implementing orders. Moreover, because these informal complaint procedural rules are not competition- related, we cannot find these rules are no longer necessary in the public interest as a result of meaningful economic competition. Accordingly, the staff concludes that the rules remain necessary in the public interest and recommends that repeal or modification is not warranted. 10 Federal Communications Commission DA 05- 19 3 Part 6 – Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities Description 7. Part 6 implements sections 255 and 251( a)( 2) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996. 3 Sections 255 and 251( a)( 2) require manufacturers of telecommunications equipment and providers of telecommunications services to ensure that such equipment and services are accessible to persons with disabilities, if readily achievable. The rules also establish complaint procedures to provide aggrieved parties an unqualified option to pursue an accessibility claim against a manufacturer or service provider informally or through more formal adjudicatory procedures. Purpose 8. The purpose of the rules is to bring the benefits of advances in telecommunications to all Americans, including those who face accessibility barriers to telecommunications products and services. Analysis Status of Competition 9. Not relevant. As noted above, Part 6 implements sections 255 and 251( a)( 2) of the Communications Act of 1934, as amended by the Telecommunications Act of 1996. 4 These provisions are intended to bring the benefits of advances in telecommunications to all Americans, including those who face accessibility barriers to telecommunications products and services by requiring manufacturers of telecommunications equipment and providers of telecommunications services to ensure that such equipment and services are accessible to persons with disabilities, if readily achievable. Accordingly, the realization of these benefits is not determined by economic competition. 3 47 U. S. C. §§ 255, 251( a)( 2). See Implementation of Section 255 and 251( a)( 2) of the Communications Act of 1934, as enacted by the Telecommunications Act of 1996; Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities, WT Docket No. 96- 198, FCC 99- 181, Report and Order and Further Notice of Inquiry, 16 FCC Rcd 6417 (rel. Sep. 29, 1999). 4 47 U. S. C. §§ 255, 251( a)( 2). See Implementation of Section 255 and 251( a)( 2) of the Communications Act of 1934, as enacted by the Telecommunications Act of 1996; Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities, WT Docket No. 96- 198, FCC 99- 181, Report and Order and Further Notice of Inquiry, 16 FCC Rcd 6417 (rel. Sep. 29, 1999) 11 Federal Communications Commission DA 05- 19 4 Recent Efforts 10. No recent efforts. Comments 11. No comments received. Recommendation 12. The staff does not recommend changes to Part 6 as part of the Biennial Review. The rules serve to bring the benefits of advances in telecommunications to all Americans, including those who face accessibility barriers to telecommunications products and services to ensure their full participation in our society. Moreover, because these rules are not competition- related, we cannot find these rules are no longer necessary in the public interest as a result of meaningful economic competition. We accordingly conclude that Part 6 remains necessary in the public interest and recommend that repeal or modification is not warranted. 12 Federal Communications Commission DA 05- 19 5 Part 7 – Access to Voicemail and Interactive Menu Services and Equipment by People with Disabilities Description 13. Part 7 implements sections 255 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996. 5 Section 255 requires manufacturers of telecommunications equipment and providers of telecommunications services to ensure that such equipment and services are accessible to persons with disabilities, if readily achievable. Part 7 extends these accessibility requirements to the providers of voicemail and interactive menu services and to the manufacturers of the equipment that perform those functions. The rules also establish complaint procedures to provide aggrieved parties an unqualified option to pursue an accessibility claim against a manufacturer or service provider informally or through more formal adjudicatory procedures. Purpose 14. The purpose of the rules is to bring the benefits of advances in telecommunications to all Americans, including those who face accessibility barriers to telecommunications products and services. This will ensure their full participation in our society by extending these accessibility requirements of section 255 to the providers of voicemail and interactive menu services and to the manufacturers of the equipment that performs these functions. Analysis Status of competition 15. Not relevant. As noted above, Part 7 implements section 255 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996. 6 This provision is intended to bring the benefits of advances in telecommunications to all Americans, including those who face accessibility barriers to telecommunications products and services by requiring manufacturers of telecommunications equipment 5 47 U. S. C. § 255. See Implementation of Section 255 and 251( a)( 2) of the Communications Act of 1934, as Enacted by the Telecommunications Act of 1996; Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities, WT Docket No. 96- 198, FCC 99- 181, Report and Order and Further Notice of Inquiry, 16 FCC Rcd 6417 (rel. Sep. 29, 1999). 6 47 U. S. C. §§ 225, 251( a)( 2). See Implementation of Section 255 and 251( a)( 2) of the Communications Act of 1934, as enacted by the Telecommunications Act of 1996; Access to Telecommunications Service, Telecommunications Equipment and Customer Premises Equipment by Persons with Disabilities, WT Docket No. 96- 198, FCC 99- 181, Report and Order and Further Notice of Inquiry, 16 FCC Rcd 6417 (rel. Sep. 29, 1999). 13 Federal Communications Commission DA 05- 19 6 and providers of telecommunications services to ensure that such equipment and services are accessible to persons with disabilities, if readily achievable. Part 7 extends these accessibility requirements to the providers of voicemail and interactive menu services and to the manufacturers of the equipment that perform those functions. Accordingly, the realization of these benefits is not determined by economic competition. Recent Efforts 16. No recent efforts. Comments 17. No comments received. Recommendation 18. The staff does not recommend changes to Part 7 as part of the Biennial Review. The rules serve to bring the benefits of advances in telecommunications to all Americans, including those who face accessibility barriers to telecommunications products and services, ensuring their full participation in our society. Moreover, because these rules are not competition- related, we cannot find these rules are no longer necessary in the public interest as a result of meaningful economic competition. We accordingly conclude that Part 7 remains necessary in the public interest and recommend that repeal or modification is not warranted. 14 Federal Communications Commission DA 05- 19 7 PART 64, Subpart B – Restrictions on Indecent Telephone Message Services Description 19. Part 64, Subpart B implements the provisions of section 223( b) of the Communications Act of 1934, as amended, relating to defenses to prosecution for indecent commercial communications. 7 Section 223( b) prohibits the use of the telephone for the purpose of obscene commercial communications. It also prohibits use of the telephone for indecent commercial communications without the consent of the other party and prohibits use of the telephone for indecent commercial communications that are available to anyone under 18 years of age. Section 223( b) also provides for certain defenses to prosecution for making indecent commercial communications. 20. Under section 64.201 of the Commission’s rules, a provider of indecent commercial telephone communications has a defense to prosecution if the provider has notified the common carrier that the provider is engaged in providing indecent commercial communications, and does one of the following: (1) requires credit card payment before transmitting the message; (2) requires an authorized access or identification code, which has been established by mail, before transmitting the message; or (3) scrambles the message so that the audio is unintelligible and incomprehensible without a descrambler. Subpart B also provides a defense to prosecution for message sponsor subscribers to mass announcement services if they ask the carrier to take certain precautions. In addition, Subpart B bars common carriers, to the extent technically feasible, from providing access to obscene or indecent communications from the telephone to anyone who has not previously requested access to such services in writing if the carrier provides billing and collection for the provider of the obscene or indecent communications. Purpose 21. Part 64, Subpart B is intended to implement the statutory restrictions on the commercial provision by telephone of indecent communications consistent with the First Amendment. In particular, Subpart B is intended to protect minors and non-consenting adults from indecent communications. Analysis Status of Competition 22. Not relevant. As noted, Part 64, Subpart B is intended to protect minors and non- consenting adults from indecent communications by implementing restrictions on 7 47 U. S. C. § 223( b). 15 Federal Communications Commission DA 05- 19 8 the commercial provision by telephone of indecent communications. Such protections are not determined by economic competition. Recent Efforts 23. No recent efforts. Comments 24. No comments received. Recommendation 25. The staff does not recommend changes to Part 64, Subpart B as part of the Biennial Review. Part 64, Subpart B is intended to implement the statutory restrictions on the commercial provision by telephone of indecent communications consistent with the First Amendment. In particular, Subpart B is intended to protect minors and non- consenting adults from indecent communications. Moreover, because Part 64, Subpart B is not competition- related, we cannot find these rules are no longer necessary in the public interest as a result of meaningful economic competition. We accordingly conclude that Part 64, Subpart B remains necessary in the public interest and recommend that repeal or modification is not warranted. 16 Federal Communications Commission DA 05- 19 9 Part 64, Subpart F – Telecommunications Relay Services and Related Customer Premises Equipment for Persons with Disabilities Description 26. Part 64, Subpart F implements section 225 of the Communications Act of 1934, as amended. 8 Section 225 codifies Title IV of the Americans with Disabilities Act of 1990 (ADA) which requires that the Commission ensure that telecommunications relay services (TRS) are available, “to the extent possible and in the most efficient manner,” to individuals with hearing or speech disabilities in the United States. 9 Section 225 defines TRS as telephone transmission services that make it possible for an individual with a hearing or speech disability to engage in communication by wire or radio with a hearing individual in a manner functionally equivalent to that available to persons who do not have such a disability. The rules provide minimal functional, operational, and technical standards for TRS programs. The rules give states a significant role in ensuring the availability of TRS by treating carriers as compliant with their statutory obligations if they operate in a state that has a relay program certified as compliant by the Commission. The rules also establish a cost recovery and carrier contribution mechanism (TRS Fund) for the provision of interstate TRS and require states to establish cost recovery mechanisms for the provision of intrastate TRS. The Consumer & Governmental Affairs Bureau’s analysis of part 64, Subpart F will be limited to an analysis of issues relating to TRS policy. For a discussion of issues related to administration of the TRS Fund refer to the Wireline Competition Bureau’s analysis of Part 64, Subpart F. Purpose 27. Part 64, Subpart F is intended to facilitate communication by persons with a hearing or speech disability by ensuring that interstate and intrastate TRS are available throughout the country, and by ensuring uniform minimum functional, operational, and technical standards for TRS programs. The TRS rules ensure that individuals with hearing or speech disabilities receive the same quality of service when they make TRS calls, regardless of where their calls originate or terminate. Analysis Status of Competition 28. Although TRS is intended to be an accommodation required of entities offering telephone service for persons with disabilities, at present, there is competition in the interstate TRS market, particularly with the Internet- based TRS 8 47 U. S. C. § 225. 9 Pub. Law No. 101- 336, § 401, 104 Stat. 327, 366- 69 (1990). 17 Federal Communications Commission DA 05- 19 10 services (IP Relay and VRS). Consumers can select a provider of their choice by going to that provider’s Web page. The majority of intrastate TRS, however, is provided by state TRS programs certified as meeting the Commission's mandatory minimum standards. Therefore, the individual states decide whether to have multiple TRS providers at the intrastate level as part of their state program, or whether to limit competition for intrastate TRS to the request for proposal and vendor selection process. Recent Efforts 29. On June 17, 2003, the Commission released a Second Report and Order, Order on Reconsideration, and Notice of Proposed Rulemaking adopting new TRS services and features, and proposing additional TRS services and features, consistent with the goal of functional equivalency. 10 30. On June 30, 2003, CGB released the 2003- 2004 TRS rate Order, which adopted the per- minute compensation rates for traditional TRS and IP Relay, Speech-to- Speech, and Video Relay Service (VRS). 11 In this order, CGB examined the cost and demand data submitted by the providers, and determined that some of the costs submitted for the provision of VRS were not allowable under the statute and cost recovery regulations. Therefore, CGB disallowed some costs for VRS, and a result did not adopt NECA’s proposed compensation rate for VRS of approximately $14 per minute, but instead adopted a rate of approximately $7 per minute. As a result, the size of the Interstate TRS Fund was decreased by over $15 million, money ultimately saved by consumers. 31. On August 1, 2003, the Commission released the captioned telephone VCO service Declaratory Ruling, which recognized this service as another form of TRS eligible for compensation from the Interstate TRS Fund. 12 Captioned telephone VCO service uses a telephone that looks similar to a traditional telephone but also has a text display that allows the user, on one standard telephone line, to both listen to the other party speak and simultaneously read captions of what the other party is saying. This way, a typical user of this service, who has the ability to speak and some residual hearing, can both listen to what is said over the telephone and read captions for clarification. 10 In the Matter of Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Second Report and Order, Order on Reconsideration, and Notice of Proposed Rulemaking, 18 FCC Rcd 12379 (2003). 11 In the Matter of Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Order, 18 FCC Rcd 12823 (2003). 12 In the Matter of Telecommunications Relay Services, and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Declaratory Ruling, 18 FCC Rcd 16121 (2003). 18 Federal Communications Commission DA 05- 19 11 32. On June 30, 2004, the Commission released a Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking that comprehensively addressed the provision, regulation, and compensation of the various forms of TRS. 13 That order generally affirmed the June 30, 2003, Bureau rate order, but revised upward the VRS compensation rate. In addressing cost recovery issues, that order clarified that determining the annual compensation rates is not “rate making,” that the “reasonable” costs for which providers may be compensated do not include profits or a markup on expenses, and that engineering and research and development costs that relate to providing services and features beyond the applicable mandatory minimum standards are not compensable. The order emphasized that the purpose of the cost recovery scheme is to permit providers to recovery their reasonable costs of providing TRS, which they are obligated to do as an accommodation for persons with certain disabilities. 33. Finally, also on June 30, 2004, the CGB released the 2004- 2005 TRS rate Order, which adopted NECA’s recommended per- minute compensation rates for traditional TRS and IP Relay, Speech- to- Speech, and Video Relay Service (VRS). 14 Comments 34. No comments received. Recommendation 35. The staff does not recommend changes to Part 64, Subpart F as part of the Biennial Review. The TRS rules serve to facilitate communication by persons with a hearing or speech disability by ensuring that interstate and intrastate TRS are available throughout the country, and by ensuring uniform minimum functional, operational, and technical standards for relay programs. The TRS rules also ensure that individuals with hearing or speech disabilities receive the same quality of service when they make relay calls, regardless of where their calls originate or terminate. We accordingly do not find that the TRS rules are “no longer necessary in the public interest as the result of meaningful economic competition between providers of telecommunications services.” The staff recommends that repeal or modification is not warranted. 13 Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking, 19 FCC Rcd 12475 (2004). 14 Telecommunications Relay Services and Speech- to- Speech Services for Individuals with Hearing and Speech Disabilities, Order, 19 FCC Rcd 12224 (2004). 19 Federal Communications Commission DA 05- 19 12 Part 64, Subpart G – Furnishing of Enhanced Services and Customer Premises Equipment by Bell Operating Companies; Telephone Operator Services Description 36. Part 64, Subpart G addresses: (1) the provision of enhanced services and customer premises equipment (CPE) by Bell Operating Companies (BOCs); and (2) the provision of operator services. To the extent that Part 64, Subpart G addresses the provision of operator services, the rules implement the provisions and standards of the Telephone Operator Consumer Services Improvement Act of 1990 (TOCSIA) as codified at section 226 of the Communications Act of 1934, as amended. 15 The purpose of TOCSIA is to protect consumers who make interstate operator assisted calls from payphones, hotels, and other public locations from unreasonably high rates and unfair and deceptive practices. There are two categories of requirements set forth in TOCSIA and the Commission’s rules: 1) rules applicable to “Aggregators” which are defined as persons or entities that make telephones available to the public or to transient users of their facilities for interstate telephone calls using a provider of operator services and 2) rules applicable to “Operator Service Providers” which are defined as common carriers that provide operator services, or any other persons determined by the Commission to be providing operator services. The rules require that operator service providers identify themselves at the beginning of each call and provide consumers with information concerning their rates upon request. The rules also prohibit call blocking and require that customers be able to obtain access to the operator services provider of their choice. The rules impose restrictions on charges related to the provision of operator services, minimum standards for routing and handling of emergency telephone calls, and rules governing the filing of informational tariffs and the provision of operator services for prison inmates. The Consumer & Governmental Affairs Bureau’s analysis of Part 64, Subpart G is limited to that portion of Subpart G that implements TOCSIA. 16 Purpose 37. The purpose of Part 64, Subpart G is, in part, to protect consumers by ensuring that they have information about the rates charged by operator services providers, and that they can reach the operator services provider of their choice. The rules also promote public safety by prescribing minimum standards for operator service provider and call aggregator handling of emergency telephone calls. Analysis 15 47 U. S. C. § 226. 16 We note that while the Consumer & Governmental Affairs Bureau has primary responsibility for most of the TOCSIA rules, the Wireline Competition Bureau has primary responsibility for the remaining TOCSIA rules. 20 Federal Communications Commission DA 05- 19 13 Status of Competition 38. The operator services market continues to become increasingly competitive. Recent Efforts 39. No recent efforts. Comments 40. No comments received. Recommendation 41. The staff does not recommend changes to Part 64, Subpart G, to the extent it implements the provisions and standards of TOCSIA, as part of the Biennial Review. The purpose of Part 64, Subpart G is, in part, to protect consumers by ensuring that they have information about the rates charged by operator services providers, and that they can reach the operator services provider of their choice. The rules also promote public safety by prescribing minimum standards for operator service provider and call aggregator handling of emergency telephone calls. We accordingly do not find that Part 64, Subpart G is “no longer necessary in the public interest as the result of meaningful economic competition between providers of [such] services.” The staff recommends that to the extent that Part 64, Subpart G implements the provisions and standards of TOCSIA repeal or modification is not warranted. 21 Federal Communications Commission DA 05- 19 14 Part 64, Subpart K – Changing Long Distance Service Description 42. Part 64, Subpart K implements section 258 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996. 17 Section 258 expanded the Commission’s existing authority to deter and punish “slamming,” the submission or execution of an unauthorized change in a subscriber’s selection of a provider of telecommunications service. The rules prescribe verification procedures for telecommunications carriers to use in confirming subscribers’ decisions to change telecommunications carriers. A carrier that fails to comply with the Commission’s verification procedures is liable to the subscriber’s authorized carrier for all amounts paid by the subscriber after the violation. The rules absolve subscribers of liability for charges billed by unauthorized carriers in certain cases, impose liability on unauthorized carriers for all charges collected from subscribers, and establish procedures to govern preferred carrier freezes. Purpose 43. Part 64, Subpart K attempts to: eliminate the fraudulent practice of “slamming,” or changing a subscriber’s authorized telecommunications carrier without the subscriber’s knowledge or explicit authorization; foster consumer choice; and facilitate competition in the telecommunications services market. Analysis Status of Competition 44. Competition in local service markets has continued to increase. Competitive local service providers continue to use all modes of entry contemplated by the 1996 Act, and were earning about 16 percent of local service revenues for the year 2003, up from 10 percent in 2001. Competition for business customers in metropolitan areas, in general, continues to develop more rapidly than competition for residential customers or customers in rural areas. In addition, consumers appear to be using wireless telephones as substitutes for wireline services, and local service over cable has increased to over three million connections. The long distance market has been open to competition for some time, and domestic and international long distance prices have fallen. There is greater competition for high volume customers than for low volume customers. 17 47 U. S. C. § 258. 22 Federal Communications Commission DA 05- 19 15 Recent Efforts 45. On March 17, 2003, the Commission released a Third Order on Reconsideration and Second Further Notice of Proposed Rulemaking, Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996/ Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance in Docket No. 94- 129 amending the Part 64, Subpart K rules to clarify and strengthen its telephone slamming rules and ask for comment on whether to expand the minimum content requirements for third party verifications. The Commission clarified that local exchange carriers executing carrier change requests can be held liable for unauthorized carrier changes; modified the “drop- off” requirement to allow sales agents, in certain circumstances, to remain silently on the line during verification; and discontinued the requirement that carriers file FCC Form 478. These changes became effective on July 21, 2003. 46. On July 16, 2004, as part of the 2000 Biennial Review effort, the Commission released a First Order on Reconsideration in Docket 00- 257 and Fourth Order on Reconsideration in Docket 94- 129 amending the Part 64, Subpart K rules to address issues raised in petitions for reconsideration of our Streamlining Order and certain ancillary slamming issues relating to switchless resellers that were raised in these dockets, but had not yet been resolved. The Commission clarified that acquiring carriers will continue to pay switching fees for acquired customers unless a state regulatory agency has ordered the exiting carrier to pay, denied requests for modification of our notice requirements under our streamlined carrier change procedures, denied a request for a change to our carrier freeze rules, and denied a request that switchless resellers must obtain carrier identification codes. Comments 47. No comments received. Recommendation 48. The staff does not recommend changes to Part 64, Subpart K as part of the Biennial Review. Part 64, Subpart K attempts to: eliminate the fraudulent practice of “slamming,” or changing a subscriber’s authorized telecommunications carrier without the subscriber’s knowledge or explicit authorization; foster consumer choice; and facilitate competition in the telecommunications services market. Moreover, meaningful economic competition still does not diminish the need for the anti-slamming rules. To the contrary, increased carrier competition for customers may exacerbate the slamming practice and thus increase the necessity for such anti-slamming, consumer protection regulation. We accordingly do not find that Part 64, Subpart K is “no longer necessary in the public interest as the result of meaningful 23 Federal Communications Commission DA 05- 19 16 competition between providers of telecommunications services.” The staff recommends that repeal or modification is not warranted. 24 Federal Communications Commission DA 05- 19 17 Part 64, Subpart L – Restrictions On Telephone Solicitation Description 49. Part 64, Subpart L implements Section 227 of the Communications Act of 1934 as amended. 18 Section 227 codifies the Telephone Consumer Protection Act of 1991 (TCPA) which was enacted to address certain telemarketing practices thought to be an invasion of consumer privacy and risk to public safety. The TCPA imposes restrictions on the use of automatic telephone dialing systems (“ autodialers”), artificial or prerecorded messages, and telephone facsimile machines, and requires the Commission to adopt rules to implement these protections. Pursuant to the Commission's rules implementing the TCPA, a person or entity engaged in telemarketing is required to maintain a record of a called party's request not to receive future solicitations for a period of five years. Telemarketers must develop and maintain written policies for maintaining their lists, and they are required to inform their employees of the list's existence and train them to use the list. The rules prohibit telemarketers from calling residential telephone subscribers before 8 a. m. or after 9 p. m. and require telemarketers to identify themselves to called parties. 50. In 2003, the Commission established, in conjunction with the FTC, a national do- not- call registry for consumers who wish to avoid telemarketing calls. The FTC has responsibility for administering the do- not- call registry, while the FCC and FTC are responsible for enforcement of the registry. Telemarketers are required to access the numbers in the registry and remove them from their call lists on a quarterly basis. As mandated by the TCPA, the Commission's rules establish general prohibitions against autodialed calls being made without prior express consent to certain locations, including emergency lines or health care facilities, the use of prerecorded or artificial voice message calls to residences, and the transmission of unsolicited advertisements by facsimile machines. The TCPA rules provide that facsimile and prerecorded voice transmissions, as well as telephone facsimile machines, must meet specific identification requirements. The TCPA rules also prohibit line seizures by prerecorded messages. Both the identification requirements and prohibition on line seizures are codified in Part 68 of the Commission’s rules (see 47 C. F. R. §§ 68.318( c) and 68.318( d)). 19 Purpose 51. Part 64, Subpart L is intended to protect subscriber privacy and public safety without unnecessarily restricting legitimate telephone marketing and sales. Analysis 18 47 U. S. C. § 227. 19 See discussion of Part 68 herein for an analysis of these rules. 25 Federal Communications Commission DA 05- 19 18 Status of Competition 52. Not relevant. As noted above, Part 64, Subpart L implements the Telephone Consumer Protection Act of 1991 (TCPA). The TCPA is intended to protect subscriber privacy without unnecessarily restricting legitimate telephone marketing and sales. The realization of such protections is not determined by economic competition. The staff notes that since the adoption of the rules, telemarketing practices have changed significantly. New technologies have emerged that allow telemarketers to better target potential customers and make it more cost effective to market using telephones and facsimile machines. Recent Efforts 53. On September 18, 2002, the Commission released a Notice of Proposed Rulemaking seeking comment on whether any of its telemarketing rules need to be revised or additional rules need to be adopted to more effectively carry out Congress’s directives in the Telephone Consumer Protection Act (TCPA). 20 54. On June 26, 2003, the FCC adopted an Order updating its TCPA rules and establishing a national do- not- call registry for consumers who wish to avoid telemarketing calls. 21 The registry is nationwide in scope, includes all telemarketers (with the exception of certain non- profit organizations), and covers both interstate and intrastate telemarketing calls. 55. Industry estimates indicate that telemarketers may attempt as many as 104 million calls to consumers and businesses every day. The Commission also cited dramatic increases in telemarketer use of autodialers, which deliver prerecorded messages to thousands of potential customers every day, and predictive dialers, which initiate phone calls while telemarketers are talking to other consumers and which frequently abandon calls before a telemarketer is free to take the next call. The Commission has implemented the do- not- call registry in conjunction with the Federal Trade Commission (FTC). The national database is administered by the FTC and enforcement is being coordinated between the FCC, the FTC and the states. 56. In the Order, the FCC also adopted restrictions on the use of predictive dialers in an effort to reduce the number of “hang- up” and “dead air” calls consumers experience. In addition, it specified that telemarketers cannot block caller ID information and tightened its existing rules on unsolicited faxes to require that 20 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, CC Docket No. 92- 90, Notice of Proposed Rulemaking and Memorandum Opinion and Order, FCC 02- 250 (rel. Sep. 18, 2002). 21 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Report and Order, 18 FCC Rcd 14014 (2003). 26 Federal Communications Commission DA 05- 19 19 express permission be obtained in writing by companies before sending faxed advertisements to its customers. Finally, the Order establishes an exemption to permit calls by a marketer to friends, family members and acquaintances. 57. In addition, the Commission released on August 18, 2003, an Order on Reconsideration delaying the effective date of the written consent requirement for fax advertising until January 1, 2005. 22 The delay was intended to give parties additional time to obtain the recipients’ written permission, and to allow the Commission the opportunity to review the petitions for reconsideration filed on this issue. 58. On March 19, 2004, the Commission released an NPRM and FNPRM seeking comment on two issues relating to the TCPA. 23 Specifically, the Commission sought comment on whether to adopt a limited safe harbor period during which a telemarketer will not be liable for violating the rule prohibiting autodialed and prerecorded message calls to wireless numbers for calls made to numbers that have been recently ported from wireline to wireless service. On August 25, 2004, the Commission adopted an Order which: 1) created a limited safe harbor period from the TCPA’s prohibition on calls to wireless numbers. 24 Persons will not be liable for placing autodialed and prerecorded message calls where such calls are made to a wireless number ported from wireline service within the previous 15 days, provided the number is not already on the national do- not- call registry or the caller’s company-specific do- not- call list. A limited safe harbor will provide a reasonable opportunity for persons to identify numbers that have been ported from wireline service. 59. The Order also amends the existing national do- not- call registry safe harbor provision to require telemarketers to access the registry and scrub their call lists of those numbers on the registry every 31 days. The rule change will become effective on January 1, 2005. This amendment will benefit consumer privacy interests by reducing from three months to 31 days the maximum period within which telemarketers must update their database of numbers registered on the national do-not- call list in order to qualify for the safe harbor protections. We also believe this action is consistent with the intent of Congress, which directed the FTC in the Consolidated Appropriations Act of 2004 to amend its corresponding safe harbor rule in a similar manner. Absent action to amend our safe harbor rule, many telemarketers would face inconsistent standards since the FTC’s jurisdiction extends only to certain entities while our jurisdiction extends to all telemarketers. 22 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Order on Reconsideration, 18 FCC Rcd 16972 (2003). 23 Rules and Regulations Implementing the Controlling the Assault of Non- Solicited Pornography and Marketing Act of 2003; Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 04- 53, CG Docket No. 02- 278, Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking, 19 FCC Rcd 5056 (2004). 24 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Order, FCC 04- 204 (rel. September 21, 2004). 27 Federal Communications Commission DA 05- 19 20 60. On October 1, 2004, the Commission released an Order extending for a period of six months the effective date of the written consent requirement for sending unsolicited facsimile advertisements. 25 The Commission believes that the public interest will best be served by delaying the effective date of the written consent requirement to allow either Congress to act on pending legislation or the Commission to address the petitions for reconsideration filed on these issues. Comments 61. No comments received. Recommendation 62. The staff does not recommend changes to Part 64, Subpart L as part of the Biennial Review. Part 64, Subpart L is intended to protect subscriber privacy and public safety without unnecessarily restricting legitimate telephone marketing and sales. Moreover, because these rules are not competition- related, we cannot find these rules are no longer necessary in the public interest as a result of meaningful economic competition. We accordingly conclude that the rules remain necessary in the public interest and recommend that repeal or modification is not warranted. 25 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02- 278, Order, FCC 04- 233 (rel. October 1, 2004). 28 Federal Communications Commission DA 05- 19 21 Part 64, Subpart O – Interstate Pay- Per- Call and Other Information Services Description 63. Part 64, Subpart O implements section 228 of the Communications Act of 1934, as amended. 26 Subpart O concerns pay- per- call and certain other information services. Subpart O requires common carriers that assign telephone numbers to providers of interstate pay- per- call services to require that the provider comply with these rules as well as certain other laws and regulations. Subpart O restricts the provision of pay- per- call services over 800 and “toll free” numbers and bars the provision of interstate pay- per- call services on a collect basis. Subpart O provides for 900 service access code assignment to pay- per- call services. It requires local exchange carriers to offer subscribers the option of blocking access to 900 numbers from their telephones. Subpart O establishes conditions for common carrier provision of billing and collection for pay- per- call services and bars the disconnection or interruption of local exchange or long- distance service for the non- payment of charges for interstate pay- per- call and certain information services. Purpose 64. Part 64, Subpart O is intended to both promote the legitimate development of pay- per- call services and protect consumers from the fraudulent or unscrupulous provision of pay- per- call services. Analysis Status of Competition 65. Competitive developments have not affected the need for this rule because these are consumer protection rules, whose purposes are unaffected by competition. While competition might lead to development of some changes that might benefit consumers, these rules are intended to protect consumers from misleading, unclear, and even fraudulent conduct. Recent Efforts 66. In July, the Commission released a Notice of Proposed Rulemaking on its interstate pay- per- call rules, seeking comment on possible modifications to address circumvention of the rules. 26 47 U. S. C. § 228. Section 228 codifies the Telephone Disclosure and Dispute Resolution Act, Public Law 102- 556, 106 Stat. 4181, approved Oct. 28, 1992. 29 Federal Communications Commission DA 05- 19 22 Comments 67. No comments received. Recommendation 68. The staff does not recommend changes to Subpart O as part of the current Biennial Review. Part 64, Subpart O is intended to both promote the legitimate development of pay- per- call services and protect consumers from the fraudulent or unscrupulous provision of pay- per- call services. The staff believes these regulatory objectives continue to be valid. We accordingly do not find that the rules are “no longer necessary in the public interest as a result of meaningful economic competition between providers of telecommunications services.” The staff recommends that repeal or modification is not warranted. Staff notes that there is an open proceeding addressing ways to prevent circumvention of our existing Subpart O rules. 27 27 Policies and Rules Governing Interstate Pay- Per- Call and Other Information Services Pursuant to the Telecommunications Act of 1996; Policies and Rules Governing Interstate Pay- Per- Call and Other Information Services, and Toll- free Number Usage; Truth- in- Billing and Billing Format; CC Docket Nos. 96- 146 and 98- 170, CG Docket No. 04- 244, Notice of Proposed Rulemaking, FCC 04- 162 (rel. July 16, 2004). 30 Federal Communications Commission DA 05- 19 23 Part 64, Subpart P – Calling Party Telephone Number; Privacy Description 69. The requirements in Part 64, Subpart P are based on the Commission’s authority under sections 1, 4, 201- 205, and 218 of the Communications Act of 1934, as amended. 28 Subpart P covers Calling Party Number (CPN) services, including “Caller ID,” which depend on capabilities that use out- of- band signaling techniques such as “Signaling System Seven (SS7).” Subpart P provides that common carriers using SS7 must, subject to certain exceptions, transmit the CPN associated with interstate calls to interconnecting carriers without additional charge. Originating carriers using SS7 must recognize *67 as a caller’s request for privacy when dialed as the first three digits of an interstate call. Carriers providing line blocking services are required to recognize *82 as a caller’s request that privacy not be provided and that the CPN be passed on an interstate call. Subpart P requires carriers to notify customers of their *67 and * 82 capabilities and restricts the use of telephone subscriber information. Purpose 70. The purpose of Part 64, Subpart P is to protect subscriber privacy while fostering the development of new and innovative services. Analysis Status of Competition 71. Competition in local service markets has continued to increase since the 2000. Competitive local service providers continue to use all modes of entry contemplated by the 1996 Act, and were earning about 16 percent of local service revenues for the year 2003, up from 10 percent in 2001. Competition for business customers in metropolitan areas, in general, continues to develop more rapidly than competition for residential customers or customers in rural areas. In addition, consumers appear to be using wireless telephones as substitutes for wireline services, and local service over cable has increased to over three million connections. The long distance market has been open to competition for some time, and domestic and international long distance prices have fallen. There is greater competition for high volume customers than for low volume customers. 28 47 U. S. C. §§ 151, 154, 201- 205, 218. 31 Federal Communications Commission DA 05- 19 24 Recent Efforts 72. In July of 2003, the Commission revised its rules under the Telephone Consumer Protection Act (TCPA) to address changes in the telemarketing marketplace. Among other things, the Commission adopted new rules at 64.1601( e) to require telemarketers to transmit caller identification (caller ID) information and, when available, by the telemarketer’s carrier, the name of the telemarketer. In addition, telemarketers are prohibited from blocking the transmission of caller ID information. The Commission determined that caller ID allows consumers to screen out unwanted calls and to identify companies that they wish to ask not to call again. Comments 73. No comments received. Recommendation 74. The staff does not recommend any changes as part of the Biennial Review. The purpose of Part 64, Subpart P is to protect subscriber privacy while fostering the development of new and innovative services. The staff believes these regulatory objectives continue to be valid because with increasing competition, consumers are likely to continue to receive significant numbers of telemarketing calls. Therefore, we cannot find these rules are “no longer necessary in the public interest as a result of meaningful economic competition.” We accordingly conclude that the rules remain necessary in the public interest and recommend that repeal or modification is not warranted. 32 Federal Communications Commission DA 05- 19 25 Part 64, Subpart Y – Truth- In- Billing Requirement for Common Carriers Description 75. The Commission adopted the rules in Subpart Y pursuant to its authority under sections 201( b) and 258 of the Communications Act of 1934, as amended. 29 Subpart Y contains binding truth- in- billing guidelines that apply to carriers selling telecommunications services. 30 Subpart Y requires carriers to provide customers with necessary information about their services and charges. Specifically, Subpart Y requires carriers to separate charges on the bill by provider, to describe clearly the services involved, to display clearly the name of the service provider in association with its charges, to display a toll- free number (or, in certain cases, an email or website address) for consumer inquiries, to identify those charges for which failure to pay will not result in disconnection of the customer’s basic local service, and to highlight new service providers. Purpose 76. Part 64, Subpart Y is designed to make telephone bills easier for consumers to understand, so that customers can make informed choices among carriers and services. Subpart Y is also intended to make it easier for consumers to identify and report fraud, such as slamming (unauthorized change to consumer’s telecommunications carrier) and cramming (placement of unauthorized, misleading, or deceptive charges on a consumer’s telephone bill). Analysis Status of Competition 77. Competitive developments have not affected the need for this rule because these are consumer protection rules, whose purposes are unaffected by competition. While competition might lead to development of some changes that might benefit consumers, these rules are intended to protect consumers from misleading, unclear, and even fraudulent conduct. CMRS was exempted because we had very few complaints in the record regarding CMRS at the time the rule was adopted. Recent Efforts 29 47 U. S. C. §§ 201( b), 258. 30 The Commission exempted CMRS carriers and other providers of mobile service from compliance with certain truth- in- billing requirements, including the requirements to highlight new providers, to provide descriptions of services rendered, and to identify charges for which failure to pay will not result in disconnection of the customer’s basic, local service. See CC Docket No. 98- 170, 14 FCC Rcd 7492 (1999). 33 Federal Communications Commission DA 05- 19 26 78. No recent efforts. Comments 79. No comments received. Recommendation 80. The staff does not recommend any changes as part of the Biennial Review. The rules in Part 64, Subpart Y are intended to make telephone bills easier for consumers to understand, so that customers can make informed choices among carriers and services. The rules also are intended to make it easier for consumers to identify and report fraud, such as slamming (unauthorized change to consumer’s telecommunications carrier) and cramming (placement of unauthorized, misleading, or deceptive charges on a consumer’s telephone bill). The staff believes these regulatory objectives continue to be valid since these are consumer protection rules, whose purposes are unaffected by competition. Therefore, we cannot find these rules are “no longer necessary in the public interest as a result of meaningful economic competition.” The staff recommends that repeal or modification is not warranted. Staff notes that there is an open proceeding associated with Subpart Y, 31 and more recently a petition for declaratory ruling or rulemaking aimed at these rules. 32 31 Truth- in- Billing and Billing Format, CC Docket No. 98- 170, First Report and Order and Further Notice of Proposed Rule Making, 14 FCC Rcd 7492 (1999). 32 Truth in Billing and Billing Format, National Association of State Utility Consumer Advocates’ Petition for Declaratory Ruling Regarding Truth- in Billing; CC Docket No. 98- 170 and CG Docket No. 04- 208, Public Notice, 69 Fed. Reg. 113 (2004). 34 Federal Communications Commission DA 05- 19 27 Part 68 – Connection of Terminal Equipment to the Telephone Network Description 81. Part 68 was established in 1974 as the result of a court decision ruling that the Bell Operating Companies could not bar direct connection of customer premises equipment (CPE) to the public switched telephone network (PSTN), so long as the CPE would not cause harm to the PSTN. 33 Part 68 also implements the Hearing Aid Compatibility Act of 1988 (HAC Act). 34 The HAC Act requires that, unless exempt, all essential telephones and all telephones manufactured in or imported into the United States after August 16, 1989 must “provide internal means for effective use with hearing aids that are designed to be compatible with telephones which meet established technical standards for hearing aid compatibility.” 35 The statute also directs the Commission to assess periodically the appropriateness of continuing the exemptions. In addition, among its many provisions, Part 68 also includes certain requirements for terminal equipment which implement the Telephone Consumer Protection Act of 1991 (the TCPA). 36 Congress enacted the TCPA in an effort to address telephone marketing calls and certain telemarketing practices thought to be an invasion of consumer privacy and a risk to public safety. The TCPA imposes, among other things, certain restrictions on the use of automatic dialing machines and the use of telephone facsimile machines to send unsolicited advertisements. These include a requirement that addresses line seizure by automatic telephone dialing systems and a requirement that all fax transmissions include source labeling (47 C. F. R. §§ 68.318( c) and 68.318( d), respectively). The scope of this discussion is limited to Part 68 as it applies to telephone compatibility with hearing aids, line seizure by automatic telephone dialing systems, and the requirement that all fax transmissions include source labeling. 37 Purpose 82. The purpose of Part 68 is, in part, to provide for uniform standards for the compatibility of hearing aids and telephones to ensure that persons with hearing aids have reasonable access to the telephone network. The purpose of sections 68.318( c) 33 Hush- A- Phone v. United States, 238 F. 2d 266 (D. C. Cir. 1956). 34 47 U. S. C. § 610. 35 Public mobile service phones are currently exempt from the hearing aid compatibility requirements of the HAC Act. See 47 U. S. C. § 610( b)( 2)( A)( i) and (ii). The Commission’s rules broadly define public mobile services as “radio services in which common carriers are authorized to offer and provide mobile and related fixed radio telecommunication services for hire to the public.” See 47 C. F. R. § 22. 99. 36 Pub. L. No. 102- 243, 105 Stat. 2394 (1991), codified at 47 U. S. C. § 227. 37 The Wireline Competition Bureau oversees Part 68 as it applies to the connection of CPE to the PSTN. A discussion of Part 68 as it applies to such matters is contained in the Wireline Competition Bureau’s Biennial Regulatory Review 2004 Staff Report. 35 Federal Communications Commission DA 05- 19 28 and 68.318( d) is to implement the specific mandates of the TCPA which, as noted above, were intended to address telephone marketing calls and certain telemarketing practices thought to be an invasion of consumer privacy and a risk to public safety. Analysis Status of Competition 83. Not relevant with regard to Part 68 as it applies to hearing aid compatibility. The rules implement the HAC Act and are intended to ensure that persons with hearing aids have reasonable access to the telephone network by providing uniform standards for the compatibility of hearings aids and telephones. Accordingly, the realization of these benefits is not determined by economic competition. 84. Not relevant with regard to sections 68.318( c) and 68.318( d). 38 The staff notes that since the adoption of the rules, telemarketing practices have changed significantly. New technologies have emerged that allow telemarketers to better target potential customers and make it more cost effective to market using telephones and facsimile machines. Recent Efforts 85. In July of 2003, the Commission revised its rules under the Telephone Consumer Protection Act (TCPA) to address changes in the telemarketing marketplace. Among other things, the Commission amended the rule at 68.318( d) to address certain activities by facsimile broadcasters. The rules require that if a facsimile broadcaster demonstrates a high degree of involvement in the sender’s facsimile messages, such as supplying the numbers to which a message is sent, that broadcaster’s name, under which it is registered to conduct business with the State Corporation Commission (or comparable regulatory authority) must be identified on the facsimile along with the sender’s name. Comments 86. No comments received. Recommendation 87. The staff does not recommend changes to Part 68 as it applies to hearing aid compatibility as part of the Biennial Review. The purpose of Part 68 is, in part, to provide for uniform standards for the compatibility of hearings aids and telephones to ensure that persons with hearing aids have reasonable access to the telephone network which the rules continue to do. Moreover, because Part 68 as it applies to hearing aid 38 See discussion of Part 64, Subpart L supra. 36 Federal Communications Commission DA 05- 19 29 compatibility is not competition- related, we cannot find that Part 68 is no longer necessary in the public interest as a result of meaningful economic competition. We accordingly conclude that Part 68 as it applies to hearing aid compatibility is necessary in the public interest and recommend that repeal or modification is not warranted. 88. The staff does not recommend changes to Part 68, sections 68.318( c) and 68.318( d) as part of the Biennial Review. Sections 68.318( c) and 68.318( d) implement the specific mandates of the TCPA which, as noted above, were intended to address telephone marketing calls and certain telemarketing practices thought to be an invasion of consumer privacy and a risk to public safety. Moreover, because these rules are not competition- related, we cannot find these rules are no longer necessary in the public interest as a result of meaningful economic competition. We accordingly conclude that these rules remain necessary in the public interest and recommend that repeal or modification is not warranted. 37