Interstate Information Services

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 93-22; CC Docket No. 96-146; FCC 96-289]

Interstate Information Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission adopted this Notice of Proposed Rule Making to

address possible evasions of new statutory requirements that impose

more stringent restrictions on the use of toll-free numbers to charge

callers for information services and repeal the exemption to pay-per-

call status accorded to any service provided pursuant to tariff. This

action was taken to amend the Commission's rules to ensure that these

requirements governing interstate pay-per-call and other information

services contained in the Telecommunications Act of 1996 are fully

realized.

DATES: Comments must be submitted on or before August 26, 1996. Reply

comments must be submitted on or before September 16, 1996. Written

comments by the public on the proposed and/or modified information

collections are due August 26, 1996. Written comments must be submitted

by the Office of Management and Budget (OMB) on the proposed and/or

modified information collections on or before September 24, 1996.

ADDRESSES: Federal Communications Commission, 1919 M Street N.W.,

Washington, D.C. 20554. In addition to filing comments with the

Secretary, a copy of any comments on the information collections

contained herein should be submitted to Dorothy Conway, Federal

Communications Commission, Room 234, 1919 M Street, N.W., Washington,

D.C. 20554, or via the Internet to [email protected], and to Timothy

Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W., Washington,

D.C. 20503 or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Mary Romano, Enforcement Division,

Common Carrier Bureau, (202) 418-0960. For additional information

concerning the information collections contained in this NPRM contact

Dorothy Conway at (202) 418-0217, or via the Internet at

[email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's

Notice of Proposed Rule Making (NPRM) in CC Docket No. 96-146 [FCC 96-

289], adopted June 28, 1996 and released July 11, 1996. The full text

of the NPRM is available for inspection and copying during normal

business hours in the FCC Reference Center, Room 239, 1919 M Street,

N.W., Washington, D.C. The full text of this NPRM may also be purchased

from the Commission's duplicating contractor, International

Transcription Services, 2100 M Street, N.W., Suite 140, Washington,

D.C. 20037, (202) 857-3800. For a document relating to this NPRM, see

final rules involving interstate information services published

elsewhere in this issue.

Paperwork Reduction Act

This NPRM contains either a proposed or modified information

collection. The Commission, as part of its continuing effort to reduce

paperwork burdens, invites the general public and the Office of

Management and Budget (OMB) to comment on the information collections

contained in this NPRM as required by the Paperwork Reduction Act of

1995, Public Law 104-13. Public and agency comments are due on or

before August 26, 1996. OMB comments are due September 24, 1996.

Comments should address: (a) Whether the proposed collection of

information is necessary for the proper performance of the functions of

the Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

Title: Disclosure Requirements for Information Services Provided

Under a Presubscription or Comparable Arrangement.

Type of Review: New collection.

Respondents: Information providers offering services under a

presubscription or comparable arrangement.

Number of Respondents: 1,000.

Estimated Time per Response: 5.

Total Annual Burden: 5,000.

Estimated costs per respondent: $0.00.

Needs and Uses: This disclosure requirement will ensure that

consumers are fully informed about an information service before

entering into an agreement to purchase the service on a subscription

basis.

Summary of Notice of Proposed Rule Making

1. On June 28, 1996, the Commission adopted a Notice of Proposed

Rule Making (NPRM) in CC Docket No. 96-146 (released July 11, 1996; FCC

96-289) proposing changes to Part 64 of the Commission's rules which

govern the provision of interstate pay-per-call and information

services. In a companion Order, the Commission amended these rules to

conform with amendments to Section 228 of the Communications Act of

1934, as amended, (Communications Act), 47 USC Sec. 228, that were

enacted by the Telecommunications Act of 1996,

[[Page 39108]]

Public Law 104-104, (1996 Act). The NPRM proposes limited additional

rule changes intended to prevent evasion of the new statutory

requirements.

2. Through amendments to Section 228 of the Communications Act, the

1996 Act addresses abusive practices that have threatened public

confidence in toll-free numbers and left telephone subscribers

vulnerable to unexpected charges for calls to information services,

subject to disconnection of local and long-distance telephone service

for failure to pay such charges, and unable to block access to unwanted

services. In apparent efforts to avoid consumer safeguards applicable

to pay-per-call (or 900 number) services, information providers (IPs)

have offered their programs through collect calls, purported

presubscription arrangements, and tariffed-service systems that have

been available on 500, 700, 800, international and domestic POTS

(``plain old telephone service'') numbers. IPs evidently move their

services from one arrangement and dialing sequence to another in

response to new protective regulations, rulings, or enforcement

actions, sometimes with the apparent encouragement of common carriers

who pay commissions to IPs in exchange for the increased traffic

generated by information-service calls.

3. The provisions of Section 228 of the Communications Act attest

to Congress' determination that consumers should be: (1) Provided basic

information regarding the price and other material terms and conditions

applicable to interstate information services before agreeing to

purchase them; (2) able to block access to unwanted services; and (3)

protected from disconnection of basic communications services for

failure to pay information-services charges. 47 USC Sec. 228(c) (4),

(5). The revisions to Section 228 enacted by the 1996 Act are intended

to ensure that consumers are not deprived of these protections by

information services available through toll-free dialing sequences or

tariffed-service systems.

4. The Commission determined that in analyzing the effect of the

new statutory requirements, it must look not only to the practices that

are now prohibited but also to the likely responses of IPs and common

carriers who might seek to evade the statute. The Commission stated

that its consideration of possible evasions has been influenced by

awareness of past evasions that have resulted in widespread deception

and abuse. The Commission concluded that it should act now to

discourage future abuse. Accordingly, as set forth in the proposed

rules and explained below the Commission proposed certain very limited

modifications to Sections 64.1501(b), 64.1504, and 64.1510 of the

rules, which contain the presubscription definition, toll-free number

limitations, and billing requirements. We also seek comment on whether

additional regulations are necessary to protect consumers from certain

practices by common carriers involved in transmitting interstate

information services that could be interpreted as not being just and

reasonable under Section 201(b) of the Act.

I. Proposed Rule Changes

A. ``Definitions--Presubscription or Comparable Arrangement''--47 CFR

Sec. 64.1501(b)

5. While the 1996 Act requires written subscription to information

services available through toll-free numbers, written agreements are

not explicitly required for information services that might be offered

through other telephone numbers. Although virtually all complaints

involving purportedly presubscribed information services have involved

programs available through 800 numbers, the Commission expressed

concern that, without a uniform requirement for written

presubscription, the same ``instant presubscription'' abuses

experienced by 800-number callers when oral presubscription was

permissible might emerge on other dialing sequences. Accordingly, the

Commission proposed to revise the presubscription definition to include

a requirement that all presubscription arrangements (not just those

involving toll-free service) be executed in writing or, alternatively,

through payment by direct remittance, prepaid account, or debit,

credit, charge or calling card regardless of the telephone number used

to access the relevant information service. The Commission also

proposed to require explicitly that presubscription agreements must be

executed by a legally competent adult. In addition, to prevent

deceptive use of presubscription agreements tied to contests or other

promotions, the Commission proposed that the presubscription document

be separate or easily severable from any promotions or inducements. The

Commission asked commenters to consider whether safeguards should be

required to ensure that electronically transmitted presubscription

agreements are valid commercial instruments and that electronic

execution does not encourage the abuses that arose from oral execution

of presubscription contracts.

6. The Commission also proposed to add to the presubscription

definition a requirement that a consumer must use a pre-existing

credit, charge, or calling cards to obtain information services and

that an actual card must have been delivered to the party to be billed

prior to assessment of any charges. Additionally, such cards could not

operate to assess charges through automatic number identification

(ANI). The Commission stated that these proposals are intended to

prevent use of ``instant'' credit, charge, or calling cards that might

be issued by an IP during the course of a call to an information

service without confirming that the caller is, in fact, the party to be

billed.

B. ``Restrictions on the Use of Toll-Free Numbers''--47 CFR

Sec. 64.1504

7. The limitations on the use of toll-free numbers to provide

information services contained in Section 228(c)(7) of the

Communications Act are framed to apply to ``the calling party.'' Thus,

the statute explicitly protects callers to toll-free numbers from six

prohibited transactions, including connection to a pay-per-call service

and assessment of information-service charges absent a written

agreement or payment by prepaid account, debit, credit, charge, or

calling card. The Commission proposed to modify Section 64.1504 of the

rules to ensure that subscribers whose telephone lines may be used to

place calls to toll-free numbers likewise are not assessed charges for

calls to information services provided by means specifically described

in the statutory prohibitions. Thus, the Commission proposed to amend

Section 64.1504 (c), (d), and (e) to state explicitly that the

protections afforded to ``the calling party'' also apply to ``the

subscriber to the originating line.''

8. The Commission urged parties to comment on the potential

effectiveness of these provisions in combating deception and fraud that

have been associated with 800 number information services and invited

comment as to whether any other actions might be warranted to forestall

future abuse involving toll-free numbers. The Commission asked parties

to address its tentative conclusion that a carrier's billing of calls

dialed to an 800 or other toll-free number on the basis of ANI is a

violation of Section 228(c)(7)(A) of the Communications Act unless the

call involves use of telecommunications devices for the deaf. Usually,

calls to carriers' toll-free-access numbers are delivered only if a

calling card is used or the call is collect. The Commission tentatively

concluded that with the exception of calls using

[[Page 39109]]

telecommunications devices for the deaf, reliance on ANI to bill any

type of call to a toll-free number--even a carrier's toll-free-access

code--does not appear to satisfy a common carrier's statutory

obligation to provide communications service in a just and reasonable

manner under Section 201(b) of the Communications Act. The Commission

sought comment on that tentative conclusion and encouraged parties to

address whether it is appropriate to revisit issues involving use of

ANI to bill callers to toll-free numbers now, and, if so, what would be

the most effective regulatory response.

C. ``Billing and Collection of Pay-Per-Call and Similar Service

Charges''--47 CFR Sec. 64.1510

9. The Commission proposed one minor modification to Section

64.1510(c) to implement the 1996 Act's billing requirements virtually

verbatim. The Commission proposed to add language to state explicitly

that charges for presubscribed information services accessed through a

toll-free number must be displayed separately from those for local and

long-distance telephone service. The Commission asked for comment on

the costs to carriers for separate billing. In addition, the Commission

requested commenters' views as to whether current or predicted

conditions warrant adoption of a rule covering carrier billing of

presubscribed information services that are not available through toll-

free numbers.

D. Redefinition of Pay-Per-Call to Remove the Tariffed Services

Exemption

10. The Commission noted that in repealing the tariffed services

exemption to pay-per-call status, Congress specifically sought to end

service arrangements in which telephone subscribers are charged high

prices for transmission of calls to ostensibly free information

services. The Commission expressed concern, however, that some entities

may seek to continue these arrangements despite Congress' clear

intention that they be ended. Under Section 228(i)(1) of the

Communications Act, imposition of a per-call or per-time-interval

charge in excess of the charge assessed for transmitting a call is a

requirement for pay-per-call status. Carriers who have invoked the

tariffed services exemption in an effort to shelter arrangements

whereby information services are provided at tariffed rates might

likewise still claim that their services do not meet the criteria for

pay-per-call status because callers purportedly are not charged for

conveyance of information but only for transmission of calls. While

recognizing that there may be some truly free information services that

callers might wish to access through a toll call, the Commission

concluded that it must take steps to ensure that the protective

purposes underlying Congress' decision to remove the tariffed services

exemption are fully realized.

11. The Commission tentatively concluded that when a common carrier

charges a telephone subscriber for a call to an interstate information

service, any form of remuneration from that carrier to an entity

providing or advertising the service, or any reciprocal arrangement

between such entities, constitutes per se evidence that the charge

levied actually exceeds the charge for transmission. Accordingly,

interstate services provided through such arrangements would fit within

the pay-per-call definition and, thus, be required to be offered

exclusively through 900 numbers. The Commission invited comment on this

tentative conclusion and, also, as to whether, in any event, such

conduct by a common carrier is just and reasonable.

II. Procedural Issues

A. Ex Parte Presentations

12. This is a non-restricted notice-and-comment rulemaking

proceeding. Ex parte presentations are permitted, except during the

Sunshine Agenda period, provided that they are disclosed as provided in

the Commission's rules. See generally 47 CFR Secs. 1.1202, 1.1203,

1.1206.

B. Initial Regulatory Flexibility Analysis

13. Pursuant to the Regulatory Flexibility Act of 1980, 5 USC 601,

the Commission concluded that the proposals contained in the NPRM may

have some impact on small entities due to the proposed requirement that

all presubscription agreements to obtain interstate information

services be executed in writing. Public comment is requested on the

initial regulatory flexibility analysis set forth fully in the NPRM.

These comments must be filed in accordance with the same filing

deadlines set for comments on the other issues in this NPRM but they

must have a separate and distinct heading designating them as responses

to the Regulatory Flexibility Analysis.

C. Comment Filing Procedures

14. Pursuant to applicable procedures set forth in Sections 1.415

and 1.419 of the Commission's rules, 47 CFR Secs. 1.415, 1.419,

interested parties may file comments on or before August 26, 1996 and

reply comments on or before September 16,1996. To file formally in this

proceeding, participants must file an original and four copies of all

comments, reply comments, and supporting comments. If participants wish

each Commissioner to have a personal copy of their comments, an

original plus nine copies must be filed. Comments and reply comments

should be sent to the Office of the Secretary, Federal Communications

Commission, Washington, D.C. 20554. Comments and reply comments will be

available for public inspection during regular business hours in the

FCC Reference Center (Room 239) of the Federal Communications

Commission, 1919 M Street, N.W., Washington, D.C. 20554.

15. Parties are asked to submit comments and reply comments on

diskette. Such diskette submission are in addition to the formal filing

requirements addressed above. Parties submitting diskettes should

submit them to Mary Romano of the Common Carrier Bureau, 2025 M Street,

N.W., Room 6120, Washington, D.C. 20554. Such submissions should be on

a 3.5 inch diskette formatted in an IBM compatible form using MS DOS

5.0 and WordPerfect 5.1 software. The diskette should be submitted in

``read only'' mode. The diskette should be clearly labelled with the

party's name, proceeding, type of pleading (comment or reply comments)

and date of submission. The diskette should be accompanied by a cover

letter.

Ordering Clauses

16. It is ordered, pursuant to Sections 1, 4(i), 4(j), and 228 of

the Communications Act, 47 USC Secs. 152, 154(i), 154(j), and 228, that

a Notice of Proposed Rule Making is hereby adopted, proposing amendment

of 47 CFR Part 64 as set forth below.

17. It is further ordered that CC Docket No. 93-22 is hereby

terminated.

18. It is further ordered that the Secretary shall send a copy of

this Notice of Proposed Rule Making including the initial regulatory

flexibility analysis to the Chief Counsel for Advocacy of the Small

Business Administration, in accordance with Section 603(a) of the

Regulatory Flexibility Act.

List of Subjects in 47 CFR Part 64

Communications common carriers, Computer technology, Federal

Communications Commission, Telephone.

[[Page 39110]]

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Part 64 of Title 47 of the Code of Federal Regulations is proposed

to be amended as follows:

1. The authority citation for Part 64 continues to read as follows:

Authority: Sec. 4, 48 Stat. 1066, as amended; 47 USC 154, unless

otherwise noted. Interpret or apply secs. 201, 218, 226, 228, 48

Stat 1070, as amended, 1077; 47 USC 201, 218, 226, 228 unless

otherwise noted.

2. Section 64.1501(b) is revised to read as follows:

Sec. 64.1501 Definitions.

* * * * *

(b) Presubscription or comparable arrangement means an agreement to

purchase information services evidenced by:

(1) A written contractual agreement (including one transmitted

through electronic medium) between an information services provider and

a legally competent individual that is executed for the sole purpose of

arranging purchase of information services and is separate or easily

severable from any promotions or inducements, and in which:

(i) The service provider clearly and conspicuously discloses to the

consumer all material terms and conditions associated with the use of

the service, including the service provider's name and address, a

business telephone number which the consumer may use to obtain

additional information or to register a complaint, and the rates for

the service;

(ii) The service provider agrees to notify the consumer at least

one billing cycle in advance of any future rate changes;

(iii) The consumer agrees to use the service on the terms and

conditions disclosed by the service provider; and

(iv) The service provider requires the use of an identification

number or other means to prevent unauthorized access to the service by

nonsubscribers; or

(2) Disclosure of a pre-existing credit, prepaid account, debit,

charge, or calling card number, along with authorization to bill that

number: Provided, that an actual credit, charge, or calling card:

(i) Has, upon request or application, been delivered to the party

to be billed prior to assessment of charges; and

(ii) Does not operate to assess charges through automatic number

identification;

(3) Provided, that a presubscription arrangement to obtain

information services provided by means of a toll-free number shall

conform to the requirements of Sec. 64.1504(c).

3. Section 64.1504 is amended by revising introductory text of

paragraph (c) and paragraphs (d) and (e) to read as follows:

Sec. 64.1504 Restrictions on the use of toll-free numbers.

* * * * *

(c) The calling party or subscriber to the originating line being

charged for information conveyed during the call unless:

* * * * *

(d) The calling party or subscriber to the originating line being

called back collect for the provision of audio or data information

services, simultaneous voice conversation services, or products; and

(e) The calling party or subscriber to the originating line being

assessed by virtue of the caller being asked to connect or otherwise

transfer to a pay-per-call or other information service, a charge for

the call.

* * * * *

4. Section 64.1510 is amended by revising paragraph (c)(2) to read

as follows:

Sec. 64.1510 Billing and collection of pay-per-call and similar

service charges.

* * * * *

(c) * * *

(2) Clearly list the 800 or other toll-free number dialed in a

location separate from local and long distance telephone charges.

[FR Doc. 96-19137 Filed 7-25-96; 8:45 am]

BILLING CODE 6712-01-P