Interstate Pay-Per-Call and Other Information Services

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

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

Interstate Pay-Per-Call and Other Information Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopted this Order to amend its rules governing

the provision of interstate pay-per-call and other information services

to conform with the requirements of Section 701 of the

Telecommunications Act of 1996 which amended Section 228 of the

Communications Act of 1934, as amended. The rules adopted in the Order

incorporate the amendments to Section 228 virtually verbatim and are

intended to protect consumers from abuses involving use of toll-free

numbers and tariffed service systems to levy charges for interstate

information services.

EFFECTIVE DATE: December 23, 1996.

FOR FURTHER INFORMATION CONTACT: Mary Romano, Enforcement Division,

Common Carrier Bureau, (202) 418-0960.

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

in CC Docket Nos. 93-22 and 96-146 [FCC 96-289], adopted June 28, 1996

and released July 11, 1996. The full text of the Order 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 Order 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

[[Page 39085]]

relating to this Order, see a proposed rule involving interstate

information services published elsewhere in this issue.

Paperwork Reduction

Public reporting burden for collections of information is estimated

as follows:

------------------------------------------------------------------------

Est.

avg.

Sections hours Annual

per burden

response

------------------------------------------------------------------------

Section 64.1504..................................... 3750 10,500

Section 64.1510..................................... 1350 540,000

------------------------------------------------------------------------

Total Annual Burden: 550,500.

Frequency of Response: On Occasion.

These estimates include the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collections of information.

Send comments regarding these burden estimates or any other aspects of

the collections of information, including suggestions for reducing the

burden, to the Federal Communications Commission, Records Management

Branch, Room 234, Paperwork Reduction Project, Washington, D.C. 20554

and to the Office of Management and Budget, Paperwork Reduction

Project, Washington, D.C. 20503.

Summary of Order:

1. On June 28, 1996, the Commission adopted an Order in CC Docket

No. 93-22 and 96-146 (released July 11, 1996; FCC 96-289) that amends

Part 64 of the Commission's rules to conform with the

Telecommunications Act of 1996, Public Law 104-104, (1996 Act). Among

other things, the 1996 Act amended Section 228 of the Communications

Act of 1934, as amended, (Communications Act), 47 USC Sec. 228, to

enact new restrictions on the manner in which toll-free numbers may be

used to provide information services and to repeal of the statutory

exemption to pay-per-call status accorded to any tariffed service under

the Telephone Disclosure and Dispute Resolution Act of 1992, Public Law

102-556 (TDDRA). As set forth in the final rules and explained below,

the Commission amended its pay-per-call regulations to comply with the

statutory mandate that our rules reflect the new requirements of

Section 228 of the Communications Act.

I. Requirements of Amended Section 228

A. ``Billing for 800 Calls''--47 USC Sec. 228(c)(7)

2. The TDDRA placed limits on charging callers who place calls to

toll-free numbers to reach information services. The 1996 Act amends

Section 228(c) of the Communications Act to expand those restrictions.

The 1996 Act adds a new prohibition on ``the calling party being

assessed, by virtue of being asked to connect or otherwise transfer to

a pay-per-call service, a charge for the call [to an 800 or any other

toll-free number].'' 47 USC Sec. 228(c)(7)(E). The Commission added to

its rules Section 64.1504(e) to codify, verbatim, this statutory

provision.

3. The 1996 Act also modifies Section 228(c)(7)(C) to prohibit

charging callers for calls to toll-free numbers for conveyance of

information unless ``the calling party has a written agreement,

including an agreement transmitted through an electronic medium,'' or

``the calling party is charged for the information * * * by means of a

credit, prepaid, debit, charge, or calling card.'' 47 USC

Secs. 228(c)(7)(C)(i)-(ii), (c)(9). These requirements and the

Commission's new implementing regulations are explained below.

1. ``Subscription Agreements for Billing for Information Provided Via

Toll-Free Calls''--47 USC Sec. 228(c)(8)

4. ``In General''--47 USC Sec. 228(c)(8)(A). The 1996 Act

enumerates specific requirements that must be followed when information

services are charged to callers to an 800 or other toll-free number

pursuant to a written presubscription agreement.

As provided in 47 USC Sec. 228(c)(8)(A)(i)-(vi), the agreement must

include:

(i) the rate at which charges are assessed for the information;

(ii) the information provider's name;

(iii) the information provider's business address;

(iv) the information provider's regular business telephone number;

(v) the information provider's agreement to notify the subscriber

at least one billing cycle in advance of all future changes in the

rates charged for the information; and

(vi) the subscriber's choice of payment method, which may be by

direct remit, debit, prepaid account, phone bill, or credit or calling

card.

The Commission added to its rules Sections 64.1504(c)(1)(i)-(vi) to

codify, verbatim, these statutory requirements governing

presubscription agreements to obtain information services available

through a toll-free number.

5. ``Billing Arrangements''--47 U.S.C. 228(c)(8)(B). The 1996 Act

prescribes new requirements for common carriers who bill telephone

subscribers for information services that are available through a toll-

free number and provided pursuant to a written presubscription

agreement. Section 228(c)(8)(B)(i) provides that

If a subscriber elects * * to pay by means of a phone bill, * *

* the [written presubscription] agreement shall clearly explain that

the subscriber will be assessed for calls made to the information

service from the subscriber's phone line.

Further, under Section 228(c)(8)(B) (ii)-(iii), any telephone bill

containing such charges must display the toll-free number that was

dialed to access the information service and contain a prominent

disclaimer stating that local and long distance telephone service may

not be disconnected for failure to pay disputed information-service

charges. The Commission added to its rules Secs. 64.1504(c)(vi) and

64.1510(c) and amended Sec. 64.1510(b) to codify, virtually verbatim,

these statutory requirements governing billing of presubscribed

information services through a telephone bill.

6. ``Use of PINs to Prevent Unauthorized Access''--47 U.S.C.

228(c)(8)(C). The 1996 Act provides that a presubscription agreement to

obtain information services through a toll-free number must include ``a

unique personal identification number or other subscriber-specific

identifier,'' a requirement that ``a subscriber use this number or

identifier to obtain access to the information provided,''

``instructions on its use,'' and assurance ``that services accessed by

use of the subscriber's personal identification number or subscriber-

specific identifier'' will be billed in the manner specified by the

subscriber (e.g., ``direct remit, debit, prepaid account, phone bill,

or credit or calling card''). 47 U.S.C. 228(c)(8)(C), (c)(8)(A)(vi).

The Commission added to its rules Sec. 64.1504(c)(vii) to codify,

virtually verbatim, these statutory requirements governing PINs.

7. ``Exceptions''--47 U.S.C. 228(c)(8)(D). The 1996 Act establishes

exceptions to the requirement for written presubscription ``for calls

utilizing telecommunications devices for the deaf, for directory

services provided by a common carrier or its affiliate or by a local

exchange carrier or its affiliate, or for any purchase of goods or of

services that are not information services.'' 47 U.S.C. 228(c)(8)(D).

The

[[Page 39086]]

Commission added to its rules Sec. 64.1504(f)(1) to codify, verbatim,

these statutory exceptions to the requirement that presubscription be

executed in writing for information services available through a toll-

free number.

8. ``Termination of Service''--47 U.S.C. 228(c)(8)(E). The 1996 Act

directs common carriers to investigate promptly complaints that a

presubscribed information service accessed through an 800 or other

toll-free number has not been provided in accordance with the statutory

requirements. Carriers also explicitly are accorded authority to

terminate service to an IP who fails to provide evidence of a written

presubscription agreement for disputed charges. The Commission added to

its rules Sec. 64.1503(b) to codify, virtually verbatim, statutory

provisions involving common carriers' investigations of complaints and

termination of service.

9. ``Treatment of Remedies''--47 U.S.C. 228(c)(8)(F). Section

228(c)(8)(F) provides that the remedies specified in Section 228(c)

``are in addition to any other remedies that are available under [the

Commission's forfeiture authority in] Title V of [the Communications]

Act. This provision simply specifies that both the Commission's Title V

statutory penal provisions and the remedies contained in Section

228(c), (e.g., termination of service to an information provider) may

be invoked against parties who violate Commission rules or orders

concerning interstate information services. The Commission determined

that the provision is effectively implemented by the statute alone and

need not be added to our pay-per-call regulations, which govern the

conduct of common carriers who transmit or bill and collect for pay-

per-call or other information services.

2. ``Charges by Credit, Prepaid, Debit, Charge, or Calling Card in

Absence of Agreement''--47 U.S.C. 228(c)(9)

10. The 1996 Act establishes payment by prepaid account, debit,

credit, charge, or calling card as alternatives to written

presubscription for information services charged to callers to 800 or

other toll-free numbers provided that all such calls begin with an

introductory disclosure message that--

(A) clearly states that there is a charge for the call;

(B) clearly states the service's total cost per minute and any

other fees for the service or for any service to which the caller may

be transferred;

(C) explains that the charge must be billed on either a credit,

prepaid, debit, charge, or calling card;

(D) asks the caller for the card number; clearly states that

charges for the call begin at the end of the introductory message; and

(E) clearly states that the caller can hang up at or before the end

of the introductory message without incurring any charge whatsoever.

47 U.S.C. 228(c)(9) (A)-(F). The Commission added to its rules

Sec. 64.1504(c)(2) to codify, verbatim, these statutory provisions

governing use of a prepaid account, debit, credit, charge, or calling

card to pay for information services that are accessed through an 800

or other toll-free number.

11. ``Bypass of Introductory Disclosure Message''--47 U.S.C.

228(c)(10). Under the 1996 Act, IPs may install a bypass mechanism so

that repeat callers to an information service accessed through an 800

or other toll free number can ``avoid listening to the introductory

message, provided that the information providers shall disable such a

bypass mechanism after the institution of any price increase and for a

period of time determined to be sufficient by the Federal Trade

Commission to give callers adequate and sufficient notice of a price

increase.'' The Commission added to its rules Sec. 64.1504(f)(2) to

codify, verbatim, these statutory provisions governing mechanisms that

permit repeat callers to bypass the introductory message required for

all information services that are accessed through an 800 or other

toll-free number and that bill through a prepaid account, debit,

credit, charge, or calling card rather than by means of a

presubscription agreement.

B. Definitions

1. Pay-Per-Call Services--47 U.S.C. Sec. 228(i)

12. The 1996 Act redefines the term ``pay-per-call services'' by

eliminating the exemption accorded to any service provided pursuant to

tariff under the TDDRA. The Commission amended Section 64.1501(a) of

its rules to remove the tariffed services exception.

2. Calling Card--47 U.S.C. Sec. 228(c)(11)

13. After recognizing payment by ``calling card'' as an acceptable

means of obtaining information services available through a toll-free

number, the 1996 Act defines a calling card as ``an identifying number

or code unique to the individual, that is issued to the individual by a

common carrier and enables the individual to be charged by means of a

phone bill for charges incurred independent of where the call

originates.'' The Commission added to its rules Section 64.1501(c) to

codify, verbatim, the statutory definition of ``calling card.''

3. Presubscription or Comparable Arrangement--47 CFR Sec. 1501(b).

14. Neither the TDDRA nor the 1996 Act defines the term

``presubscription or comparable arrangement,'' which Section 228(i)(2)

establishes as an exemption to pay-per-call status. In implementing the

TDDRA, however, the Commission and the FTC adopted identical

definitions intended to guard against uncontrolled access to

information services and to ensure that consumers receive information

necessary to make informed choices about whether to subscribe to such

services. The 1996 Act does not directly mandate modification of the

presubscription definition contained in Section 64.1501(b) of our

rules. The Commission determined, however, that certain aspects of the

definition are inconsistent with statutory requirements governing

presubscription to information services available through 800 or other

toll-free numbers. Therefore, the Commission added to its rules Section

64.1501(b)(6) to specify that presubscription arrangements to obtain

information services provided by means of an 800 or other toll-free

number must conform to the requirements of Section 64.1504(c). This

amendment incorporates into the Commission's general presubscription

definition statutory requirements that govern 800-number

presubscription.

II. Procedural Issues

A. Administrative Procedure Act Requirements

15. Because the rule changes set forth in Appendix A and adopted

herein simply conform the Commission's rules to the statute, the

Commission found for good cause that compliance with the notice and

comment provisions of the Administrative Procedure Act is unnecessary.

See 5 U.S.C. Sec. 553(b)(B). Moreover, to the extent that the

provisions of the 1996 Act mirror proposals set forth in the

Commission's Further Notice of Proposed Rule Making, Policies and Rules

Implementing the Telephone Disclosure and Dispute Resolution Act, CC

Docket No. 93-22, 59 FR 46806 (September 12, 1994), notice and comment

requirements have been satisfied.

Ordering Clauses

16. Accordingly, it is ordered, pursuant to Sections 1, 4(i), 4(j),

and 228 of the Communications Act, 47 U.S.C. Secs. 152, 154(i), 154(j),

and 228, that 47 CFR Part 64 IS AMENDED as set forth below, effective

December 23, 1996.

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

terminated.

[[Page 39087]]

List of Subjects in 47 CFR Part 64

Communications common carriers, Computer technology, Federal

Communications Commission, Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rules Changes

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

as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

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

Authority: Sec. 4, 48 Stat. 1066, as amended; 47 U.S.C. 154,

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

48 Stat 1070, as amended, 1077; 47 U.S.C. 201, 218, 226, 228 unless

otherwise noted.

2. The heading of Subpart O of Part 64 is revised to read as

follows:

Subpart O--Interstate Pay-Per-Call and Other Information Services

3. Section 64.1501 is revised to read as follows:

Sec. 64.1501 Definitions.

For purposes of this subpart, the following definitions shall

apply:

(a) Pay-per-call service means any service:

(1) In which any person provides or purports to provide:

(i) Audio information or audio entertainment produced or packaged

by such person;

(ii) Access to simultaneous voice conversation services; or

(iii) Any service, including the provision of a product, the

charges for which are assessed on the basis of the completion of the

call;

(2) For which the caller pays a per-call or per-time-interval

charge that is greater than, or in addition to, the charge for

transmission of the call; and

(3) Which is accessed through use of a 900 number;

(4) Provided, however, such term does not include directory

services provided by a common carrier or its affiliate or by a local

exchange carrier or its affiliate, or any service for which users are

assessed charges only after entering into a presubscription or

comparable arrangement with the provider of such service.

(b) Presubscription or comparable arrangement means a contractual

agreement in which:

(1) 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;

(2) The service provider agrees to notify the consumer of any

future rate changes;

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

conditions disclosed by the service provider; and

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

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

nonsubscribers;

(5) Provided, however, that disclosure of a credit, prepaid

account, debit, charge, or calling card number, along with

authorization to bill that number, made during the course of a call to

an information service shall constitute a presubscription or comparable

arrangement if an introductory message containing the information

specified in Sec. 64.1504(c)(2) is provided prior to, and independent

of, assessment of any charges. No other action taken by a consumer

during the course of a call to an information service, for which

charges are assessed, can create a presubscription or comparable

arrangement.

(6) 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).

(c) Calling card means an identifying number or code unique to the

individual, that is issued to the individual by a common carrier and

enables the individual to be charged by means of a phone bill for

charges incurred independent of where the call originates.

4. Section 64.1503 is revised to read as follows:

Sec. 64.1503 Termination of pay-per-call and other information

programs.

(a) Any common carrier assigning a telephone number to a provider

of interstate pay-per-call service shall specify by contract or tariff

that pay-per-call programs not in compliance with Sec. 64.1502 shall be

terminated following written notice to the information provider. The

information provider shall be afforded a period of no less than seven

and no more than 14 days during which a program may be brought into

compliance. Programs not in compliance at the expiration of such period

shall be terminated immediately.

(b) Any common carrier providing transmission or billing and

collection services to a provider of interstate information service

through any 800 telephone number, or other telephone number advertised

or widely understood to be toll-free, shall promptly investigate any

complaint that such service is not provided in accordance with

Sec. 64.1504 or Sec. 64.1510(c), and, if the carrier reasonably

determines that the complaint is valid, may terminate the provision of

service to an information provider unless the provider supplies

evidence of a written agreement that meets the requirements of this

Sec. 64.1504(c)(1).

5. Section 64.1504 is revised to read as follows:

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

A common carrier shall prohibit by tariff or contract the use of

any 800 telephone number, or other telephone number advertised or

widely understood to be toll-free, in a manner that would result in:

(a) The calling party or the subscriber to the originating line

being assessed, by virtue of completing the call, a charge for a call;

(b) The calling party being connected to a pay-per-call service;

(c) The calling party being charged for information conveyed during

the call unless:

(1) The calling party has a written agreement (including an

agreement transmitted through electronic medium) that specifies the

material terms and conditions under which the information is offered

and includes:

(i) The rate at which charges are assessed for the information;

(ii) The information provider's name;

(iii) The information provider's business address;

(iv) The information provider's regular business telephone number;

(v) The information provider's agreement to notify the subscriber

at least one billing cycle in advance of all future changes in the

rates charged for the information;

(vi) The subscriber's choice of payment method, which may be by

direct remit, debit, prepaid account, phone bill, or credit or calling

card and, if a subscriber elects to pay by means of phone bill, a clear

explanation that the subscriber will be assessed for calls made to the

information service from the subscriber's phone line;

(vii) A unique personal identification number or other subscriber-

specific identifier that must be used to obtain access to the

information service and instructions on its use, and, in addition,

assures that any charges for services

[[Page 39088]]

accessed by use of the subscriber's personal identification number or

subscriber-specific identifier be assessed to subscriber's source of

payment elected pursuant to paragraph (c)(1)(vi) of this section; or

(2) The calling party is charged for the information by means of a

credit, prepaid, debit, charge, or calling card and the information

service provider includes in response to each call an introductory

message that:

(i) Clearly states that there is a charge for the call;

(ii) Clearly states the service's total cost per minute and any

other fees for the service or for any service to which the caller may

be transferred;

(iii) Explains that the charges must be billed on either a credit,

prepaid, debit, charge, or calling card;

(iv) Asks the caller for the card number;

(v) Clearly states that charges for the call begin at the end of

the introductory message; and

(vi) Clearly states that the caller can hang at or before the end

of the introductory message without incurring any charge whatsoever.

(d) The calling party being called back collect for the provision

of audio or data information services, simultaneous voice conversation

services, or products; and

(e) The calling party being assessed by virtue of the caller being

asked to connect or otherwise transfer to a pay-per-call service, a

charge for the call.

(f) Provided, however, that:

(1) Notwithstanding paragraph (c)(1) of this section, a written

agreement that meets the requirements of that paragraph is not required

for:

(i) Calls utilizing telecommunications devices for the deaf;

(ii) Directory services provided by a common carrier or its

affiliate or by a local exchange carrier or its affiliate; or

(iii) Any purchase of goods or of services that are not information

services.

(2) The requirements of paragraph (c)(2) of this section shall not

apply to calls from repeat callers using a bypass mechanism to avoid

listening to the introductory message: Provided, That information

providers shall disable such a bypass mechanism after the institution

of any price increase for a period of time determined to be sufficient

by the Federal Trade Commission to give callers adequate and sufficient

notice of a price increase.

6. In Section 64.1510, paragraph (b) is revised and new paragraph

(c) is added to read as follows:

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

service charges.

* * * * *

(b) Any common carrier offering billing and collection services to

an entity providing interstate information services on a collect basis

shall, to the extent possible, display the billing information in the

manner described in paragraphs (a)(2)(i), (A), (B), (D) and (a)(2)(ii)

of this section.

(c) If a subscriber elects, pursuant to Sec. 64.1504(c)(1)(vi), to

pay by means of a phone bill for any information service provided by

through any 800 telephone number, or other telephone number advertised

or widely understood to be toll-free, the phone bill shall:

(1) Include, in prominent type, the following disclaimer: ``Common

carriers may not disconnect local or long distance telephone service

for failure to pay disputed charges for information services;'' and

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

[FR Doc. 96-19138 Filed 7-25-96; 8:45 am]

BILLING CODE 6712-01-P