III. Authority for Rules

The Commission's authority to adopt these consumer protection rules derives in part from its general authority to regulate public utilities (see Section 701). Additional specific authority is found in Sections 2889.9 and 2890, which include specific disclosure and customer service requirements, and in Section 2890.1.

A. Billing Agents and Vendors that are not Public Utilities

Although cramming does not necessarily involve multiple entities, experience has shown that it often occurs in the context of a billing chain involving one or more billing agents in addition to the billing telephone company and yet another entity responsible for initiating the process of placing a charge on a subscriber's bill. For this reason, the Legislature in enacting Sections 2889.9 and 2890 made the requirements of those sections applicable to billing agents and to other persons or corporations "responsible for generating a charge" on a subscriber's telephone bill, whether or not they are public utilities. Commission rules implementing this anti-cramming legislation apply to these entities as well. If persons or corporations subject to Sections 2889.9 or 2890 fail to comply with those statutes or the Commission's implementing rules, the Commission may impose penalties on them. (Section 2889.9(b).)

The term "entity responsible for generating a charge" in Section 2890 refers to a person or corporation that initiates the process of getting a charge placed on a subscriber's telephone bill. Some carriers, however, have argued in comments that the phrase is ambiguous because billing agents also play a role in "generating a charge" on a subscriber's bill. Accordingly, in these rules, we have used the term "vendor" to refer to a person or corporation that initiates the process of placing a non-communications charge on a subscriber's telephone bill. In the context of non-communications charges, vendors likely will not be public utilities in most cases; however, if a billing telephone company sells non-communications products or services directly to its own subscribers, it will be acting both as a billing telephone company and as a "vendor" within the meaning of these rules.

B. Wireless Telephone Service Providers

Wireless telephone service providers that choose to provide billing services for non-communications products and services are subject to these rules. Section 332(c)(3)(A) of the Federal Communications Act bars states from regulating wireless telephone rates unless specific authorization is obtained from the FCC, but states may "regulate the other terms and conditions of service." The Act also does not prevent states from requiring wireless service providers to comply with general consumer protection laws. (Spielhotz v. Superior Court (2001) 86 CA4th 1366; see also In re Wireless Consumers Alliance, Inc., FCC 00-292 (Aug. 14, 2000), reconsideration denied, FCC 01-35 (Jan. 31, 2001).) Moreover, these interim rules apply to billing for products and services unrelated to telephone service, except to the extent that the rules prohibit disconnection of basic local residential service for nonpayment of non-communications charges, a provision that does not, at present, affect wireless telephone service providers.