COM/CXW/KPP/sid/mnt Mailed 7/13/2001

Decision 01-07-030 July 12, 2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Establish Consumer Rights and Consumer Protection Rules Applicable to All Telecommunications Utilities.

Rulemaking 00-02-004 (Filed February 3, 2000)

TABLE OF CONTENTS

Title Page

INTERIM OPINION ADOPTING INTERIM RULES GOVERNING THE INCLUSION OF NONCOMMUNICATIONS-RELATED CHARGES

IN TELEPHONE BILLS 2

I. Summary 2

II. Background 3

III. Authority for Rules 5

A. Billing Agents and Vendors that are not Public Utilities 5

B. Wireless Telephone Service Providers 6

IV. Applicability of Truth in Lending Act 7

V. Basic Approach: Deterrence Through Accountability 10

VI. Key Issues 12

A. Protection for Consumers and Businesses 12

B. Role of Billing Telephone Company 12

C. Authorization of Charges 13

1. Billing Telephone Companies Must Obtain Affirmative Consent from a Subscriber before Opening Up that Subscriber's Telephone Bill to Non-Communications Charges (the "Opt-in" Requirement) 13

2. Charges Must Be Authorized By Subscriber at Point of Sale 14

3. Subscribers May Revoke Their Authorization 14

D. Privacy Protections 15

E. No Disconnection Rule 16

VII. Complaint Procedures 16

VIII. Conclusion 18

IX. Need for Hearings 18

X. Comments on Draft Decision 18

Findings of Fact 19

Conclusions of Law 21

INTERIM ORDER 22

APPENDIX A: Interim Rules Governing Non-Communications-Related
Charges on Telephone Bills

INTERIM OPINION

ADOPTING INTERIM RULES GOVERNING THE INCLUSION OF NONCOMMUNICATIONS-RELATED CHARGES

IN TELEPHONE BILLS

I. Summary

This decision adopts interim rules governing the inclusion of non-communications-related charges on telephone bills. Effective July 1, 2001, billing telephone companies are permitted to include non-communications charges on subscribers' telephone bills, subject to consumer protection rules adopted by the Commission. (Public Utilities Code Section 2890, version effective July 1, 2001.) ¹ Although recent anti-cramming legislation codified at Sections 2889.9 and 2890 contains many applicable consumer protection provisions, the Legislature has directed the Commission to adopt by July 1, 2001, "any additional rules it determines to be necessary to implement the billing safeguards of Section 2890, for the inclusion of non-communications-related products and services in telephone bills." (Section 2890.1) The interim rules set forth in Appendix A to this decision contain safeguards the Commission deems necessary, at this time, to ensure that subscribers are billed only for charges they have authorized.

The Commission is preparing new, comprehensive consumer protection rules that it will issue in the form of a General Order later in this proceeding. Today's interim rules, possibly with some modifications, will be incorporated into and superseded by that General Order.