Decision 00-03-020 March 2, 2000

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Rulemaking on the Commission's Own Motion to Consider Adoption of Rules Applicable to Interexchange Carriers for the Transfer of Customers Including Establishing Penalties for Unauthorized Transfer.	Rulemaking 97-08-001 (Filed August 1, 1997)
Investigation on the Commission's Own Motion to Consider Adoption of Rules Applicable to Interexchange Carriers for the Transfer of Customers Including Establishing Penalties for Unauthorized Transfer.	Investigation 97-08-002 (Filed August 1, 1997)

FINAL OPINION ON RULES
DESIGNED TO DETER SLAMMING,
CRAMMING, AND SLIDING

FINAL OPINION ON RULES DESIGNED TO DETER SLAMMING, CRAMMING, AND SLIDING 2

1. Summary 2

2. Consumer Perspective 3

3. Procedural Background 5

3.1. Prehearing Conference Through Oral Argument 5

3.2. CALTEL's Request for a Hearing 6

4. Recent California Legislation 11

4.1. Unauthorized Customer Transfer (Slamming) 11

4.2. Unauthorized Billing ("Cramming") 12

4.2.1. Billing Rules and Restrictions 13

4.2.2. Solicitation Requirements 14

4.2.3. Commission Jurisdiction and Enforcement 15

4.2.4. Commission Implementation of SB 378 and AB 2142 15

4.2.5. New Responsibilities of Billing Telephone Companies 16

4.2.6. Commission Authority over Billing Agents 17

5. Issues Not Addressed By 1998 Legislation 17

5.1. "Best Practices" Guidelines 18

5.2. Parties' Comments on the Draft Decision 19

6. Billing Telephone Companies And Customer Disputes 20

7. Local Disconnect For Failure To Pay Long Distance Charges 21

7.1. Background and Draft Decision 21

7.2. Additional Evidence Presented on the Local Disconnect Issue 25

7.2.1. Summary of Each Party's Evidence 25

7.2.2. Discussion of Additional Evidence 32

7.3. Local Disconnect and Pub. Util. Code § 2890(d) 33

7.4. Competitive Local Carriers and Local Disconnect 36

8. Carrier Identification In Bills 38

9. Slamming Record-Keeping 41

10. Expiration Date For Letters Of Agency 42

11. Third-Party Verification Compliance Survey 46

12. The Commission's Consumer Protection Role And Responsibilities 47

13. Rate Disclosure Requirements 49

14. Removing The Economic Incentive For Slamming 50

15. Comments On Second Draft Decision 51

Findings Of Fact 52

Conclusions Of Law 54

FINAL ORDER 57

Attachment A Anti-Cramming Best Practices Guidelines

Attachment B Subscriber Complaint Reporting Rules

Attachment C Consumer Education Plan

FINAL OPINION ON RULES
DESIGNED TO DETER SLAMMING,
CRAMMING, AND SLIDING

1. Summary

The Commission opened this proceeding to determine if the Commission could better protect consumers against the unauthorized changing of their telephone provider while still making it easy for customers to exercise their choice so as to enhance vigorous competition. This decision increases protection of California consumers by prohibiting local exchange companies from disconnecting local service for nonpayment of long distance charges. In this proceeding, we found that our policy allowing such disconnections may have created an inaccurate perception among consumers that they must pay all charges on their bill, even unauthorized charges, or risk losing their local service. This decision is intended to dispel that perception.

This decision also discusses the Federal Communications Commission's advisory guidelines and California's telephone corporations that bill for third parties. While we leave the corporations free to modify these guidelines to better meet their particular customers' needs, the topics in these guidelines represent consumer protection issues which we expect California billing telephone companies to address.

In reviewing our rules applicable to interexchange carriers and other telecommunications service providers, we have made several minor rule changes needed to better identify the carriers and providers. On the whole, however, the proceeding showed that aggressive enforcement of existing rules against carriers and providers that are violating existing rules would most benefit consumers.

Our assessment of whether consumers are being served by their carrier of choice has shown that while the rate of transfer disputes filed by consumers has generally decreased, there is a troublingly higher rate of disputes among business and residential customers whose language preference is other than English as compared to English-speaking groups. To combat this difference, we require local exchange carriers to implement a consumer education plan through community-based organizations.

To provide context for our actions, we begin with a summary of the consumer perspectives we have heard, then outline the procedural history of this proceeding, and finally detail our specific directives on unauthorized billing (cramming), unauthorized customer transfer (slamming), and the use of dated transfer authorizations (sliding).