FCC Clarifies Slamming Rules

Posted: 6/2003

FCC Clarifies Slamming Rules

By Josh Long

The
Federal Communication Commission has modified the FCC’s carrier change or
"slamming" regulations and seeks industry comment on proposed
third-party verification (TPV) requirements. Comments are due June 2 and replies
are due June 17. The FCC’s action stands to affect facilities-based telecom
service providers and resellers as well as providers of TPV services.

The FCC now says LECs entering
carrier change requests can be held liable for unauthorized changes. The FCC
declined to find IXCs liable for an unauthorized change when the LEC made the
mistake. Attorney Thomas K. Crowe, says the order was in response to claims by
Sprint Corp. and WorldCom Inc. that LEC actions or "LEC installs"
sometimes can result in an unauthorized carrier change.

The FCC also reversed a previous
policy and now requires verification of long-distance carrier changes in
situations in which a customer initiates or changes long-distance service by
contacting a LEC directly, notes Crowe. "The current FCC regulations impose
a 60-day limitation on the amount of time an LOA maybe considered valid. The
FCC’s decision eliminates this 60-day limit in the case of multiline and/or
multilocation business customers that have entered into negotiated agreements
with carriers to add presubscribed lines to their business locations during the
course of a term agreement," he says.

The FCC also discontinued a
requirement that carriers file Form 478 semi-annually, on Aug. 15 and on Feb.
15, to report data regarding slamming allegations.

The FCC modified a requirement to
allow, under certain circumstances, a carrier or sales agent to remain silent on
the phone when initiating a three-way conference call between the agent,
customer and the independent verifier.

The regulator now will allow a sales
representative to stay on the line in some cases, says Larry Leikin, vice
president of sales for VoiceLog LLC, a third-party verification company. A
company must show it is too great an economic burden or technologically
unfeasible for the phone company to upgrade the systems necessary to drop off
the line, once the call is transferred to a TPV agent or automated system, he
explains. A phone company also can obtain an exemption if the sales agent is
located in an area where the local telephone company does not use technology to
support a drop-off call, says Leikin.

In an order released March 17, the
FCC cited an Internet-based survey conducted by VoiceLog. Of the 58 companies
surveyed, 21 percent said the cost to upgrade the systems to comply with the
drop-off rule would exceed $10,000, 13 percent estimated the costs would exceed
$50,000 and 10 percent said the costs would surpass $100,000. Slightly more than
half of the respondents said they were not in compliance with the rule, while 43
percent said they were unaware of it, the FCC order states.

VoiceLog’s arguments were made to
aid smaller providers — such as a long-distance reseller — not titans like
AT&T Corp. "This was never really aimed at the larger companies,"
Leikin says, but, "I would expect there will be quite a few companies out
there that will take advantage of it." Leikin says he was aware of specific
companies that would file for relief with the FCC.

The FCC originally adopted the
drop-off rule to protect consumers from being pressured by the sales
representative during the TPV process. VoiceLog argues the sales representative
should be able to stay on the line in the event the customer has a legitimate
question. However, the FCC says that shouldn’t be necessary if the telemarketer
is straightforward with the person before the call is transferred to a
third-party agent.

Finally, the FCC is seeking comment
on five proposed additional requirements for TPV calls, including:

"The proposed new TPV
requirements could present serious burdens to the industry in signing up new
customers, if adopted," says attorney Crowe. "In particular, the
proposed new script additions could essentially double the volume of the current
script obligation, potentially impeding sales."