2000 Biennial Review-Review of Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, 12605-12611 [05-5059]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 70, Number 49 (Tuesday, March 15, 2005)]
[Rules and Regulations]
[Pages 12605-12611]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-5059]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 94-129, CC Docket No. 00-257; FCC 04-153]


2000 Biennial Review--Review of Policies and Rules Concerning 
Unauthorized Changes of Consumers' Long Distance Carriers

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission addresses issues raised in 
petitions for reconsideration filed pursuant to the First Report and 
Order and Fourth Report and Order, and certain ancillary slamming 
issues relating to switchless resellers that were raised in CC Docket 
No. 94-129 and CC Docket No. 00-257 that have not yet been resolved.

DATES: Effective March 15, 2005.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

[[Page 12606]]


FOR FURTHER INFORMATION CONTACT: Nancy Stevenson or David Marks, of the 
Consumer & Governmental Affairs Bureau at (202) 418-2512.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's First 
Order on Reconsideration and Fourth Order on Reconsideration 
(Reconsideration Order), CC Docket Nos. 94-129 and 00-257, FCC 04-153, 
adopted June 30, 2004 and released July 16, 2004. The complete text of 
the Reconsideration Order is available for public inspection and 
copying during regular business hours at the FCC Reference Information 
Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 
20554. The complete text of this decision may be purchased from the 
Commission's duplicating contractor, Best Copy and Printing Inc. 
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 
20554. Customers may also contact BCPI at their website: 
www.bcpiweb.com or call 1-800-378-3160. The Reconsideration Order 
addresses issues arising from the First Report and Order and Fourth 
Report and Order FCC 01-156, 16 FCC Rcd 11218; published at 66 FR 
28117, May 22, 2001. This Reconsideration Order does not contain new or 
modified information collection requirements subject to the Paperwork 
Reduction Act of 1995 (PRA), Public Law 104-13. In addition, it does 
not contain any new or modified ``information collection burden for 
small business concerns with fewer than 25 employees,'' pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 
44.U.S.C. 3506(c)(4).
    To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental 
Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY). This 
First Order on Reconsideration and Fourth Order on Reconsideration can 
also be downloaded in Word and Portable Document Format (PDF) at http:/
/www.fcc.gov/cgb/policy.

Synopsis

    In the Second Report and Order and Further Notice of Proposed 
Rulemaking (Section 258 Order) the Commission established a 
comprehensive framework of rules to implement section 258 and 
strengthen its existing anti-slamming rules. The Commission modified 
the existing requirements for the authorization and verification of 
preferred carrier changes, added procedures for handling preferred 
carrier freezes, and adopted aggressive new liability rules designed to 
take the profit out of slamming. (See 64 FR 7763, February 16, 1999). 
However, at that time, the Commission did not specifically address the 
process for carrier changes associated with the sale or transfer of a 
subscriber base from one carrier to another. In such situations, 
carriers typically sought waivers of the carrier change authorization 
and verification rules in order to effect the sale or transfer without 
obtaining individual subscriber consent. The former Common Carrier 
Bureau, now the Wireline Competition Bureau, routinely granted such 
requests, contingent upon the carrier's provision of adequate notice to 
the affected subscribers, along with other consumer protections. See, 
DA 01-1431, Order 16 FCC Rcd 12503 (2001); DA 01-1450, Order, 16 FCC 
Rcd 12607 (2001).
    In the Report and Order Streamlining the International Section 214 
Authorization Process and Tariff Requirements (Streamlining Order), the 
Commission eliminated the need for such waivers by establishing a self-
certification process for compliance with the authorization and 
verification requirements for the carrier-to-carrier sale or transfer 
of subscriber bases. Incorporating the streamlined certification and 
notification process into the rules has significantly reduced the 
burden on carrier and Commission resources while still protecting 
consumers' interests. Under the revised rules, carriers need not obtain 
individual authorization and verification for carrier changes 
associated with the carrier-to-carrier sale or transfer of a subscriber 
base, provided that, not later than 30 days before the planned carrier 
change, the acquiring carrier notifies the Commission, in writing, of 
its intention to acquire the subscriber base and certifies that it will 
comply with the required procedures, including the provision of advance 
written notice to all affected subscribers. (See 61 FR 15724, April 9, 
1996). The advance subscriber notice must disclose: (1) The rates, 
terms, and conditions of the service(s) to be provided by the acquiring 
carrier; (2) the fact that the acquiring carrier will be responsible 
for any carrier change charges associated with the transaction; (3) the 
subscriber's right to select a different preferred carrier, if an 
alternate carrier is available; (4) a toll-free customer service 
telephone number for inquiries about the transfer; (5) the fact that 
all subscribers receiving the notice, including those who have arranged 
preferred carrier freezes through their local service providers, will 
be transferred to the new carrier if they do not select a different 
preferred carrier before the transfer date; and (6) whether the 
acquiring carrier will be responsible for resolving outstanding 
complaints against the selling or transferring carrier. (See 47 CFR 
64.1120(e)(3)).
    The petitions for reconsideration focus on the following main 
issues: Costs associated with the transfer of customers, provision of 
the advance written notice to affected subscribers, and preferred 
carrier freezes. We address these in turn below.

Charges Associated With Carrier Transfers

    Background. In the Streamlining Order, the Commission found that it 
was consistent with section 258 to require the acquiring carrier to be 
responsible for any carrier change charges associated with customer 
transfers. In addition, the Commission directed the acquiring carrier 
to state in its advance subscriber notice that it will assume such 
responsibility.
    Discussion. SBC argues that the Commission should not require 
acquiring carriers to be responsible for any carrier change charges 
associated with a carrier-to-carrier sale or transfer. SBC agrees that 
subscribers should not bear the burden of carrier change charges for 
negotiated carrier-to-carrier transfers, but states that the current 
rule eliminates carriers' flexibility to allocate the responsibility 
for carrier change charges between the carriers. SBC further argues 
that the requirement is particularly problematic for default transfers, 
because the acquiring carrier is forced to transfer subscribers to its 
service pursuant to state-created obligations, and the Commission's 
requirement may conflict with state rules that require the exiting 
competing LEC to pay carrier change charges. According to SBC, because 
default carrier obligations are created by the states, the states are 
best situated to determine which carrier is responsible for switch-over 
charges in a default transfer. Additionally, SBC claims that a 
significant number of the customers who have been defaulted to its 
service have left SBC shortly after the transfer. It contends that ``a 
former customer that previously made a conscious decision to discard 
SBC's service and obtain service from a competing LEC is likely to do 
so again within a short period of time. Thus, SBC is unlikely to recoup 
any switch-over costs from the default customer via a long-term 
carrier-customer relationship.''

[[Page 12607]]

    In a similar vein, Verizon seeks clarification that our rules do 
not prevent an incumbent LEC from assessing a nonrecurring charge on 
customers it acquires by default transfer. In contrast to SBC, however, 
Verizon does not dispute that carrier change charges should not be 
imposed on subscribers in the normal sale of a long distance subscriber 
base. Verizon states that, under these circumstances, the two carriers 
have agreed to a sale and the cost of carrier change charges has been 
taken into account when the terms of the transfer were negotiated. In a 
default carrier transfer, however, Verizon states that the incumbent 
LEC has not negotiated for these customers, but is instead required by 
law to take them. According to Verizon, ``[r]equiring ILECs to waive 
these charges, and imposing other obligations on them under these 
rules, is likely to cause them to resist becoming default carriers, 
with the possible customer service problems that could result.'' As a 
general rule, when subscribers are switched between carriers as a 
result of a negotiated sale or transfer or the exiting carrier's 
bankruptcy, we believe that the acquiring carrier should be responsible 
for carrier change charges associated with that transfer. As we stated 
in the Streamlining Order, because carrier change charges associated 
with a carrier-to-carrier sale or transfer are involuntary in terms of 
the subscriber, subscribers should not bear the burden of the cost of 
the service provider change. In addition, we noted that the acquiring 
carrier is in the best position to cover these charges because it would 
have the billing relationship with the customer after the transfer. We 
therefore deny SBC's request to modify this general rule. In situations 
where an incumbent LEC acquires customers, the revenues from those 
customers following the transfer will flow to the incumbent LEC. Though 
some subscribers may switch from the acquiring carrier to an 
alternative provider after the transfer, we believe a significant 
number will stay and generate revenues for the acquiring carrier. We 
note that in some situations, transferred customers would not have an 
alternative to the acquiring carrier when a competing LEC leaves the 
market and there is no other competing LEC in the service area. Thus, 
we continue to believe that the acquiring carrier will generally be in 
the best position to cover carrier change costs, because in most 
instances it will have a billing relationship with the customer post-
transfer. (See Streamlining Order, 16 FCC Rcd 11228 at paragraph 25). 
We do not believe that this rule eliminates carrier flexibility in 
negotiated transfer situations. As noted in the Streamlining Order, if 
carrier change charges are known to be the responsibility of the 
acquiring carrier, we expect that these charges will be factored into 
the terms of the agreement between the selling/transferring carrier and 
the acquiring carrier.
    We also deny Verizon's request to impose carrier change charges on 
subscribers who are switched as the result of a default carrier-to-
carrier transfer, rather than imposing such charges on the acquiring 
carrier. As the Commission has previously held, because subscribers do 
not request the carrier changes associated with a carrier-to-carrier 
sale or transfer, they should not bear the burden of the cost of 
changing service providers. Also, as Sprint notes in its opposition, 
the modification suggested by Verizon could deter customers from 
switching from an incumbent LEC to a competing LEC in the first place, 
as the incumbent LEC would likely emphasize to subscribers that they 
will pay the costs of resuming incumbent LEC service in the event the 
competing LEC exits the market.
    As noted above, when subscribers are switched between carriers as a 
result of a negotiated sale or transfer or the exiting carrier's 
bankruptcy, we believe the acquiring carrier should generally be 
responsible for carrier change charges associated with a negotiated 
sale or transfer. However, while we maintain this general rule rather 
than adopting either SBC's or Verizon's proposed modifications, we do 
adopt one minor modification to the rule for particular, limited 
circumstances. Specifically, when an acquiring carrier acquires 
customers by default `` other than through bankruptcy--and State law 
would require the exiting carrier to pay these costs, we will require 
the exiting carrier to pay such costs to meet our streamlined slamming 
rules.( See 47 CFR 64.1120(e)(3)(iii); see also Rule Changes). We 
recognize that States are often in the best position to evaluate the 
circumstances surrounding a carrier's exit from providing service in 
the first instance and to consider whether the circumstances warrant 
imposing exit costs on that carrier. Moreover, states have a valid 
interest, as do we, in ensuring the continuation of service to all 
customers. In situations where no State law assigns carrier 
responsibility for these costs, the Commission's general rule would 
control.

Advance Subscriber Notice

    As noted above, in the Streamlining Order, the Commission required 
acquiring carriers to provide subscribers with 30-day advance notice of 
a carrier change associated with a sale or transfer. In reaching this 
conclusion, the Commission noted that providing affected subscribers 
with notice of the transaction at least 30 days before it occurs would 
enable a subscriber to make an informed decision as to whether to 
accept the acquiring carrier as his or her preferred carrier. The 
Commission also required that the advance written notice to affected 
subscribers must include the details of the rates, terms and conditions 
of the service(s) to be provided to transferred customers and the means 
by which customers will be notified of changes in those service 
features. Disclosure of such information has likewise been a feature of 
the waiver process.

Responsibility for Notice

    SBC argues that the Commission should not require acquiring 
carriers to provide advance written notice to affected subscribers 
where State law imposes that responsibility on the exiting carrier, 
claiming that modification of this rule will eliminate unnecessary 
duplicative notice by the acquiring carrier. Verizon agrees that an 
exiting carrier's compliance with State notice rules should be 
sufficient, and that additional notice by the default carrier should 
not be required unless the exiting LEC has failed to provide such 
notice. Similarly, Qwest argues that the Commission should hold a 
default transferee responsible for customer notification only where 
``no other processes have been established.'' According to Qwest, the 
transferring carrier often notifies its customers of its decision to 
exit the business, and therefore the Commission should not require the 
involuntary acquiring carrier LEC to incur the expense of additional 
notification. Qwest claims that there is no proof that the public 
interest mandates a second notice from a default carrier.
    We are not persuaded by petitioners' arguments that acquiring 
carriers should not be responsible for providing advance notification 
of a default or carrier-to-carrier transfer or sale. The least cost 
provider of information about any given carrier's rates, terms and 
conditions is the carrier that is offering those services to the 
public. We believe providing this information to consumers is 
consistent with and furthers the goal of section 258 to protect 
consumers from fraudulent activities. Although we

[[Page 12608]]

recognize and appreciate that both state law and contractual 
obligations may impose some obligations on exiting carriers, the 
default carrier will still be best able to inform customers of the 
rates, terms and conditions of the service(s) it will provide, the 
exact means by which it will notify the subscriber of any changes to 
those rates, terms and conditions, and its toll-free customer service 
number. Moreover, as the Commission noted in the Streamlining Order, in 
most cases sufficient subscriber list information will be available to 
the acquiring carrier such that it will be able to provide the required 
notice.

Timing of Notice

    Verizon states that the streamlined procedures do not adequately 
address situations in which the competing LEC has left the marketplace 
due to insolvency or for other reasons and the incumbent LEC is 
required by a State commission to serve the exiting LEC's customers. In 
these cases, according to Verizon, the incumbent LEC has no control 
over the timing of the competing LEC's departure from the market and 
will not be able to comply with the streamlined procedure rules. 
Verizon requests that we modify the rules to require affected 
subscriber notice within a ``reasonable'' time of the State-ordered 
default carrier's learning that customers will be transferred, rather 
than 30 days prior to the planned change. Verizon argues that the 
Commission should modify the rules for such transfers ``to take their 
peculiar nature into account'' rather than resolving such issues on a 
case-by-case basis. We deny Verizon's request. Verizon has offered no 
evidence to refute the Commission's general finding that a 30-day 
notice period is necessary to provide subscribers with sufficient 
opportunity to make an informed decision whether to accept the 
acquiring carrier as his or her preferred carrier. We continue to 
believe that customers acquired by state order should be entitled to 
the same protections as subscribers acquired in a ``normal'' sale or 
transfer. We note that, in the case of an order by a state commission, 
that commission should take into consideration the 30-day notice rule 
when deciding the timing of the transfers it is ordering. We recognize, 
however, that in certain limited cases, 30 days advance notice may not 
be possible. Accordingly, under our current rules, default carriers 
unable to provide 30 days' notice to the Commission may request a 
limited waiver of the 30-day notice requirement. Based on our 
experience administering these rules, we believe that situations of the 
sort described by Verizon occur infrequently and under varied 
circumstances. As such, we continue to believe that these situations 
are best handled on a case-by-case basis as requests for waivers of the 
streamlined carrier change rules. (See 68 FR 19152, April 18, 2003.)

Rates, Terms, and Conditions of the New Service Provider

    AT&T argues that requiring carriers to provide detailed information 
about their services to newly-acquired customers may result in 
substantial needless expense and delay for participants in carrier-to-
carrier sale or transfer of subscriber bases. AT&T requests that the 
Commission clarify that the rules are not intended to impose more 
stringent advance disclosure requirements than were applied under the 
Commission's waiver process. AT&T argues that ``[n]othing in the Third 
Further Notice of Proposed Rulemaking, (Third Further Notice) proposing 
the new self-certification process suggested that the Commission 
intended the revised rule to be more onerous than the then existing 
waiver process in this regard.'' See 66 FR 8093, January 18, 2001. AT&T 
states that it would be more reasonable to permit acquiring carriers to 
summarize the material terms of their service offerings in their 
notifications to affected customers.
    ASCENT and WorldCom support AT&T's position. ASCENT agrees that the 
streamlined rules ``should not impose more stringent notification 
requirements than had been required by the Commission under the 
previous waiver paradigm,'' claiming that it would be inconsistent with 
the goal of streamlining to simultaneously increase disclosure 
obligations. Similarly, WorldCom contends that the Streamlining Order 
was ``intended to institutionalize the amount of detail already 
required under the waiver process. The Commission did not intend to 
expand upon carriers' obligations, but to simply describe the amount of 
information that carriers are currently required to provide.''
    We disagree with AT&T that it would be ``more reasonable'' to 
permit acquiring carriers to summarize the material terms of their 
service offerings in their notifications to affected customers. We 
reiterate that acquiring carriers are required to provide affected 
subscribers with detailed information concerning the rates, terms and 
conditions of the service(s) to be provided to transferred customers. 
Because the acquiring carrier is no longer required to obtain each 
individual subscriber's consent, it is critical that the advance 
written notice contain at least some level of detail as to the rates, 
terms and conditions of the services the acquiring carrier will 
provide. We disagree with WorldCom's assertion that such disclosure is 
inconsistent with the goal of streamlining. Disclosing the rates, terms 
and conditions of service in the advance notice to subscribers is 
significantly less burdensome to acquiring carriers than obtaining 
individual subscriber consent and verification in these transactions. 
Moreover, providing this information in the advance notice will enable 
transferred subscribers to make a timely, informed decision regarding 
their ultimate choice of service providers in areas where alternatives 
to the acquiring carrier are available. It is difficult to imagine how 
a subscriber could make this sort of decision without knowing, for 
example, the rates the acquiring carrier will charge. We also note that 
the Commission, in the Streamlining Order, declined to require the 
acquiring carrier to continue to charge affected subscribers the same 
rates as those charged by the selling or transferring carrier for a 
specified period after the transfer. Commenters in that proceeding had 
asserted that such a requirement could prove difficult and costly. 
Waivers issued by the Commission prior to the creation of the 
streamlined rules, however, generally were predicated on assurances 
that rates would not change. Therefore, the level of detail necessary 
to inform subscribers of the rates they will be charged may differ 
under the current streamlined rules as compared to the former waiver 
process.

Preferred Carrier Freezes

    Section 64.1190 of our rules permits local service providers to 
offer subscribers the option of requesting a preferred carrier 
``freeze'' as an additional measure of protection against unauthorized 
carrier changes. (47 CFR 64.1190.) With such a freeze in place, the 
subscriber is assured that his or her preferred carrier will not be 
changed without the subscriber's express consent. As discussed above, 
the Streamlining Order required the acquiring carrier to inform 
subscribers in advance that they will be transferred to it if they do 
not select a different preferred carrier before the transfer date. In 
addition, the subscriber notice must state that existing preferred 
carrier freezes on the service(s) involved in the transfer will be 
lifted, and that customers who wish to have freeze protection after the 
transfer must contact their local service providers to obtain this 
service.

[[Page 12609]]

    SBC requests that the Commission modify its rules such that, to the 
extent mechanized processes or other methods allow LECs to effect the 
transfer without lifting the freeze, LECs would not be required to lift 
preferred carrier freezes on services involved in a carrier-to-carrier 
transfer. SBC states that mechanized processes exist that allow local 
service providers to transfer a subscriber base with freeze protection 
on some accounts by bypassing the freeze rather than actually lifting 
it. In such cases, SBC contends that the acquiring carrier should only 
be required to inform affected subscribers that their existing freeze 
protections will remain in place after the transfer.
    SBC claims that this proposed modification will permit carriers to 
effectuate carrier-to-carrier transfers as efficiently as possible. 
Sprint opposes SBC's proposal, noting that it would require customers 
to determine on their own whether their preferred carrier freezes were 
still in place, which would be contrary to the underpinnings of the 
rules governing preferred carrier freezes: ``the customer--and not the 
LEC--should decide whether to freeze his/her service account with the 
acquiring carrier.''
    We decline to modify the rules as SBC suggests. Although SBC 
represents that it has implemented a mechanized process in ``several of 
its operating companies,'' it does not provide any indication of how 
commonly used or reliable such mechanized processes are. It is thus 
unclear what impact the proposed modification would have--i.e., whether 
it would address a significant problem for LECs or whether it might 
create headaches for subscribers should the mechanized process fail in 
some way. As noted in the Streamlining Order, in the event of a sale or 
transfer of a subscriber base, a subscriber with a freeze could be left 
without presubscribed service when the selling or transferring carrier 
ceases to provide service, if that customer failed to give consent to 
lift the freeze and thus was not automatically switched to the 
acquiring carrier. We continue to believe that, under such 
circumstances, it is preferable to permit the transfer of such a 
subscriber to the acquiring carrier, after adequate advance notice, 
rather than risk having the subscriber lose presubscribed service 
altogether. We believe that it is appropriate to ensure that 
subscribers with preferred carrier freezes in place do not lose 
presubscribed service even if they fail to respond to notice of an 
impending carrier change.
    As the Commission has previously noted, ``the essence of a 
preferred carrier freeze is that a subscriber must specifically 
communicate his or her intent to request or lift a freeze.'' The 
current rule maintains the consumer's control over such freezes by 
requiring that customers be informed in advance of the transfer that 
any applicable preferred carrier freeze will be lifted, so that those 
customers who wish to initiate a freeze on the services they receive 
after the transfer must specifically express their intent to do so. 
Under the streamlined procedures, ``frozen'' subscribers who prefer not 
to receive service from the acquiring carrier will have sufficient 
notice of their ability to select another provider, and will have 
notice of the need to contact their local service providers if they 
wish to initiate freeze protection for the service(s) they receive 
after a transfer to a new carrier. The decision remains in the hands of 
the customer, not the LEC.

Switchless Reseller Issues

    As noted above, we address in the First Report and Order and Fourth 
Report and Order certain ancillary slamming issues relating to 
switchless resellers that were raised in this docket but have not yet 
been resolved. Specifically, we affirm the recommendations of the NANC 
regarding switchless resellers' use of carrier identification codes. In 
2000, the Commission sought analysis and recommendations from the NANC 
on a proposal to require switchless resellers to obtain their own 
carrier identification codes (``CICs'') in order to address ``soft 
slamming'' and related carrier identification problems that arise from 
the shared use of CICs. A switchless reseller is a carrier that lacks 
switches or other transmission facilities in a given local access and 
transport area (LATA). It purchases long distance service in bulk from 
facilities-based carriers and resells such service directly to 
consumers. Resellers frequently share CICs with the underlying carriers 
whose services they resell. CICs are four-digit numerical codes used by 
LECs to route traffic to IXCs and to identify them for billing 
purposes. They are assigned by the North American Numbering Plan 
Administration on a nationwide basis. A soft slam is the unauthorized 
change of a subscriber from its authorized carrier to a new carrier 
that uses the same CIC. Because the change is not executed by the LEC, 
which continues to use the same CIC to route the subscriber's calls, a 
soft slam bypasses the preferred carrier freeze protection available to 
consumers from LECs. Carrier misidentification occurs because LECs also 
identify carriers by their CICs for billing purposes. A LEC's call 
record therefore is likely to reflect the identity of the underlying 
carrier whose CIC is used, even if the actual service provider is a 
reseller. As a result, the name of the underlying carrier may appear on 
the subscriber's bill in lieu of, or in addition to, the reseller with 
whom the subscriber has a direct relationship. This makes it difficult 
for consumers to detect a slam and to identify the responsible carrier. 
In April, 2001, the NANC submitted its recommendations. (See Report to 
the NANC, April 17, 2001 (submitted April 20, 2001) (CIC IMG Report to 
the NANC, Analysis and Recommendation on the Adoption of a Switchless 
Reseller CIC Requirement to Address ``Soft Slamming''). It concluded 
that the proposal to require switchless resellers to obtain and fully 
deploy CICs would not be effective to prevent soft slamming due to 
technical constraints, and would speed the depletion of numbering 
resources, dampen competition, hinder the participation of small 
businesses in telecommunications, and reduce choice while increasing 
prices for consumers. This conclusion affirms the concerns about 
potential adverse impact on the industry and consumers raised in the 
Third Report and Order. See 66 FR 12877, August 15, 2000. We agree with 
the NANC's assessment, and therefore decline to adopt a requirement 
that all switchless resellers deploy CICs. While we acknowledge that 
soft slamming remains a problem, albeit one of undetermined dimensions, 
we believe that our existing rules offer some help in alleviating this 
problem. For example, the Section 258 Order imposes on facilities-based 
carriers the responsibilities of executing carriers in soft slam 
situations (See Section 258 Order, 14 FCC Rcd 1564-65 at paragraphs 92-
93. See also 47 CFR 64.1100(b); 64.1150(a), (b); and 64.1140(b)(1)). 
Our rules require that the name of the service provider associated with 
each charge must be clearly and conspicuously identified on the 
telephone bill, which should help to make unauthorized carrier changes 
readily detectable by end users. (See 47 CFR 64.2401). However, we 
encourage the industry to work to find additional, effective ways to 
prevent soft slamming without adversely affecting consumer choice.

Supplemental Final Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA) (See 5 U.S.C. 
603. The RFA, see 5 U.S.C. 601, et seq., was amended by the Contract 
with America Advancement Act of 1996, Public Law

[[Page 12610]]

104-121, 110 Statute 87 (1996) (CWAA). Title II of the CWAA is the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), an 
Initial Regulatory Flexibility Analysis (IRFA) (5 U.S.C. 603) was 
incorporated into the Third Further Notice in this proceeding. See 66 
FR 8093 January 18, 2001. Additionally, a Final Regulatory Flexibility 
Analysis (FRFA) was included in the Streamlining Order. In compliance 
with the RFA, this Supplemental Final Regulatory Flexibility Analysis 
(Supplemental FRFA) supplements the FRFA included in the Streamlining 
Order to the extent that changes to that Order adopted here on 
reconsideration require changes in the conclusions reached in the FRFA.

Need for and Objectives of This Action

    Section 258 of the Act makes it unlawful for any telecommunications 
carrier ``to submit or execute a change in a subscriber's selection of 
a provider of telephone exchange services or telephone toll service 
except in accordance with such verification procedures as the 
Commission shall prescribe.'' In the Section 258 Order, the Commission 
established a comprehensive framework of rules to implement section 258 
and strengthen its existing anti-slamming rules. After the release of 
that Order, the Commission received many requests for waiver of the 
carrier change and authorization rules in transactions where carriers 
were selling or transferring their subscriber bases to other carriers 
in order to transition in a seamless, efficient manner. The 
Streamlining Order modified those rules to provide for a streamlined 
approach that would meet the consumer protection goals of section 258 
and also permit carriers to efficiently transfer customers without the 
need for Commission approval of a waiver petition. Subsequently, 
several petitioners sought reconsideration of the Streamlining Order's 
treatment of the costs associated with the transfer of customers, 
provision of the advance written notice to affected subscribers, and 
preferred carrier freezes. This Reconsideration Order addresses those 
issues, and also resolves an outstanding request from 2001 on a 
proposal to address ``soft slamming'' issues and related carrier 
identification problems that arise from the shared use of carrier 
identification codes.

Description and Estimate of the Number of Small Entities to Which This 
Order on Reconsideration Will Apply

    The RFA directs agencies to provide a description of, and, where 
feasible, an estimate of, the number of small entities that may be 
affected by the rules adopted herein. (See 5 U.S.C 603(b)(3)). The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' (See 5 U.S.C 601(3)). In addition, the 
term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act. (See 15 U.S.C 632). A 
``small business concern'' is one which: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA). (See 5 U.S.C 601(4)).
    In the previous FRFA of the Streamlining Order, we described and 
estimated the number of small entities that would be affected by the 
streamlined rules. These included wireline carriers and service 
providers, local exchange carriers, interexchange carriers, competitive 
access providers, operator service providers, pay telephone operators, 
resellers (including debit card providers), toll-free 800 and 800-like 
service subscribers, and cellular licensees. The rule amendment adopted 
herein may apply to the same entities affected by the rules adopted in 
that order.

Summary Analysis of the Projected Reporting, Record-Keeping, and Other 
Compliance Requirements

    The RFA requires an agency to describe any significant alternatives 
that it has considered in developing its approach, which may include 
the following four alternatives (among others): ``(1) The establishment 
of differing compliance or reporting requirements or timetables that 
take into account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) the 
use of performance rather than design standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for such small 
entities.'' (See 5 U.S.C. 603(c)(1)-(c)(4)). We do not find that this 
Reconsideration Order creates a significant economic impact on small 
entities. We could therefore meet our obligations under the RFA by 
certifying that there is no significant economic impact on small 
entities, rather than including this SFRFA. (See generally 5 U.S.C. 
605). We nonetheless include this Supplemental FRFA to demonstrate that 
we have considered the impact of our action on small entities in 
adopting this Reconsideration Order.

Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    As noted above, the amendment to our rules adopted in this 
Reconsideration Order does not have a significant impact on small 
entities. The amendment provides that, where applicable, state law 
shall determine carrier responsibility for switch-over charges 
associated with default transfers. The Commission concludes that this 
requirement would not impose significant additional costs or 
administrative burdens on small carriers.

Report to Congress

    The Commission will send a copy of this Reconsideration Order, 
including this Supplemental FRFA, in a report to be sent to Congress 
pursuant to the Congressional Review Act. (See 5 U.S.C. 801(a)(1)(A)). 
In addition, the Commission will send a copy of this Reconsideration 
Order, including this Supplemental FRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of this 
Reconsideration Order and Supplemental FRFA (or summaries thereof) will 
also be published in the Federal Register. (See 5 U.S.C. 604(b)).

Ordering Clauses

    Accordingly, pursuant to sections 1, 4, 201-205, 255, and 258 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 201-
205, 255 and 258, this reconsideration order is adopted.
    The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this Reconsideration 
Order, including the Supplemental Final Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 64

    Communications common carriers, Telecommunications.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Change

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 continues to read as follows:


[[Page 12611]]


    Authority: 47 U.S.C. 154, 254(k) secs. 403(b)(2)(B), (C), Public 
Law 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 
225, 226, 228, and 254(k) unless otherwise noted.


0
2. Section 64.1120 is amended by revising paragraph (e)(3)(iii) to read 
as follows:


Sec.  64.1120  Verification of orders for telecommunications service

* * * * *
    (e) * * *
    (3) * * *
    (iii) The acquiring carrier will be responsible for any carrier 
change charges associated with the transfer, except where the carrier 
is acquiring customers by default, other than through bankruptcy, and 
state law requires the exiting carrier to pay these costs;
* * * * *
[FR Doc. 05-5059 Filed 3-14-05; 8:45 am]
BILLING CODE 6712-01-P