Empowering Consumers To Prevent and Detect Billing for Unauthorized Charges (“Cramming”); Consumer Information and Disclosure; Truth-in-Billing and Billing Format, 52625-52632 [2011-21547]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 76, Number 163 (Tuesday, August 23, 2011)]
[Proposed Rules]
[Pages 52625-52632]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21547]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 11-116 and 09-158; CC Docket No. 98-170; FCC 11-106]


Empowering Consumers To Prevent and Detect Billing for 
Unauthorized Charges (``Cramming''); Consumer Information and 
Disclosure; Truth-in-Billing and Billing Format

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The purpose of this document is to seek comment on proposed 
amendments to the Commission's Truth-in-Billing rules that would 
require wireline telephone companies (i.e. wireline telecommunications 
common carriers) to notify subscribers clearly and conspicuously, at 
the point of sale, on each bill, and on their Web sites, of the option 
to block third-party charges from their telephone bills, if the company 
offers that option, and place charges from non-telephone company third-
parties in a bill section separate from telephone company charges, and 
would require both wireline and wireless (i.e. Commercial Mobile Radio 
Service (``CMRS'') common carriers) telephone companies to notify 
subscribers on all telephone bills and on their Web sites that 
subscribers may file complaints with the Commission, provide the 
Commission's contact information for the submission of complaints, and 
include on Web sites a link to the Commission's complaint Web page. 
This action will enable subscribers to detect, rectify, and prevent 
placement of unauthorized charges on their telephone bills; a practice 
known as ``cramming.''

DATES: Comments are due on or before October 24, 2011. Reply comments 
are due on or before November 21, 2011.

ADDRESSES: You may submit comments, identified by CG Docket No. 11-116 
by any of the following methods:
     Federal Communications Commission's Web site: Follow the 
instructions for submitting comments.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: John B. Adams, Consumer and 
Governmental Affairs Bureau, Policy Division, at (202) 418-2854 
(voice), or e-mail JohnB.Adams@fcc.gov.
    For additional information concerning the potential new or revised 
information collection requirements contained in document FCC 11-106, 
contact Cathy Williams, Federal Communications Commission, at (202) 
418-2918, or via e-mail Cathy.Williams@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (``NPRM''), FCC 11-106, adopted and released on 
July 12, 2011, in CG Docket Nos. 11-116 and 09-158, and CC Docket No. 
98-170. The full text of this document and copies of any subsequently 
filed documents in this matter will be available for public inspection 
and copying via ECFS, and during regular business hours at the FCC 
Reference Information Center, Portals II, 445 12th Street, SW., Room 
CY-A257, Washington, DC 20554. They may also be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc., 
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, 
telephone: (202) 488-5300, fax: (202) 488-5563, or Internet: https://www.bcpiweb.com. This document can also be downloaded in Word or 
Portable Document Format (``PDF'') at https://www.fcc.gov/guides/cramming-unauthorized-misleading-or-deceptive-charges-placed-your-telephone-bill. 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 and 
Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 
(TTY).
    Pursuant to 47 CFR 1.1200 et seq., this matter shall be treated as 
a ``permit-but-disclose'' proceeding in accordance with the 
Commission's ex parte rules. Persons making ex parte presentations must 
file a copy of any written presentation or a memorandum summarizing any 
oral presentation within two business days after the presentation 
(unless a different deadline applicable to the Sunshine period 
applies). Persons making oral ex parte presentations are reminded that 
memoranda summarizing the presentation must: (1) List all persons 
attending or otherwise participating in the meeting at which the ex 
parte presentation was made; and (2) summarize all data presented and 
arguments made during the presentation. If the presentation consisted 
in whole or in part of the presentation of data or arguments already 
reflected in the presenter's written comments, memoranda or other 
filings in the proceeding, the presenter may provide citations to such 
data or arguments in his or her prior comments, memoranda, or other 
filings (specifying the relevant page and/or paragraph numbers where 
such data or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with section 1.1206(b) of the Commission's rules. 
In proceedings governed by section 1.49(f) or for which the Commission 
has made available a method of electronic filing, written ex parte 
presentations and memoranda summarizing oral ex parte presentations, 
and all attachments thereto, must be filed through the electronic 
comment filing system available for that proceeding, and must be filed 
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). 
Participants in this proceeding should familiarize themselves with the 
Commission's ex parte rules.

Synopsis

    In the NPRM, the Commission proposes rules to require wireline and 
wireless telephone companies to provide to subscribers information that 
will enable subscribers to detect, rectify, and prevent cramming. 
Cramming is the placement of unauthorized charges on subscribers' 
telephone bills. Specifically, the Commission proposes that wireline 
telephone companies disclose to subscribers information about blocking 
of third-party charges and place third-party charges in a separate bill 
section from all telephone company charges. The Commission further 
proposes that wireline and wireless telephone companies, on their bills 
and on their Web sites, notify subscribers that they can file 
complaints with the Commission, provide the Commission's contact 
information for filing complaints, and provide a link to the 
Commission's complaint Web site on their Web sites.

Disclosure of Blocking of Third-Party Charges

    The Commission proposes that wireline telephone companies that 
offer subscribers the option to block third-party charges from their 
telephone bills must clearly and conspicuously notify subscribers of 
this option at the point of sale, on each bill, and on their Web

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sites. The Commission seeks comment on specific details about how this 
disclosure should be implemented. The proposed rules amend the 
Commission's Truth-in-Billing rules (codified at 47 CFR 64.2400-
64.2401), which mandate ``clear and conspicuous'' disclosure (i.e. 
notice that would be apparent to the reasonable consumer) of certain 
information on telephone bills. The Commission seeks comment on the 
wording, placement, font size, and other relevant factors, at the point 
of sale, on bills, and on Web sites, that would be necessary for this 
notification, as well as any notification about fees for blocking, to 
satisfy this standard. Can existing practices of telephone companies 
that already offer blocking be improved other than by the proposed 
disclosures, such as by better training of customer service 
representatives?

Separate Bill Section for Third-Party Charges

    The Commission proposes that wireline telephone companies place 
charges from non-telephone company third parties in a distinct section 
of the telephone bill separate from telephone company charges. The 
Commission's Truth-in-Billing rules already require charges from 
different telephone companies on a single telephone bill to be 
separated. Those rules also permit service bundles to be listed as a 
single service offering of the telephone company, even if the bundle 
includes third-party services. No change is proposed as to the manner 
in which bundles may be billed under our rules. Are more specific 
requirements needed? Should third-party charges be listed separately on 
the first page of telephone bills or further highlighted in some other 
fashion? Is there any need to require identification of the third-party 
vendor associated with each charge beyond the requirements already 
contained in the Truth-in-Billing rules? What changes will telephone 
companies need to make to billing systems to comply with this proposed 
rule? How much will these changes cost and how long will they take? Are 
there ways to minimize burdens on telephone companies, especially 
smaller ones?

Disclosure of Commission Contact Information

    Information available to the Commission, including a report from 
the General Accountability Office, indicates that many telephone 
subscribers do not know how to file complaints about telephone service. 
The Commission proposes that wireline and wireless telephone companies, 
on their bills and on their Web sites, clearly and conspicuously notify 
subscribers that they can file complaints with the Commission, provide 
the Commission's contact information for filing complaints, and provide 
a link on their Web sites to the Commission's complaint Web site. The 
disclosure should include the Commission's telephone number and Web 
site address. How much will it cost telephone companies to comply with 
this requirement, and how long will it take them to comply?

Wireless and Internet Telephone Service

    The Commission seeks comment on whether all of the rules proposed 
for wireline telephone service also should apply to wireless and 
Internet telephone service. Complaint data from the Commission and the 
Federal Trade Commission indicate that approximately 80% to 90% of 
cramming complaints relate to wireline telephone service. What is the 
nature and magnitude of cramming for wireless telephone service? What 
percentage of unauthorized charges is from wireless telephone 
companies, and what percentage is from third parties? Do unauthorized 
charges occur more frequently with particular types of wireless service 
plans or features? Does cramming affect wireless telephone subscribers 
differently than wireline telephone subscribers? How? Are there 
differences between wireline and wireless telephone industry practices 
or billing platforms that are relevant in assessing the propriety and 
effectiveness of potential regulatory solutions? What are the 
differences? The Commission seeks current and updated data from states 
regarding wireless cramming and how differences in state authority over 
wireless telephone service impact the need for federal oversight. Can 
industry practices or voluntary guidelines successfully address 
cramming for wireless telephone service? To what extent are industry 
guidelines and practices evolving to address cramming, such as in-
application marketing? Are options to block third-party charges, if 
any, clearly and conspicuously disclosed to subscribers?

Additional Questions for Comment

    The Commission seeks comment on other possible requirements that 
may help subscribers to detect, rectify, and prevent cramming.
    Disclosure of Third-Party Contact Information: Should telephone 
companies clearly and conspicuously provide contact information for 
each third party in association with its charges? Should specific 
contact information be provided, such as the third party's name and 
toll-free customer service telephone number? The Commission's Truth-in-
Billing rules permit, but do not require, telephone companies to 
provide contact information for third parties if the third party 
possesses sufficient information to answer questions concerning the 
subscriber's account and is fully authorized to resolve subscriber 
complaints. Implicit in this proviso is a requirement for the telephone 
company to verify the contact information. To what extent do telephone 
companies already verify third-party contact information? What would be 
the incremental burden on telephone companies to do so? How and to what 
extent would imposing a verification requirement benefit subscribers, 
telephone companies, or both? Should any particular form of 
verification be required? At what intervals should telephone companies 
be required to re-verify third-party contact information?
    Requiring Wireline Telephone Companies to Offer Blocking: Should 
wireline telephone companies be required to block third-party charges 
upon subscriber request? If so, should they be prohibited from charging 
a fee for doing so? Many wireline telephone companies already offer 
blocking at no additional fee, which suggests that there is no 
technical or cost barrier to making blocking available, or that the 
cost of doing so is not sufficiently high to warrant additional fees 
beyond the monthly recurring charge for wireline telephone service. 
What technical or cost barriers exist? Which telephone companies offer 
blocking? What specific types or categories of charges are blocked? Is 
an additional fee is assessed for blocking, and what is the amount of 
the fee? How was the amount of the fee determined? What kinds or types 
of charges should be subject to blocking if wireline telephone 
companies were required to block them, such as charges from long 
distance telephone companies, Internet service providers and other 
providers affiliated with the telephone company, and non-telephone 
company third parties? Should bundles, which may contain services 
provided by third parties, be treated differently?
    Prohibiting All Third-Party Charges on Wireline Telephone Bills: 
The Commission seeks comment on the impact, both positive and negative, 
that prohibiting third-party charges on wireline telephone bills, 
unless the subscriber opts in, may have on wireline telephone 
companies, subscribers, and third parties. What is the scope of the 
Commission's authority to impose such a ban? What kinds or types of 
charges

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should be subject to such a prohibition on third-party charges?
    Due Diligence: The Commission seeks comment on whether it should 
require carriers, before contracting or agreeing with a third party to 
place its charges on telephone bills, to screen each third party to 
ensure that it has operated and will continue to operate in compliance 
with all relevant state and federal laws. What is the nature and 
adequacy of current industry practices in this regard? How are 
telephone companies monitoring and tracking subscriber complaints with 
respect to cramming? What thresholds exist with respect to cramming 
complaints before a telephone company takes adverse action against a 
third party? Should such thresholds be required and what should they 
be? What annual percentage of charges from third parties is refunded, 
uncollectible, or unbillable? To what extent do telephone companies 
attempt to identify affiliated companies after one affiliate has been 
identified as engaging in cramming, attempt to track whether a company 
continues under a different name, or attempt to track whether the same 
persons engage in cramming via a new company? How successful have 
telephone companies been in doing so? What penalties or other measures 
are employed to deter cramming? Are there improvements that could be 
made or do better deterrents exist? How many third parties submit 
charges to telephone companies for placement on telephone bills? What 
are their lines of business or types of products? How many real parties 
in interest are there owning or operating these companies? How could 
third parties change or improve their efforts to monitor and track 
cramming complaints?
    Federal-State Coordination: To address potential subscriber 
confusion about to which state and federal agencies they can complain 
about cramming and recognizing that coordinated state and federal 
efforts is a critical component to protecting subscribers, the 
Commission seeks comment on how to better coordinate sharing of 
cramming complaints and information. Are there ways to share 
information, such as through the shared complaint database maintained 
by the Federal Trade Commission? Should wireline and wireless telephone 
companies report trends or spikes in complaints they receive about 
specific third parties? What is the nature and extent of the cramming 
problem in each state? What is the number of wireline and wireless 
cramming complaints? What are the trends in the last few years? What 
enforcement or legislative actions have states taken to address 
cramming?
    Accessibility: How will the Commission's proposed rules affect, and 
could they be improved to better assist, people with disabilities, 
people living in Native Nations on Tribal Lands in Native communities, 
and people with limited English proficiency. What measures should 
telephone companies take to ensure that the information they provide to 
subscribers is accessible to such individuals.
    Internet Telephone Service: The Commission seeks comment on whether 
any of the proposed rules, any of the other requirements discussed, or 
similar requirements should apply to providers of Internet telephone 
service (i.e. interconnected VoIP service). Do bills for Internet 
telephone service raise the same risks of cramming as wireline or 
wireless telephone service? Are there differences that necessitate a 
different regulatory approach? What kinds of safeguards are needed to 
protect and would be effective in protecting Internet telephone service 
subscribers from cramming?
    Definition of Service Provider or Service: The Commission seeks 
comment on the need to define ``service provider'' or ``service,'' as 
those terms are used in the Truth-in-Billing rules, to better address 
charges that arguably may not be for a service. What specific 
definitions would be effective? Are there alternatives, such as 
changing the Truth-in-Billing rules to refer to more than services and 
service providers? What specific rules would need to be changed and 
what specific changes would be needed?

Effective Consumer Information Disclosure

    In proposing rules to improve transparency on cramming or any other 
consumer issue, the Commission intends to look at the many factors 
involved in effective consumer information disclosure. This will ensure 
that the rules serve their intended purpose without posing an undue 
burden on industry. There are two key criteria for the success of such 
an approach. First, acknowledging the potential difficulty of 
quantifying benefits and burdens, the Commission needs to determine 
whether the proposed disclosure rules will significantly benefit 
consumers and, in fact, clarify important issues for them--for example, 
by helping them detect hidden charges, making contractual terms more 
transparent, or clarifying rates and fees. Second, the Commission seeks 
to maximize the benefits to consumers from our proposed rules while 
taking into consideration the burden of compliance to carriers. These 
costs and benefits can have many dimensions, including cost and revenue 
implications for industry, financial benefits to consumers, and other, 
less tangible benefits, such as the value of increasing consumer choice 
or preventing fraud.
    To address the first criterion in the case of cramming, the 
Commission seeks comment on the best ways to ensure that the proposed 
disclosures will actually benefit consumers. To what extent may 
consumers be expected to utilize the additional information? Are there 
ways to implement the disclosures that would increase the number of 
consumers who will benefit and the nature of the benefits? What are the 
best ways to ensure that disclosure of third-party charges on bills is 
clear and conspicuous; that third-party blocking options are clearly 
disclosed; and that FCC contact information is provided in ways that 
consumers will see it and know how to use it? What, if any, are the 
best practices of consumer disclosure in other areas and of assessing 
the effectiveness of disclosures? Are there other examples, research, 
and recommendations that would be applicable here?
    To address the second criterion in the case of cramming, the 
Commission seeks comment on the nature and magnitude of the costs and 
benefits of the proposed rules to consumers and carriers. How, if at 
all, do these vary by telephone company and by type (e.g., wireline, 
wireless) and size of telephone company? What, if any, specific 
concerns exist for telephone companies serving rural areas, Native 
Nations on Tribal lands and Native communities, and their customers. 
The Commission seeks specific information about whether, how, and by 
how much such carriers and their customers may be impacted differently 
in terms of the costs and benefits of the proposed rules. What is the 
most cost-effective approach for modifying existing policies and 
practices to achieve the goals of the proposed rules?
    The Commission seeks comment on the extent of cramming, including 
totals for all charges and unauthorized charges from third parties, 
total annual unauthorized charges to wireline and CMRS consumers, 
amounts credited annually to consumers for unauthorized charges, total 
uncollectible charges, how much the proposed rules will reduce these 
amounts, and methods to quantify unauthorized charges accurately. The 
Commission also seeks comment on the costs to consumers to block third-
party charges, to monitor bills to guard against

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cramming, and to resolve disputes over unauthorized charges, including 
intangible costs like time. The Commission invites comment regarding 
consumers' experiences with unauthorized charges.
    How and how much has cramming affected consumer confidence and 
decisions of whether to purchase particular kinds of goods or services? 
Will the proposed rules lead to increased consumer purchasing, and how 
much? What are potential costs of cramming to third-party vendors that 
do not engage in cramming, such as costs associated with reduced demand 
for their products due to a loss of consumer confidence in the 
marketplace, and reduced innovation and investment due to lower demand 
for their products? What are the potential costs that the proposed 
rules and other potential requirements may impose on third-party 
vendors, such as lost revenue from legitimate transactions? Are there 
any other potential costs and/or benefits to third-party vendors from 
the proposed rules?
    What are the specific kinds and amounts of compliance costs that 
carriers may incur? If billing or other system modifications are 
required, what is the exact nature of those modifications, the time 
required to implement them, and their cost? What is the amount of 
annual revenue that carriers receive from providing billing-and-
collection services to third parties and the anticipated reduction, if 
any, that would result from adoption of the proposed rules or other 
requirements? Will these figures differ depending upon which third-
party charges are blocked? What are telephone companies' costs to offer 
the ability to block all third-party charges?
    The Commission seeks comment on the nature and magnitude of costs 
that carriers might avoid or reduce by complying with the proposed 
rules. Some possible cost savings might be reductions in the number of 
calls to customer service, reduced costs to process refunds, reduced 
costs to investigate disputed charges, reduced uncollectible charges, 
reduced costs to monitor billing activities by third parties, and 
reduced costs to audit third parties or to develop and monitor 
performance improvement plans imposed upon third parties.
    The Commission seeks comment on and quantification of any other 
costs and benefits that it should consider, and information that will 
enable it to weigh the costs and benefits associated with the proposed 
rules. Commenters should provide specific data and information, such as 
actual or estimated dollar figures for each specific cost or benefit 
addressed, including a description of how the data or information was 
calculated or obtained and any supporting documentation or other 
evidentiary support. Vague or unsupported assertions generally can be 
expected to be less persuasive than more specific and supported 
statements.

Legal Issues

    Communications Act: What is the nature and scope of the 
Commission's authority under the Communications Act of 1934, as 
amended, to adopt the proposed rules and regarding the additional 
issues for comment? The Commission believes that it has authority under 
Section 201(b) of the Communications Act to adopt the proposed rules. 
The bill format and labeling requirements in the Truth-in-Billing rules 
are based, in whole or part, on the Commission's authority under 
Section 201(b) of the Communications Act to enact rules to implement 
the requirement that all charges, practices, classifications, and 
regulations for and in connection with interstate communications 
service be just and reasonable. The problem of crammed third-party 
charges depends on and arises from the relationship between the 
telephone company and its customer; telephone bills are an integral 
part of this relationship. Unauthorized third-party charges appear on 
telephone bills only because the telephone company permits them to be 
there. Further, if it is not clear on a telephone bill what a charge is 
for and who the service provider is, a consumer may erroneously believe 
that the charge is related to a service provided by the telephone 
company.
    Section 332(c)(1)(A) of the Communications Act states that wireless 
telephone companies are subject to Section 201(b) authority for their 
common carrier services. They largely are subject to the Truth-in-
Billing rules promulgated under Section 201(b) to the same extent as 
wireline telephone companies for common carrier services. Thus, the 
Commission believes that its authority to extend the proposed rules and 
other requirements to wireless telephone companies is co-extensive with 
its authority to promulgate them for wireline telephone companies. The 
Commission seeks comment on this analysis.
    Does the Commission need to invoke its ancillary Title I authority 
to adopt requirements to address cramming? The Commission ``may 
exercise ancillary jurisdiction only when two conditions are satisfied: 
(1) the Commission's general jurisdictional grant under Title I [of the 
Communications Act] covers the regulated subject and (2) the 
regulations are reasonably ancillary to the Commission's effective 
performance of its statutorily mandated responsibilities.'' Comcast 
Corp. v. FCC, 600 F.3d 642, 646 (DC Cir. 2010) (quoting American 
Library Ass'n v. FCC, 406 F.3d 689, 691-92 (DC Cir. 2005)). An exercise 
of such authority under Title I may be necessary here because entities 
that are not classified as common carriers nonetheless may, like common 
carriers, provide billing-and-collection services for third parties or 
submit charges for inclusion on a telephone bill.
    The Commission has previously asserted ancillary jurisdiction over 
VoIP providers in other contexts. See, e.g., IP-Enabled Services; E911 
Requirements for IP-Enabled Service Providers, 20 FCC Rcd 10245, 10261-
66, paragraphs 26-35 (2005) (rules requiring VoIP providers to supply 
enhanced 911 capabilities to their customers), aff'd sub nom. Nuvio 
Corp. v. FCC, 473 F.3d 302 (DC Cir. 2007). Can and should the 
Commission exercise Title I authority to apply the proposed rules to 
any non-carriers? Are there particular entities, including but not 
limited to interconnected VoIP providers, that should be subject to the 
proposed rules? Further, the Commission has previously asserted that 
its Title I authority extends to a common carrier's provision of 
billing-and-collection services to third parties that are not carriers. 
See Detariffing of Billing and Collection Services, Report and Order, 
102 FCC 2d 1150, paragraphs 35-38 (1986). It seeks comment on whether 
that authority would extend to the proposals in the NPRM.
    First Amendment: A regulation of commercial speech will be found 
compatible with the First Amendment if: (1) There is a substantial 
government interest; (2) the regulation directly advances the 
substantial government interest; and (3) the proposed regulation is not 
more extensive than necessary to serve that interest. Central Hudson 
Gas and Electric Corp. v. Public Service Commission, 447 U.S. 557, 566 
(1980). Moreover, ``regulations that compel `purely factual and 
uncontroversial' commercial speech are subject to more lenient review 
than regulations that restrict accurate commercial speech.'' See, e.g., 
New York State Restaurant Association v. New York City Board of Health, 
556 F.3d 114, 132 (2nd Cir. 2009) (upholding New York City health code 
requiring restaurants to post calorie content information on their 
menus and menu boards) (citing Zauderer v. Office of Disciplinary

[[Page 52629]]

Counsel, 471 U.S. 626, 651 (1985)); National Elec. Mfrs. Ass'n v. 
Sorrell, 272 F.3d 104, 113 (2nd Cir. 2001) (upholding Vermont statute 
prescribing labeling requirements on mercury-containing lamps).
    The Commission's statutory obligations include protecting consumers 
from unjust or unreasonable charges and practices. The record in this 
proceeding suggests that consumers continue to incur substantial costs 
each year from the inclusion of unauthorized charges on their telephone 
bills. The proposed rules are designed to advance the government's 
interest by providing consumers with basic tools necessary to protect 
themselves from these unauthorized charges. The Commission seeks 
comment on whether the proposed rules and other issues for comment are 
consistent with these and any other First Amendment considerations.

Procedural Matters

    Ex Parte Presentations: This is a permit-but-disclose notice and 
comment rulemaking proceeding. Ex parte presentations are permitted in 
accordance with the Commission's rules.
    Filing of Comments and Reply Comments: Pursuant to sections 1.415 
and 1.419 of the Commission's rules, interested parties may submit 
comments, identified by CG Docket No. 11-116 by any of the following 
methods:
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the Commission's Electronic Comment 
Filing System (ECFS) https://fjallfoss.fcc.gov/ecfs2/. Filers should 
follow the instructions provided on the Web site for submitting 
comments and transmit one electronic copy of the filing to each docket 
number referenced in the caption, which in this case is CG Docket No. 
11-116. For ECFS filers, in completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket number.
     Parties may also submit an electronic comment by Internet 
e-mail. To get filing instructions, filers should send an e-mail to 
ecfs@fcc.gov, and include the following words in the body of the 
message, ``get form .'' A sample form and 
directions will be sent in response.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Because three docket 
numbers appears in the caption of this proceeding, filers must submit 
four additional copies for the additional docket numbers. In addition, 
parties must send one copy to the Commission's duplicating contractor, 
Best Copy and Printing, Inc., 445 12th Street, SW., Washington, DC 
20554, or via e-mail to fcc@bcpiweb.com. Filings can be sent by hand or 
messenger delivery, by commercial overnight courier, or by first-class 
or overnight U.S. Postal Service mail. All filings must be addressed to 
the Commission's Secretary, Office of the Secretary, Federal 
Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building. The filing 
hours are 8:00 a.m. to 7:00 p.m.
    Commercial overnight mail (other than U.S. Postal Service Express 
Mail and Priority Mail) must be sent to 9300 East Hampton Drive, 
Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, 
and Priority mail must be addressed to 445 12th Street, SW., Washington 
DC 20554.
    The comments and reply comments filed in response to this NPRM will 
be available via ECFS at: https://fjallfoss.fcc.gov/ecfs2/. You may 
search by docket number (Docket No. CG-11-116). Comments are also 
available for public inspection and copying during business hours in 
the FCC Reference Information Center, Portals II, 445 12th Street, SW., 
Room CY-A257, Washington, DC 20554. Copies may also be purchased from 
Best Copy and Printing, Inc., telephone (800) 378-3160, facsimile (301) 
816-0169, e-mail FCC@BCPIWEB.com.
    Accessibility Information: 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 Notice of Proposed Rulemaking also can be 
downloaded in Word and Portable Document Formats (``PDF'') at https://www.fcc.gov/guides/cramming-unauthorized-misleading-or-deceptive-charges-placed-your-telephone-bill. Contact the FCC to request 
reasonable accommodations for filing comments (accessible format 
documents, sign language interpreters, CART, etc.) by e-mail at: 
FCC504@fcc.gov; phone: 202-418-0530 or TTY: 202-418-0432.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended, 
(``RFA''), the Commission has prepared this Initial Regulatory 
Flexibility Analysis (``IRFA'') of the possible significant economic 
impact on a substantial number of small entities by the policies and 
rules proposed in the NPRM. Written public comments are requested on 
the IRFA. Comments must be identified as responses to the IRFA and must 
be filed by the deadlines for comments on the NPRM provided on the 
first page of this document. The Commission will send a copy of the 
NPRM, including this IRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration.

Need for, and Objectives of, the Proposed Rules

    In document FCC 11-106, the Commission summarized the record 
compiled in this proceeding and the Commission's own complaint data. 
The record confirms that cramming is a significant and ongoing problem 
that has affected wireline consumers for over a decade, and drawn the 
notice of Congress, states, and other federal agencies. The substantial 
volume of wireline cramming complaints that the Commission, FTC, and 
states continue to receive underscores the ineffectiveness of voluntary 
industry practices and highlights the need for additional safeguards. 
Recent evidence, such as the volume of wireless cramming complaints and 
wireless carriers'' settlement of litigation regarding unauthorized 
charges, raises a similar concern with unauthorized charges on 
Commercial Mobile Radio Service (``CMRS'') bills, such as those of 
providers of wireless voice telephone service.
    Although the Commission has addressed cramming as an unreasonable 
practice under Section 201(b) of the Communications Act, there are 
currently no rules that specifically address unauthorized charges on 
wireline telephone bills. The Commission believes that adopting such 
requirements will provide consumers with the safeguards they need to 
protect themselves from this risk.

Legal Basis

    The legal basis for any action that may be taken pursuant to the 
NPRM is contained in Sections 1-2, 4, 201, 301, 303, 332, and 403 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151-152, 154, 
201, 301, 303, 332, and 403.

[[Page 52630]]

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply

    The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that will be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. Under the Small Business Act, a ``small business concern'' is one 
that: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) meets any additional criteria 
established by the Small Business Administration (``SBA''). Nationwide, 
there are a total of approximately 29.6 million small businesses, 
according to the SBA. The NPRM seeks comment generally on wireline and 
wireless telecommunications common carriers. However, as noted in 
Section IV of the NPRM, the Commission seeks comment on how to reduce 
burdens on small entities.
    Incumbent Local Exchange Carriers (``Incumbent LECs''). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. Census Bureau data for 
2007, which now supersede data from the 2002 Census, show that there 
were 3,188 firms in this category that operated for the entire year. Of 
this total, 3,144 had employment of 999 or fewer, and 44 firms had had 
employment of 1000 or more. According to Commission data, 1,307 
carriers reported that they were incumbent local exchange service 
providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or 
fewer employees and 301 have more than 1,500 employees. Consequently, 
the Commission estimates that most providers of local exchange service 
are small entities that may be affected by the rules and policies 
proposed in the NPRM. Thus, under this category and the associated 
small business size standard, the majority of these incumbent local 
exchange service providers can be considered small.
    Competitive Local Exchange Carriers (``Competitive LECs''), 
Competitive Access Providers (``CAPs''), Shared-Tenant Service 
Providers, and Other Local Service Providers. Neither the Commission 
nor the SBA has developed a small business size standard specifically 
for these service providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. Census Bureau data for 2007, which now supersede data from 
the 2002 Census, show that there were 3,188 firms in this category that 
operated for the entire year. Of this total, 3,144 had employment of 
999 or fewer, and 44 firms had had employment of 1,000 employees or 
more. Thus under this category and the associated small business size 
standard, the majority of these Competitive LECs, CAPs, Shared-Tenant 
Service Providers, and Other Local Service Providers can be considered 
small entities. According to Commission data, 1,442 carriers reported 
that they were engaged in the provision of either competitive local 
exchange services or competitive access provider services. Of these 
1,442 carriers, an estimated 1,256 have 1,500 or fewer employees and 
186 have more than 1,500 employees. In addition, 17 carriers have 
reported that they are Shared-Tenant Service Providers, and all 17 are 
estimated to have 1,500 or fewer employees. In addition, 72 carriers 
have reported that they are Other Local Service Providers. Of the 72, 
seventy have 1,500 or fewer employees and two have more than 1,500 
employees. Consequently, the Commission estimates that most providers 
of competitive local exchange service, competitive access providers, 
Shared-Tenant Service Providers, and Other Local Service Providers are 
small entities that may be affected by rules adopted pursuant to the 
NPRM.
    Interexchange Carriers. Neither the Commission nor the SBA has 
developed a small business size standard specifically for providers of 
interexchange services. The appropriate size standard under SBA rules 
is for the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
Census Bureau data for 2007, which now supersede data from the 2002 
Census, show that there were 3,188 firms in this category that operated 
for the entire year. Of this total, 3,144 had employment of 999 or 
fewer, and 44 firms had had employment of 1,000 employees or more. Thus 
under this category and the associated small business size standard, 
the majority of these Interexchange carriers can be considered small 
entities. According to Commission data, 359 companies reported that 
their primary telecommunications service activity was the provision of 
interexchange services. Of these 359 companies, an estimated 317 have 
1,500 or fewer employees and 42 have more than 1,500 employees. 
Consequently, the Commission estimates that the majority of 
interexchange service providers are small entities that may be affected 
by rules adopted pursuant to the NPRM.
    Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category. Prior to that time, such firms were 
within the now-superseded categories of ``Paging'' and ``Cellular and 
Other Wireless Telecommunications.'' Under the present and prior 
categories, the SBA has deemed a wireless business to be small if it 
has 1,500 or fewer employees. For the category of Wireless 
Telecommunications Carriers (except Satellite), Census data for 2007 
show that there were 1,383 firms that operated that year. Of those, 
1,368 firms had fewer than 100 employees, and 15 firms had more than 
100 employees. Thus, under this category and the associated small 
business size standard, the majority of firms can be considered small. 
Similarly, according to Commission data, 413 carriers reported that 
they were engaged in the provision of wireless telephony, including 
cellular service, Personal Communications Service (``PCS''), and 
Specialized Mobile Radio (``SMR'') telephony services. An estimated 261 
of these firms have 1,500 or fewer employees and 152 firms have more 
than 1,500 employees. Consequently, the Commission estimates that 
approximately half or more of these firms can be considered small. 
Thus, using available data, it estimates that the majority of wireless 
firms are small.
    Wireless Telephony. Wireless telephony includes cellular, personal 
communications services, and specialized mobile radio telephony 
carriers. As noted, the SBA has developed a small business size 
standard for Wireless Telecommunications Carriers (except Satellite). 
Under the SBA small business size standard, a business is small if it 
has 1,500 or fewer employees. According to Commission data, 434 
carriers report that they are engaged in wireless telephony. Of these, 
an estimated 222 have 1,500 or fewer employees, and 212 have more than 
1,500 employees. Therefore, the

[[Page 52631]]

Commission estimates that 222 of these entities can be considered 
small.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    In the NPRM, the Commission proposes requirements that: (1) Require 
wireline carriers to notify subscribers clearly and conspicuously at 
the point of sale, on each bill, and on their Web sites, of the option 
to block third-party charges from their telephone bills, if the carrier 
offers that option; (2) require wireline carriers to place charges from 
non-carrier third-parties in a bill section separate from carrier 
charges; and (3) require wireline and CMRS carriers to include on all 
telephone bills and on their Web sites the Commission's contact 
information for the submission of complaints. The record reflects that 
cramming primarily has been an issue for wireline telephone customers. 
However, there is evidence of a concern with unauthorized charges on 
wireless bills. Therefore, the Commission also seeks comment on whether 
it should extend any similar protections to wireless consumers.
    These proposed rules may necessitate that some common carriers make 
changes to their existing billing formats and/or disclosure materials. 
For example, to provide the required contact information on their bills 
may necessitate changes to billing formats. However, some carriers may 
be in compliance with many of these requirements and require no 
additional compliance efforts.

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

    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed 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 or reporting requirements under the rule for 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 small 
entities.
    In the NPRM, the Commission seeks comment on ways to minimize the 
economic impact on carriers to comply with the proposed rules. For 
example, it seeks comment on establishing timeframes that will allow 
carriers sufficient opportunity to make any necessary changes to comply 
with any rules adopted in a cost efficient manner. The Commission also 
seeks comment on how to alleviate burdens on small carriers. It seeks 
guidance on whether the proposed rules should be limited to wireline 
service or whether there are justifications to extend those safeguards 
to wireless service. Finally, it seeks comment on an extensive cost and 
benefit analysis to determine the overall impact on consumers and 
industry of the proposed rules.

Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    None.

Initial Paperwork Reduction Act of 1995

    The NPRM seeks comment on a potential new or revised information 
collection requirement or may result in a new or revised information 
collection requirement. If the Commission adopts any new or revised 
information collection requirements, the Commission will publish 
another notice in the Federal Register inviting the public to comment 
on the requirements, as required by the Paperwork Reduction Act of 
1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to 
the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), the Commission seeks-comment-on how it might 
``further reduce the information collection burden for small business 
concerns with fewer than 25 employees.''

Ordering Clauses

    Pursuant to the authority contained in sections 1-2, 4, 201, 301, 
303, 332, and 403 of the Communications Act of 1934, as amended 47 
U.S.C. 151-152, 154, 201, 301, 303, 332, and 403, the Notice of 
Proposed Rulemaking is adopted.
    The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, SHALL SEND a copy of the NPRM, including 
the Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Reporting and recordkeeping requirements, Telecommunications, 
Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend Part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

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

    Authority: 47 U.S.C. 154, 254(k); secs. 403(b)(2)(B), (c), Pub. 
L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 
222, 225, 226, 228, 254(k), and 620 unless otherwise noted.

    2. Section 64.2400 is amended by revising paragraph (b) to read as 
follows:


Sec.  64.2400  Purpose and scope.

    (a) * * *
    (b) These rules shall apply to all telecommunications common 
carriers, except that Sec. Sec.  64.2401(a)(2), 64.2401(c), and 
64.2401(f) shall not apply to providers of Commercial Mobile Radio 
Service as defined in Sec.  20.9 of this chapter, or to other providers 
of mobile service as defined in Sec.  20.7 of this chapter, unless the 
Commission determines otherwise in a future rulemaking.
    3. Section 64.2401 is amended by revising paragraphs (a)(2) and (d) 
and by adding new paragraph (f) to read as follows:


Sec.  64.2401  Truth-in-Billing Requirements.

    (a) * * *
    (2) Where charges for two or more carriers appear on the same 
telephone bill, the charges must be separated by service provider. 
Where charges for one or more service providers that are not carriers 
appear on a telephone bill, the charges must be placed in a distinct 
section separate from all carrier charges.
* * * * *
    (d) Clear and conspicuous disclosure of inquiry and complaint 
contacts. 
    (1) Telephone bills must contain clear and conspicuous disclosure 
of any information that the subscriber may need to make inquiries about 
or contest charges on the bill. Common carriers must prominently 
display on each bill a toll-free number or numbers by which subscribers 
may inquire or dispute any charges on the bill. A carrier may list a 
toll-free number for a billing agent, clearinghouse, or other third 
party, provided such party possesses sufficient information to answer 
questions concerning the subscriber's account and is fully authorized 
to resolve the consumer's complaints on the carrier's behalf.
    (2) Where the subscriber does not receive a paper copy of his or 
her telephone bill, but instead accesses that bill only by e-mail or 
the Internet, the common carrier may comply with these

[[Page 52632]]

billing disclosure requirements by providing on the bill an e-mail or 
Web site address. Each carrier must make a business address available 
upon request from a consumer.
    (3) Telephone bills and carrier Web sites must clearly and 
conspicuously state that the subscriber may submit inquiries and 
complaints to the Federal Communications Commission, and provide the 
telephone number, Web site address, and, on the carrier's Web site, a 
direct link to the webpage for filing such complaints. That information 
must be updated as necessary to ensure that it remains current and 
accurate.
* * * * *
    (f) Blocking of third-party charges. Common carriers that offer 
subscribers the option to block third-party charges from appearing on 
telephone bills must clearly and conspicuously notify subscribers of 
this option at the point of sale, on each telephone bill, and on each 
carrier's Web site.

 [FR Doc. 2011-21547 Filed 8-22-11; 8:45 am]
BILLING CODE 6712-01-P