Press Release and Bill Summary.
Re: Telecommunications Competition and Consumer Protection Act (anti-slamming bill).
From: Sen. John McCain, Sen. Olympia Snowe, and Sen. Richard Bryan.
Date: May 19, 1999.
Source: Senate Commerce Committee. This document was created by scanning a fax copy and converting into HTML.

McCAIN, SNOWE, BRYAN BILL TO STOP SLAMMING

WASHINGTON, D.C. -- Senator John McCain (R-AZ), Chairman of the Committee on Commerce, Science, and Transportation, today introduced a bill to stop the widespread anti-consumer telemarketing abuse known as slamming. Senators Olympia Snowe (R-ME) and Richard Bryan (D-NV) are original cosponsors.

"Slamming has to stop once and for all. Consumers should not have to continue to deal with fraudulent and abusive telemarketing practices engaged in by companies selling long-distance telephone service," McCain said. "This legislation establishes effective anti-slamming laws and stiff penalties for those carriers found guilty."

"Slamming is a serious crime, and this is a serious solution. Companies engaged in slamming will no longer be able to hide behind the anonymity of the phone lines. Phone companies and their customers should reach agreements on phone services, and slamming destroys that relationship. This legislation will restore an element of trust that has been lost through this abhorrent practice," Snowe said.

"It is hard to believe, but the practice of slamming is perfectly legal," Bryan said. "Supposedly reputable companies are dancing between the letters of the law and treating consumers in an absolutely abusive manner. As a result of slamming, consumers are faced with higher phone bills and a maze of paperwork just to get back to their original phone company. It is time to put a stop to these unfair, anti-consumer practices."

Congress failed to act on the issue last year, and in the absence of legislation, the Federal Communication Commission (FCC) adopted anti-slamming rules. Yesterday, a court stayed this set of rules. The main reason the court stayed the FCC's anti-slamming rules is that the long-distance companies -- the companies who are responsible for slamming -- asked the court to do so because of an alternative anti-slamming proposal they want the FCC to implement.

"This scheme is the latest manifestation of an ongoing effort by the long-distance companies to avoid having to face up to real penalties if they can't make their telemarketers stop slamming people," McCain said. "Their rhetoric deplores slamming, but their machinations before Congress and the FCC show otherwise. And if the FCC -- the supposedly pro-consumer FCC -- were to even flirt with the notion of embracing the long-distance industry's scheme it would show, when push comes to shove, whose interests would really matter to this agency."

Slamming is the practice whereby a consumer's chosen long-distance telephone company is changed without the consumer's knowledge or consent. Slamming has been the number one consumer complaint for the last several years.

The bill is similar to McCain's bill from last year, the Consumer Anti-Slamming Act, which was adopted by the Senate unanimously. This marks the third time Senator McCain has introduced anti-slamming legislation.

(bill summary attached)

Telecommunications Competition and Consumer Protection Act of 1999
introduced May 19, 1999

The TCCPA tackles slamming by creating a two-track approach to the problem. The bill provides for an Code of Subscriber Protection Practices to be created with input by the Federal Communications Commission, Federal Trade Commission, and telecommunications carrier representatives to include measures to end slamming. The TCCPA includes tough regulatory measures to be applied to those companies electing not to participate in the use of the Code.

Code of Subscriber Protection Practices:

Minimum requirements to be incorporated into the Code include restricting the use of negative option marketing; requiring verification of changes in a subscribers' service; forbidding unfair and deceptive practices; requiring carriers to provide subscribers with notifications of any changes in service; provides for reimbursement and credits for charges not authorized by subscribers; requires procedures for receiving and processing subscriber allegations. The Code does not preempt applicable penalties under existing law for code violations.

For carriers electing not to adhere to the Code, the FCC shall prescribe regulations including verification of changes in subscribers' service including maintenance of such records; forbidding negative option marketing; providing notice of changes in service to subscribers; obliges offending carriers, once an allegation is made by a subscriber, to provide automatic switch-back to original carrier and to provide credit for unauthorized charges; requires the FCC to adopt procedures for rendering determinations with respect to violations; requires the FCC to award damages to subscribers in the amount of $500, and to carriers harmed by slamming in an amount equal to the sum such carriers would have received from the subscriber during the violation; requires that determinations be made no later than 6 months after filings by carriers or subscribers; requires carriers to maintain records of reported violations, to provide the FCC with monthly reports on such violations, to make such information available to any telecommunications carrier, requires the FCC to punish violations of the reporting requirement with fines not less than $40,000 for the first offense and not less than $150,000 for each subsequent offense, and authorizes the FCC to collect forfeitures for reporting violations as well as on behalf of subscribers.

The TCCPA also requires the FCC to compile and publish every six months a report ranking carriers for violations; requires the Commission to investigate carriers among 5 worst performers 3 reports in a row, and to fine them $1,000,000 if the FCC finds the carrier misrepresented its adherence to the Code; requires the FCC to review the Code every two years; permits States to bring civil actions against carriers in U.S. district court, permits State Attorneys General to exercise the authority provided them by their respective states, and does not restrict actions taken by states against carriers in State court; State laws imposing more restrictive requirements, regulations, damages, costs, or penalties related to slamming are not preempted.