House Subcommittee Approves Anti-Slamming and Anti-Spamming Bill

(August 7, 1998)  The House Telecommunications Subcommittee approved a bill to provide consumers and phone companies further protections against unauthorized switching of long distance carriers, and to limit unsolicited commercial e-mail.

The bill approved and reported to the full  House Commerce Committee was an amendment in the nature of a substitute to the original version of HR 3888.  The amendment was offered by Subcommittee Chairman Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), and was endorsed by all members who spoke.  It was passed by a voice vote, without opposition.

HR 3888 is now significantly different from the Senate anti-slamming and anti-spamming bill, S 1618 ES.  Also, the Senate bill contains a "truth in billing" section that would limit long distance phone companies ability to explain universal service charges on monthly bills.  This section relates to the ongoing debate of the e-rate program, and is not likely to be made part of the House bill.

The bill next goes to the Commerce Committee, where it is likely to be revised further.   Rep. Tauzin, who presided at the meeting, stated that "this is indeed a work in progress."  Tauzin also stated that the Telecommunications Subcommittee would have more hearings in September, especially on the issue of "cramming," or the placement of unauthorized charges on phone bills.

The spamming provisions of the bill would provide that senders of unsolicited commercial email, or spam, must include in the body of the message information that filtering software would be able to identify. and use to screen out spam.  It would also require that recipients of spam be deleted from further mailings by replying to the spammer with a "remove" message.

Rep. Billy Tauzin described the provisions in the Amendment in the Nature of a Substitute that pertained to spamming.

"The Substitute would provide the tools necessary for Internet Service Providers (ISPs) to block unsolicited commercial email (UCE) from reaching customers.  The Substitute requires anyone who sends a UCE to include certain information in the beginning of the body of the message.  That information can then be used by ISP's to mechanically identify these messages and filter or block their delivery.  In addition, it is expected that software would be developed in the marketplace to allow consumers to do their own blocking of UCEs if they choose.  Additionally, the Substitute would allow any consumer to simply reply to the UCE with the word "REMOVE" in the subject line.  The sender of the UCE then would be prohibited from sending additional messages to that consumer.  Unsolicited commercial email is defined to exclude messages sent to persons who expressly requested them, messages sent to persons who have a pre-existing business relationship with the sender, or messages sent by non-profit agencies."

The bill grandfathers the anti-spamming laws of the two states which have such laws: Washington and Nevada.

Rep. Rick White (R-WA), the founder and co-chair of the Congressional Internet Caucus, urged the subcommittee to proceed cautiously.

"I am a little concerned about moving at this time on the spamming provisions in this bill.  And as I said before, we may not know as much about this issue as we would like to know.  I am also concerned that even when we think we know a lot about issues , and we pass legislation in this body we often end up with unintended consequences.  And when we don't know what we are doing, and we really don't know what we are doing, we really get ourselves in trouble.  So, I think caution at this point would by far be the best policy.  I also think that we are at a time where it would be best to let the states experiment with some different approaches, so that we could see what works best.  It may be, I am receptive to the argument that email, national interstate standard is preferable.  But we are at a stage now that certain states have taken action, including my state of Washington."

White also stated that "I'm concerned about several provisions in the bill, and I want to make sure we take the time to do it right. Proliferating spam can turn people away from the Internet, but clamping down too hard can hurt it, too."

The bill changes the way in which consumers complain about slamming.  The bill would require the new long distance carrier to notify the consumer in writing within 15 days of submitting the change to the local exchange carrier.  It would also require the local exchange carrier to prominently display on its next bill that the long distance carrier has been switched.  Then, if the switched customer notifies his local exchange carrier within 30 days that he was slammed, he must be switched back at no charge, and receive a credit or discharge for charges incurred.

The bill also gives the previously authorized carrier the remedy of filing a complaint with the FCC for lost revenues, plus $500 per violation.  Also, carriers falsely accused of slamming are given an FCC complaint remedy.  Finally, the Federal Trade Commission would be required to adopt and enforce rules preventing unfair or deceptive methods to persuade consumers to switch carriers.

The Federal Communications Commission came under some criticism for not dealing with slamming itself. Rep. Stearns (R-FL) commented that:

"I am a little hesitant to have Congress step in here, because when we passed the telecommunications bill we said we wanted less government, less regulation. And here we are today moving forward with a bill to take care of this. But, Congress has little else to do but to legislate an answer to fraudulent practice, or to advance some regulatory strategy, because frankly, the FCC has yet to act. And that is question I leave perilously in the air today. Where is the FCC? Basically, through the telecommunications act, through codifying a new section in the communications act to close the abusive loopholes that was created by the breakup of AT&T in 1984. We gave the power to the FCC to issue new regulations to prevent slamming. I mean, we are spending a lot of money over at the FCC. It is curious to see why the FCC has not taken some action, and why this just hangs on and on. So, I am glad to support this bill."

The bill dropped the surety bond requirement that was in the original version of the bill, HR 3888 IH.

Both Rep. Rick White (R-WA) and Rep. Mike Oxley (R-OH) would rather have passed different versions.  Both introduced and explained amendments, then withdrew them.   They wanted to place them on the record, and start a discussion about them.  They may be reintroduced when the full Commerce Committee meets to mark up the bill.

Rep. White's proposal would have treated spam much differently.  His amendment would have left spam regulation to the ISPs.  This amendment provided that:

"A person shall not initiate the transmission of unsolicited commercial electronic mail in or affecting interstate or foreign commerce through the server of an interactive computer service provider to one or more subscribers of the interactive computer service provider in contravention of the rules of the interactive computer service provider that the interactive computer service provider makes publicly available including on its web site ..."

He described it as a "more market based solution to the problem."  He criticized the bill which the subcommittee approved.  "[I]it really legitimizes the practice of having one bite at the apple for unsolicited email.  In some ways that could encourage the very problem that we are trying to solve. ... One of the most valuable things you could ever create for somebody who wants to send unsolicited commercial email is a list of people who have asked to have their names removed, because then you know those are real people who read their email."

Rep. Oxley's amendment would have treated slamming much differently.  Rather than rely on consumers and the FCC to enforce anti-slamming regulations, his proposal would rely on long distance carriers who lose customers to slamming to bring suit and collect damages from slammers, and hence, deter slamming.  The recovery would be lost billings plus $500 per incident.  His proposal stated that:

"A telecommunications carrier that was providing telephone exchange service or telephone toll service to a subscriber before the occurrence of an alleged violation of subsection (a) shall be permitted to file a complaint seeking damages ... for such alleged violation in a court of competent jurisdiction.  Any such complaint shall be filed not later than 6 months after the date on which any subscriber as to whose service such damages are sought was changed in alleged violation of subsection (a).  ... In a proceeding under this paragraph, if the court determines that a violation of subsection (a) has occurred, the court shall award damages ... in an amount equal to the sum of (i) the gross amount of charges that the carrier would have received from the subscriber during the violation, and (ii) $500 per violation."

Members of the subcommittee who participated in the discussion and debate included Tauzin, Oxley, Stearns, White, Markey, Gordon, Eshoo, Manton, Dingell, and McCarthy.  Many other members of the subcommittee, including new member Rep. Heather Wilson (R-NM), attended and voted, but did not speak.