Agenda:  November 30, 1999
Item No: 

Docket:  UT-980675

Staff:   Vicki Elliott, Assistant Director, Consumer Affairs
   Glenn Blackmon, Assistant Director, Telecommunications
   Rebecca Beaton, Regulatory Consultant
   Tani Thurston, Consumer Program Specialist
   David Griffith, Senior Engineer
   Dennis Moss, Review Judge

Recommendation

Amend WAC 480-120-139, Changes in local exchange and intrastate toll services, 
to reflect the revisions in the attached proposed final rules.

Discussion
On July 8, 1998, the Commission approved filing with the Code Reviser a 
preproposal statement of inquiry (CR-101) to explore the need for rules to 
protect consumers from an unauthorized change in their preferred carrier 
(slamming).  Since that time, staff has held one stakeholders’ meeting, has 
received four rounds of written comments, and has reported to the Commission at 
three open meetings.  On September 22, 1999, the Commission approved filing 
with the Code Reviser proposed rules under a CR-102.  This meeting contemplates 
adopting final rules.  The rules proposed for adoption today reflect the 
results of stakeholder work, as well as adoption by the Federal Communications 
Commission (FCC) of rules regarding changes to consumers’ telephone service 
providers.

Briefly, the proposed rules revise existing rules in the following ways:

•Reflects changes consistent with the FCC rules.  This includes new language 
regarding what type of written documentation is required to verify a customer’s 
choice to change service providers; how third party verification of a customer’
s choice to change providers must be completed; how a service provider must act 
when soliciting more than one type of telecommunications service; how long 
carriers must maintain authorization records; the role of the executing carrier 
in verifying a customer’s choice to change providers; and how local exchange 
companies must offer, implement, and lift carrier freezes.

•Requires local exchange companies to offer a carrier freeze.  The new FCC 
rules do not require local exchange companies to offer their customers the 
ability to freeze their choice of carriers, but instead, describes the process 
for offering, implementing, and lifting freezes if the local exchange company 
chooses to offer them.  The proposed rules require local exchange companies to 
offer carrier freezes to all customers.

•Requires local exchange companies to notify customers about the option of a 
carrier freeze.  The FCC rules are silent on how, or if, local exchange 
companies are required to  notify customers about the option of a carrier 
freeze.  The proposed rules require local  exchange companies to notify 
customers about this option no later than the customer’s  first telephone bill 
and to notify customers annually through a bill insert, bill message,  direct 
mailing, or similar direct notice.

Staff appreciates the comments and participation of the stakeholders during the 
process of discussing and drafting the proposed rule language.  They made a 
number of useful suggestions and allowed open communications between all 
parties.  The process enabled staff to develop rules which staff believes 
appropriately protects consumers without undue regulatory burden.  

There are two areas where staff and some participants did not reach complete 
agreement.  In particular, some stakeholders oppose the requirement that local 
exchange companies be required to offer a carrier freeze and the requirement 
that they must notify customers about this option.  
While staff acknowledges these requirements go beyond the FCC rules, we believe 
there are compelling reasons to do so.  A preferred carrier freeze is a 
valuable tool that consumers can use to protect themselves from carriers who 
slam.  Staff has data that shows slamming is consistently one of the top 
complaints from consumers about their telephone service.  In 1996, Consumer 
Affairs received 186 complaints about slamming; in 1997, the number increased 
to 228; and in 1998, this number was 475 complaints.  We estimate 1999 will 
bring 500 slamming complaints. Staff believes that any tool a consumer can get 
to protect themselves should be available to all consumers, and that they 
should be notified that such an option exists.  The availability of a carrier 
freeze does little good if customers do not know they can use such a tool to 
protect themselves.  If the only customers who find out about this option are 
customers who have already been slammed, the value is diminished considerably, 
since the damage has already been done.  The purpose of a carrier freeze is to 
allow customers the choice of protecting themselves from slamming before it 
occurs.

Staff recommends the Commission amend  WAC 480-120-139, Changes in local 
exchange and intrastate toll services, to reflect the revisions in the attached 
proposed final rules.