BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Preproposal Rulemaking Inquiry Regarding Prepaid Telephone Services ) Docket UT-971469 ) ) Comments of Sprint ) Communications Company L.P. ) COMMENTS OF SPRINT COMMUNICATIONS COMPANY L.P. Pursuant to the Notice of Preproposal Rulemaking Inquiry Regarding Prepaid Telephone Services and Notice of Comments Due March 18, 1998 issued February 17, 1998 in the referenced docket (“Notice”), Sprint Communications Company L.P. (“Sprint”) respectfully submits its comments on the proposed rulemaking. I. SPRINT’S INTEREST IN THIS PROCEEDING Sprint wishes to thank the Commission for offering interested parties the opportunity to comment at the outset of the potential rulemaking in this matter. Prepaid telephone services are an area of great interest to Sprint, particularly prepaid phonecards, referred to in the Notice as “debit cards.” Prepaid phonecards represent a relatively new and fast-growing segment of the telecommunications market. Sprint has taken the lead in the field by creating the Spree brand of phonecards, the most recognizable brand of phonecards made today. Sprint also has been a pioneer in forging marketing alliances with distributors, providing convenient points of sale to those who want to use this convenient method of obtaining telecommunications services. Sprint believes that consumers have a right to know what services they are getting when they use phonecards. At the same time, as a nationwide provider of prepaid phonecard services, Sprint contends that consistent regulatory treatment of phonecards from state to state is in the best interest of prepaid telephone service providers and the general public. This Commission should attempt to balance the interests of both consumers and service providers in establishing rules for prepaid phonecard services. II. THE COMMISSION SHOULD PROMULGATE PREPAID TELEPHONE SERVICE RULES SIMILAR TO THOSE RECENTLY ADOPTED IN FLORIDA Sprint contends that the best way to balance the interest of consumers and prepaid telephone service providers is for this Commission to promulgate prepaid telephone service regulations similar to those recently adopted in Florida. A copy of the Florida Public Service Commission’s Rules Governing Prepaid Calling Services (Part XVI, Sections 25-24.900 et seq.) (“Florida Rules”) are attached as Attachment A. Sprint believes that the Florida Rules can serve as a template for discussions regarding the need for, and scope of, prepaid telephone service regulations in Washington. For example, the Notice recognizes that prepaid calling cards are a distinct subset of prepaid calling services. See Notice at 1. Accordingly, there should be specific definitions differentiating prepaid calling cards from prepaid calling services. The Florida Rules clearly distinguish prepaid calling services from prepaid calling cards by defining each term separately. See Florida Rules, Sections 25-24.905(3), (4). The Notice suggests that the proposed rulemaking should consider establishing regulations regarding disclosure of information to consumers, both at the time of purchase and when phonecards are used. See Notice at 1-2. The Florida Rules provide workable standards for consumer disclosure. See Florida Rules, Section 25-24.920. The Florida Rules place the responsibility for providing information to consumers squarely on prepaid calling service providers. Certain information is required to be legibly printed on phonecards, such as the name of the prepaid calling service provider, toll-free customer service and network access numbers, and any required authorization code. Florida Rules, Section 25-24.920(1). However, the Florida Rules also allow prepaid calling service providers the flexibility to determine for themselves how best to communicate other types of information to end users, such as expiration policy, while establishing a “default” standard to protect consumers should companies choose not to set their own policy. See Florida Rules, Sections 25-24.920(2), (10). Rather than micromanage the business practices of this fast-growing market, the Florida Rules provide a benchmark for service standards that is worthy of emulation in Washington. Sprint meets the service requirements set forth in the Florida Rules, and believes that the public would benefit immensely if all prepaid telephone service providers were obligated to do the same. III. SPECIFIC CONCERNS REGARDING THE NOTICE IN THIS DOCKET Sprint has some qualms about the recommendations made by Commission Staff in the Notice. For example, the Notice suggests that carriers provide “a contact name and number for Commission Staff.” Notice at 2. Sprint believes that this suggestion is both onerous and vague. Sprint provides a toll-free number for customer service on all of its phonecards. This customer service number is accessible 24 hours a day, seven days a week. Sprint’s prepaid phonecard business is not just national, but international in scope, providing service to customers around the globe. It would be a true hardship to require Sprint to supply accurate and current individual contact information for each and every regulatory commission staffer that has responsibility for overseeing that particular commission’s jurisdiction over the prepaid phonecard service market. In addition, Sprint would respectfully oppose attempts to limit the denominations of phonecards sold in the state of Washington. See Notice at 2. From Sprint’s perspective, it does not make sense to arbitrarily restrict the value of services sold to consumers. Higher denomination cards typically have a lower cost per minute for end users. Consumers should be able to choose the value of service they wish to purchase. By allowing consumers to do so, market forces will determine the denomination values consumers want, thereby naturally regulating the denomination values sold. Lastly, the Notice makes a general reference to “[t]ypical users of debit cards.” Notice at 1. With all due respect, in Sprint’s experience, there is no “typical user” of prepaid phonecard services. Parents purchase phonecards for use by their children outside the home or away at school; travelers buy them for convenient calling while on the road; grandparents buy phonecards as gifts for their grandchildren; budget-conscious consumers purchase an amount of service they can afford; collectors purchase cards for their unique designs; there are even phonecards given away as promotions. In short, there are many different types of phonecard users, and many reasons why phonecards are bought and used. The Commission should keep the diverse nature of the prepaid telephone services market in mind as it strives to create a regulatory framework for the industry. IV. CONCLUSION Sprint thanks the Commission for the opportunity to submit comments on this matter, and looks forward to participating in this docket in the future. Sprint respectfully requests that the undersigned counsel be included on the list of interested parties on Sprint’s behalf. Dated: March 17, 1998, at San Mateo, California. Respectfully submitted, SPRINT COMMUNICATIONS COMPANY L.P. ______________________________ Richard L. Goldberg Regulatory Attorney Sprint Communications Company L.P. 1850 Gateway Drive, 7th Floor San Mateo, CA 94404-2467 Telephone: 650-513-2736 Facsimile: 650-513-2737 EXHIBIT A FLORIDA PUBLIC SERVICE COMMISSION RULES GOVERNING PREPAID CALLING SERVICES PART XVI, SECTIONS 25-24.900 ET SEQ. (Exhibit A - not available in electronic format - please contact the Records Center for a copy)