March 12, 1998

Mr. Paul Curl
Acting Secretary
Washington Utilities and 
 Transportation Commission
1300 S. Evergreen Park Drive S. W.
P. O. Box 47250
Olympia, Washington 98504-7250

RE:  Notice of Preproposal Rulemaking Inquiry Regarding Prepaid Telephone 
Services and Notice of Comments Due March 18, 1998.    Docket No. UT - 971469

Dear Mr. Curl:

On February 17, 1998, the Commission invited interested parties to file 
comments in response to its Notice of Preproposal Rulemaking Inquiry Regarding 
Prepaid Telephone Services and the CR-101 filed with the Code Reviser for 
Docket No. UT-971469.  This letter responds to the Commission request for 
comment on the need for a state rule relating to prepaid telephone services.  

U S WEST does not believe a Commission rule is necessary for prepaid telephone 
services.  The function of prepaying for service is not in and of itself a 
telecommunications service and is outside the scope of telecommunications 
regulation. Existing consumer protection laws should prove to be adequate in 
addressing the concerns raised by the Commission staff at the February 11, 1998 
open meeting.  Regulation of all telecommunications companies provides the 
Commission with the necessary avenue to protect consumers from questionable 
providers.

Should the Commission continue to pursue rulemaking activity, U S WEST will 
participate and would like to be included on the interested parties list for 
this docket. Following are U S WEST’s preliminary comments on the potential 
areas the rule may cover as identified by the Commission staff.

Establish Definition of Prepaid Services:    U S WEST agrees that in such a 
rulemaking, the Commission should establish a definition of “Prepaid 
Services.”  At this time,          U S WEST does not propose a specific 
definition, but suggests that such a definition be limited to the prepayment of 
long distance telecommunications services.

Disclosure to the Consumer:   U S WEST agrees that consumers should be able to 
make informed purchases of prepaid telecommunications services.   With the very 
limited space available on the card itself, U S WEST suggests that any rules 
related to disclosure on the card be limited to the following:

Toll Free Customer Service Number  (May, or may not be the carrier).
Carrier Name and Card Provider
Expiration Date (if one exists)
Operating Instructions

Additional consumer information may be provided either with the card at the 
time of purchase, or posted at the purchase location (e.g., posted on the 
vending machine, or by some other form of signage).    In addition, U S WEST 
suggests that consumers would benefit by knowing how many domestic minutes they 
are buying for the face value amount of the card.  Clearly, the consumer is 
buying minutes of use, not dollars of use. Disclosure of minutes purchased, or 
minutes remaining on the card, poses some very difficult technical concerns.  
Disclosure of time remaining on the card at the end of a call is nearly 
impossible.  Customers typically hang up when the call is completed.  Providing 
disclosure of remaining minutes at the beginning of each call may be feasible. 

An important consideration for this area is the reality that international 
rates change on average, twice per month.  Therefore, disclosure of minutes 
available at the time of purchase may not be feasible.

Access to the Carrier:   U S WEST does not agree that a contact name and number 
for Commission Staff is needed.  However, along with other consumer information 
provided at the time of purchase, the Commission could be identified (with 
telephone number and address) as the location for consumer complaints.    Staff 
suggests that a toll free number be provided for access to the carrier.  U S 
WEST agrees that consumers should have toll free access to their provider. 

Protection of Advanced Payments:  U S WEST agrees with Staff’s suggested course 
of action.  Consumer protection would serve to enhance the reputation of the 
prepaid card industry.  There is a very low market entry barrier for this line 
of business.  Anyone with a personal computer and $1,000 can enter the 
business.  Consumers are buying what they perceive to be inexpensive long 
distance service, when in fact there is a very high correlation between poor 
service and products priced at rates that are too good to be true.

Limit of Debit Card Denominations:  U S WEST does not support limiting the 
denomination of cards sold in Washington.  However, if the Commission 
determines a denomination limit is appropriate, U S WEST suggests that card 
denomination amounts greater than $50 be allowed for residence cards since the 
majority of cards sold are to customers making international calls.  An 
inappropriate limited denomination could unintentionally discriminate against 
the most frequent users of this service.

U S WEST has not quantified the economic impact of each provision outlined 
above.  Until more detailed information is available it is not possible to 
quantify the impact of each provision.

If you need further information or have any questions, please contact Theresa 
Jensen at 206-345-4726.

Very truly yours,