Agenda Date: September 27, 2000 Item Number: 2C Docket: UT-990043 Company Name: Qwest Corporation (formerly, U S WEST Communications, Inc.) Staff: Suzanne Stillwell, Consumer Affairs Supervisor Recommendation: Grant Qwest Corporation’s request for a waiver until September 30, 2000, of the requirement, within WAC 480-120-141(2)(b), to verbally advise consumers how to receive a rate quote on an operator-assisted call. Grant the permanent partial waiver of WAC 480-120-141(2)(b) as it applies to collect calls from inmates at correctional facilities, and only as it applies to the originating, not the receiving, party. Grant the waiver of WAC 480-120-141(2)(b) as it applies to the receiver of a collect call from inmates at correctional facilities until December 31, 2000. Require the Company to provide Staff with a monthly progress report regarding steps taken to implement the technology by December 31, 2000. Background: On January 12, 1999, Qwest Corporation (Qwest/U S WEST) filed a petition to waive WAC 480-120-141(2)(b). Qwest/U S WEST sought a waiver of the requirement that an operator service provider must provide an automatic rate prompt to advise the consumer how to receive a rate quote before an operator-assisted call may be connected. The waiver is needed since the technology had not been developed at that time. Qwest/U S WEST stated that implementation of this rule would substantially impact the company. It expected the costs to run between $10.7 million to over $18 million to implement the technology ordered by the rule. Qwest/U S WEST sought an extension for 15 months after the date of an FCC order on this very same issue to develop the technology to provide automatic verbal rate quotes from a pay phone. Several companies sought similar waivers of the verbal disclosure requirements from the Federal Communications Commission (FCC). Staff worked with the FCC throughout 1999 to coordinate a consistent state and federal response. The FCC has not acted on this specific issue for any local exchange company. As a result, Staff likewise did not act on Qwest/U S WEST’s petition. On September 20, 2000, Qwest/U S WEST asked the Commission to take action on its originally-filed petition, and states that it can comply with this section of the rule by September 30, 2000. In addition, Qwest/U S WEST now asks for additional consideration as it relates to pay phone service from correctional facilities. Qwest/U S WEST seeks a permanent waiver of that portion of the rule requiring automatic rate disclosure, at inmate facilities, to the party originating the operator-assisted (collect) call. The company further seeks a temporary waiver of this rule until December 31, 2000 regarding verbal disclosure to persons receiving collect calls from inmate pay phones in order to deploy the technology at the facilities throughout the state. Discussion: Verbal Disclosure of Rates, WAC 480-120-141 (2)(b) 1. General The Commission made significant changes to its pay phone and operator services rules in January 1999, to carry out consumer protections regarding pay phone use after deregulation of much of the pay phone industry at the federal level. The Commission’s rules were revised in order to be consistent with the Telecommunications Act of 1996 and subsequent FCC orders relating to pay phones and operator services, and to ensure adequate protections for users of pay phones within Washington state. One of the major additions to the FCC’s rules and subsequently the Commission’s rules requires the company to provide the capability for a consumer to receive a verbal rate quote from the pay phone within no more than two key strokes. Qwest/U S WEST also petitioned the FCC for Clarification or Waiver of its verbal disclosure requirement. In its June 30, 1998, order DA 98-1285, the FCC granted a limited stay as it relates to U S WEST and Ameritech’s position that the verbal disclosure rules do not apply to local exchange company (LEC) provision of interstate intraLATA operator services. The limited stay was granted until 60 days after the release of a Commission reconsideration order addressing the issues. The FCC has not yet acted on this petition. Qwest/U S WEST now indicates that it can comply with the verbal rate disclosure by September 30, 2000. The company’s operator-assisted rates are not a source of complaints for this Commission. Staff recommends granting a temporary waiver of WAC 480-120-141(2)(b) until September 30, 2000. However, if requested, Qwest must provide a rate quote to a caller. The rate quoted for the call must include any applicable surcharge, and charges to the user must not exceed the quoted rate. After September 30th, Staff will conduct an investigation into the practices of Qwest/U S WEST’s operator services, and if Qwest/U S WEST is not able to offer verbal disclosures in compliance with the rule, it will be subject to penalties. 2. Prison pay phones This Commission's rules define a consumer as the party initiating and/or paying for a call using operator services. In collect calls, both the originating party and the receiving party of the call are considered consumers. Qwest/U S WEST seeks a permanent waiver of that portion of the rule requiring access to the automatic rate disclosure from the party originating the operator-assisted (collect) call, when that call originates from an inmate phone at a correctional facility. Qwest/U S WEST has concerns about safety, security, and fraud that can take place when an inmate has access to a live operator. Department of Corrections also expressed similar concerns. Qwest/U S WEST's automated technology will prompt the called party to ask for a rate quote. The inmate cannot initiate the rate quote, however, and that is the reason why there is a need for a permanent partial waiver. Once the called party initiates the rate request, both the caller and the called party will hear the rate information. Either party may terminate the call by hanging up. Qwest/U S WEST also seeks a temporary waiver until December 31, 2000, to deploy the technology necessary to allow the receiver of a collect call from an inmate phone obtain a rate prompt. Qwest/U S WEST has escalated this issue to its provider for installation sooner than the end of the year, and may improve upon this commitment. Qwest/U S WEST will keep the Commission informed. Staff believes this is a sound request since U S WEST’s operator-assisted rates are reasonable, and compare favorably to other carrier’s rates that serve inmate phones. The Company advised Staff that it is unlikely the operator-assisted rates would change in the near future. Thus, Staff recommends granting the permanent partial waiver to WAC 480-120-141(2)(b) only as it applies to collect calls from inmates at correctional facilities, and only as it applies to the originating, not the receiving, party. Staff further recommends granting the temporary waiver of WAC 480-120-141(2)(b) as it applies to the receiver of the collect call until December 31, 2000, and that the Company be required to provide the Commission Staff with a monthly report outlining specific action steps taken to ensure statewide implementation of this technology by year end. Conclusion: In Docket UT-990043, Staff recommends that the Commission grant Qwest’s request for a waiver until September 30, 2000, of the requirement, within WAC 480-120-141(2)(b), to verbally advise consumers how to receive a rate quote on an operator-assisted call. Qwest must still provide a rate quote if requested by a caller. In addition, the rate quoted for the call must include any applicable surcharge. Charges to the user must not exceed the quoted rate. Grant the permanent partial waiver of WAC 480-120-141(2)(b) as it applies to collect calls from inmates at correctional facilities, and only as it applies to the originating, not the receiving, party. Grant the waiver of WAC 480-120-141(2)(b) as it applies to the receiver of a collect call from inmates at correctional facilities until December 31, 2000. Require the Company to provide Staff with a monthly progress report regarding steps taken to implement the technology by December 31, 2000.