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New
Requirements for Wireless Service Contracts in Minnesota
Minnesota
recently enacted new statutory provisions which in part will
require wireless carriers to notify customers in writing 60
days in advance of any proposed “substantive change"
in the contract. A “substantive change” includes
any modification that would result in an increased charge
or extend the term of the contract. If the subscriber does
not affirmatively accept the change (orally or in writing),
the original terms of the contract remain in force. The rules
are to be codified at Minnesota Statutes, § 325F.695.
The provisions,
initially scheduled to become effective July 1, 2004, would
apply to all contracts entered into on or after May 1, 2004.
On June
18, 2004, the major wireless carriers filed suit in federal
court in Minneapolis against the Minnesota Attorney General
in an effort to prevent enforcement of the rules (Case No.
04-2981, D. Minn.). The carriers argue that the new provisions
exceed the limited authority over wireless services reserved
to states under the federal Communications Act.
The court
granted the carriers’ request for a temporary restraining
order (TRO) on June 29, 2004. The TRO prohibits any attempt
to enforce the rules while the court considers the carriers’
request for a preliminary injunction.
California Adopts Final Consumer
Protection Rules
On May
27, 2004, the California Public Utilities Commission (CPUC)
adopted new rules governing the marketing and sale of telecommunications
services (CPUC General Order 168, adopted in Decision 04-05-057).
The rules impose extensive requirements on all types of telecommunications
carriers (wireless, wireline, long distance providers) relating
to, among other things, contracts, disclosures, customer notifications
and billing. The final decision and general order are available
at www.cpuc.ca.gov/static/industry/telco/consumer+information/billofrights/.
Carriers
must bring their operations into compliance by Dec. 7, 2004
for most of the rules and by July 31, 2005 for the remainder.
It is
expected that carriers will seek reconsideration of the rules
at the CPUC and pursue legal challenges in state and federal
court. In conjunction with those efforts, carriers likely
will seek to delay implementation of the rules.
FCC Considers Request for Declaratory
Ruling Regarding Truth-In-Billing for “Regulatory,”
“Administrative” and “Government-Mandated”
Charges
The Federal
Communications Commission has opened a docket to seek comment
on a request by the National Association of State Utility
Consumer Advocates (NASUCA) for a declaratory ruling that
both wireline and wireless telecommunications carriers are
prohibited from “imposing monthly line-item charges,
surcharges or other fees on customers’ bills unless
such charges have been expressly mandated by a regulatory
agency.” According to the FCC, NASUCA sought the ruling
because, it contends, current carrier uses of line-item charges
are misleading and deceptive, bear no relationship to the
regulatory costs they purport to recover, and thus constitute
unreasonable and unjust practices and charges in violation
of “full and non-misleading billed charges” principles
the FCC adopted in its “Truth-in-Billing” proceeding.
Comments must be filed by July 14, 2004, and replies by Aug.
13, 2004.
Telemarketers Take Do-Not-Call
Challenge to U.S. Supreme Court While FTC Refines and Enforces
Its Registry Rules
The American
Teleservices Association (ATA) and two of its members have
asked the Supreme Court to reverse the appeals court and declare
the National Do-Not-Call Registry unconstitutional under the
First Amendment. The ATA petition focuses on how the registry
discriminates against commercial speech in the name of protecting
consumers from unwanted calls, while permitting charitable,
nonprofit, political and religious entities to continue calling
even those consumers listed on the Do Not Call Registry. In
seeking Supreme Court review, ATA’s petition points
out that the registry regulates not just how companies use
the phone to sell to consumers, but also effectively closes
off an entire channel of communication that, if let stand,
can serve as a model for regulation of similar channels including
snail mail or email. It is expected that a decision on whether
the Supreme Court will opt to hear the case will be made some
time this fall and, if review is granted, that the case will
heard this winter or spring with a decision by the time the
Court recesses early next summer.
Meanwhile,
the Federal Trade Commission has commenced its first enforcement
action that includes alleged violations of the National Do-Not-Call
Registry and commenced two rulemakings that propose to further
tighten the regulatory burden faced by companies engaged in
telemarketing.
- The
FTC filed a complaint against National Consumer Council,
a group of defendants the agency alleges “masqueraded”
as a nonprofit debt-negotiation organization to deceive
consumers into enrolling in their program by promising to
reduce their debts, and that it called individuals who placed
their telephone numbers on the Do-Not-Call Registry.
- In
the first of the FTC’s two rulemakings, the FTC tripled
the frequency with which companies must update their downloads
of national registry data, requiring downloads now on a
monthly instead of quarterly basis. (The Federal Communications
Commission has sought comment on whether to amend its parallel
Do-Not-Call Registry rules to match the new FTC requirement,
though the Appropriations Act required only the FTC, not
the FCC, modify its rules.)
- In
the second rulemaking, the FTC proposed to increase the
fees telemarketers must pay to acquire the do-not-call data
necessary for them to lawfully place telemarketing calls.
The FTC purports to increase the rate per area code from
$25 to $45 and to raise the maximum cap from $7,375 to $12,375.
Bills Introduced to Create Company-Specific
“Do-Not-Fax” Rule While Reinstating Established
Business Exemption to Prohibition on Unsolicited Faxes
Congressman
Joe Barton (R-Tex.) has introduced the Junk Fax Prevention
Act of 2004. If passed, the bill would amend the Telephone
Consumer Protection Act’s unsolicited fax provisions
to include a company-specific do-not-fax requirement while
at the same time answering the call of industry and trade
associations to reinstate an exemption, removed by the Federal
Communications Commission last year in its telemarketing rules
revision, that allows companies to send unsolicited faxes
to those with whom they have an “established business
relationship.” The new law would reinstate the established
business relationship exemption (except in cases where a do-not-fax
request is lodged) so long as the fax bears a notice on the
first page explaining the do-not-fax right and how to exercise
it, and would allow the FCC, at its discretion, to permit
trade associations that are tax-exempt non-profit organizations
to send unsolicited advertisements to their members without
including the do-not-fax notice. The bill would give the FCC
270 days to adopt regulations implementing it, and would require
the FCC to report on, and GAO to study, the enforcement of
the Act’s and the FCC’s junk fax provisions. Similar
bills also were introduced in the Senate.
FTC Recommends Against a National
Do-Not-Spam Registry and Announces Instead an Email Authentication
Summit for Fall 2004
The Federal
Trade Commission has reported to Congress that, at the present
time, a National Do-Not-Email Registry modeled on the National
Do-Not-Call Registry would fail to reduce the amount of spam
consumers receive, could not be enforced effectively, and
might in fact increase the number of unsolicited emails consumers
face. The FTC submitted the report in response to a statutory
mandate in the Controlling the Assault of Non-Solicited Pornography
and Marketing (“CAN-SPAM”) Act. It suggested that,
instead of adopting some kind of “do-not-spam”
registry, that anti-spam efforts focus on creating robust
email authentication systems that would prevent spammers from
hiding their tracks and thereby evading Internet service provider
anti-spam filters and law enforcement efforts. In furtherance
of that alternative, the FTC announced that it will sponsor
a Fall 2004 Authentication Summit to encourage thorough analyses
and, ultimately, deployment of potential authentication systems. |
