| |
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. |
