FCC MODIFIES CARRIER CHANGE RULES
As
part of the Federal Communications Commissionís (the ìCommissionî or the
ìFCCî) biennial regulatory review, the Commission adopted on May 15, 2001
new carrier change rules (47 U.S.C. ß 258(a); Telecommunications Act of
1996.) in a Report and Order (In the Matter of 2000 Biennial Review ñ Review of Policies and Rules Concerning
Unauthorized Changes of Consumers Long Distance Carriers, CC Docket
No. 00-257; Implementation of Subscriber
Carrier Selection Changes Provisions of the Telecommunications Act of
1996, CC Docket No. 94-129; Policies
and Rules Concerning Unauthorized Changes of Consumers Long Distance Carriers;
First Report and Order in CC Docket No. 00-257 And Fourth Report and Order
in CC Docket No. 94-129; Adopted:Ý May
7, 2001;Ý Released: May 15, 2001., http://www.fcc.gov/Bureaus/Common_Carrier/Orders/2001/fcc01156.txt),
to applicable situations involving the carrier-to-carrier sale or transfer
of subscriber bases that intends to ease the process for acquiring carriers. The
new rules became effective June 21, 2000.Ý
Under the Commissionís carrier change authorization and verification
rules in effect prior to June 21, 2001, 47 C.F.R. ß 64.1100 et
seq., a carrier must receive individual subscriber consent before
a carrier change may occur.Ý These
rules are intendedÝ to prevent
ìSlamming,î the practice of switching a telephone subscriberís long distance
provider without first obtaining a subscriberís knowing authorization. When a carrier acquires another carrier, the process for obtaining
each individual subscriberís consent pursuant to the FCCís carrier change
rules is a very time consuming and expensive. Consequentially, carriers generally have sought a waiver of the
carrier change authorization and verification rules to effect the carrier-to-carrier
sale or transfer of a subscriber base without obtaining individual subscriber
consent.Ý The FCCís Common Carrier
Bureau (the ìBureauî) routinely granted such requests, but it is a burdensome
process and carriers are not able to predict with certainty the amount
of time it will take to receive a Bureau decision on their waiver requests.Ý
The FCC is also burdened with processing waiver requests.
Against this background, the Commission amended section 64.1120
of its rules, 47 C.F.R. ß 64.1120, by adding a new subsection (e).Ý
The new amended rule establishes a self-certification process for
carrier-to-carrier sale or transfer of subscriber bases, thereby eliminating
the need for a carrier to obtain a waiver of Commission rules prior to
closing a transaction.
Under the new rules, carriers can make carrier-to-carrier sales
or transfers of subscribers bases, provided that, not later than 30
days before the planned carrier change, the acquiring carrier notifies
the Commission, in writing, of its intention to acquire the subscriber
base and certifies that it will comply with the required procedures, including
the provision of advanced written notice to all affected subscribers.
This notice to the FCC can be made by simply filing a letter in
CC Docket No. 00-257 with the Secretary of the Commission.Ý
The letter must include (1) the names of the parties to the transaction,
(2) the types of telecommunications services provided to the affected
subscribers, (3) the date of the transfer of these subscribers to the
acquiring carrier, (4) a certificate of compliance with the requirements
of this process, typically signed by an officer or designated person on
behalf of the company, and (5) an attached copy of the notice sent to
the affected subscribers. In the event of any material change to this
required information, the acquiring carrier must file a written notification
of the changes with the Commission no more than 10 days after the transfer
date designated in the prior filing.Ý
Carriers acquiring
subscribers have the responsibility to also provide those subscribers
with reasonable advanced written notice of a carrier change associated
with a sale or transfer.Ý This
notice to subscribers must occur not later than 30 days before the
planned carrier change.Ý The
notice must inform the customer of:
1. The
date on which the carrier will become the subscriberís new provider of
telecommunications service;
2. The
rates, terms, and conditions of the service(s) to be provided by the acquiring
carrier;
3. The
fact that the acquiring carrier will be responsible for any carrier change
charges associated with the transaction;
4. The
subscribers right to select a different preferred carrier, if an alternative
carrier is available;
5. A
toll-free customer service telephone number for inquiries about the transfer;
6. The
fact that all subscribers receiving the notice, including those who have
arranged preferred carrier freezes through their local service providers,
will be transferred to the new carrier if they do not select a different
preferred carrier before the transfer date, and that the customer will
again have to arrange for new freeze protection after the transfer with
its local service provider;
7. Whether
the acquiring carrier will be responsible for resolving outstanding complaints
against the selling or transferring carrier. (The Commission declined
to require acquiring carriers to handle outstanding complaints against
the selling or transferring carrier.)
While
not required, a carrier may state in its notice to an affected term contract
subscriber that the subscriber may face termination penalties if the subscriber
selects another carrier prior to the expiration of the term contract,
if that is the case.
The
Telecommunications group at Shughart Thomson & Kilroy, P.C.,
offers a comprehensive telecommunications industry practice, with nationally
and internationally recognized experts in the field of telecommunications
relating to broadcasting, cable, wireline and wireless carriers as well
as telecommunications mergers, financings, and acquisitions.
For
more information call the Telecommunications Group Attorneys:
Michael L. Glaser
Philip W. Bledsoe
Howard B. Gelt
Michael D. Murphy
