article: SECTION 1. IMPROVED PROTECTION FOR CONSUMERS. (a) Verification of Authorization.--Subsection (a) of section 258 of the Communications Act of 1934 (47 U.S.C. 258) is amended to read as follows: ``(a) Prohibition.-- ``(1) In general.--No telecommunications carrier or reseller of telecommunications services shall submit or execute a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service except in accordance with this section and such verification procedures as the Commission shall prescribe. ``(2) Verification.-- ``(A) In general.--In order to verify a subscriber's selection of a telephone exchange service or telephone toll service provider under this section, the telecommunications carrier or reseller shall, at a minimum, require the subscriber-- ``(i) to acknowledge the type of service to be changed as a result of the selection; ``(ii) to affirm the subscriber's intent to select the provider as the provider of that service; ``(iii) to affirm that the consumer is the subscriber or is authorized to select the provider of that service for the telephone number in question; ``(iv) to acknowledge that the selection of the provider will result in a change in providers of that service; and ``(v) to provide such other information as the Commission considers appropriate for the protection of the subscriber. ``(B) Additional requirements.--The procedures prescribed by the Commission to verify a subscriber's selection of a provider shall-- ``(i) preclude the use of negative option marketing; ``(ii) provide for verification of a change in telephone exchange service or telephone toll service provider in oral, written, or electronic form; and ``(iii) require the retention of such verification in such manner and form and for such time as the Commission considers appropriate. ``(3) Intrastate services.--Nothing in this section shall preclude any State commission from enforcing such procedures with respect to intrastate services. ``(4) Section not to apply to wireless.--This section does not apply to a provider of commercial mobile service, as that term is defined in section 332(d)(1) of this Act.''. (b) Resolution of Complaints.--Section 258 of the Communications Act of 1934 (47 U.S.C. 258) is amended by adding at the end thereof the following: ``(c) Notice to Subscriber.--Whenever there is a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service, the telecommunications carrier or reseller selected shall notify the subscriber in writing, not more than 15 days after the change is processed by the telecommunications carrier or the reseller-- ``(1) of the subscriber's new carrier; and ``(2) that the subscriber may request information regarding the date on which the change was agreed to and the name of the individual who authorized the change. ``(d) Resolution of Complaints.-- ``(1) Prompt resolution.-- ``(A) In general.--The Commission shall prescribe a period of time, not in excess of 120 days after a telecommunications carrier or reseller receives notice, for the telecommunications carrier or reseller to resolve a complaint by a subscriber concerning an unauthorized change in the subscriber's selection of a provider of telephone exchange service or telephone toll service. ``(B) Unresolved complaints.--If a telecommunications carrier or reseller fails to resolve a complaint within the time period prescribed by the Commission, then, within 10 days after the end of that period, the telecommunications carrier or reseller shall-- ``(i) notify the subscriber in writing of the subscriber's right to file a complaint with the Commission concerning the unresolved complaint, the subscriber's rights under this section, and all other remedies available to the subscriber concerning unauthorized changes; ``(ii) inform the subscriber in writing of the procedures prescribed by the Commission for filing such a complaint; and ``(iii) provide the subscriber a copy of any evidence in the carrier's or reseller's possession showing that the change in the subscriber's provider of telephone exchange service or telephone toll service was submitted or executed in accordance with the verification procedures prescribed under subsection (a). ``(2) Resolution by commission.--The Commission shall provide a simplified process for resolving complaints under paragraph (1)(B). The simplified procedure shall preclude the use of interrogatories, depositions, discovery, or other procedural techniques that might unduly increase the expense, formality, and time, involved in the process. The Commission shall issue an order resolving any such complaint at the earliest date practicable, but in no event later than-- ``(A) 150 days after the date on which it received the complaint, with respect to liability issues; and ``(B) 90 days after the date on which it resolves a complaint, with respect to damages issues, if such additional time is necessary. ``(3) Damages awarded by commission.--In resolving a complaint under paragraph (1)(B), the Commission may award damages equal to the greater of $500 or the amount of actual damages. The Commission may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under the preceding sentence. ``(e) Penalty.-- ``(1) In general.--Unless the Commission determines that there are mitigating circumstances, violation of subsection (a) is punishable by a fine of not less than $40,000 for the first offense, and not less than $150,000 for each subsequent offense. ``(2) Failure to notify treated as violation of subsection (a).--If a telecommunications carrier or reseller fails to comply with the requirements of subsection (d)(1)(B), then that failure shall be treated as a violation of subsection (a). ``(f) Recovery of Fines.--The Commission may take such action as may be necessary-- ``(1) to collect any fines it imposes under this section; and ``(2) on behalf of any subscriber, any damages awarded the subscriber under this section. ``(g) Change Includes Initial Selection.--For purposes of this section, the initiation of service to a subscriber by a telecommunications carrier or a reseller shall be treated as a change in a subscriber's selection of a provider of telephone exchange service or telephone toll service.''. (c) State Right-of-Action.--Section 258 of the Communications Act of 1934 (47 U.S.C. 258), as amended by subsection (b), is amended by adding at the end thereof the following: ``(h) Actions by States.-- ``(1) Authority of states.--Whenever the attorney general of a State, or an official or agency designated by a State, has reason to believe that a telecommunications carrier or reseller has engaged or is engaging in a pattern or practice of changing telephone exchange service or telephone toll service provider without authority from subscribers in that State in violation of this section or the regulations prescribed under this section, the State may bring a civil action on behalf of its residents to enjoin such unauthorized changes, an action to recover for actual monetary loss or receive $500 in damages for each violation, or both such actions. If the court finds the defendant willfully or knowingly violated such regulations, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under the preceding sentence. ``(2) Exclusive jurisdiction of federal courts.--The district courts of the United States, the United States courts of any territory, and the District Court of the United States for the District of Columbia shall have exclusive jurisdiction over all civil actions brought under this subsection. Upon proper application, such courts shall also have jurisdiction to issue writs of mandamus, or orders affording like relief, commanding the defendant to comply with the provisions of this section or regulations prescribed under this section, including the requirement that the defendant take such action as is necessary to remove the danger of such violation. Upon a proper showing, a permanent or temporary injunction or restraining order shall be granted without bond. ``(3) Rights of commission.--The State shall serve prior written notice of any such civil action upon the Commission and provide the Commission with a copy of its complaint, except in any case where such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Commission shall have the right-- ``(A) to intervene in the action; ``(B) upon so intervening, to be heard on all matters arising therein; and ``(C) to file petitions for appeal. ``(4) Venue; service of process.--Any civil action brought under this subsection in a district court of the United States may be brought in the district wherein the defendant is found or is an inhabitant or transacts business or wherein the violation occurred or is occurring, and process in such cases may be served in any district in which the defendant is an inhabitant or where the defendant may be found. ``(5) Investigatory powers.--For purposes of bringing any civil action under this subsection, nothing in this section shall prevent the attorney general of a State, or an official or agency designated by a State, from exercising the powers conferred on the attorney general or such official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence. ``(6) Effect on state court proceedings.--Nothing contained in this subsection shall be construed to prohibit an authorized State official from proceeding in State court on the basis of an alleged violation of any general civil or criminal statute of such State. ``(7) Limitation.--Whenever the Commission has instituted a civil action for violation of regulations prescribed under this section, no State may, during the pendency of such action instituted by the Commission, subsequently institute a civil action against any defendant named in the Commission's complaint for any violation as alleged in the Commission's complaint. ``(8) Definition.--As used in this subsection, the term `attorney general' means the chief legal officer of a State. ``(i) State Law Not Preempted.--Nothing in this section or in the regulations prescribed under this section shall preempt any State law that imposes more restrictive intrastate requirements or regulations on, or which prohibits unauthorized changes in, a subscriber's selection of a provider of telephone exchange service or telephone toll service.''. (d) Report on Carriers Executing Unauthorized Changes of Telephone Service.-- (1) Report.--Not later than October 31, 1998, the Federal Communications Commission shall submit to Congress a report on unauthorized changes of subscribers' selections of providers of telephone exchange service or telephone toll service. (2) Elements.--The report shall include the following: (A) A list of the 10 telecommunications carriers that, during the 1-year period ending on the date of the report, were subject to the highest number of complaints of having executed unauthorized changes of subscribers from their selected providers of telephone exchange service or telephone toll service when compared with the total number of subscribers served by such carriers. (B) The telecommunications carriers, if any, assessed fines under section 258(e) of the Communications Act of 1934 (as added by subsection (c)), during that period, including the amount of each such fine and whether the fine was assessed as a result of a court judgment or an order of the Commission or was secured pursuant to a consent decree. SEC. 2. REPORT ON TELEMARKETING PRACTICES. (a) In General.--The Federal Communications Commission shall issue a report within 180 days after the date of enactment of this Act on the telemarketing practices used by telecommunications carriers or resellers or their agents or employees for the purpose of soliciting changes by subscribers of their telephone exchange service or telephone toll service provider. (b) Specific Issues.--As part of the report required under subsection (a), the Commission shall include findings on-- (1) the extent to which imposing penalties on telemarketers would deter unauthorized changes in a subscriber's selection of a provider of telephone exchange service or telephone toll service; (2) the need for rules requiring third-party verification of changes in a subscriber's selection of such a provider; and (3) whether wireless carriers should continue to be exempt from the verification and retention requirements imposed by section 258(a)(2)(B)(iii) of the Communications Act of 1934 (47 U.S.C. 258(a)(2)(B)(iii)). (c) Rulemaking.--If the Commission determines that particular telemarketing practices are being used with the intention to mislead, deceive, or confuse subscribers and that they are likely to mislead, deceive, or confuse subscribers, then the Commission shall initiate a rulemaking to prohibit the use of such practices within 120 days after the completion of its report.
summary: Amends the Communications Act of 1934 to prohibit a telecommunications carrier or a reseller of telecommunications services from submitting or executing a change in a subscriber's selection of a provider of telephone exchange service or toll service, except in accordance with this Act and Federal Communications Commission (FCC) verification procedures. Requires a carrier or reseller, in verifying a subscriber's selection of a telephone exchange or toll service provider, to require the subscriber to: (1) acknowledge the type of service to be changed by the selection; (2) affirm the intent to select the service provider; (3) affirm that the consumer is the subscriber or is authorized to make such selection for that telephone number; (4) acknowledge that such selection will result in a change of service provider; and (5) provide any other such information the FCC considers appropriate for the subscriber's protection. Requires FCC selection verification procedures to: (1) preclude the use of negative option marketing; (2) provide for verification of a change of provider in oral, written, or electronic form; and (3) require the retention of such verification in a manner and form and for such time as the FCC considers appropriate. Makes the above provisions inapplicable to providers of commercial mobile service. Requires a carrier or reseller selected by a subscriber to notify the subscriber in writing not more than 15 days after the change is processed by the carrier or reseller: (1) of the subscriber's new carrier; and (2) that the subscriber may request information regarding the date of the change and the individual authorizing the change. Requires the FCC to: (1) prescribe a period not to exceed 120 days after receipt of notice of a complaint of an unauthorized change for the carrier or reseller to resolve such complaint; and (2) provide a simplified process for resolving such complaints. Authorizes the FCC, in resolving a complaint, to award damages of: (1) the greater amount of $500 or actual damages; or (2) three times such amount. Provides penalties for violations of this Act and authorizes the FCC to collect fines and damages. Treats an initiation of service as a change in a subscriber's selection for purposes of this Act. Authorizes a State, when it has reason to believe that a carrier or reseller has or is engaged in a practice of changing service providers without subscriber authority, to bring an action on behalf of its residents to enjoin such changes and to recover damages. Gives Federal courts exclusive jurisdiction over such actions. Requires FCC notification of, and authorizes FCC intervention in, any such action. Requires the FCC to report to the Congress on unauthorized changes in subscribers' providers. (Sec. 2) Directs the FCC to issue a report on the telemarketing practices used by carriers or resellers to solicit changes by subscribers in their service providers. Authorizes the FCC to initiate a rulemaking to prohibit particular practices it determines are being used with the intention to mislead, deceive, or confuse subscribers.