Original Notice.

     Preproposal statement of inquiry was filed as WSR 99-09-027.

     Title of Rule: Customer information rules, WAC 480-120-201 through 480-120-209 and WAC 480-120-211 through 480-120-216. The proposed rules would consider the use of information made available to telecommunications companies by customers solely by virtue of the customer-company relationship.

     Purpose: The proposed rules would clarify the extent to which customer information may be used by telecommunications companies; establish notice requirements; establish operational requirements for customer approval mechanisms; establish requirements for confirmation of customer approval for the use of customer information; and limit the use, under some circumstances, of subscriber list information. The proposed rules would replace the current rules on this topic: WAC 480-120-144 and 480-120-151 through 480-120-154.

     Other Identifying Information: Docket UT-990146, Customer privacy notification rules. This is the second CR-102 proposal in this docket. The first covered general rules and was adopted at WSR 01-15-022. Another proposal will be filed that will address remaining rules.

     Statutory Authority for Adoption: RCW 80.01.040 and 80.04.160.

     Summary: See Explanation of Rule below.

     Name of Agency Personnel Responsible for Drafting: Robert Shirley, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504-7250, (360) 664-1292; Implementation and Enforcement: Carole J. Washburn, Secretary, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504-7250, (360) 664-1174.

     Name of Proponent: Washington Utilities and Transportation Commission, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: The rule concerns the use of customer information made available to telecommunications companies by customers solely by virtue of the customer-carrier relationship. Its purpose is to clarify the uses of the information and the approval, or lack of approval, that must be given by the customer to the company before the information is used.

     The anticipated effect is to permit the use of call detail information (e.g., whom you call and when and where you call) only with affirmative approval of a customer (so-called "opt-in" approval). Other, less personal information (e.g., whether customer subscribes to one line or two) may be used by companies or entities under common control of or with a telecommunications company after annual notice and opportunity to "opt-out" (i.e., disapprove) the use of that less personal information. Customers will be in a position to control the use of certain very private information and some less private information, while companies will be in a position to conduct the day-to-day operations of their business and use, with the approval of the customer, certain information that may be useful in marketing telecommunications-related services and other products and services.

     The proposed rules would clarify permitted and not permitted uses of customer information that has been rendered uncertain by a decision of the 10th Circuit Court of Appeals and a revision of the FCC's rules on this topic. For example, a recent action by one company to use opt-out approval where current rules require opt-in approval resulted in substantial confusion among customers.

     Proposal Changes the Following Existing Rules: The proposal would permit customers to opt-out of the use of certain private account information by their telecommunications company. Federal law, 47 U.S.C. § 222, requires customer approval before certain customer information may be used by a company for other than day-to-day operations. The proposed rules replace WAC 480-120-151 through 480-120-154, which did not permit customers to opt-out of certain uses under certain circumstances. Call detail information that once was permitted to be used without affirmative approval and without an opportunity to opt-out under some circumstances, will now require affirmative, opt-in approval before it can be used.

     A small business economic impact statement has been prepared under chapter 19.85 RCW.

     Over the last three years, the commission has circulated multiple rounds of draft rules and held many workshops with stakeholders to discuss draft rule language, receive comments, and explore options. The commission's regulation of the telecommunications industry is economic regulation, and at every stage of the process, the economic impact of potential rule changes was an integral part of the commission's analysis. In addition, the commission on two occasions asked stakeholders to provide information on the economic impact of potential rule provisions for use in preparing a small business economic impact statement (SBEIS). An SBEIS is intended to evaluate any disproportionate impacts of the rule making on small businesses.

     2. Regulatory Fairness Act Requirements: Administrative rules implemented by state agencies can have a disproportionate impact on small businesses, compared to large business, simply because of the size of those businesses. This disproportionate impact may affect competition, innovation, employment, economic growth, and threaten the very existence of some small businesses. Thus, the Regulatory Fairness Act, chapter 19.85 RCW, was enacted with the intent of reducing any disproportionate impact of state administrative rules on small businesses.

     The Regulatory Fairness Act requires agencies to prepare an SBEIS if the proposed rule will impose "more than minor costs on businesses in an industry." An agency must then compare the costs of compliance with the proposed rule for large and small businesses within an industry, and then consider how to mitigate any disproportionate impact on small businesses. A business is categorized as "small" under the Regulatory Fairness Act if the business employs fifty or fewer employees.

     3. Background: Pursuant to chapter 19.85 RCW, staff determined that it was necessary to prepare an SBEIS for revisions to the rules in Docket No. UT-990146, as the proposed rules may impose more than minor costs on telecommunications companies operating in Washington state. However, almost all telecommunications companies operating in Washington state are not "small" businesses as defined by the Regulatory Fairness Act. Under the telecommunications laws, specifically RCW 80.04.350, a telecommunications company is considered to be "small" if it serves fewer than 2% of the state's access lines, i.e., fewer than about 80,000 access lines. Even a small telecommunications company typically has more than the fifty employees that define a "small business" under the Regulatory Fairness Act.

     Because the commission engages in economic regulation of the telecommunications industry, the economic impact of its regulation is integrated directly into its decision process. The statutory objective of the agency is to ensure that telecommunications companies offer service at prices and terms that are fair, just, reasonable, and sufficient. These terms, taken together, have come to mean that the commission must provide regulated companies with a reasonable opportunity to earn a fair profit on their business. Rates for regulated services are based on costs and reasonable profit, so requirements that increase costs for the regulated company can ultimately lead to increased rates by that company. The ultimate impact of changes in regulations therefore falls on the customers of the regulated company more than on the regulated company itself.

     Few telecommunications companies are small businesses, and the commission's regulations primarily take the form of economic regulation. As a result of these two factors, the principal impact of commission regulations on small business is indirect, through the rates that small businesses pay to large telecommunications companies. Small businesses are generally not affected directly by the commission's regulations. Rather, as customers of the telecommunications companies, small businesses are affected if the commission's rules cause a telecommunications company to change its rates, offer different services, or change the quality of its services.

     Because of this large indirect effect on small businesses as customers of regulated telecommunications companies, traditional mitigation approaches to minimize disproportionate impact on small businesses are frequently not meaningful.

     4. Study Procedure: The commission considered the economic impact of potential changes to the telecommunications industry rules as an integral part of its review of the rules themselves. In each round of written and oral comments by stakeholders, economic factors were central to the public interest considerations being argued.

     In addition, the commission specifically solicited input on economic impacts at two points during the rule review process. The commission circulated an SBEIS questionnaire in March 2001 on draft rules to require customer credits for service quality performance problems. The commission received responses from Qwest, Verizon, and WCI Cable, none of whom are small businesses. WCI Cable said the rules would have no economic impact. Verizon said that the draft rules would cause it to incur expenses of $3.7 million to hire, train, and equip additional staff to improve service performance and cause it to incur lower revenues of $4.5 million per year in the form of service quality credits. Qwest said the draft rule would result in lower revenues of $1.5 million due to service quality credits. Qwest was unable to quantify the cost of some components of the draft rules and identified minor tariff revision and customer notification costs.

     The commission modified the service performance rules in response to concerns raised by Verizon, Qwest, and other stakeholders. The proposed rules still require customer credits when customers receive inadequate service, but the standards better match the operating practices of the regulated companies. Even at the cost levels identified by Qwest and Verizon, however, the increased expenses and reduced revenues are well under 1% of the companies' revenues.

     The commission issued a second SBEIS questionnaire in August 2001 soliciting input on the economic impact of all the rules being revised in chapter 480-120 WAC. The commission used an interactive survey form on its web site to make it easier for companies to submit cost data. Paper copies were accepted as well. The interactive SBEIS web site accepted submissions from August 24, 2001, through November 7, 2001, and again from February 14, 2002, through March 7, 2001 [2002]. The commission received a single response from a company that provides specialized E-911 services. The respondent said that the rules, as revised, would have no economic impact on its business.

     It may be that companies did not respond either because they were not small businesses or because, under the cost-based methods used by the commission to set prices, any impact of the rules would not ultimately be borne by the company itself.

     This SBEIS is based primarily on the commission's knowledge of the telecommunications industry and the policy-oriented comments of stakeholders in various workshops and written filings.

     5. Conclusion: As the section-by-section analysis below shows, the economic impact of the proposed rule revisions is generally not significant for telecommunications companies in general or for small business telecommunications companies in particular. The proposed revisions make the telecommunications rules clearer and more consistent, which makes it easier for companies to comply with the rules. Outdated and monopoly-oriented provisions are eliminated or modernized. Some rules will result in additional costs for companies, but these are not significant.

PART I. GENERAL RULES
480-120-011 Application of rules.	No substantive change. No economic impact.
480-120-015 Exemptions from rules in chapter 480-120 WAC.	No substantive change. No economic impact.
480-120-016 Additional requirements.	No substantive change. No economic impact.
480-120-017 Severability.	No substantive change. No economic impact.
480-120-019 Telecommunications performance requirements -- Enforcement.	The proposed change eliminates vague standards that could create uncertainty about compliance for regulated companies. This may reduce legal costs for regulated companies, and the benefit would be relatively more for small businesses.
480-120-021 Definitions.	Any substantive effect of a change in definition is analyzed with the substantive rule itself.
480-120-026 Tariffs and price lists.	No change.
480-120-028 Registration.	No change.
480-120-061 Refusing service.	The rule clarifies the circumstances in which a telecommunications company is required to provide service. The clarification reduces compliance costs. Since compliance costs are a disproportionate burden on small businesses, the changes to this rule will benefit small businesses more than other businesses.
PART II. ESTABLISHING SERVICE AND CREDIT
480-120-102 Service offered.	No substantive change. No economic impact.
480-120-103 Local calling areas.	No substantive change. No economic impact.
480-120-104 Application for service.	The changes provide more specific requirements for filing applications for new service. The specific requirements are consistent with existing installation practices of most telecommunications companies, so there will be no economic impact. However, some telecommunications companies may be providing slower service than the proposed rule would allow. These companies may incur additional costs to improve their service delivery ability.
	Small telephone companies are as quick, or quicker, at installing new service. Therefore the cost impact of this rule change, if any, will disproportionately fall on any large businesses that have relatively slow installation performance.
480-120-105 Availability of information to consumers.	The proposed change requires companies to mail new customers information about the services they have ordered. Most companies already do this, and for those companies there will be no impact from the requirement. For a company that is not mailing information to new customers, the proposed rule will cause them to incur the cost of printing and mailing the information. These costs may be offset if the information causes customers to make fewer customer service calls, fail to understand and comply with a company's service terms, or request a free copy of the company's tariff or price list.
	Any such costs will probably be disproportionately large if the company is a small business, because printing and postage can be purchased more economically in large quantities. The commission was unable to identify any mitigation measures that would preserve customer protections. However, the commission eliminated some information elements that were included in earlier drafts, because companies said these would be more costly to include.
480-120-107 Company performance standards for installation or activation of access lines.	Subsection (1)(a) eliminates an uncertainty about whether companies could use above-standard performance in one exchange to offset below-standard in another exchange. The uncertainty is eliminated to the advantage of the regulated companies. This would reduce compliance costs, particularly for large companies that have a mix of rural and urban exchanges. Subsection (1)(b) is not a substantive change.
	Subsection (1)(c) is a new requirement to complete all access line orders within one hundred eighty days. Companies rarely take longer than one hundred eighty days to complete an order, but this requirement could increase costs for a company that would otherwise take longer. Subsection (2) clarifies the method of counting violations. It is not a substantive change.
	Subsection (3) provides for exceptions. It is not a substantive change. Subsection (4) exempts competitive local exchange companies, who are currently subject to the rule. This mitigation reduces compliance costs for both small and large competitive companies.
480-120-108 Installation and activation credits.	This rule requires companies to offer credits to customers when service is not installed by the promised date. It exempts any service that is subject to effective competition. It provides two methods that a company can use to calculate the credit. The rule will impose economic costs on any company that does not install service on time. This will be in the form of either reduced revenues, due to application of the credits, or increased expenses to meet commitments.
	The indirect impact on small businesses, as telephone customers, is to lower costs. Fewer order commitments will be missed, and in those cases where a commitment is missed the customer will receive a credit on its telephone bill. Small telecommunications companies generally have better service performance than large telecommunications companies. Thus the economic cost, if any, of compliance will be less for small business.
480-120-109 Missed appointment credits.	This rule requires companies to offer credits to customers when the company does not keep an installation or repair appointment. The rule will impose economic costs on any company that does not keep appointments. This will be in the form of either reduced revenues, due to application of the credits, or increased expenses to employ enough technicians to keep appointments.
	The indirect impact on small businesses, as telephone customers, is to lower costs. Fewer appointments will be missed, and in those cases where an appointment is missed the customer will receive a credit on its telephone bill. Small telecommunications companies generally have better service performance than large telecommunications companies. Thus the economic cost, if any, of compliance will be less for small business.
480-120-112 Company performance for orders for nonbasic services.	This rule requires companies to complete orders for nonbasic services within one hundred eighty days. Companies rarely take longer than one hundred eighty days to complete an order, but this requirement could increase costs for a company that would otherwise take longer.
	The indirect impact on small businesses, as telephone customers, is to lower costs. Nonbasic services include business access lines beyond two lines and data services typically used by small business. More timely installation of these services would allow businesses to have telecommunications services necessary for their operation. Small telecommunications companies generally have better service performance than large telecommunications companies. Thus the economic cost, if any, of compliance will be less for small business telecommunications companies.
480-120-122a Establishment of establishing credit -- Residential services.	The proposed changes clarify requirements for companies to require deposits and manage their risk of uncollectible accounts. Doing so reduces compliance costs, particularly for small business telecommunications companies. The proposed rule says companies cannot use credit reports as the basis to require deposits for basic local service. The existing rule also has this prohibition, so there is no economic impact.
	The proposed rule clarifies that companies cannot use a customer's long-distance payment history as a basis for requiring a deposit for basic local service. This clarification could result in increased costs or lower revenues for some companies, if they are requiring deposits based on long-distance charges. The overall economic effect of the proposed changes is negligible.
480-120-122b Establishment of establishing credit -- Residential services.	The proposed changes clarify requirements for companies to require deposits and manage their risk of uncollectible accounts. Doing so reduces compliance costs, particularly for small business telecommunications companies. The proposed rule says companies cannot use credit reports as the basis to require deposits for basic local service. The existing rule also has this prohibition, so there is no economic impact.
	The proposed rule clarifies that companies cannot use a customer's long-distance payment history as a basis for requiring a deposit for basic local service. This clarification could result in increased costs or lower revenues for some companies, if they are requiring deposits based on long-distance charges. The overall economic impact of the proposed changes is negligible.
480-120-123 Establishment of establishing credit -- Business services.	No substantive change. No economic impact.
480-120-124 Guarantee in lieu of deposit.	No substantive change. No economic impact.
480-120-125 Deposit or security -- Telecommunications resellers.	No substantive change. No economic impact.
480-120-127 Protection of customer prepayments.	No substantive change. No economic impact.
480-120-128 Deposit administration.	The proposed changes clarify requirements without making substantive changes. The type of treasury bill used in calculating the interest rate on deposits is changed, due to a change by the federal government in the types of bills issued. The method of calculation is unchanged, and companies' deposit interest expenses are expected to have virtually no change.
480-120-132 Business offices.	No substantive change. No economic impact.
480-120-133 Response time for calls to business office or repair center.	The proposed rule would establish standards for how long a company could keep a customer on hold during a customer service or repair call. The new standards are more specific than the existing standard, which applies to repair calls but not customer service calls. The proposed standards are consistent with answer time standards used by the industry itself. As a result, there is no economic impact from the proposed rule.
	Small business telecommunications companies often do not use automated call handling systems. The commission included an alternative performance standard in subsection (3) to accommodate these companies.
480-120-145 Extending service.	No substantive change. No economic impact.
480-120-146 Changing service providers from one local exchange company to another.	The proposed rule clarifies responsibilities when a customer changes from one local telephone company to another local telephone company. To comply with this rule, a company must communicate with another company during the transition of a customer's service. This could result in minor costs to disconnect service. Since any cost would be based on the number of disconnection orders, there is no disproportionate impact on small business.
480-120-147 Changes in local exchange and intrastate toll services.	There is no substantive change to the existing requirements for verification of customer orders before changing local or long-distance providers. Subsection (7) provides an exception when a company is changing customers' service as a result of a corporate merger, acquisition, or transfer of customer base. Companies currently must seek a waiver of the rule in these circumstances. Incorporating the exception into rule means that companies will no longer incur costs to file a waiver petition and will not have to wait for the commission to review and approve the petition.
	By eliminating a filing requirement, the cost savings resulting from subsection (7) will disproportionately benefit small business telecommunications companies. This is because costs of regulatory filings are higher, on a per-revenue or per-customer basis, for small business.
PART III. PAYMENTS AND DISPUTES
480-120-161 Form of bills.	No substantive change. No economic impact.
480-120-162 Cash and urgent payments.	No substantive change. No economic impact.
480-120-163 Refunding for overcharge.	No substantive change. No economic impact.
480-120-164 Prorata credits.	The proposed rule requires companies to provide credits if a service is unavailable for more than twenty-four hours. Most companies already provide credits in this circumstance. Those that do not will incur costs to modify their billing or accounting systems to track the credits and will incur reduced revenues by the amount of the credits.
	Small business telephone companies generally have better service performance than large business telephone companies, so they would pay fewer credits on a per-customer or per-revenue basis. However, if a small business has to modify its systems to track the credits, the costs of these modifications would be higher on a per-customer or per-revenue basis. The commission did not identify any mitigation provisions that would still protect customers, including small business customers, from having to pay for service not received.
480-120-165 Complaints and disputes.	No substantive change. No economic impact.
480-120-166 Customer complaints.	The proposed rule incorporates existing practices and policies into rule. There is no substantive change in the requirements and no economic impact.
480-120-167 Company responsibility.	The proposed rule clarifies responsibility when an informal complaint involves more than one company. The economic impact is to reduce costs, but by a negligible amount. Since costs would be incurred on a per-customer basis, the effect on small business is proportionate to the effect on large business.
PART IV. DISCONTINUING AND RESTORING SERVICE
480-120-171 Discontinuing service -- Customer requested.	No substantive change. No economic impact.
480-120-172 Discontinuing service -- Company initiated.	No substantive change. No economic impact.
480-120-173 Restoring service after discontinuation.	No substantive change. No economic impact.
480-120-174 Restoring service based on Washington telephone assistance program (WTAP) or federal enhanced tribal lifeline program eligibility.	The proposed rule requires a company to restore local service if the customer enrolls in a low-income assistance program. There is no economic impact on the regulated companies, because the program benefits cover the costs of providing service.
PART V. POSTING AND PUBLICATION NOTICE
480-120-193 Posting of tariffs for public inspection and review.	No substantive change. No economic impact.
480-120-194 Publication of proposed tariff changes to increase charges or restrict access to services.	No substantive change. No economic impact.
480-120-195 Notice of tariff changes other than increases in recurring charges and restrictions in access to services.	No substantive change. No economic impact.
480-120-196 Customer notice requirements -- Competitively classified telecommunications companies or services.	No substantive change. No economic impact.
480-120-197 Adjudicative proceedings where public testimony will be taken.	No substantive change. No economic impact.
480-120-198 Notice verification and assistance.	No substantive change. No economic impact.
480-120-199 Other customer notice.	No substantive change. No economic impact.
PART VI. CUSTOMER INFORMATION
480-120-201 Telephone solicitation.	No substantive change. No economic impact.
480-120-202 Using a customer's call detail information.	No substantive change from the existing rule, which also requires opt-in approval for use of call detail information. No economic impact.
480-120-203 Using private account information in the provision of services.	No substantive change. No economic impact.
480-120-204 Using private account information during an inbound call.	No substantive change. No economic impact.
480-120-205 Using private account information for marketing related services.	The current rule allows companies to use private account information to market related services without informing the customer or securing the customer's approval. The proposed rule allows a customer to opt out of this use. The economic impact of this rule, in the form of either additional expenses or reduced revenues, is discussed below at WAC 480-120-207 and 480-120-208.
480-120-206 Using private account information for marketing unrelated services.	This proposed rule allows companies to use an "opt-out" approach before using customers' private account information to market unrelated services. The existing rule requires affirmative, "opt-in" approval.
	The change reduces expenses and increases revenues for regulated companies. Companies will incur lower expenses to secure approval for use of customer information. Companies will increase revenues due to the increased marketing capabilities through use of private information. The economic impacts of this change are similar for large and small businesses.
480-120-207 Notice when use of private account information is permitted unless a customer directs otherwise ("opt-out").	This rule establishes the notice provisions when opt-out approval is used. To use customers' private information, the company must print and mail a notice to customers explaining the use and giving the customer a chance to say no. Printing and postage costs are higher, on a per-customer basis, for a small business.
	There is no overall increase in costs as a result of this rule, because the company is not required to use customers' private account information to market other services. A company would incur these costs only if it expects that the use would reduce other marketing expenses and/or increase revenues by enough to offset the notice costs.
480-120-208 Mechanisms for opting out of use, disclosure, and access to private customer account information.	The proposed rile [rule] requires a company, if it chooses to use customers' private account information for marketing, to establish mechanisms by which customers can say no. A company would incur costs to process incoming telephone calls, written notices, and web site transactions.
	There is no overall increase in costs as a result of this rule, because the company is not required to use customers' private account information to market other services. A company would incur these costs only if it expects that the use would reduce other marketing expenses and/or increase revenues by enough to offset the notice costs.
480-120-209 Notice when explicit ("opt-in") approval is required.	The proposed rule clarifies and increases the disclosures that a company must make when seeking explicit approval to use a customer's private account information. There is no increase in costs as a result of this rule, because the existing rule requires a notice when a company seeks opt-in approval. Moreover, a company is not required to incur any costs, since it is not required to use customer private account information for marketing.
480-120-211 Confirming change in approval status.	The proposed rule requires a company to give written confirmation of a customer's change in privacy status. A company would incur costs to print and mail the confirmation notice. There is no overall increase in costs as a result of this rule, because the company is not required to use customers' private account information for marketing.
480-120-212 Duration of customer approval or disapproval.	No substantive change. No economic impact.
480-120-213 Safeguards required for using private account information.	The proposed revision requires companies to file a copy of a document that they are already required to produce. The additional cost of filing the document, as part of an existing annual report filing, is negligible. There is no economic impact on small business telecommunications companies, if they are exempt from this filing requirement by RCW 80.04.530.
480-120-214 Disclosing customer proprietary network information.	No substantive change. No economic impact.
480-120-215 Using privacy listings for telephone solicitation.	No substantive change. No economic impact.
480-120-216 Using subscriber list information for purposes other than directory publishing.	The proposed rule requires companies to remove customers, upon request, from subscriber lists sold to telemarketers. There is no requirement to notify customers of this provision. The rule reflects existing practice within the telecommunications industry. There is no economic impact.
PART VII. TELECOMMUNICATIONS SERVICES
480-120-251 Directory service.	No substantive change. No economic impact.
480-120-252 Intercept services.	No substantive change. No economic impact.
480-120-253 Automatic dialing-announcing device (ADAD).	No substantive change. No economic impact.
480-120-254 Information delivery services.	No substantive change. No economic impact.
480-120-255 Caller identification service.	No substantive change. No economic impact.
480-120-256 Emergency services.	No substantive change. No economic impact.
480-120-261 Operator services.	No substantive change. No economic impact.
480-120-262 Operator service providers (OSPs).	The proposed rule increases the amount of information that customers receive when they make operator-assisted calls. The rule establishes benchmark rates for operator-assisted calls.
	The current rule applies only to calls from pay phones and hotels using the presubscribed operator service. The proposed rule expands the scope to include calls made using any operator service provider. Operator service providers that do not already provide presubscribed services will incur additional expenses if they do not currently give customers the ability to obtain a rate quote. If they already have rate quote ability, there will be no additional costs as a result of the expanded scope.
	For operator service providers whose charges are below the benchmark, the proposed rule does not change existing disclosure requirements. There is no economic impact for these companies.
	For operator service providers whose charges are above the benchmark, the proposed rule requires a rate quote on each call. These companies may incur one-time costs to reprogram operator assistance platforms to deliver the rate quote on all above-benchmark calls. Additional expense may be incurred due to the time spent delivering the rate quote. The companies also may experience reduced revenues, because customers may hang up when they hear what the rates are.
	The proposed rule likely does not directly affect small businesses, because operator service providers typically require more than fifty employees. However, the proposed rule indirectly affects small businesses that own, manage, or operate pay telephones, convenience stores, and motels. These businesses sometimes receive commissions from operator service providers that are based on operator service revenues generated at their location. If customers choose not to complete calls after they hear the rates, revenues to the site owners will be reduced.
	The commission did not identify any mitigation provisions for small businesses. Requiring disclosure was the less burdensome method of protecting consumers, compared to direct regulation of operator service provider rates. The rule implements a statute, RCW 80.36.520, that applies to all operator service providers regardless of size.
480-120-263 Pay phone service providers (PSPs).	No substantive change. No economic impact.
480-120-264 Prepaid calling services.	No substantive change. No economic impact.
PART VIII. FINANCIAL RECORDS AND REPORTING RULES
480-120-301 Accounting requirements for competitively classified companies.	No substantive change. No economic impact.
480-120-302 Accounting requirements for companies not competitively classified as competitive.	The proposed rule updates and streamlines accounting requirements. The economic impact of the changes, while a benefit to companies, is negligible. The rule provides for reduced accounting requirements for small businesses.
480-120-303 Reporting requirements for competitively classified companies.	No substantive change. No economic impact.
480-120-304 Reporting requirements for companies not competitively classified as competitive.	No substantive change. No economic impact. The rule provides streamlined filing requirements for small businesses.
480-120-305 Streamlined filing requirements for Class B telecommunications company rate increases.	The proposed rule simplifies and reduces the filing requirements for a small telecommunications company (including small businesses) that seek to increase rates. The revisions reduce expenses for companies seeking to justify an increase in regulated rates. The benefits are disproportionately felt by small businesses, since accounting and legal services are higher for them on a per-revenue or per-customer basis.
480-120-311 Access charge and universal service reporting.	The proposed rule simplifies and reduces filing requirements for companies that collect access charges. The benefits are disproportionately felt by small businesses, since accounting and legal services are higher for them on a per-revenue or per-customer basis.
480-120-312 Universal service cost recovery authorization.	No substantive change. No economic impact.
480-120-313 Terminating access charges.	No substantive change. No economic impact.
480-120-321 Expenditures for political or legislative activities.	No substantive change. No economic impact.
480-120-322 Retaining and preservation of preserving records and reports.	No substantive change. No economic impact.
480-120-323 Washington Exchange Carrier Association (WECA).	No substantive change. No economic impact.
PART IX. SAFETY AND STANDARDS RULES
480-120-401 Network performance standards.	The proposed changes clarify existing performance standards and make them more specific. This reduces uncertainty and compliance costs. Expenses could increase for a company whose performance was not in violation of the existing, vague rule, if the same performance level does not comply with the more specific standards. The commission is not aware of any companies in this situation.
480-120-402 Safety.	No substantive change. No economic impact.
480-120-411 Network maintenance.	No substantive change. No economic impact.
480-120-412 Major outages.	No substantive change. No economic impact.
480-120-413 Collocation.	No substantive change. No economic impact.
480-120-414 Emergency operation.	No substantive change. No economic impact.
480-120-436 Responsibility for drop facilities and support structure.	The proposed rule reflects current practice. No substantive change. No economic impact.
480-120-437 Responsibility for maintenance and repair of facilities and support structures.	The proposed rule reflects current practice. No substantive change. No economic impact.
480-120-438 Trouble report standard.	No substantive change. No economic impact.
480-120-439 Service quality performance reports.	The proposed changes eliminate outdated reporting requirements and add reporting requirements consistent with the commission's performance standards. Local exchange companies are expected to incur some initial costs to establish systems to track and report the statistics in the report. The cost of the periodic report filing itself is negligible. Reporting costs are generally a disproportionate expense for small businesses, but the rule exempts small telecommunications companies from the reporting requirements. With this mitigation, there is no disproportionate impact on small business.
480-120-440 Service interruptions and impairments, excluding major outages.	The proposed rule would change the standard for restoration of interruptions of basic service from two working days, which is an average of sixty hours, to forty-eight hours. Most companies restore basic service interruptions in less than forty-eight hours, but some companies may incur additional expenses to hire employees or contracts to meet the shorter restoration interval. The proposed rule would change the standard for restoration of nonbasic services from two working days to seventy-two hours. Some companies may have slightly lower expenses because they will be able to comply with the rule with fewer repair technicians.
	The proposed rule provides additional exceptions to the service restoration intervals. These exceptions represent situations when a company would have difficult[y] meeting the forty-eight hour or seventy-two hour standard. Including the additional exceptions lowers costs for regulated companies. The increased expenses and reduced expenses resulting from the proposed rule changes do not have a disproportionate impact on small business, because the costs are generally incurred in proportion to the number of customers served.
480-120-450 Enhanced 9-1-1 (E911) obligations of local exchange companies.	The proposed rule changes clarify responsibilities for maintaining E-911 information. Some companies may incur additional costs to comply with the requirement to offer a method for customers and other telecommunications companies to submit data base changes electronically. Any additional costs would be minor and could be recovered through the rates charged for E-911 service.
480-120-451 Local exchange carrier contact number for use by public safety answering points (PSAPs).	This proposed rule requires companies to maintain a contact number for use by county E-911 systems. The cost of a contact number is negligible, so there is no economic impact from the proposed rule.
480-120-452 Reverse search by enhanced 9-1-1 (E911) public safety answering point (PSAP) of ALI/DMS data base -- When permitted.	No substantive change. No economic impact.
PART X. ADOPTION BY REFERENCE
480-120-999 Adoption by reference.	No substantive change. No economic impact.
REPEALED
480-120-121 Responsibility for delinquent accounts.
480-120-131 Reports of accidents.
480-120-151 Telecommunications carriers' use of customer proprietary network information (CPNI).
480-120-152 Notice and approval required for use of customer proprietary network information (CPNI).
480-120-153 Safeguards required for use of customer proprietary network information. (CPNI).
480-120-154 Definitions.

     A copy of the statement may be obtained by writing to Washington Utilities and Transportation Commission, P.O. Box 47250, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504-7250, phone (360) 664-1234, fax (360) 586-1150. The small business economic impact statement addresses this proposal and the remaining rules that will be filed under a subsequent proposal.

     RCW 34.05.328 does not apply to this rule adoption. The commission is not an agency to which RCW 34.05.328 applies. The proposed rules are not significant legislative rules as referenced in RCW 34.05.328(5).

     Hearing Location: Washington Utilities and Transportation Commission, Headquarters, Room 206, 1300 South Evergreen Park Drive S.W., Olympia, WA 98502-7250 [98504-7250], on July 26, 2002, at 1:30 p.m.

     Assistance for Persons with Disabilities: Contact Mary De Young by Friday, July 19, 2002, TDD (360) 586-8203, or (360) 664-1133.

     Submit Written Comments to: Secretary, Docket No. UT-990146, Washington Utilities and Transportation Commission, 1300 South Evergreen Park Drive S.W., P.O. Box 47250, Olympia, WA 98504-7250, fax (360) 586-1150, by May 22, 2002.

     Date of Intended Adoption: July 26, 2002.

April 3, 2002

Carole J. Washburn

Secretary

     "Call detail" means:

     (a) Any information that identifies or reveals for any specific call, the name of the caller, the name of any person called, the location from which a call was made, the area code, prefix, any part of the telephone number of any participant, the time of day of the call, the duration of a call, or the cost of a call;

     (b) The aggregation of information in (a) of this subsection up to the level where a specific individual is associated with information on calls made to a given area code, prefix, or complete telephone number, whether that information is expressed through amount spent, number of calls, or number of minutes used and whether that information is expressed in monthly, less-than-monthly or greater-than-monthly units;

     (c) The aggregation of the information in (a) of this subsection up to the level where a specific individual is associated with general calling patterns (e.g. peak, off-peak, weekends) or amounts spent expressed on a less-than-per-month basis;

     (d) The number of calls that are answered or unanswered and information related to them that provide information by time of the day, day of the week, or by week or weeks up to but not including by month.

     Call detail does not include information other than (a), (b) and (c) of this subsection compiled on a monthly basis. For example, it does not include the monthly amount spent on long distance calls or the monthly amount spent on ancillary services. It does include, for example, the monthly amount spent calling area code XXX, and the number of unanswered calls between the hours of 8:00 A.M. and 5:00 P.M. and the number of unanswered calls on Tuesdays.

     "Customer proprietary network information (CPNI)" means (a) Information that relates to the quantity, technical configuration, type, destination, location, and amount of use of a telecommunications service, including call detail, and that is made available to the company by the customer solely by virtue of the customer-company relationship, which includes information obtained by the company for the provision of the telecommunication service; and (b) Information contained in the bills pertaining to telephone exchange service or telephone toll service received by a customer of a company; except that CPNI does not include subscriber list information.

     "Company" means any telecommunications company as defined in RCW 80.04.010.

     "Private account information" means customer proprietary network information that is associated with an identifiable individual.

     "Subscriber list information (SLI)" means any information:

     (a) Identifying the listed names of subscribers of a company and those subscribers' telephone numbers, addresses, or primary advertising classifications (as such classifications are assigned when service is established), or any combination of listed names, numbers, addresses, or classifications; and

     (b) That the company or an affiliate has published, caused to be published, or accepted for publication in any directory format.

     "Telecommunications-related products and services" means:

     (a) The offering of telecommunications for a fee directly to the public, or to such classes of users to be effectively available directly to the public, regardless of the facilities used; or

     (b) Services offered over common carrier transmission facilities which employ computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information, provide the subscriber additional, different, or restructured information, or involve subscriber interaction with stored information; or

     (b) Equipment employed on the premises of a person to originate, route, or terminate telecommunications.

     "Telecommunications service" means the offering of telecommunications for a fee directly to the public, or to such classes of users to be effectively available directly to the public, regardless of the facilities used.

     "Telemarketing" means contacting a person by telephone in an attempt to sell one or more products or services.

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     Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 480-120-202   Use of customer proprietary network information permitted.   Customer proprietary network information may be used as permitted by 47 U.S.C. Section 222 except where sections 480-120-202 through 216 require otherwise.

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     (2) Without seeking or obtaining customer approval, a company may use, disclose, or permit access to a customer's call detail information to the extent necessary to:

     (a) Initiate, render, coordinate, facilitate, bill, and collect for telecommunications services the customer has purchased or requested;

     (b) Protect the rights or property of the company, or to protect users of those services and other companies from fraudulent, abusive, or unlawful use of, or subscription to, such services;

     (c) Resolve formal and informal complaints communicated to the company or commission by an applicant or customer;

     (d) Provide records to a data base management system, as defined in WAC 480-120-340, or to any other database used in the provision of enhanced 9-1-1 or 9-1-1 service, or perform any other service for enhanced 9-1-1 or 9-1-1 purposes; and

     (e) Comply with any applicable law, or any governmental rule, regulation or order, or any subpoena or other demand of apparently lawful authority.

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     (1) Initiate, render, coordinate, facilitate, bill, and collect for telecommunications services the customer has purchased or requested;

     (2) Protect the rights or property of the company, or to protect users of those services and other companies from fraudulent, abusive, or unlawful use of, or subscription to, such services;

     (3) Resolve formal and informal complaints communicated to the company or commission by a customer or applicant;

     (4) Provide records to a data base management system, as defined in WAC 480-120-340, or to any other database used in the provision of enhanced 9-1-1 or 9-1-1 service, or perform any other service for enhanced 9-1-1 or 9-1-1 purposes; and

     (5) Comply with any applicable law, or any governmental rule, regulation or order, or any subpoena or other demand of apparently lawful authority.

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     (1) Such call was initiated by the customer; and

     (2) During the call and prior to the company's use of the information, the customer expresses approval for the company to use the information during the call.

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     (2) A company may not use a customer's private account information as provided for in subsection (1) of this section unless it has provided notice to each customer pursuant to WAC 480-120-207 and provides the customer with reasonable opportunity to direct the company not to use the information ("opt-out") pursuant to WAC 480-120-208.

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     (2) A company may not use a customer's private account information pursuant to WAC 480-120-206 unless, at least once in the past year, the company has provided a written notice to the customer, as provided for in this section, and provides the customer with a reasonable opportunity to opt-out at any time.

     (3) The written notice must be mailed separately from any advertising or promotional material. It may be included with the customer's bill.

     (4) The written notice must be posted on the company's web site and must be readily accessible from the company's home page.

     (5) Any opt-out notice must include the following items:

     (a) A statement that the name, address, and telephone number, if published in the telephone directory, are not private information and will not be withheld from telemarketers if the customer opts-out;

     (b) A statement that private account information may be used to market (i) telecommunications-related products and services, or (ii) other products and services, or both (i) and (ii), whichever applies;

     (c) A statement that the customer has a right to direct the company not to use the customer's private account information and that doing so will not affect the provision of any services to which the customer subscribes;

     (d) A disclaimer that an opt-out directive for private account information does not prevent the company from making telephone solicitation or telemarketing calls to the customer and does not prevent the company from including the customer's listed name, address, and telephone number in lists sold, leased or provided to other firms. This disclaimer is not required if the company's practice is to exclude customers who opt-out of private account information use from use or disclosure for telemarketing purposes or if the company does not sell, lease, or directly provide such lists to other firms;

     (e) A statement that the customer should expect to receive written confirmation within thirty days of the directive and suggest that the customer call the company if the confirmation is not received by this time;

     (f) A prominent statement of specific instructions by which the customer can direct the company not to use the customer's private account information. The dedicated opt-out telephone number required by WAC 480-120-208 (2)(a) must be printed in bold type and in a size larger than the body of the notice.

     (6) The notice must be in plain language and must not be misleading.

     (7) The notice must be clearly legible, in twelve-point or larger type.

     (8) A company may state in the notice that the use of private account information may enhance the company's ability to offer products and services tailored to the customer's needs, if such a statement is accurate.

     (9) A company may state in the notice that the customer, upon affirmative written request, may compel the company to provide private account information to any person.

     (10) If the company has a website, it must provide a link on the home page that is labeled "Customer Privacy" that will take a reader to the notice required in this section and the telephone number required in WAC 480-120-208 (2)(a).

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     (2) At a minimum, companies must allow customers to opt-out using the following mechanisms, which must be provided by the company:

     (a) Calling a dedicated, toll-free telephone number that provides access to a live or automated operator at all times. The telephone number must be accessible from all areas of the state and customers must have the option to direct the company to not use their private account information ("opt-out") without receiving additional information from the company before giving their directive;

     (b) Calling any telephone number that the company provides for billing or customer service inquiries. This subsection permits companies to transfer customers directly to the number required in (a) of this subsection;

     (c) Marking a box or blank on the notice and returning it to a stated address;

     (d) Returning a postage-paid card included with the notice;

     (e) Electronic mail, if the company otherwise receives or sends electronic mail messages to its customers; and

     (f) Submitting an opt-out form found on the company's web site. The opt-out form must be directly linked to the written notice required by WAC 480-120-207. The web site must be accessible to the public using generally available browser software.

     (3) A company may require, as part of any opt-out mechanism, that the customer comply with reasonable procedures to verify the identity of the customer. Any opt-out verification procedure must be no more burdensome on the customer than any verification procedure used by the company when a customer provides explicit ("opt-in") approval or orders additional services on an existing account.

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     (2) A company must maintain records of customer notification and approval.

     (3) Any solicitation for explicit customer approval must be accompanied by a written notice to the customer of the customer's right to restrict use of, disclosure of, and access to that customer's private account information. The notice must state that private account information includes all information related to specific calls initiated or received by a customer.

     (a) The notice must state that the customer has a right under federal and state law to protect the confidentiality and limit the use, disclosure, and access to the customer's private account information.

     (b) The notice must state that the company has a duty under federal and state law to protect the confidentiality of private account information and to comply with the customer's limitations on use, disclosure of, and access to the information.

     (c) The notice must state the types of information that constitute private account information. If a company is seeking explicit approval to use, disclose, or permit access to call detail information, the notice must specify that private account information includes the telephone numbers of all calls made or received by the customer.

     (d) The notice must specify the names of entities, including affiliates, subsidiaries and companies under common control, which may receive private account information and whether the private account information can be used, disclosed, or accessed by any entity or person other than the company providing the notice.

     (e) The notice must describe each purpose for which private account information can be used, disclosed, or accessed and specifically disclose whether the private account information can be used to market services to the customer.

     (f) The notice must inform the customer that approval by the customer is voluntary and that no action is required to protect the customer's private account information.

     (g) The notice must inform the customer that deciding not to approve will not affect the provision of any services to which the customer subscribes.

     (h) The notice must be comprehensible and must not be misleading.

     (i) The notice must be clearly legible, in twelve-point or larger type, and be placed so as to be readily apparent to a customer.

     (j) If any portion of a notice is translated into another language, then all portions of the notice must be translated into that language.

     (k) A company may state in the notice that the customer's approval to use, disclose, or permit access to private account information may enhance the company's ability to offer products and services tailored to the customer's needs, if the statement is accurate.

     (l) A company may state in the notice that the customer, upon affirmative written request, may compel the company to disclose the customer's private account information to any person.

     (m) The notice must state that any approval for use, disclosure of, or access to private account information may be revoked or limited at any time.

     (n) The notice must state that the customer should expect to receive written confirmation within thirty days and suggest that the customer call the company if the confirmation is not received by this time.

     (4) Opt-in approval by the customer must be:

     (a) In writing and may be made by e-mail; or

     (b) Orally, if the oral approval is verified by an independent third-party using substantially the same procedures as provided in WAC 480-120-139 (1)(c).

     (5) The following table illustrates information identified in subsection 208 and 209 and whether it would be considered to require explicit "opt-in" permission, an "opt-out" directive or is not covered by the rule.

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     (2) A company may not use, disclose, or permit access to a customer's private account information based on a customer's explicit "opt-in" approval until three weeks after mailing the confirmation to the customer.

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     (1) Companies must train all personnel who have access to private account information as to when they are and are not authorized to use, disclose, or permit access to private account information, and companies must implement an express disciplinary process to deal with violations of the requirement.

     (2) Companies must establish a supervisory review process regarding company compliance with rules governing use, disclosure of, or access to private account information for outbound marketing situations and must maintain records of company compliance for at least two years. Specifically, sales personnel must obtain supervisory approval of any proposed outbound marketing request.

     (3) Companies must have an officer, as an agent of the company, sign a compliance certificate on an annual basis stating the officer has personal knowledge that the company has established operating procedures that are adequate to ensure compliance with rules concerning private account information and call detail. The company must provide a statement accompanying the certificate explaining how its operating procedures ensure that it is or is not in compliance with the rules on this topic. The certificate and the compliance statement must be filed with the company's annual report to the commission.

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     (2) When the company provides the notice required in subsection (1) of this section in writing, the notice must include a toll-free number and an e-mail address the customer may use to state that solicitation should not be made.

     (3) When the company provides the notice in subsection (1) of this section by phone call, the customer must be informed that inclusion in a solicitation list may be declined and if declined, the company must not make any additional solicitation.

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     The following sections of the Washington Administrative Code are repealed:

480-120-144	Use of privacy listings for telephone solicitation.
480-120-151	Telecommunications carriers' use of customer proprietary network information (CPNI).
480-120-152	Notice and approval required for use of customer proprietary network information (CPNI).
480-120-153	Safeguards required for use of customer proprietary network information (CPNI).
480-120-154	Definitions.

© Washington State Code Reviser's Office