S-4500

AN ACT Relating to telephone advertising clarity and disclosure; adding a new chapter to Title 19 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) The legislature finds that:

(a) Consumers want and need the benefit of complete and accurate information before making decisions about their telecommunications service;

(b) When consumers are denied complete and accurate information about the telecommunications services being offered to them, the result is consumer confusion, inflated prices, and an erosion of confidence in the telecommunications industry; and

(c) Informed consumers with complete and accurate information who make good marketing decisions are critical to the growth of healthy competition in the telecommunications industry.

(2) The legislature therefore intends to encourage high standards and best practices for advertising within the telecommunications industry by requiring specified disclosures as part of calling plan advertisements made in this state.

NEW SECTION. Sec. 2. This chapter applies to all advertisements for calling plans offering competitive local, local toll, and long-distance telecommunications services to residential consumers in the state, regardless of the mode of transmission or the regulatory status of the telecommunications service provider.

NEW SECTION. Sec. 3. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Advertisements" means any telephone solicitation or written, printed, electronic, audio, or visual solicitation, that includes a price representation or a price comparison and is reasonably designed to result in a sale of or subscription to a calling plan arrangement.

(2) "Calling plan" means any tariff, price list, contract, or other arrangement governing the price, terms, and conditions under which competitive local, local toll, or long-distance telecommunications services are provided to residential customers.

(3) "Competitive local telecommunications service" means the provision of voice grade access to the public switched network and calls within a customer's local calling area as defined by the utilities and transportation commission where such service has been classified as competitive by the commission.

(4) "Local toll telecommunications service" means the provision of voice grade calls outside a customer's local calling area but within a customer's local access transport area as defined by the utilities and transportation commission in conformance with applicable federal law.

(5) "Long-distance telecommunications service" means the provision of voice grade calls from one local access transport area to another local access transport area as defined by the utilities and transportation commission in conformance with applicable federal law.

NEW SECTION. Sec. 4. (1) No telecommunications service provider may misrepresent, in any manner, directly or by implication, the price of a calling plan.

(2) No person may state the price of a calling plan, or any portion of the price of a calling plan, unless he or she also discloses clearly and conspicuously in immediate proximity to any price claim the effective rate per minute calculated in accordance with section 6 of this act.

NEW SECTION. Sec. 5. (1) All calling plan advertisements, other than telephone solicitations, or audio or visual advertisements, must include in clear and conspicuous language that is readily noticeable and understandable by the intended audience the following information in a format substantially similar to the label set forth in subsection (2) of this section:

(a) The effective rate per minute, calculated in accordance with section 6 of this act;

(b) All one-time, nonrecurring charges, if any, customers are required to pay in order to obtain the calling plan, including but not limited to sign-up, activation, or installation fees;

(c) All incremental rates included in the calling plan and the times and coverage areas in which they apply, including but not limited to fixed per-minute charges, per-minute charges which vary by time of day, day of the week, distance, or location of the caller or the call recipient;

(d) All recurring charges, if any, that apply to the calling plan, including but not limited to monthly minimum charges, connection fees, or per-call minimum charges; and

(e) All pass-through charges, if any, that apply to the calling plan, including but not limited to the surcharge, fee, or method of calculating a customer's charge to reimburse the telecommunications service provider for its obligation to pay federal or state universal service fees, carrier access charges, or pay phone access charges. Pass-through charges need not include itemized taxes that a telephone service provider is required by law to collect from subscribers.

(2) Label format.

Calling Plan Disclosure Statement

Effective rate per minute Information required in subsection (1)(a) of this section

One-time charges Information required in subsection (1)(b) of this section

Calling plan rates Information required in subsection (1)(c) of this section

Minimum charges Information required in subsection (1)(d) of this section

Pass-through charges Information required in subsection (1)(e) of this section

(3) Telephone solicitations and audio and visual advertisements must include, at a minimum, the effective rate per minute calculated in accordance with section 6 of this act and a statement disclosing, in clear and conspicuous language that is readily noticeable and understandable to the intended audience, the source or location where written information that outlines the one-time, incremental, minimum, and pass-through charges applicable to the plan is available upon request.

(4) Telecommunications service providers shall provide the information required under subsection (1) of this section, in writing, to residential customers in the state at the time the customers sign up for a calling plan that includes competitive local, local toll, or long-distance and at any time upon request.

(5) In the event a calling plan is offered that combines competitive local, local toll, or long-distance telecommunications service as part of a bundled package, the disclosures required in this section must identify any variations in the rates, terms, and charges that apply separately to competitive local, local toll, or long-distance telecommunications services.

(6) In the event a calling plan for competitive local, local toll, or long-distance telecommunications service is offered in conjunction with other products or services as part of a bundled package with an inclusive price, the disclosures required in this section must be made as if the competitive local, local toll, or long-distance telecommunications service were offered separately from the other products or services. For the purposes of allocating prices among the services and products contained in a bundled package, the prices allocated to the included competitive local, local toll, or long-distance services must not be below cost.

(7) Upon receipt of the information required in subsection (4) of this section, the customer shall have three days in which to cancel the telecommunications services ordered at no cost or obligation to the customer.

NEW SECTION. Sec. 6. The effective rate per minute required to be disclosed under this chapter must be calculated as the sum of all rates, charges, and fees, excluding taxes required by law to be collected from customers, that would be incurred by a customer making sixty minutes of calls per month, divided by sixty minutes. This calculation must be made based on a customer making the following calls:

(1) Forty-five minutes of state-to-state long distance calls, priced at the highest state-to-state rates that apply at each of the following times:

(a) Fifteen minutes during weekday days: Six calls, each of 2.5 minutes duration, made at the time between 8 a.m. and 5 p.m. Monday through Friday, at which the highest rates apply;

(b) Fifteen minutes during weekday evenings: Two calls, each of 7.5 minutes duration, made at the time between 8 p.m. and 12 a.m. Monday through Friday, at which the highest rates apply; and

(c) Fifteen minutes during weekends: One call of 15.0 minutes duration, made at the time between 12:01 a.m. Saturday and 11:59 p.m. Sunday, at which the highest rates apply.

(2) Fifteen minutes of in-state long distance calls, priced at the highest in-state rates that apply at each of the following times:

(a) Five minutes during weekday days: Two calls, each of 2.5 minutes duration, made at the time between 8 a.m. and 5 p.m. Monday through Friday, at which the highest rates apply;

(b) Five minutes during weekday evenings: One call of 5.0 minutes duration, made at the time between 8 p.m. and 12 a.m. Monday through Friday, at which the highest rates apply; and

(c) Five minutes during weekends: One call of 5.0 minutes duration, made at the time between 12:01 a.m. Saturday and 11:59 p.m. Sunday, at which the highest rates apply.

NEW SECTION. Sec. 7. A telecommunications service provider's failure to substantially comply with any of the disclosure requirements in section 5 of this act is a defense to the nonpayment of charges accrued as a result of using the telecommunication service provider's competitive local, local toll, or long-distance services, billed by any entity.

NEW SECTION. Sec. 8. (1) The legislature finds that the practices covered by section 5 of this act are matters vitally affecting the public interest. Violations of section 5 of this act are not reasonable in relation to the development and preservation of business.

(2) Notwithstanding RCW 19.86.170, a violation of section 5 of this act is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.

NEW SECTION. Sec. 9. This act may be known and cited as the telephone truth-in-advertising act.

NEW SECTION. Sec. 10. This act takes effect September 1, 2000.

NEW SECTION. Sec. 11. Sections 1 through 10 of this act constitute a new chapter in Title 19 RCW.