PERMANENT RULES
COMMISSION
STATUTORY OR OTHER AUTHORITY: The Washington Utilities and Transportation Commission takes this action under Notice No. WSR 98-24-124, filed with the Code Reviser on December 2, 1998. The commission brings this proceeding pursuant to RCW 80.36.140.
STATEMENT OF COMPLIANCE: This proceeding complies with the Open Public Meetings Act (chapter 42.30 RCW), the Administrative Procedure Act (chapter 34.05 RCW), the State Register Act (chapter 34.08 RCW), the State Environmental Policy Act of 1971 (chapter 34.21C [43.21C] RCW), and the Regulatory Fairness Act (chapter 19.85 RCW).
DATE OF ADOPTION: The commission adopted this rule on
January 27, 1999.
CONCISE STATEMENT OF PURPOSE AND EFFECT OF THE RULE: The rules define prepaid calling services, establish disclosure requirements for relevant terms, and establish technical and customer service standards. The rules also require that any company collecting customer prepayments must post a bond, establish an escrow account, or provide other satisfactory evidence of financial ability to provide customer refunds if necessary.
REFERENCE TO AFFECTED RULES: This rule changes the following sections of the Washington Administrative Code (WAC): None.
PREPROPOSAL STATEMENT OF INQUIRY AND ACTIONS THEREUNDER: The commission filed a Preproposal Statement of Inquiry (CR-101) on February 13, 1998, at WSR 98-05-055.
ADDITIONAL NOTICE AND ACTIVITY PURSUANT TO PREPROPOSAL STATEMENT: The CR-101 statement advised interested persons that the commission was considering entering a rule making relating to prepaid calling services and protection of consumer prepayments. The commission also informed persons of the inquiry into this matter by providing notice of the subject and the CR-101 to all persons on the commission's list of persons requesting such information pursuant to RCW 34.05.320(3), providing notice to all registered telecommunications companies, and by providing notice to the commission's list of telecommunications attorneys.
NOTICE OF PROPOSED RULE MAKING: The commission filed a Notice of Proposed Rule Making (CR-102) on December 4, 1998, at WSR 98-24-124. The commission scheduled this matter for oral comment and adoption under Notice No. WSR 98-24-124 on Wednesday, January 27, 1999 in the Commission's Hearing Room, Second Floor, Chandler Plaza Building, 1300 South Evergreen Park Drive S.W., Olympia, WA. The notice also provided interested persons the opportunity to submit written comments to the commission.
MEETINGS OR WORKSHOPS; ORAL COMMENTS: The commission convened a workshop on May 28, 1998, prior to filing the notice of proposed rule making (CR-102). Many interests participated in the CR-101 phase discussions, and a number of issues were resolved during that phase. The commission commends the parties for the spirit of cooperation and the efforts that produced a high degree of consensus about most aspects of the rule-making.
Several persons presented oral comments at the commission's January 27, 1999, rule-making hearing. Theresa Jensen, representing US WEST Communications, Inc., asked whether the proposed rule would apply to the company's prepaid T-1 services. The rule will not apply to T-1 services as currently marketed. By definition it would only apply to prepaid services that are depleted as the customer uses the service, and when the prepaid time is exhausted the customer's access is terminated. This satisfied US WEST's concerns.
Manuel Chavallo and Tim Hegert of MUNDO Telecommunications asked whether the bonding requirement in the rule applied to all telecommunications companies, even those who resell wholesale service to the public. The rule will apply to such companies and to any telecommunications company that is collecting customer prepayments.
Howard Segermark, International Telecard Association (ITA) stated that the reporting requirements in the rule require prepaid calling card companies to estimate their Washington figures since they distribute cards through wholesale distributors and cannot identify where the cards are actually sold. He suggested that the language be amended to read "The report must contain the following estimated information" and opposed the rule with its proposed language, "the report must contain the following information." The suggestion is rejected because the rule applies to all telecommunications companies that collect advanced payments, not only prepaid calling card providers. Most other services are marketed in ways that easily identify the value of service sold in Washington. This reporting requirement now applies to most prepaid calling card providers currently operating in the state, pursuant to a condition in the companies' registrations, and they appear to be providing adequate information based on staff experience where it was necessary to collect on the bond.
COMMENTERS (written and oral comments): The commission received written and oral comments from many interested persons prior to the adoption hearing. These included the following:
Ron Gayman and Janet Browne, AT&T
Howard Segermark and Steve Trotman, International Telecard Association
Michael Welch, Global Communications Network
Manuel Chavallo and Tim Hegert of MUNDO Telecommunications Rogelio Pena, MCI Worldcom
Andrew Isar, Telecommunications Resellers Association
Elizabeth Holowinski, Law Offices of Thomas K. Crowe
Dan Agar, Paracom
Andrew Jones, Sprint
Richard L. Goldberg, Sprint
Nancy Judy, Sprint
Theresa Jensen, Joyce Morris and Bob Couture, US WEST
Tim Peters, Electric Lightwave
Glenn Harris, Sprint
Karen Markle, BLT Technologies/Worldcom prepaid
Sjelby Gilje, Seattle Times
Sunny Kim and Cliff Chow, TTI Telecommunications
Marcy Greene, PT-1 Communications, Inc.
Robert Munoz, WORLDCOM
James L. Forney, Fone America, Inc.
Linda Tong and Joan Gage, GTE
Heidi Kristen Yore, MCI
Comments suggesting changes that the commission accepted (and adopted changes from the language noticed) or rejected (to adopt the noticed language) are set out below under the relevant headings. Here the commission identifies written and oral comments of a general nature.
Mundo Telecommunications (Manuel Chavallo) submitted general comments on the rules asking that enforcement mechanisms be implemented to deal with companies not providing proper disclosure; failing to comply with technical standards or providing service within the state without proper registration. No changes to the rule were necessary. Staff indicated that the commission would enforce compliance with the new rules provisions in the same manner as it enforces existing rules. This satisfied the company's concerns.
Sprint (Andrew Jones) supports both the requirement that technical assistance be available to customers twenty-four hours a day, seven days a week and the requirement that a company must make an announcement when the prepaid account or prepaid calling card balance is about to be depleted. It stated that these requirements should not be lessened under the guise of fostering competition.
The Telephone Resellers Association ("TRA", by Andrew Isar) urged the commission to authorize out of state providers to deposit prepayments in out of state banks having Washington-state branches. This rule will allow companies to use out of state banks that have a branch in Washington when customer prepayments are maintained in an in-state branch.
RULE-MAKING HEARING: The rule proposal was considered for adoption, pursuant to the notice, on Wednesday, January 27, 1999, before Chairwoman Anne Levinson via teleconference and Commissioner Richard Hemstad. The commission heard oral comments from Mary Taylor, representing commission staff; Theresa Jensen, US WEST Communications; Howard Segermark, International Telecard Association; Manuel Chavallo and Tim Hegert of MUNDO Telecommunications. Comments of a general nature are set out above.
SUGGESTIONS FOR CHANGE THAT ARE REJECTED: In this discussion, the adopted rules will be referred to as sections 052 and 058. Both are within chapter 480-120 WAC; the chapter designation is deleted for convenience and ease in reference.
In response to industry comments, commission staff withdrew a proposal that companies publish the availability of the commission to resolve problems and a telephone number to reach the commission. It proposed and the commission adopted a new subsection 052(7) merely restating companies' existing obligation to provide information about the commission in certain settings. AT&T, ITA and MCIW commented on the new subsection (7). AT&T and ITA believe it is an improvement over the prior proposal. MCIW argued the sufficiency of its current approach -- merely referring consumers to the blue pages of their telephone directory. MCIW contends that the requirement of referral to many different jurisdictions is unnecessarily expensive. The commission rejects MCIW's suggestion. Simply referring customers to the directory does not meet the commission's present requirement under WAC 480-120-101. The additional requirement will have minimal expense. The commission accepts the new subsection (7) but rejects MCIW's suggested changes.
ITA also stated that new phone cards may become available that offer unlimited service for a number of days. The company proposed language to state that cards offering unlimited domestic and international service within a given period need not post their per-minute rates or their decrementing policies, which would be irrelevant. The commission defers the subject to another time in the absence of information that such cards actually are on the market and require a change in the rule proposal. The rule's requirement that all rates, surcharges, fees or taxes be outlined in the presale documentation should cover this situation. If it does not, companies may request an exemption from the rule or petition for its amendment.
ITA addressed subsection 052 (5)(b)(iii), requiring the disclosure of expiration policies in presale documents. ITA stated that some firms have issued cards with no expiration, but impose a monthly "line-maintenance" charge if the card is not used in six months. ITA urged the commission to adopt Florida language that "Cards without a specific expiration period printed on the card, and with a balance of service remaining, shall be considered active for a minimum of one year from the date of first use, or if recharged, from the date of the last recharge." The commission rejects the proposal. Any "line-maintenance" fee must be disclosed under subsection 052 (5)(b)(ii), and the commission believes that the expiration policy stated in subsection 052 (5)(b)(iii) is reasonable, appropriate, and should be adopted.
ITA suggested deleting subsection 052 (10)(b), requiring customer notice of a company's termination of business in the state, contending that no phonecard issuer knows the identity of its customers. The commission rejects the suggestion because the rule language is clear that a company is only required to comply with this provision if it knows the relevant information.
Thomas K. Crowe (by Elizabeth Holowinski) proposed that the commission require companies to report the number of prepaid calling card intrastate minutes used by consumers in the state of Washington within a reporting period. The commission received similar suggestions on this issue from MCIW and ITA. We reject the proposal because under it the commission would only be able to identify services used within Washington. The bond is designed to protect the unused portion of prepaid service purchased in the state, because the consumer may elect to use it all within the state. The commission accepts the commission staff observation that while some debit card companies may be structured so that they cannot identify the actual cards sold in Washington, they certainly can make reasonably accurate estimates based on the information they retain about their businesses. The rule will not only apply to companies providing prepaid calling services, it will apply to any company that is collecting customer prepayments within the state. Many such companies do track the information on a Washington-specific basis.
MCI commented on the requirement in subsection 052 (4)(d) that companies provide call detail report free of charge to customers upon request. The company contended that, while it can provide call detail reports for a given day, providing accumulative call detail reports for individual prepaid personal identification numbers is particularly onerous and will require costly systems modifications to implement. ITA comments that companies should be able to provide the information orally to a customer and charge the customer if a written report is requested. Sprint stated that other sections of the rule adequately disclose this information to the customer, and therefore the call detail requirement is unnecessary. Sprint also stated concerns about a company's possible liability if it released information to someone other than the actual user of the service. The commission believes that a consumer with a dispute will reasonably expect -- and a company should be required to provide -- sufficient information to resolve a billing inquiry. When a dispute is related to prepaid services the company must be capable of explaining how, when and where prepaid service was depleted. Under modified language, it is clear that companies may take steps to confirm that the person making the request was the actual user of the service.
Sprint, AT&T, ITA, and MCIW commented on subsection 052(8), relating to refunds for unused balances. All four stated that refunds should only be required when a company has failed to provide service as promised. Additionally AT&T indicated that companies should only be required to refund unused balances after commission review. ITA urged that the refunds should be made in-kind and at the discretion of the service provider. MCI stated that because it does not collect full retail price for prepaid calling cards it should not be required to refund based on the retail value remaining on the card. Prior language, focusing on contentions of failure to provide service as opposed to actual failure, has been changed so it is clear that refunds are required in instances of service failure. The commission rejects MCIW's contention that it need not refund the full cost of service because it does not receive full payment. A consumer who is experiencing service problems should not be penalized because a company chooses to provide service through retail sellers who purchase the cards at a wholesale rate. The customer has paid a specific dollar amount for a prepaid calling card, and must receive a refund of the unused amount if the company fails to provide service.
TRA argues that twenty-four hour staffing is unreasonable and burdensome to small companies, asserting that perpetual staffing is unnecessary for discretionary services, such as prepaid calling cards. The commission believes that twenty-four hour coverage for technical assistance is a reasonable requirement for all providers of telecommunications services because the need for such services continues around the clock. Prepaid service may well be the only service available to a customer. It is entirely reasonable to require that any company electing to provide the service will support it at any time it may be needed. We decline to modify the proposed language.
TRA asked that subsection 052(9), performance standards for prepaid calling services, be modified to recognize that resellers who rely exclusively on the technical network services provided by underlying carriers are incapable of meeting the commission's proposed standard. TRA agrees with commission staff that the reseller should work with its underlying carrier to resolve network problems, but argues that to hold a reseller unilaterally responsible for substandard performance when it has made a good faith effort to resolve service affecting problems with its underlying carrier would serve to punish the reseller and allow the underlying carrier to operate with seeming impunity. This would be particularly harmful if the underlying carrier is also competing against the reseller. TRA also raised this argument during both the CR-101 and CR-102 comment periods, and commission staff did not support the suggestions. The commission shares commission staff's concern that any company holding itself out to provide service to the public should be ultimately responsible to that consumer for the service. To do otherwise would reduce the carrier's incentives to secure adequate service from existing or other possible suppliers. The underlying carrier's failures may also be the subject of private or commission enforcement action, as well.
COMMISSION ACTION: After considering all of the information regarding the proposal, the commission adopted the proposed rules with the changes recommended by commission staff.
CHANGES FROM PROPOSAL: The commission adopted the proposal with several changes from the text noticed at WSR 98-24-124. We describe here the changes that the commission adopted, other than grammatical, organizational, or clearly nonsubstantive changes.
1. Subsection (1). Exclude credit and debit cards from "prepaid services" in the rule, and explain how such cards are treated. US WEST Communications, Inc. (Joyce Morris) asked that the definitions section be amended to make it clear the prepaid calling services rule did not apply to credit cards (e.g., Visa, Mastercard) or cash equivalent ("debit") cards. The commission modifies this section to make clear the distinctions among the various cards commonly used to secure service, and how each is considered for regulatory purposes.
2. Subsections (2) and (3). Clarification that the without-charge number for technical assistance may be the same as the business office number. International Telecard Association (ITA) (Howard Segermark) suggested a clarification stating that a company may use the same toll-free number for both its business office function and its technical assistance function. The proposal is accepted. This change makes it clear that companies are not required to have different toll-free numbers for technical and business purposes, as long as the twenty-four hour technical service support requirement is met. This change clarifies that companies are not required to bear the cost of two toll-free lines.
3. Subsection (4). Require that billing increments be defined in the company staff's price list, tariff, or presale documentation. This change on the commission's initiative requires a definition of billing increment, so the company's compliance with the definition and the terms of its prepaid service may be verified.
4. Subsection (4). Reduce from 36 to 30 months the time for retention of call records. This change reduces the cost to companies of retaining records, to better balance consumer and regulatory needs with the costs of compliance. Commission staff recommends the change after consultation with affected companies to reduce the costs of compliance.
5. Subsection (4). Require production of only information that the company possesses. MCIW states that it does not always acquire originating number information and it is thus not always able to retain the information to comply with subsection (4)(e)(ii) of the rule as proposed. The commission modifies the rule to specify that the information only must be maintained when it is actually passed to the company.
6. Subsection (4). Call detail reports. In response to a concern voiced by ITA, the modified rule allows companies to first provide an oral call detail report and to take measures to confirm that the person requesting call detail is the actual account holder. The change reduces costs to companies while preserving consumer protections.
7. Subsection (5). Require that, if a consumer is required to call a company to obtain an access number for use with the service, the company must publish a toll-free telephone number for that purpose on the prepaid calling card. The change responds to comments by MCI and provides marketing flexibility without hampering consumer interests.
8. Subsection (5). Allow expiration to be defined by a period of availability (e.g., 90 days) as well as by a date certain. This change recognizes the business problems of providers who market through retail outlets and may have little control over how long a card may stay in inventory before it is sold. The provision gives providers the flexibility to standardize the period of service availability to assure equal value for customers and to provide accurate information for consumer information and comparison. Paracom also addressed subsection (5)(a)(vi) which required that an expiration date, if applicable, be printed on prepaid calling cards. The company stated that it prints a large number of cards at a time in order to achieve necessary economies of scale and keep prices low. The actual expiration date of these cards will vary depending on their distribution date. The company suggested an amendment providing an option in the dialing menu to provide the expiration date by pressing key on telephone. MCI addressed similar concerns and advocated printing a specific expiration date or policy statement to inform customers how the expiration date is determined, and making the actual expiration date available to consumers by calling customer service. The commission adopts amended language that allows a company whose expiration dates are established based on initial use to print a statement on the card that indicates the length of time the card will be active after the initial activation.
9. Subsection 5. Remove a requirement to warn consumers that lost cards may be irreplacable. Both MCI and ITA objected to the proposed language in subsection (5)(a)(viii) which required that a statement be placed on a prepaid calling card warning customers to safeguard their cards because they would assume full liability for lost or stolen cards. Commission staff supported removing this subsection entirely; the commission accepts the staff recommendation on the basis that the consequences of loss are within the public's general understanding and that the limited space available for notices should be devoted to matters of higher priority.
10. Subsection (6). Remove requirement for advance disclosure of international rates in presale documentation. AT&T (Ron Gayman), Paracom, and Thomas Crowe argue for deletion of a requirement to disclose international rates in the presale documentation, on the basis that it is impossible to include because the charges vary from country to country and fluctuate much more often than rates for domestic calls. There is wide disparity and great volatility as to international rates. Quoted rates may be outdated before use and the space required to state all rates could be out of proportion with the consumer benefit.
As a result the commission removed proposed disclosure requirements relating to international rates and removed references to international rates from subsections 052 (5)(b)(i) and (6)(a)(vi). The change reduces the burdens of compliance. MCI questioned the commission's jurisdiction over the requirements in subsections (5)(b)(i) and (6)(a)(vi) that rates for interstate as well as international calls be disclosed in presale documents. Interstate rates are discussed above. The commission is not asserting jurisdiction over interstate rates. The commission is asserting jurisdiction over disclosure of rates to Washington state consumers.
11. Subsection (7). Remove the draft requirement of presale disclosure of consumers' right to commission assistance with complaints; remove requirement of referral to commission at time of unresolved complaint and substitute the requirement to provide the commission's complaint number to a consumer upon request or in compliance with other rule. AT&T, ITA, TRA, Sprint, and Thomas K. Crowe commented on subsections 052 (5)(b)(v) and (6)(a)(x) of the proposal, requiring sellers of prepaid services to disclose in presale documents consumers' right to assistance from the state regulatory agency in the state where the prepaid service was purchased. AT&T argued that this section is unnecessary because existing WAC 480-120-101 already requires supervisors to make unhappy customers aware of the commission. Mr. Crowe argued that this requirement would be discriminatory since no other segment of the telecommunications industry is required to provide this information in its bills or point of sale materials. ITA argued that the statement would require too much room on a prepaid calling card. TRA argued that the commission cannot lawfully require prepaid telecommunications service providers to include a general statement about consumer rights to contact regulatory agencies in other states, no matter how technically correct such a statement may be. Sprint suggested that the information be provided via the company's customer service number, not written material. The commenters raise valid points. In response to the comments the commission accepts the commission staff recommendation to eliminate the two subsections in question and substitute new subsection (7), which restates companies' responsibility under WAC 480-120-101.
12. Clarify that information must be placed either on the card or card packaging, or at the point of sale, but not both. MCI commented that the proposed rules relating to packaging and point of sale documents will be difficult and costly to implement, and that it has only limited control over retail cooperation in displaying the information. The proposal's intent was that the information be in either form, at the company's option. The commission modifies the rule language to clarify the intent.
13. Subsection (7). Clarify that refunds other than for failure to charge proper rates or failure to meet technical standards are within a company's discretion and may be undertaken pursuant to the company's own form. The rule requires companies to refund prepaid service when the company fails to meet technical standards and when it fails to charge the proper rates. This change, in response to ITA and AT&T comments, clarifies that refunds for other reasons are within the company's business discretion, and authorizes companies to develop forms to assist them in gathering accurate and sufficient information.
14. Subsection (9). Reduce from 99% to 98% the standards for call completion. This change brings the standard for prepaid service into consistency with the standard for other types of telecommunications service, and reduces the burden of compliance on companies subject to the rule.
15. Subsection (11). Extend the phase-in of disclosure compliance by extending compliance in printing for ninety days and display for nine months (up from ninety days) after the rule's effective date. Both ITA and MCIW objected to the ninety day time frame for compliance with WAC 480-120-052(10). They argued that requiring compliance with the rule on that schedule would cause extraordinary costs to prepaid calling card companies, citing costs including destruction of existing inventory, reprinting cards, and producing entirely new and unforeseen packaging and point of sale materials. Both argued that the commission should consider allowing nine months for compliance to permit depletion of existing inventory. The adopted rule is amended to require that any material printed more than ninety days after the effective date of the rule must conform with the new requirements. All printed materials on display or distributed more than nine months after the effective date of the rule must comply with the rule provisions. The remaining provisions will be effective ninety days from the effective date of the rule. This change reduces burdens on companies by allowing them to continue to print existing materials while designing replacements, and by allowing them to exhaust much or all of their stock of such materials before using new materials. It reflects a balancing of consumer and commercial interests.
16. WAC 480-120-052 (7)(vi) is added, requiring supervisory personnel when dealing with dissatisfied consumers to provide the consumer with the commission's toll-free number and address, clarifying that the requirement applicable to all telecommunications companies does apply to prepaid service providers.
17. WAC 480-120-052 (8)(a) is modified slightly to clarify that companies must only provide refunds when they fail to provide service as promised, not simply when a customer "contends" that the company has failed to provide service as promised.
18. WAC 480-120-052(11) proposed language would have allowed ninety days from the effective date of this rule for compliance. The language is modified so that companies have nine months to have all written materials in circulation (e.g. prepaid calling cards and presale documents) in compliance with the rule provisions. The remaining rule requirements retain the ninety day implementation deadline. This change is to mitigate costs of compliance and to better balance consumer and provider interests.
19. Allow companies that seek exemption from bonding or guarantee provisions to present any evidence they believe will demonstrate the adequate protection of consumer interests. Paracom requested that language that would excuse a company from posting a bond if the company has transferred funds sufficient to cover all outstanding customer prepayments to its underlying carrier if the carrier meets the requirements of subsection (a) or (b). It also advocated a new section (4)(e) which would allow a company to petition the commission on an exception basis and state reasons for requesting exemption from bonding requirements. Paracom's resale agreement is unique and it is not appropriate to address each unique situation in the rule. The commission does add subsection (e) to the rule, which allows a company to petition for a waiver of the rule and to present any additional information it believes supports a contention that consumers will be adequately protected if the financial security requirement is reduced or waived. Doing so allows the commission to minimize financial burdens on companies to the greatest extent consistent with protection of consumer interests.
20. In WAC 480-120-058, protection of customer prepayments, subsection (4), the commission added language to clarify that a company may petition for waiver of the bonding requirement to offer evidence that consumer interests will be adequately protected without the requirement. This charge reduces regulatory burdens on business while retaining consumer protections.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 2, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 2, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
1. WAC 480-120-052 and 480-120-058, as set forth in Appendix A, is adopted as a rule of the Washington Utilities and Transportation Commission, to take effect on the ninety-first day after the distribution date of the issue of the Washington State Register in which it appears.
2. This order and the rule set out below, after being recorded in the register of the Washington Utilities and Transportation Commission, shall be forwarded to the code reviser for filing pursuant to chapters 80.01 and 34.05 RCW and chapter 1-21 WAC.
3. The commission sets out in this order its reasons for adoption of the proposed rule, for adopting changes from the language originally noticed, and for declining to adopt suggested changes. This discussion supplements and may modify information and reasoning set out in commission staff memoranda, presented when the commission considered filing a preproposal statement of inquiry, when it considered filing the formal notice of proposed rule making, and when it considered adoption of this proposal. To provide a complete picture, the commission adopts the commission staff memoranda, in conjunction with the text of this order, as its concise explanatory statement as required by RCW 34.05.025.
DATED at Olympia, Washington, this 23rd day of April 1999.
Washington Utilities and Transportation Commission
William R. Gillis, Commissioner
Richard Hemstad, Commissioner
OTS-2552.4
NEW SECTION
WAC 480-120-052
Prepaid calling services.
(1) Prepaid calling services - Defined.
(a) Prepaid calling services (PPCS) means any transaction in which a consumer pays for service prior to use and the prepaid account is depleted as a consumer uses the service. Prepaid calling services may require the use of an access number or authorization code. The transaction often includes an object the size of a credit card which displays relevant information about the service. These objects are defined as prepaid calling cards.
(b) This section excludes credit cards and cash equivalent cards. Services provided at pay telephones using these cards are regulated under the provisions of WAC 480-120-138.
(i) Credit cards: Cards that can be used to make consumer purchases utilizing preapproved bank credit (e.g., Visa, MasterCard). Consumers utilizing such cards to complete pay telephone calls are charged the applicable tariffed coin operator rates on file with the commission for pay phone provider service at that location.
(ii) Cash equivalent cards: Are cards that may either be purchased for exclusive use at card reader pay telephones or may be used both for consumer purchases and use at card reader pay telephones. Cash equivalent cards are not purchased for the exclusive use through an individual telecommunications provider. Consumers utilizing such cards to complete pay telephone calls are charged the applicable tariffed coin operator rates on file with the commission for pay phone provider service at that location.
(2) Business office requirements for providers of prepaid calling services. A company offering prepaid calling services must provide consumers a without charges telephone number staffed by live personnel during regular business hours. The personnel must be sufficient to respond to all service related inquires and must be capable of answering general account related questions. The without charge number business office number may be the same as the technical assistance number required in subsection (3) of this section.
(3) Technical assistance requirements when providing prepaid calling services. A company offering prepaid calling services must provide consumers a without charge number staffed by live personnel twenty-four hours a day, seven days a week. The personnel must be sufficient to respond to all inquires and must be capable of assisting consumers with technical problems or questions related to their service. The without charge number for technical assistance may be the same as the business office number required in subsection (2) of this section as long as the number is staffed twenty-four hours a day.
(4) Billing requirements for prepaid calling services.
(a) Billing increments must be defined in the company’s price list, or tariff and presale document. If a company uses an increment based on a time measurement, the increments must not exceed one minute. If the company bills usage in "unit" measurements, units must clearly be defined using both equivalent dollar amounts and time measurement. Unit billing increments can not exceed the equivalent one minute rate.
(b) Service may be rated only for the actual time a circuit is open that allows for conversation. Conversation time of less than a full billing increment shall not be rounded up beyond that full increment.
(c) Companies may not reduce the value of a PPCS account by more than the charges specified on the prepaid calling card; prepaid calling card packaging; visible display at the point of sale; rates specified in the presale document; or the rate authorized by the commission at the time of purchase. The PPCS may, however, be recharged by the consumer at a rate different from that specified in the initial presale agreement or the last recharge information so long as the rate and surcharges conform with the company’s tariff or price list at the time of purchase. The consumer must be informed of the new rates at the time of recharge.
(d) Companies providing prepaid calling services must be capable of providing consumers, upon request, call detail reports at no charge.
(i) Companies may establish verification procedures to confirm the person requesting the call detail was the actual user of the service.
(ii) Call detail reports may be provided orally to a consumer. The company will only be required to provide a written call detail report at no charge if the user requests the information in writing.
(e) Companies providing prepaid calling services must maintain call data for a minimum of thirty months. The data must include the following:
(i) Dialing and signaling information that identifies the inbound access number called or the access identifier;
(ii) The number of the originating phone when the information is passed to the prepaid calling provider;
(iii) The date and time the call was originated;
(iv) The duration or termination time of the call;
(v) The called number; and
(vi) The personal identification number (PIN) and/or account number.
(5) Written disclosure requirements for prepaid calling services - Prepaid calling cards.
(a) Information required on prepaid calling cards. At a minimum the cards must contain the following information:
(i) The company's name as registered with the commission. A "doing business as" name may only be used if officially filed with the commission. The language must clearly indicate that the company is providing the prepaid telecommunication services.
(ii) The toll-free or without charge number to reach the company’s business office;
(iii) The toll-free or without charge number to reach the company’s technical assistance office, if different than the business office number;
(iv) The company’s toll-free or without charge number used to access the company’s service, if applicable;
(v) Authorization code, if required to access the service or if applicable the toll-free number user is required to call to establish access capability;
(vi) Expiration date, if applicable. If a card expires after a set period of time from activation, (e.g., ninety days after first use) the company must place a general statement on the card outlining this expiration policy. If an expiration date or expiration policy is not disclosed on the card it will be considered live indefinitely; and
(vii) Cards must be voided or otherwise physically marked if they were produced as a "nonlive" card so that it is clear to the user that the card is only a sample and is not active. If the card is not disclosed as a nonoperative card, the card is considered live and the issuing company must honor it.
(b) Prepaid calling card - Presale or point of sale documents. The following information must be legibly printed on the card, packaging, or display visible in a prominent area at the point of sale of the prepaid calling card in such a manner that the consumer may make an informed decision prior to purchase. If the information below is to be provided on a visible display at the point of sale the company must ensure by contract with its retailers or distributors that the information is provided to the consumer.
(i) Maximum charge per billing increment for prepaid calling card service. If a company charges varying rates for intrastate and interstate calls all applicable rates must be provided. The rates displayed must be no more than those approved in the tariff or price list of the company at the time of retail purchase;
(ii) Approved charges for all services, and surcharges, fees, and taxes, if applicable and the method of application;
(iii) Expiration policy, if applicable. If an expiration date is not disclosed the service will be considered live until the prepaid balance is depleted;
(iv) Recharge policy, if applicable. If an expiration date is not disclosed at the time service is recharged the service will be considered live indefinitely; and
(6) Written disclosure requirement for prepaid calling service - Other than prepaid calling cards. Presale agreement. The following information shall be provided in a presale document to an applicant prior to consumer prepayment and initiation of service:
(i) The company’s name as registered with the commission. A "doing business as" name may only be used if officially filed with the commission. The language must clearly indicate that the company is providing the prepaid telecommunication services.
(ii) The toll-free or without charge number to reach the company’s business office;
(iii) The toll-free or without charge number to reach the company’s technical assistance office, if different than the business office number;
(iv) The company’s toll-free or without charge number used to access the company’s network, if applicable;
(v) Authorization code, if required to access the service;
(vi) Maximum charge per billing increment for prepaid calling service. If a company charges varying rates for intrastate and interstate calls all applicable rates must be provided. The rates displayed shall be no more than those approved in the tariff or price list of the company at the time of retail purchase;
(vii) Approved charges for all services, and surcharges, fees, and taxes if applicable, and the method of application;
(viii) Expiration date, if applicable;
(ix) Recharge policy, if applicable.
(7) Verbal disclosure requirements for prepaid calling services.
(a) Companies offering prepaid calling service must:
(i) Provide an announcement at the beginning of each call indicating the time remaining on the prepaid account or prepaid calling card;
(ii) Provide an announcement when the prepaid account or prepaid calling card balance is about to be depleted. This announcement must be made at least one minute prior to depletion.
(iii) When requested by a Washington state consumer, the company's business office and technical assistance office must provide the consumer the number for the Washington utilities and transportation commission consumer services line; and
(iv) Company supervisory personnel must provide dissatisfied applicants or subscribers the commission's toll-free number and address in conformance with WAC 480-120-101.
(8) Requirements for refund of unused balances.
(a) When a company has failed to provide service at rates provided in presale documentation or quoted at the time an account is recharged, or that the company has failed to meet technical standards, companies offering prepaid calling services must provide refunds for any unused service or provide equivalent credit in services offered when requested by a customer. Refunds must equal the value remaining on the prepaid calling account or prepaid card. The customer is allowed to choose either the refund or equivalent service option.
(b) Refund requests received from consumers for reasons other than improper rates or failure to meet technical standards may be made at the sole discretion of and in a form prescribed by the company.
(9) Performance standards for prepaid calling services. Each company shall ensure that:
(a) A minimum of ninety-eight percent of all call attempts are completed to the called party’s number. Station busies and unanswered calls will be considered completed calls.
(b) A minimum of ninety-eight percent of all call attempts are completed to a company’s business office number. Station busies and unanswered calls will not be counted as completed calls.
(c) A minimum of ninety-eight percent of all call attempts are completed to the company’s technical assistance number. Station busies and unanswered calls will not be counted as completed calls.
(10) Requirements when a company ceases operations in the state of Washington. When a company ceases operations in the state, the company must:
(a) Provide the commission with thirty days advance notice in writing.
(b) At least twenty-one days before termination, provide written notice to customers at the address on file with the company, if applicable, indicating that service will be ending, and explain how customers may receive a refund on any unused service.
(c) Beginning at least fifteen days before termination, provide oral notice of termination at the beginning of each call originated in Washington, including the date of termination and a number to call for more information.
(d) Provide information to consumers via its customer service number outlining the procedure for obtaining refunds and continue to provide this information for sixty days from the date company ceases operations.
(e) Within twenty-four hours after ceasing operations, provide the commission and the company’s bonding agent a list of all account numbers with unused balances. The list must include the following:
(i) The identification number used by the company on each account for billing/debit purposes;
(ii) The unused portion of any prepaid monthly fee on each account;
(iii) The unused time, stated in units or minutes as applicable on each account and the equivalent dollar amount.
(11) Compliance requirements for prepaid calling services.
(a) Printed materials including prepaid calling cards, presale documents, and point of sale documents.
(i) All materials printed ninety days after the effective date of the rule must comply with provisions of this rule;
(ii) All printed materials in circulation must comply with this rule within nine months of the effective date of this rule.
(b) Rules requirements - excluding printed material. Companies providing prepaid calling services within the state of Washington must be in compliance with this rule within ninety days of the effective date of this rule.
(12) Other regulatory requirements. Companies providing prepaid calling services must comply with all other laws and commission rules relating to provision of telecommunications services unless the company has filed for and received waiver from the commission.
(13) Penalties for provision of service by an unregistered telecommunications company. When a penalty is imposed upon finding that an unregistered company has provided prepaid calling services within the state of Washington, the commission may assess penalties of up to one hundred dollars per day per violation under RCW 80.04.405 and/or up to one thousand dollars per day per violation under RCW 80.04.380.
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(1) A company that intends to collect customer prepayments must first demonstrate to the commission that it meets (a), (b), or (c) of this subsection.
(a) The company has a corporate debt rating, according to Standard & Poor’s of BBB or higher, or according to Moody’s of BAA or higher, with respect to outstanding debt obligation; or
(b) The company has a performance bond satisfactory to the commission sufficient to cover any customer prepayments; or
(c) The company has made provision for deposit of customer prepayments in a federally insured interest bearing trust account maintained by applicant solely for customer advances. The prepayments must be deposited in a bank, savings and loan association, mutual savings bank, or licensed escrow agent with access to such funds only for the purpose of refunding prepayments to customers. The funds must be maintained in an account within the state of Washington. In any order granting certification, the commission may require either bond or trust account or escrow as a condition.
(2) Reporting requirements for every bond or trust account.
(a) Each company collecting customer prepayments must submit to the commission a report within fifteen days after the end of each calendar quarter. The report must contain the following information specific to state of Washington operations:
(i) Total outstanding balance of customer prepayments at the beginning of the reporting period;
(ii) Dollar amount of prepaid services sold during the reporting period;
(iii) Depleted usage of prepaid services during the reporting period; and
(iv) Total outstanding prepaid service balances at the end of the reporting period.
(b) Nothing in this rule precludes commission staff from requesting current company financial or operating information at any time.
(c) A company may petition the commission for a reduction in reporting requirements. The commission may grant or deny the request by letter from the commission secretary.
(3) Calculation of trust or bond levels.
(a) The initial level of the bond or trust must comply with the provisions of subsection (1)(b) or (c) of this section.
(b) The company must adjust the subsequent level of the bond or trust based upon quarterly reports data and the company must notify the commission of that adjustment.
(4) A company may petition for and the commission may grant waiver of the bond/trust requirement either at the time of registration or at such later time as the company can demonstrate to the commission’s satisfaction that it meets standards for waiver of the bond/trust requirement. The petitioning company must provide documentation to the commission in support of the petition. The commission may grant or deny the request by letter from the commission secretary. The commission will evaluate the following to determine whether a waiver of the bond/trust requirement will be granted:
(a) Certified financial statements establishing adequate financial resources sufficient to provide service to consumers of prepaid telecommunications service;
(b) Confirmation that the company has received approval for and has been providing comparable services satisfactorily in one or more other state jurisdictions. The documentation must consist of information from the regulatory agency in the other state and must demonstrate that the company has complied with that states’ rules and regulations and has provided adequate levels of service for twelve consecutive months;
(c) Compliance, following registration with the commission, with Washington rules and provision of adequate levels of service for at least twelve consecutive months;
(d) Documentation that the company has established a bond rating as provided for in subsection (1)(a) of this section;
(e) Other evidence demonstrating that consumer interests will be adequately protected.
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