1 STATUTORY OR OTHER AUTHORITY: The Washington utilities and transportation commission (commission) takes this action under Notice No. WSR 10-10-080, filed with the code reviser on May 3, 2010. The commission initiated this proceeding pursuant to RCW 80.01.040 and 80.04.160.

     2 STATEMENT OF COMPLIANCE: This proceeding complies with the Administrative Procedure Act (chapter 34.05 RCW), the State Register Act (chapter 34.08 RCW), the State Environmental Policy Act of 1971 (chapter 43.21C RCW), and the Regulatory Fairness Act (chapter 19.85 RCW).

     3 DATE OF ADOPTION: The commission adopts this rule on the date this order is entered.

     4 CONCISE STATEMENT OF PURPOSE AND EFFECT OF THE RULE: RCW 34.05.325(6) requires the commission to prepare and publish a concise explanatory statement about an adopted rule. The statement must identify the commission's reasons for adopting the rule, describe the differences between the version of the proposed rules published in the register and the rules adopted (other than editing changes), summarize the comments received regarding the proposed rule changes, and state the commission's responses to the comments reflecting the commission's consideration of them.

     5 To avoid unnecessary duplication in the record of this docket, the commission designates the discussion in this order, including Appendix A (i.e., the rule adopted by this order), as its concise explanatory statement. Together, these documents provide a complete but concise explanation of the agency actions and its reasons for taking those actions.

     6 REFERENCE TO AFFECTED RULES: This order amends WAC 480-120-264 entitled, "Prepaid calling services."

     7 PREPROPOSAL STATEMENT OF INQUIRY AND ACTIONS THEREUNDER: The commission filed a preproposal statement of inquiry (CR-101) on February 17, 2010, at WSR 10-05-107. The statement advised interested persons that the commission was considering initiating a rule making to implement additional consumer protection disclosures regarding prepaid calling services. The commission concluded that such additions may be necessary to ensure that both the advertising for prepaid calling services as well as the disclosure of components of the service, such as the value of the service, are presented to potential consumers in the same language. The commission further concluded that additional consumer disclosure requirements may be needed to better enable consumers to make choices between competitively offered telecommunications services.

     8 On February 19, 2010, the commission issued a notice of opportunity to file written comments informing persons of this inquiry by providing notice of the subject and the CR-101 to everyone on the commission's list of persons requesting such information pursuant to RCW 34.05.320(3) and by sending notice to all regulated telecommunications companies and the commission's list of telecommunications attorneys. The commission posted the relevant rule-making information on its internet web site at http://www.utc.wa.gov/100148.

     9 The commission invited interested persons to file comments by March 22, 2010. Pursuant to the notice, the commission received three written comments which helped to guide the process. The written comments received pursuant to the CR-101 were filed by MCI Communications Services Inc., d/b/a Verizon Business Services (Verizon-MCI), Paracom, Inc. (Paracom), and AT&T Communications of the Pacific Northwest, Inc. (AT&T).

     10 NOTICE OF PROPOSED RULE MAKING: The commission filed a notice of proposed rule making (CR-102) on May 3, 2010, at WSR 10-10-080. The commission scheduled this matter for oral comment and adoption under Notice No. WSR 10-10-080 at 1:30 p.m., Monday, June 28, 2010, in the Commission's Hearing Room, Second Floor, Richard Hemstad 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, by June 7, 2010.

     11 WRITTEN COMMENTS: The commission received written comments in response to the CR-102 from Verizon-MCI and AT&T. The parties identified two issues:

     (a) The effective disclosure of international prepaid calling rates and minutes.

     (b) The need for clarification regarding whether the rule applies only to a prepaid calling "card," or, to regulated telecommunications prepaid "services" in general.

     Commission staff conferred with Verizon-MCI and AT&T regarding their written comments and developed consensus language that addressed their concerns regarding international prepaid calling rates and minutes.

     12 The consensus language regarding international prepaid calling rates and minutes is contained in Appendix A.

     13 RULE-MAKING HEARING: The commission considered the proposed rules for adoption at a rule-making hearing on Monday, June 28, 2010, before Chairman Jeffrey D. Goltz, Commissioner Patrick J. Oshie, and Commissioner Philip B. Jones. The commission heard oral comments from Mr. Tim Zawislak representing commission staff. No other interested person made oral comments.

     14 SUGGESTIONS FOR CHANGE THAT ARE ACCEPTED: Verizon-MCI and AT&T submitted written comments suggesting changes to the proposed rule. Verizon-MCI and AT&T both raise concerns about the new requirement that all applicable rates for international calls, must be disclosed on the card or its packaging as proposed in WAC 480-120-264 (5)(a)(iii). The concerns are that: (1) There is not enough space on the card or its packaging to disclose the rates for each of over two hundred countries and all applicable international call combinations (United States to a foreign county [country], foreign country to the United Stated [States] and calls to or from a cell phone) and; (2) international rates change frequently so publishing country-specific rates is impractical because the applicable rate may have changed in the time between when the card was purchased and when the call is actually placed.

     15 Both Verizon-MCI and AT&T offer similar solutions regarding the disclosure of international rates. However, they differ regarding which subsection of the rule should be modified. Verizon-MCI recommends that WAC 480-120-264 (5)(a)(iii) be revised to allow disclosure for international rates via a toll-free customer service number instead of printing the rates on the card or its packaging. AT&T recommends that WAC 480-120-264 (5)(d) be revised to allow for disclosure of international rates via a toll-free number and via a web site where the provider has a web site.

     16 The commission accepts, in principle, the intent of the changes described above. However, the commission chooses to rely on its own wording that incorporates solutions offered by Verizon-MCI and AT&T. The commission opts for including language in WAC 480-120-264 (5)(d) as is shown in bold below:

     (d) If the PPCS provider issues a card, all information contained in this subsection with the exception of international rates must be disclosed on the card or its packaging. International rates must be disclosed on the card, on its packaging, or via a without-charge telephone number. Disclosures required in (a)(i) and (vi), (b)(i) and (ii) of this subsection must be on the card.

     17 The commission finds that the wording described above and contained in Appendix A, which modifies the text in the CR-102 proposed rule text, is appropriate, and adopts the language in this rule-making process.

     18 SUGGESTIONS FOR CHANGE THAT ARE REJECTED: AT&T submitted written comments suggesting a requirement for disclosure of international rates via a web site where the company has a web site. This revision is rejected because many potential customers will not have readily available access to the internet at the time of purchase. Although the use of a web site is not prohibited, the toll-free number is the only other option acceptable for the disclosure of international rates other than disclosing this information on the card or its packaging.

     19 AT&T also submitted written comments suggesting that the proposed revisions to WAC 480-120-264 (5)(a)(vi) that change the term "card" to the term "service" are unnecessary. The commission also rejects this suggestion because the rule does not exclusively address prepaid calling cards; it encompasses other prepaid calling services. The proposed use of the word "service" enables more comprehensive consumer protection, aligns the subsection with the remainder of the rule, and essentially corrects a typographical error in the current rule. Additionally, some services provided via a card can also be recharged without the issuance of a brand new card upon expiration of the term of service. Furthermore, the use of the word "service" is consistent with WAC 480-120-264 (5)(a)(vii) and is congruent with the rule as a whole.

     20 COMMISSION ACTION: After considering all of the information regarding this proposal, the commission finds and concludes that it should adopt the rule as proposed in the CR-102 at WSR 10-10-080 and as modified by the clarification described in paragraph 15 of this order.

     21 CHANGES FROM PROPOSAL: The commission addressed the written comments submitted by Verizon-MCI and AT&T earlier in this order. The suggested changes and the commission's reason for accepting or rejecting the suggested changes are discussed in paragraphs 15 through 18 of this order.

     22 STATEMENT OF ACTION; STATEMENT OF EFFECTIVE DATE: After reviewing the entire record, the commission determines that WAC 480-120-264 should be amended to read as set forth in Appendix A, as a rule of the Washington utilities and transportation commission, to take effect pursuant to RCW 34.05.380(2) on the thirty-first day after filing with the code reviser.

     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 0, Amended 1, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, 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.

     23 The commission amends WAC 480-120-264 to read as set forth in Appendix A, as a rule of the Washington utilities and transportation commission, to take effect on the thirty-first day after the date of filing with the code reviser pursuant to RCW 34.05.380(2).

     24 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 1-21 WAC.

     DATED at Olympia, Washington, July 8, 2010.

Washington State Utilities and Transportation Commission

Jeffrey D. Goltz, Chairman

Patrick J. Oshie, Commissioner

Philip B. Jones, Commissioner

OTS-3156.3

AMENDATORY SECTION(Amending Docket UT-060676, General Order R-540, filed 3/27/07, effective 4/27/07)

WAC 480-120-264   Prepaid calling services.   (1) For the purposes of this section, prepaid calling services (PPCS) means any transaction in which a customer pays for service prior to use and applies only to those services where the number of available minutes decreases as the customer uses the service. Prepaid calling services do not include flat-rated basic local service that is billed in advance of use.

     (a) PPCS may require the use of an access number or authorization code.

     (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 480-120-263 (Pay phone service providers (PSPs)).

     (2) PPCS providers must provide customers a without-charge telephone number staffed by personnel capable of:

     (a) Responding to technical problems or questions related to their service twenty-four hours a day, seven days a week;

     (b) Responding to general account-related questions during regular business hours; and

     (c) Providing the commission's toll-free number and address to dissatisfied customers as required by WAC 480-120-165 (Customer complaints).

     (3) Billing requirements for PPCS.

     (a) A PPCS provider may charge only for the actual time a circuit is open for conversation. The tariff and presale document must define billing increments. The provider must not round up the length of conversation time for less than a full billing increment beyond that full increment.

     (i) If a PPCS provider uses an increment based on a time measurement, the increment must not exceed one minute.

     (ii) If a PPCS provider bills usage in "unit" measurements, it must clearly define units using both equivalent dollar amounts and time measurement. Unit billing increments cannot exceed the equivalent one minute rate.

     (b) At the customer's request, a PPCS provider may add additional time to an existing account in exchange for an additional payment at a rate not to exceed those on file on tariff with the commission or at rates, terms and conditions pursuant to competitive classification. The PPCS provider must inform the customer of the new rates at the time of the recharge request.

     (4) PPCS providers must maintain the following call-data for a minimum of twenty-four months:

     (a) Dialing and signaling information that identifies the inbound access number called or the access identifier;

     (b) The number of the originating phone when the information is passed to the PPCS provider;

     (c) The date and time the call was originated;

     (d) The duration or termination time of the call;

     (e) The called number; and

     (f) The personal identification number (PIN), or account number.

     (5) Disclosure requirements - Prepaid calling services.

     (a) A PPCS provider must disclose, prior to the sale, the following information:

     (i) The PPCS provider's name as registered with the commission;

     (ii) The "doing business as" name as registered with the commission, if applicable;

     (iii) The maximum charge per billing increment. A PPCS provider charging varying rates for intrastate ((and)), interstate, and international calls must disclose all applicable rates;

     (iv) The number of minutes or the value of the service and the rates from which the minutes may be determined;

     (v) Charges for all services, including any applicable surcharges, fees, or taxes, and the method of application;

     (((v))) (vi) Expiration date, if applicable. If a ((card)) service expires after a set period of time from activation, the PPCS provider must specify the expiration date ((on)) of the ((card)) service. If an expiration date is not disclosed ((on)), the ((card it)) service will be considered unexpired indefinitely; and

     (((vi))) (vii) Recharge policy, if applicable. If a PPCS provider does not disclose the expiration date at the time service is recharged, the service will be considered unexpired indefinitely.

     (b) A PPCS provider must disclose, at the time of purchase, the following information:

     (i) The without-charge telephone number(s) a customer may use to resolve technical problems, service-related questions, and general account-related questions; and

     (ii) Authorization code, if required, to access the service or, if applicable, the without-charge telephone number used to establish access capability.

     (c) The information required to be disclosed in this subsection must be in the language in which the service is advertised.

     (d) If the PPCS provider issues a card, all information contained in this subsection, with the exception of international rates, must be disclosed on the card or its packaging. International rates must be disclosed on the card, on its packaging, or via a without-charge telephone number. Disclosures required in (a)(i) and (vi), (b)(i) and (ii) of this subsection must be on the card.

     (e) If the PPCS provider is not the entity that packages the services for sale to the public, it must require the company that does so, through a written agreement, to comply with the disclosure requirements of this section.

     (6) Time of use disclosure requirements. The PPCS provider must:

     (a) Announce at the beginning of each call the time remaining on the prepaid account or prepaid calling card; and

     (b) Announce the time remaining at least one minute before the prepaid account balance is depleted.

     (7) When a PPCS provider has failed to provide service at rates disclosed prior to the sale or quoted at the time an account is recharged, or the PPCS provider has failed to meet performance standards, it must provide refunds for any unused service or provide equivalent service credit when requested by a customer. Refunds or credits must equal the value remaining on the prepaid calling account. The customer may choose either the refund or equivalent service credit option.

     (8) Performance standards for prepaid calling services. Each PPCS provider must ensure that:

     (a) Customers can complete a minimum of ninety-eight percent of all call attempts to the called party's number. The PPCS provider will consider any busy signals or unanswered calls as completed calls.

     (b) Customers can complete a minimum of ninety-eight percent of all call attempts to the PPCS provider. The PPCS provider will not consider any busy signals or unanswered calls as completed calls.

[Statutory Authority: RCW 80.36.010, 80.36.110, 80.36.320, 80.36.330, 80.36.333, 80.36.338, 80.01.040 and 80.04.160. 07-08-027 (Docket UT-060676, General Order R-540), § 480-120-264, filed 3/27/07, effective 4/27/07. Statutory Authority: RCW 80.01.040, 80.04.160, 81.04.160, and 34.05.353. 03-22-046 (Docket No. A-030832, General Order No. R-509), § 480-120-264, filed 10/29/03, effective 11/29/03. Statutory Authority: RCW 80.01.040 and 80.04.160. 02-11-080 (General Order No. R-499, Docket No. UT-991922), § 480-120-264, filed 5/14/02, effective 6/17/02.]

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