Presentation is loading. Please wait.

Presentation is loading. Please wait.

Federal Communications Commission Intergovernmental Advisory Committee

Similar presentations

Presentation on theme: "Federal Communications Commission Intergovernmental Advisory Committee"— Presentation transcript:

1 Federal Communications Commission Intergovernmental Advisory Committee
Presentation by Consumer Protection Subcommittee Ronald Brisé, Chair

2 Overview State vs. Federal Jurisdiction
Nationwide landscape of consumer protection mechanisms Technologies include telephone, cable, VoIP, internet and bundled services Case Study: Florida (Review Slide) Additional Notes: As technology has evolved, consumers have changed the way they use telecommunication services. Ten years ago there were more than 192 million landlines and now that number is down to 112 million (as of June 2011). At the same time, the number of wireless phones has grown from 114 million to 290 million (as of June 2011). High speed internet lines (i.e., at least 200 kbps in one direction) have increased dramatically from fewer than 10 million in 2001 to over 206 million ten years later. Over half of these lines are mobile wireless lines (120 million). The result of this technological innovation in telecommunications is that consumers have viable alternatives to the traditional landlines and many are choosing more than one option.

3 Intro Brief history of deregulation trend and the subsequent impacts to consumer protection services. How was consumer protection handled in regulatory framework? Questions to consider: What is a minimum standard to ensure consumer protection in a deregulated industry? The federal Telecommunications Act of 1996 established a national framework to enable competitive carriers to enter the local telecommunications marketplace. In implementation of the Act, the FCC asserted that opening the markets to competition was “intended to pave the way for enhanced competition in all telecommunications markets.” The FCC expected opening markets to “blur traditional industry distinctions and bring new packages of services, lower prices, and increased innovation to American consumers.” The availability of consumer choice was envisioned as an effective tool to weed out bad actors in the market. For the most part, the role of the state commissions and consumer advocates had remained the same for traditional telephone service providers. For example, they would resolve consumer issues with the carrier, monitor adherence to basic service rules, and assist with low income programs. New providers were often held to less stringent standards. New services and bundled services where also treated differently, depending on the state. As new competitors established themselves in various markets, incumbent carriers began petitioning state and federal regulators to decrease regulations so that the regulation of incumbents would mirror that of the entrants. This trend continues today. This raises the question faced by policymakers regarding the minimum standard needed to ensure consumer protection. I believe that the answer is dependent on the level of competition and the availability of consumer choice. But at the very least, consumers have to know where to go for help and how to get there. A simple concept, but more difficult to implement than most of us imagined.

4 State/Locality vs. Federal Jurisdiction
Cities with jurisdiction Cable franchising trend has been local-statewide Some cities provide their own cable and/or telecom State Commissions Since around 2006, there have been numerous states, including Florida, that have removed franchising authority for cable companies from the local governments and made it a single statewide authority. This activity peaked around 2008, with federal legislation introduced. However, the bills did not pass and the statewide franchising trend has slowed in recent years. A statewide franchise curtails or eliminates local governments from enforcing or resolving consumer issues. Cities that are providers of cable or telephone services receive complaints directly from their consumers just like any other service provider. For example, in Lafayette Louisiana, LUS Fiber, a subsidiary of Lafayette Utilities System, the city-owned power company, offers Internet service along with cable television and phone service. There, they have deployed more than 800 miles of fiber-optic cable underground in Lafayette, a city of 120,000, delivering Internet speeds of up to 100 megabits per second — rare for even major cities. Because they are the underlying provider of service, they are likely the first point of contact for complaints. Most areas are not served by a city phone or cable system. As a result, state commissions or other agencies are often on the front line for consumer complaints after the carrier has failed to resolve the issue to the customer’s satisfaction. In telecommunications, some states have the authority to settle complaints through formal complaint processes, while others states have a more informal process that consists of the state commission simply contacting the company and “asking” them to take another look at the issue and try to resolve it. Bundled services are handled differently from state to state. Oregon, Texas, Tennessee, Georgia, Wyoming, and Montana attempt to resolve the entire complaint, while states like Ohio, Alabama, Missouri, and South Carolina forward on the non-jurisdictional aspect of the complaint.

5 State/Locality vs. Federal Jurisdiction
Other State Agencies FCC/FTC Partner: FCC Consumer Advisory Committee In instances where the state commission does not have jurisdiction, complaints are often referred to either the FCC, the FTC, the state Attorney General, state Consumer Services agencies, or a combination of them. Using Florida as an example, we now refer retail consumer complaints to the Department of Agriculture and Consumer Services. DACS provides consumer assistance within several categories of business services, and assists customers with disputes against companies that are not regulated by any federal, state or local government entity. DACS will review each consumer complaint it receives and will take the following action: If the complaint falls within another agency's jurisdiction, DACS will refer it to that agency; If the complaint falls within DACS' jurisdiction, DACS will attempt informal mediation to resolve the consumer's dispute and evaluate the business for compliance with applicable statutory provisions; or If a complaint is filed against a business that is not regulated by any federal, state or local government entity, DACS will attempt informal mediation to resolve the consumer's dispute. In more rare instances, the complaint my be forwarded to our Attorney General. The Attorney General's Office is an enforcing authority of Florida's Deceptive and Unfair Trade Practices Act, which is meant to protect individual consumers and legitimate businesses from various types of illegal conduct in trade or commerce. Pursuant to the Act, the attorney general investigates and files civil actions against persons who engage in unfair methods of competition, unfair, unconscionable or deceptive trade practices, including, but not limited to, pyramid schemes, misleading franchise or business opportunities, travel scams, fraudulent telemarketing, and false or misleading advertising. Consumers may file billing and service related complaints with the Attorney General that relate to unfair trade practices. The AG will refer complaints that fall within the jurisdiction of the FPSC to the FPSC. Likewise, complaints that fall within the category of issues handled by the DACS will be referred to the DACS. The primary role of the AG is to take steps that are necessary to stop a company from conducting business using unfair or fraudulent trade practices. As is the case at state agencies, federal agencies encourage consumers to try to resolve the problem first with the company whose products, services or billing are at issue. However, if that does not succeed, they may file either a informal and formal complaint at the FCC. The informal complaint process requires no complicated legal procedures, has no filing charge, and does not require the complaining party to appear before the FCC. Consumers not satisfied with the response to an informal complaint can file a formal complaint. The current fee for filing a formal complaint is $200, but it is subject to change. Formal complaint proceedings are similar to court proceedings. The Federal Trade Commission investigates and initiates civil action in courts against any company that repeatedly causes unauthorized charges on consumers' telephone bills, conducts telemarketing scams, misleads consumers about broadband/telecommunications products, etc. Consumers can file complaints on-line with the FTC. It is important to note that the FTC does not resolve individual consumer complaints. The FTC collects and uses consumer complaints to detect patterns of wrong-doing, and lead to investigations and prosecutions. To facilitate partnerships with consumers and make recommendations regarding consumer issues, the FCC established the Consumer Advisory Committee. The Commission appoints thirty-one (31) members to the Committee. Of this number, two (2) represent the interests of academia; eleven (11) represent the interests of consumers; six (6) represent the interests of the disability community; two (2) represent the interests of government/regulators; seven (7) represent the interests of industry, and three (3) represent the interests of tribal/low income/minority communities.

6 State Model Comparison
Wisconsin takes complaints regarding Lifeline/USF issues and number portability problems Oklahoma & South Dakota accept wireline complaints, wireless ETC complaints New Hampshire & Missouri While continuing to take complaints, recent legislation limits the commission’s ability to mandate a resolution Wisconsin: Wisconsin deregulated its retail telecommunications service in 2011 much like Florida did. The Wisconsin PSC no longer takes consumer complaints, except for some aspects of Lifeline/Link-up equipment for individuals with special needs. The deregulation bill did not specify where complaints should go, but it left unchanged previous language directing unfair marketing practices to its Department of Agriculture, Trade, and Consumer Protection. The PSC’s Telecommunications Division is responsible for overseeing the wholesale and provider-to-provider portions of the telecommunications industry in Wisconsin. The Division does not regulate most retail offerings. The Wisconsin Commission can help resolve disputes in very limited aspects of local telephone service. The Wisconsin commission refers complaints regarding services not regulated by the commission to the Department of Agriculture, Trade and Consumer Protection. Oklahoma & South Dakota : These Commissions have limited regulatory oversight of telephone companies. Consumers can enter complaints through a generic complaint form. New Hampshire & Missouri: The Commissions do not regulate cable television, wireless/cellular, or internet service providers. They note that even though recent laws have reduced the way some telephone companies are regulated, they may still be able to provide assistance in resolving complaints with telephone service providers. Consumers can enter complaints through a generic complaint form.

7 State Model Comparison
Arkansas Maintains the authority to regulate the quality of service of all telecommunications providers but has limited authority to regulate rates, terms, and conditions of services Idaho The Commission's authority only extends to wireline telecommunication carriers, payphone providers, and limited authority over wireless carriers that have been granted ETC status California While taking all types of telecommunications complaints, it is limited on what it can do for long-distance telephone and wireless services, Internet rates and services, and as of September 28th, VoIP complaints. Arkansas : The Commission regulates telecommunications service providers that include incumbent local telephone carriers, competitive local telephone carriers, long distance companies, and private pay telephone companies. The Commission has authority to regulate the quality of service of all telecommunications providers but has limited authority to regulate rates, terms, and conditions of services. The Commission does not regulate: wireless companies that offer services such as paging, cellular or PCS services; cable and satellite companies that offer services such as television, music, or movie programming; information service companies that offer services such as voic , , or Internet; and, telecommunications relay service for handicapped persons or emergency 911 service. The commission does not have an online complaint form, but does provide the required information that must be included in a complaint, and also takes informal complaints by phone. Idaho: The Commission no longer has rate-setting authority over most telephone service providers, including Qwest. It does, however, regulate landline providers for service quality, billing, and customer relations. Consumers can enter complaints through a generic complaint form. California: The Commission’s telecommunications jurisdiction includes enforcing customer service standards for telephone services and regulating rates for basic phone service and rural carriers. The Commission also licensing wireline, wireless, two-way paging, cable telephony, and mobile radio providers serving residential and business customers. It addresses area code and telephone number conservation issues. While providing consumers with a generic complaint form, the Commission notes that it cannot help resolve issues with long-distance telephone, cellular phone rates, or Internet rates and services. The Governor recently signed into law a bill that prohibits the Commission from regulating VoIP except as required or delegated by federal law. The law limits the Commission’s ability to respond to VoIP complaints through an informal process.

8 Protection Mechanisms Per Telecom Service
Special consideration to new service/possible issues raised by bundled services Voice over Internet Protocol Cable, Broadband, and Voice Bundled Services As new innovative services have been introduced, some policy makers have concluded that a minimalist regulatory policy is necessary to support its growth and development. VoIP services represent an interesting example of such policies. The level of regulation and consumer protection over VoIP services was almost non-existent during its introduction into the market. As consumer acceptance and adoption has increased, the level of regulation applied at the federal level has increased some. VoIP providers have to comply with 911 requirements and contribute to the federal universal service fund. How complaints are addressed varies by state. Also, some of the largest telecom providers, such as AT&T, are beginning to lobby for the federal deregulation of the public switched network as they deploy their IP-based networks and replace their legacy copper lines. As this issue develops, it will place more pressure on how to protect consumers in this future world. Bundled services also raise an interesting issue. Some states only address the basic telecommunications service that is offered in a bundled service offering. Other state commissions only have jurisdiction when the basic service is offered on a standalone basis.

9 Case Study: Florida The Path To Deregulation
< FL PSC was a “one-stop-shop” for landline telephone complaints 2009 – service quality authority was reduced to basic service only 2011 – retail services deregulated Florida has been on a deregulatory path in telecommunications for a number of years. Prior to 2009, the PSC would help with any complaint related to a certificated landline telecommunications company. The consumer had a choice of a warm transfer and being shifted to a company representative or following the FPSC complaint process. If it was a bundled customer with a landline telephone complaint, the PSC would handle the complaint. The PSC was essentially a “one-stop-shop” for telephone-related questions and complaints. Also, cable providers were regulated at the local level, so consumers had a local agency to voice their concerns in that area. During the national statewide cable franchising trend, from , cable jurisdiction transferred from the local level to the state level, with our Department of Agriculture and Consumer Services beginning to handle cable complaints. In 2009, FPSC service quality authority was reduced to basic service, only representing less than 5% of the landline customers.  If a customer had any service other than a basic line, the FPSC could not handle the service quality complaint.   The FPSC could still handle all billing complaints for landline telephone companies whether basic or or nonbasic with a bundle.  Again, the customer could warm transfer to the company or follow the FPSC complaint process. The cable companies at this time completed their transition to state and federal regulation. Last year, retail services were deregulated and removed from the PSC’s jurisdiction.

10 Case Study: Florida The Florida Regulatory Reform Act
Eliminated or severely curtailed oversight of retail telecommunications, including: eliminating all oversight of interexchange telecommunications companies, limiting the Commission’s designation of eligible telecommunications carriers to traditional wireline providers, and removing remaining jurisdiction over consumer complaints, including slamming. The Regulatory Reform Act of 2011 did several things. Among them, it eliminated all oversight of interexchange telecommunications companies and it eliminated our ability to designate wireless ETCs. It also removed our authority over most retail customer functions.  On the retail side, the complaints the FPSC can take for telephone are related to Lifeline, pay phones, and relay service.  All other telephone complaints are directed to DACS or the FCC for slamming. Another thing the Reform Act did was to remove statutory authority that the PSC promote consumer protection by expanding its programs to inform customers of their rights and require companies to provide information to customers. This limits what we can do to promote customer awareness of the marketplace. We still do a pretty good job on our website and on the phone when people call us, but we are limited as to any outreach we can do.

11 Case Study: Florida The Florida Regulatory Reform Act (cont.)
The Commission still has jurisdiction to address wholesale slamming Retail customer questions and complaints are now handled by Department of Agriculture and Consumer Services Complaints regarding wireless and VoIP services are directed to DACS (Review Slide)

12 Case Study: Florida Florida PSC website:
“The Public Service Commission no longer has the authority to accept as many of the consumer telecommunications complaints as we have in the past. The PSC may still accept consumer complaints dealing with the Lifeline Program, Relay Service, and Pay Phone Service. Other consumer telecommunications complaints (excluding Slamming) should be filed with the Department of Agriculture and Consumer Services. Complaints about Slamming should be filed with the Federal Communications Commission.” The Florida PSC explains on its website that it no longer accepts many consumer complaints. However, it also includes the addresses, phone numbers, and websites for both the Department of Agriculture and the FCC. We believe that consumers visiting our site with a telephone complaint should receive the information they need, in one place, to find out where they can go.

13 Case Study: Florida A Current Complaint –
Florida consumer signs up for cable + Internet (no phone service) 3rd party installer connects service on moving day Installer secretly activates VoIP telephone line and makes international calls Customer gets bill and contacts company After 3 days of contact, the company states it will open a fraud case After 3 months, complaint is not resolved and customer calls city government A Current Complaint – This is an actual complaint from a consumer in Florida that was apparently just trying to move in and get cable and Internet service. Summary of actions on recent cable/telecom complaint (edited to remove personal/company data) In June, I contacted the company to install internet and cable services in my new home.  Within a few days, they sent a technician, that I later found out was a third party contractor, to my home to install the service.  The technician came on "moving day".  He proceeded to install what I thought were the only two services I ordered--internet and cable.  Unbeknownst to me, and without my knowledge or permission, he also installed a phone modem.  He then sat in my driveway for about an hour after the installation was complete.  We thought he was testing the lines.  We now know that he was pinging the secret phone line he added, and he was making calls to Cuba.  From speaking to NUMEROUS company representatives NUMEROUS times, their records show that the calls times were on the same day as the installation and within the same or close to the same time frame that the technician coded that he was done with the job. A few days later (as I only had the service for three days) I got a bill for long distance phone calls and a letter from the company that there may be fraud on my account and that I had to contact them right away.  I called and found out that this technician installed a phone line and made calls.  I never ordered phone service, and I have not had a land line since 1999.  After three very frustrating days of back and forth calls where I would be put on hold and transferred around the globe for periods as long as four full hours, I cancelled my cable service and switched to another provider and physically drove to a company center – one hour away - to return my equipment and speak to a live person (while I was still on hold, for now, over 4 hours).  I gave the service center my installation paperwork (they told me they needed to keep it and that they didn't have a copy machine to make a copy for me).  I was assured by them and representatives at the call center that they would start a fraud investigation, that the account would be closed, and to not pay attention to the bills that would be auto-generated.  I had several calls over the next two weeks with various representatives from the fraud department who were supposed to be investigating this issue. In July, I received the same bill for calls, I called back and went through the whole process again.  They told me the same thing-- there was an ongoing fraud investigation, the account was closed, they were going to credit the charges back to the account, I would not be responsible for them, and to ignore the bills.  In September, I got a past due bill from the company.  I contacted the 24 hr. internet support center.  This time I was told that there was no record of any fraud investigation taking place, that I was responsible for the charges, that I was past due, and that I had been sent to collections. This was from an online support service representative.  I could not believe what I was hearing since I was NEVER provided with a collections notice as is required under the law.  So, I called the service center.  A representative informed me that instead of going to the fraud department, my complaint was referred to the research department in error, that the company got rid of the research department last month and they do not have any of their notes, that I am responsible for the charges, and that I have been sent to collections. I spoke to a manager and after much back and forth (over an hour), I was again told that they would open a fraud investigation, to ignore the bill, and that they would contact the collections agency and dispute the collections. At this point, I have lost total faith and confidence that the company is going to fix this problem.  I do not think I should be responsible for paying for calls that I never made, on a service I never ordered for fraud committed by their contractor, of which they knew since they sent me the fraud letter and for which their records support. I also think that it is completely inappropriate for the company to promise me that an investigation was being performed, to advise me to ignore the bills, and then to send me to collections on the bills without following the proper procedure.  Ultimately, I would like confirmation that the account is closed, I would like the account brought to a zero balance and to be credited for all fraudulent charges, I would like them to dispute any collections proceedings on my behalf to ensure my credit isn't ruined by their mistake, and I would like to stop being billed.  Any assistance would be greatly appreciated.  I have the last bill if you need it. (end) This consumer was appealing to a government official because they did not know where else they should go. This complaint brings up several issues that might affect several different agencies: fraudulent phone service and calls, inadequate company screening of vendors, inadequate customer service, inaccurate billing, and possibly others. So, where can this Florida customer go to complain?

14 Case Study: Florida This Consumer’s Options – DACS Attorney General
FCC Any cable issues go to DACS automatically under state law (Ch ).   DACS must expeditiously assist in the resolution of the complaint. In this case, it is the phone service that is at issue.  The customer did not request the service and was billed for calls the customer did not make.  The calls were not removed from the bill as promised.  In Florida, the PSC cannot handle telephone billing issues and, in general, does not regulate VOIP.  The billing issue would go to DACS since there is no other Florida agency with authority, but the allegation of fraud would be sent to the Attorney General.  Both DACS and the Attorney General could attempt to resolve the case.

15 Case Study: Florida Florida Telecommunications Complaints
For Calendar Year 2011 and Fiscal Year (as of May) Calendar Year 2011 Fiscal Year Federal Communications Commission 4,537 Not Available Department of Agriculture & Consumer Services 2,809 2,789 Attorney General 1,143 1,029 Florida Public Service Commission 3,665* 3,446** The numbers on this table represent the number of complaints filed at each agency in Florida. It includes both wireline and wireless complaints. The legislation shifting where consumers file complaints in Florida was effective July 1, 2011. While there is some overlap in the dates, we see that the reduction in the number of complaints filed at the Commission (-6%) did not result in any increase in the number of complaints handled by the Department of Agriculture and Consumer Services or the Attorney General. Since the Florida Commission does not regulate wireless services, and retail wireline service went away July 1, 2011, the vast majority of the complaints we received were referred to other agencies – mostly DACS and the FCC. *For calendar year 2011, the FPSC referred 2,247 of these complaints to other agencies. **By comparison, for fiscal year , 3,284 of these were referred to other agencies.

16 Case Study: Florida This chart shows the number of logged complaints the Florida Commission received relating to landline telecommunications services. Prior to 2009, the commission received an average of about 330 complaints per month on telecommunications services. The first vertical red line is the date that the 2009 legislation limiting our service quality authority to basic service went into effect. The second red line is when the 2011 deregulation bill went into effect.

17 Complaints filed at the FCC
Quarterly Report of Informal Complaints 1st Quarter 2012 2nd Quarter 2012 Bundled and VoIP Service-related Complaints 2,003 1,847 Wireless Telecommunications Complaints 45,396 45,254 Wireline Telecommunications Complaints 36,032 40,150 During the second quarter of 2012, the overall number of informal complaints in the top five reported categories decreased by nearly 2% from those received and processed during the first quarter of 2012. Bundled and VoIP Service-related complaints decreased by more than 7% this quarter, from 2,003 to 1,847. Wireless Telecommunications complaints decreased by more than 6%, from 45,396 to 42,254, with Telephone Consumer Protection Act related complaints comprising the bulk of the complaints in this category. Wireline Telecommunications complaints increased by more than 11%, from 36,032 to 40,150, with Telephone Consumer Protection Act related issues, Do Not Call List and Unsolicited Faxes constituting the top categories of such complaints. So, basically, unwanted calls constituted over 94% of the Wireline complaints in the reported subcategories during the second quarter. [NOTE: The Telephone Consumer Protection Act restricts telephone solicitations (i.e., telemarketing) and the use of automated telephone equipment.]

18 Recommendations As policy makers rely on market forces to enforce minimal service quality standards, an efficient federal/state partnership is necessary. Continued market monitoring Education Improved consumer access to complaint systems Access to aggregated state data by state commissions and policy makers Support technology-neutral approaches to regulatory and deregulatory action. As policy makers rely on market forces to enforce minimal service quality standards, an efficient federal/state partnership is necessary. Continued monitoring - The ability of the market to punish and reward good service quality and customer satisfaction is only possible in a competitive environment. As a result, policy makers must continue to evaluate the competitive market conditions. Education - Outreach needs to be addressed so that consumers know where to go. Improved consumer access to complaint systems – no matter what level it is addressed, consumers need easy access to agencies that can help resolve their complaints. Access to aggregated state data by state commissions and policy makers - Policy makers and commissions need access to state complaint analysis at the FCC in order to help evaluate state policies. (e.g., if the number of complaints the FCC receives from Florida in a particular category of complaints increases 150% it might be useful to policymakers in Florida). Support technology-neutral approaches to regulatory and deregulatory action - Policies that do not pick the winners or losers foster competition and allow the market to self police service quality issues

19 Recommendations Cable Service –
Some service standards should be amended Office locations Late and missed appointments Incorporate broadband into cable standards The FCC’s customer service standards for cable contained in Section , were adopted in 1993, and not significantly amended since then.   The FCC’s standards generally set a minimum, and states and local franchising authorities were able to adopt more stringent standards.  With state-wide franchising, many states have referenced the FCC standards as the standards that govern.  Also, many private contracts with MDUs for cable service reference the FCC standards as the governing standards.  There are significant items that need to be amended.  Specifically, we should consider: The requirement for a conveniently located office open during normal business hours should be made more specific.  This is a source of many complaints from consumers who have to drive hours and wait in long lines to speak to a cable rep. in person. There should be stronger language about late and missed appointments (the industry generally provides that customers will receive credits or such installations will be free if the technician is late or does not show for the appointment). Also, if there is some way to incorporate the same standards for broadband service, since customers obtain both cable and broadband from the same company and will schedule appointments and need to contact the company for both services. 

20 Thank You! With special thanks to: Gary Resnick Brandon Stephens
Michael Vaughn Florida Public Service Commission’s Office of Telecommunications

Download ppt "Federal Communications Commission Intergovernmental Advisory Committee"

Similar presentations

Ads by Google