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Proposals for laws to protect against hotel & COCOT ripoffs




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                            In the Matter of:
        Policies and Rules Concerning Operator Service Providers

                          CC Docket No. 90-313

                                 RM-6767

Adopted:  December 13, 1990;  Released:  December 21, 1990

                 FURTHER NOTICE OF PROPOSED RULE MAKING

    By the Commission:

 I. INTRODUCTION

  1. On October 17, 1990, the President signed into law the Telephone 
Operator Consumer Services Improvement Act of 1990. ^1 The purpose of 
the Act is "to protect consumers who make interstate operator services 
calls from pay telephones, hotels, and other public locations against 
unreasonably high rates and anticompetitive practices." ^2 Under the 
Act, this Commission must, inter alia, conduct a "general" rule making 
proceeding to prescribe regulations that will implement statutory 
provisions and establish certain standards and policies, and a 
monitoring/reporting proceeding that will ultimately result in three 
reports to Congress. ^3 We therefore adopt this Further Notice of 
Proposed Rule Making in order to:  (1) "initiate" the general rule 
making and monitoring/reporting proceedings required by the Operator 
Services Act; ^4 (2) propose the required rules;  (3) invite any 
additional comments that are necessary beyond those submitted in 
response to our initial Notice of Proposed Rule Making in CC Docket No. 
90-313; ^5 (4) solicit such further information as is necessary to 
ensure that the objectives of the Act are satisfied; ^6 and (5) declare 
that, under the Act, the access and payphone compensation issues must be 
considered in a separate proceeding. ^7 The rules proposed herein shall 
supplant those proposed in the initial NPRM.

II. BACKGROUND

  2. We noted in our initial NPRM that, inter alia, the divestiture of 
AT & T had led to the entry of competitors into the interstate operator 
services industry that had previously been dominated by the Bell System. 
^8 The newer operator service providers (OSPs) are sometimes known as 
alternative operator service (AOS) companies.  AOS companies generally 
lease lines from telephone carriers and combine these transport elements 
with their own operator services.  Then, like the more traditional OSPs, 
they enter into contracts to provide operator services to "call 
aggregators," entities that make telephones available to the public or 
transient users of their premises. ^9 A caller using an aggregator's 
telephone will automatically be connected to this "presubscribed" OSP 
unless an access code ^10 is dialed.

  3. This expansion of the operator services industry led not only to a 
degree of competition among OSPs, but also to "widespread consumer 
dissatisfaction over the rates and practices of many operator service 
providers." ^11 One sign of this dissatisfaction was a complaint filed 
by two consumer advocacy groups against five AOS companies. ^12 In the 
TRAC Order, the Common Carrier Bureau (Bureau) granted the complaint in 
part and ordered the defendant companies to, inter alia:  (1) provide 
written information about their services to be posted on or near 
presubscribed telephones;  (2) identify themselves audibly at the 
beginning of calls, a process known as "call branding";  (3) discontinue 
the blocking of access to other OSPs;  and (4) cease "call splashing" to 
the extent technically possible. ^13]
  4. Shortly after the TRAC Order was released, the National Association 
of Regulatory Utility Commissioners ("NARUC") filed a petition for rule 
making, asking us to address a number of issues regarding the practices, 
policies, and appropriate regulatory treatment of OSPs. ^14 In May 1989, 
the Bureau issued a Public Notice inviting comments on the NARUC 
Petition, and a number of responses were filed.
  5. On June 14, 1990, this Commission adopted the initial NPRM in CC 
Docket No. 90-313.  In the NPRM, we granted the NARUC Petition to the 
extent that it sought a broader Commission inquiry into the practices of 
the operator services industry. ^15 More significantly, we proposed 
specific rules aimed at solving problems in the industry that had 
persisted despite previous Commission action. ^16 Besides inviting 
comments on the rules themselves, we asked interested parties to express 
their views on a number of related issues that were not the subject of 
proposed rules. ^17 Parties filed their initial comments by September 7, 
1990.
  6. Concurrently with the Commission's examination of operator service 
issues, Congress was considering specific legislative proposals that 
were intended to curb certain practices in the operator services 
industry and to preserve a caller's right to just and reasonable rates.  
During the first week of October 1990, Congress passed the Operator 
Services Act, which the President signed into law shortly thereafter.  
Following passage of the Act, the Bureau issued an order that extended 
the date for filing reply comments in CC Docket No. 90- 313 and that 
asked parties who intended to file reply comments to discuss the effects 
of the Act on that proceeding. ^18 In addition, the Bureau released a 
public notice dealing with the Act's informational tariff filing 
requirements. ^19 The notice described who must file such tariffs and 
the information that the tariffs must contain. ^20 It also established 
filing procedures and set out the format with which the tariffs must 
conform.

III. DISCUSSION

  7. After considering both the text of the Operator Services Act and 
the reply comments filed in CC Docket No. 90-313, ^21 we conclude that 
it is necessary to adopt a Further NPRM in this docket.  We think such 
action is required for several reasons.

 A. The General Rule Making Proceeding

  8. First, Section 226(d) ^22 of the Act directs the Commission to 
"initiate" a general rule making proceeding to prescribe the regulations 
described by the Act. ^23 This Further NPRM will serve to formally 
"initiate" the general proceeding.  In addition, our original proposed 
rules are not, in all respects, identical to the requirements of the 
Act.  Hence, in order to ensure that the Act is satisfied by this rule 
making proceeding, we are adopting this Further NPRM to propose new, 
comprehensive rules that are modeled directly on the text of the Act. 
^24 These new rules will supersede those proposed in the initial NPRM.  
For the most part, however, the rationale for each new proposed rule 
will be similar to the rationale set out for the analogous rule in the 
initial NPRM, and we will not repeat that discussion here.
  9. We therefore seek comment on the new proposed rules contained in 
Appendix B and ask that interested parties pay special attention in 
their comments to provisions that differ significantly from the rules 
proposed in the initial NPRM.  We wish to emphasize, however, that 
parties need not repeat the views contained in their previously 
submitted comments.  We intend to give full consideration to all 
relevant comments, including those filed during the initial stages of 
this proceeding.
  10. Several of the new proposed rules depart somewhat from the 
treatment given the same topics in the initial NPRM.  For example, the 
new rules would require double branding ^25 and the posting of the 
address of the Bureau's Enforcement Division on or near aggregator 
telephones, ^26 while the earlier proposed rules required only single 
branding and did not require the latter posting.  The new rules also 
prohibit OSPs from charging for most unanswered calls ^27 and 
aggregators from placing a higher surcharge on access code calls than on 
calls using the presubscribed OSP, ^28 topics on which we did not 
originally propose rules.  Further, the new rules would only prohibit, 
as the Act does, the blocking of 800 and 950 access, ^29 while the 
original proposed rules would have prohibited 10XXX blocking as well. 
^30 At the same time, the new rules, like the Act, require only new 
aggregator equipment to have the 10XXX access capability; ^31 we 
originally proposed that both new and existing equipment be required to 
have this capability.  We have also proposed a definition section, ^32 
which we did not do in the initial NPRM, and a somewhat different 
splashing rule ^33 based on the Act.
  11. In addition, the Operator Services Act specifically requires us to 
adopt regulations that establish:  (1) minimum standards for OSPs to use 
in the routing and handling of emergency calls; ^34 and (2) a policy for 
requiring OSPs to make public information about recent changes in 
operator services and choices available to consumers in that market. ^35 
Neither of these subjects was discussed at length in the initial NPRM.
  12. We noted in the NPRM that NARUC had recommended in its rule making 
petition that we consider adopting nationwide standards for the handling 
of emergency calls by OSPs. ^36 The purpose of such standards would be 
to ensure that emergency calls are efficiently routed to the appropriate 
local public safety organization.  In response to NARUC's 
recommendation, we simply requested comment on the topic rather than 
proposing a rule, explaining that we have traditionally deferred to the 
states in this area because of the local nature of such calls.  Given 
the requirements of the Operator Services Act, however, we now propose 
and seek comment on a specific rule, Section 64.706, that sets out a 
minimum standard for the routing and handling of emergency calls by 
OSPs.  While we have suggested in the proposed rule that only calls made 
via an "emergency" dialing sequence (e.g., "0," "911") be covered by the 
rule, we seek comment on whether it is possible for an OSP to receive 
emergency calls that are initiated in some other way.  We also 
tentatively conclude that when an OSP connects a call to the 
"appropriate emergency service of the call's originating location," the 
call must be routed not only to the proper type of service, such as a 
fire department, but also to the service that serves the caller's 
location.  For example, it would not be appropriate to route a call to 
an urban fire department when a caller is actually in a suburban locale.
  13. We also seek comment on our proposed rule concerning public 
dissemination of information by OSPs, Section 64.707.  As a matter of 
policy, we find that it is essential for participants in the operator 
services industry to communicate with the interested public.  Regular 
publication of the described materials will help to ensure that 
"consumers have the opportunity to make informed choices" ^37 when 
placing interstate calls.  Under this proposed rule, we would expect an 
OSP to make available, upon request, written information that describes 
not only its own services and recent changes in those services, but also 
the services and trends in the industry as a whole.  In addition, the 
information must include descriptions of any recent changes in the 
choices available to consumers in the operator services market and the 
methods by which they may exercise those choices.  Unlike the reporting 
they would provide as to their own services, however, we do not intend 
that OSPs be required to publish lengthy details about their 
competitors' rates and services.  Instead, we contemplate the 
publication of generic descriptions of any recent innovations in 
services and consumer choices.  We specifically seek comment on how 
detailed this information must be to satisfy Section 226(d)(4)(B) of the 
Act, which is the statutory basis of our proposed rule.

 B. CC Docket No. 90-313--Phase II

  14. Next, this Further NPRM will serve to initiate the proceeding 
required by Section 226(h)(3) of the Act, which directs the Commission 
to "initiate" a proceeding to determine whether the regulatory 
objectives specified in Section (d)(1) are being achieved.  Those 
provisions of the Act seek, first, to ensure that consumers are 
protected from unfair and deceptive practices relating to their use of 
operator services to place interstate calls and, second, to ensure that 
consumers have the opportunity to make informed choices in making such 
calls.  Toward that end, the Act directs the Commission to (1) monitor 
operator service rates (Section 226(h)(3)(A)(i));  (2) determine the 
extent to which offerings made by providers of operator services improve 
operator services in various respects (Section 226(h)(3)(A)(ii));  (3) 
report on operator service rates, incidence of complaints, and service 
offerings (both in the aggregate and with respect to particular OSPs) 
(Section 226(h)(3)(A)(iii));  (4) consider the effect of commissions and 
various other costs of doing business on the rates operator service 
providers charge consumers (Section 226(h)(3)(A)(iv)); and (5) monitor 
compliance with the Act, including the periodic placement of telephone 
calls from aggregator locations (Section 226(h)(3)(A)(v)).  Section 
226(h)(3)(B) directs the Commission to report on the progress of this 
proceeding 5, 11, and 23 months after its initiation.
  15. The Operator Services Act does not direct that the proceeding 
required by Section 226(h)(3) be separate from other proceedings that 
Congress has instructed us to initiate.  Indeed, because the purpose of 
the proceeding required by Section 226(h)(3) is to determine whether the 
regulatory objectives specified in Section 226(d) are being achieved, we 
conclude that administrative efficiency dictates that we conduct the two 
proceedings jointly in the same docket, with issues raised by Section 
226(h)(3) being designated "Phase II." Therefore, we seek comment in 
this docket on the proposed reporting requirements outlined below and on 
other issues raised by Section 226(h)(3). ^38
  16. In order to monitor and report on certain aspects of the operator 
services industry as required by Section 226(h)(3)(A) and (B), we 
conclude that we will need information beyond that provided by the 
informational tariffs that OSPs will file under Section 226(h)(1).  
Hence, we now propose that OSPs be required to file additional 
information with the Common Carrier Bureau.  This information, which is 
described below, would have to be filed not later than 6, 9, 15, and 21 
months after release of this Further NPRM.
  17. First, pursuant to Section 226(h)(3)(A)(i) and (iii), we propose 
that OSPs subject to the terms of the Act be required to submit 
compilations of their rates at each of the intervals noted above.  We 
tentatively conclude that each report should state the percentage change 
in each rate element since January 1, 1991, or since the date of the 
last report, whichever is more recent. ^39
  18. Next, pursuant to Section 226(h)(3)(A)(iii), we propose to require 
each OSP to file, at the intervals noted above, a statement of the 
number of complaints each OSP has received each month since January 1, 
1991 or since the date of its last report, whichever is more recent.  
This statement should include both complaints received directly from 
consumers and complaints filed with this Commission or other 
governmental bodies and should indicate the incidence of complaints, 
i.e., the number of complaints received divided by the number of calls 
attempted by consumers during each month covered by the report.  We 
recognize that in many instances it may not be clear whether consumers 
are complaining about interstate or intrastate calls.  Accordingly, we 
propose that the reports cover all complaints.  The reports should, when 
possible, indicate the actual numbers of interstate and intrastate 
complaints and the percentages of total complaints that those numbers 
represent.  If and only if such a distinction cannot be made, the 
reports should include the total number of complaints and an estimate of 
the percentage of complaints that relate to interstate calling.  The 
reports should also classify and quantify the complaints using the 
following categories:  (1) rate charged;  (2) blocking of access to 
carriers other than the presubscribed one;  (3) call splashing; (4) call 
quality;  (5) failure to comply with other statutory requirements or FCC 
rules;  and (6) other complaints.  We seek comment on these categories.
  19. Section 226(h)(3)(A)(iv) requires the Commission to consider the 
effect that commissions, surcharges, billing and validation costs, and 
other costs of doing business will have on the overall rates charged to 
consumers.  Therefore, we also propose to require OSPs to file certain 
cost data in order to provide a record of the effect of various costs on 
the overall rates that consumers pay for operator services, as required 
by this section.  Specifically, we propose to require OSPs to state 
their total capital investment, total expenses, and total revenue for 
the period from January 1, 1991 to the date of each report. Reports of 
expenses should separately state the amounts of commissions and 
surcharges that OSPs pay as well as their costs for billing and 
validation, total salaries and other benefits to officers and employees, 
and all other expenses.
  20. In addition to comments on the proposed reporting requirements 
outlined above, we solicit comment on the matters raised by Section 
226(h)(3)(A)(ii) and Section 226(h)(3)(A)(v).  Specifically, commenters 
should address the extent to which service offerings made by operator 
service providers are improvements, in terms of service quality, price, 
innovation, and other factors, over those available before the entry of 
new providers of operator services into the market.  Commenters are also 
invited to discuss how we can best monitor compliance with the 
provisions of Section 226 of the Act, as required by Section 
226(h)(3)(A)(v), for purposes of submitting the reports to Congress 
required by Section 226(h)(3)(B).  Commenters should specifically 
discuss methods by which the Commission may comply with the requirement 
of Section 226(h)(3)(A)(v) of "periodic placement of calls from 
aggregator locations." ^40

 C. Access and Compensation Issues

  21. In our initial NPRM, we proposed a rule prohibiting the blocking 
of 10XXX access, and most parties filed detailed comments on that issue.  
Some parties also commented on the need for us to prescribe compensation 
for owners of competitive public pay telephones for calls not routed 
through the presubscribed OSP.  While a record on these issues exists in 
the present proceeding, the Operator Services Act clearly directs us to 
conduct a "[s]eparate" rule making on access and compensation issues. 
^41 We therefore conclude that the access and payphone compensation 
issues should not be addressed in this proceeding and that the record 
established to date on these issues will be made a part of the later 
separate proceeding.

IV. PAPERWORK REDUCTION ACT

  22. The proposal contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1980 and found to impose a new or 
modified information collection requirement on the public.  
Implementation of any new or modified requirement will be subject to 
approval by the Office of Management and Budget as prescribed by the 
Act.

V. FURTHER INITIAL REGULATORY FLEXIBILITY ANALYSIS

  23. Reason for action.  The Commission is issuing this Further Notice 
of Proposed Rule Making to provide an opportunity for public comment and 
to provide a record for a Commission decision on the issues stated 
above.
  24. Objectives.  The objective of this Further Notice of Proposed Rule 
Making is to initiate a proceeding to prescribe regulations that protect 
consumers from unfair and deceptive practices related to their use of 
operator services to place interstate telephone calls and that ensure 
that consumers have the opportunity to make informed choices in making 
such calls.
  25. Legal basis.  Sections 1, 4(i), 4(j), 201-205, 218, 226, and 
303(r) of the Communications Act of 1934, as amended, 47 U.S.C. ss 151, 
154(i), 154(j), 201- 205, 218, 226, 303(r).
  26. Description, potential impact, and number of small entities 
affected.  The proposed rules will require that entities in the operator 
services industry provide information that is necessary for consumers to 
make knowledgeable choices among services.  The rules will also help to 
eliminate certain practices and charges that reduce consumer choice and 
competitiveness within the industry.  Small entities may feel some 
economic impact due to the proposed information posting and reporting 
requirements.
  27. Reporting, recordkeeping, and other compliance requirements.  The 
proposed rules require reporting in the form of the disclosure by 
operator service providers and call aggregators to their customers of 
certain information regarding their identities, their services, and the 
options customers have in using those services.  In addition, the 
Further NPRM seeks comment on whether the Commission should impose 
certain reporting requirements to provide information for use in the 
proceeding necessitated by Section 226(h)(3) of the Operator Services 
Act, 47 U.S.C. s 226(h)(3).
  28. Federal rules which overlap, duplicate, or conflict with the 
Commission's proposal.  None.
  29. Any significant alternatives minimizing impact on small entities 
and consistent with stated objectives.  We shall consider any 
alternatives suggested in comments that are consistent with the 
requirements of the Operator Services Act.
  30. Comments are solicited.  We request written comments on this 
Further Initial Regulatory Flexibility Analysis.  These comments must be 
filed in accordance with the same filing deadlines set for comments on 
the other issues in this Further Notice of Proposed Rule Making, but 
they must have a separate and distinct heading designating them as 
responses to this Regulatory Flexibility Analysis.  The Secretary shall 
send a copy of the Further Notice to the Chief Counsel for Advocacy of 
the Small Business Administration in accordance with Section 603(a) of 
the Regulatory Flexibility Act.  See 5 U.S.C. s 601, et seq.

VI. EX PARTE REQUIREMENTS

  31. For purposes of this non-restricted notice and comment rule making 
proceeding, members of the public are advised that ex parte 
presentations are permitted except during the Sunshine Agenda period.  
See generally Section 1.1206(a) of the Commission's Rules, 47 C.F.R. s 
1.1206(a).  The Sunshine Agenda period is the period of time that 
commences with the release of a public notice that a matter has been 
placed on the Sunshine Agenda and terminates when the Commission (1) 
releases the text of a decision or order in the matter;  (2) issues a 
public notice stating that the matter has been deleted from the Sunshine 
Agenda;  or (3) issues a public notice stating that the matter has been 
returned to the staff for further consideration, whichever occurs first. 
Section 1.1202(f) of the Commission's Rules, 47 C.F.R. s 1.1202(f).  
During the Sunshine Agenda period, no presentations, ex parte or 
otherwise, are permitted unless specifically requested by the Commission 
or staff for the clarification or adduction of evidence or the 
resolution of issues in the proceeding. Section 1.1203 of the 
Commission's Rules, 47 C.F.R. s 1.1203.
  32. In general, an ex parte presentation is any presentation directed 
to the
 merits or outcome of the proceeding made to decision-making personnel 
that (1), if written, is not served on the parties to the proceeding, or 
(2), if oral, is made without advance notice to the parties to the 
proceeding and without opportunity for them to be present.  Section 
1.1202(b) of the Commission's Rules, 47 C.F.R. s 1.1202(b).  Any person 
who makes or submits a written ex parte presentation shall provide on 
the same day it is submitted two copies of same under separate cover to 
the Commission's Secretary for inclusion in the public record.  The 
presentation (as well as any transmittal letter) must clearly indicate 
on its face the docket number of the particular proceeding(s) to which 
it relates and the fact that two copies of it have been submitted to the 
Secretary, and must be labeled or captioned as an ex parte presentation.
  33. Any person who in making an oral ex parte presentation presents 
data or arguments not already reflected in that person's written 
comments, memoranda, or other previous filings in that proceeding shall 
provide on the day of the oral presentation an original and one copy of 
a written memorandum to the Secretary, with a copy to the Commissioner 
or staff member involved, that summarizes the data and arguments.  The 
memorandum, as well as any transmittal letter, must clearly indicate on 
its face the docket number of the particular proceeding and the fact 
that an original and one copy of it have been submitted to the 
Secretary, and must be labeled or captioned as an ex parte presentation.  
Section 1.1206 of the Commission's Rules, 47 C.F.R. s 1.1206.
  34. All relevant and timely comments and reply comments will be 
considered by this Commission.  In reaching our decision, this 
Commission may take into account information and ideas not contained in 
the comments, provided that such information or a writing containing the 
nature and source of such information is placed in the public file, and 
provided that the fact of this Commission's reliance on such information 
is noted in the Order.

VII. CONCLUSION AND ORDERING CLAUSES

  35. In summary, the rules proposed in this Further NPRM are intended, 
as required by the Operator Services Act, to protect consumers from 
unfair and deceptive practices related to their use of operator services 
to place interstate calls, and to ensure that consumers have the 
opportunity to make informed choices in placing such calls.  As we noted 
in our initial NPRM, we expect the proposed rules to free consumers from 
charges they did not agree to and from practices that prevent them from 
using the operator service provider they prefer.  These rules will also 
help foster a marketplace environment in which operator service 
providers compete based on the merits of their services, rather than on 
the payments they provide to aggregators who deliver to them a captive 
clientele.  In submitting comments on these proposed rules, interested 
parties should note that we are particularly interested in evidence 
regarding the technical and operational complexities of implementing the 
proposed rules. We are also interested in the economic impact of 
implementation in terms of costs to or burdens on consumers, carriers, 
and call aggregators.  In Phase II of this docket, we seek separate 
comment on our proposed reporting requirements and on other issues 
raised by Section 226(h)(3) of the Operator Services Act.
  36. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 
201-205, 218, 226, and 303(r) of the Communications Act of 1934, as 
amended, 47 U.S.C. ss 151, 154(i), 154(j), 201-205, 218, 226, 303(r), 
that a FURTHER NOTICE OF PROPOSED RULE MAKING IS ISSUED, proposing the 
amendment of 47 C.F.R. Parts 64 and 68 as set forth in Appendix B.
  37. IT IS FURTHER ORDERED, pursuant to Sections 1.415 and 1.419 of the 
Commission's Rules, 47 C.F.R. ss 1.415, 1.419, that all interested 
parties may file comments on the matters discussed in this Further NPRM 
and on the proposed rules contained in Appendix B by January 22, 1991, 
and reply comments by February 6, 1991.  Comments on issues designated 
for CC Docket No. 90-313-- Phase II are also due on these dates.  Phase 
II comments must be filed separately from comments on other issues in 
this docket and must include the designation "CC Docket No. 90-313--
Phase II" in the caption of the comments. All relevant and timely 
comments will be considered by the Commission before final action is 
taken in this proceeding.  To file formally in this proceeding, 
participants must file an original and four copies of all comments, 
reply comments, and supporting comments.  If participants wish each 
Commissioner to have a personal copy of their comments, an original plus 
nine copies must be filed.  Comments and reply comments should be sent 
to the Office of the Secretary, Federal Communications Commission, 
Washington, D.C. 20554.  Comments and reply comments will be available 
for public inspection during regular business hours in the Dockets 
Reference Room (Room 239) of the Federal Communications Commission, 1919 
M Street, N.W., Washington, D.C. 20554.
  38. IT IS FURTHER ORDERED that the Chief of the Common Carrier Bureau 
is delegated authority to require the submission of additional 
information, make further inquiries, and modify the dates and procedures 
if necessary to provide for a fuller record and a more efficient 
proceeding.
  39. IT IS FURTHER ORDERED that the Secretary shall cause a copy of 
this Further NPRM, including the Further Initial Regulatory Flexibility 
Analysis, to be sent to the Chief Counsel for Advocacy of the Small 
Business Administration in accordance with Section 603(a) of the 
Regulatory Flexibility Act, 5 U.S.C. s 603(a) (1981).  The Secretary 
shall also cause a summary of this Further NPRM to appear in the Federal 
Register.
 FEDERAL COMMUNICATIONS COMMISSION
 Donna R. Searcy
 Secretary

   1 Pub.L. No. 101-435, 104 Stat. 986 (1990) (to be codified at 47 
U.S.C. s 226) ("Operator Services Act").  The text of the Act is 
attached as Appendix A.

   2 S.Rep. No. 101-439, 101st Cong., 2d Sess. 1 (1990);  see also 
H.R.Rep. No. 101-213, 101st Cong., 1st Sess. 2 (1989) ("The purpose of 
[the Act is to protect telephone consumers against unfair prices and 
practices of some operator service providers (OSPs), yet allow the 
legitimate companies in the industry the opportunity to compete in the 
market.").

   3 47 U.S.C. s 226(d), (h)(3).

   4 Id.  s 226(d)(2), (h)(3)(A).

   5 Policies and Rules Concerning Operator Service Providers, Notice of 
Proposed Rule Making, 5 FCCRcd 4630 (1990) (hereinafter NPRM).

   6 See 47 U.S.C. s 226(h)(3)(A).

   7 See id. s 226(e).

   8 NPRM, 5 FCCRcd at 4630.  A full discussion of the development of 
the operator services industry and the proceedings related to operator 
service issues is contained in the NPRM.  See id. at 4630-31.

   9 See 47 U.S.C. s 226(a)(2).

   10 An access code is a sequence of numbers that, when dialed, 
connects the caller to the OSP associated with that sequence.  See id s 
226(a)(1).

   11 NPRM, 5 FCC Rcd at 4630.

   12 Telecommunications Research & Action Center v. Central Corp., 4 
FCCRcd 2157 (Com.Car.Bur.1989) (hereinafter TRAC Order), application for 
review pending.

   13 Id. at 2159;  see also id. at 2160 nn. 5-6 (definitions of "call 
blocking" and "call splashing").

   14 See Petition of the National Association of Regulatory Utility 
Commissioners, RM-6767 (filed April 17, 1989) (hereinafter "NARUC 
Petition").

   15 NPRM, 5 Fcc Rcd at 4631 (also denying the petition in part).

   16 Id. at 4631-35, 4637-38.

   17 Id. at 4632-35 (these issues included double branding, charging 
for unanswered or uncompleted calls, and standards for the handling of 
emergency calls).

   18 Policies and Rules Concerning Operator Service Providers, CC 
Docket No. 90-313, Order, DA 90-1383 (released Oct. 5, 1990) (deadline 
for filing reply comments extended to Oct. 23, 1990).

   19 Public Notice, DA 90-1773 (released Dec. 4, 1990).

   20 See 47 U.S.C. ss 226(a)(7), (9), (h)(1)(A).

   21 Many commenting parties have expressed a preference for additional 
Commission action beyond our initial NPRM.  For example, some parties 
have suggested that a fuller record on certain issues must be developed.  
See, e.g., Reply Comments of BellSouth Tel. Cos. (further rule making 
necessary for establishment of emergency call standards).  Other parties 
have indicated that clarification is necessary for certain statutory 
requirements.  See, e.g., Reply Comments of The American Public 
Communications Council (branding, information posting).

   22 47 U.S.C. s 226(d).

   23 The Act requires that, by May 15, 1991, the Commission adopt the 
general regulations prescribed under Section 226(d)(2).  These 
regulations must take effect by June 29, 1991.  Id.

   24 Appendix B contains the text of the new proposed rules.

   25 Appendix B, s 64.703(c).  "Branding" occurs when an operator 
service provider audibly identifies itself to a caller before the call 
is connected. 47 U.S.C. s 226(b)(1)(A);  NPRM, 5 FCCRcd at 4630.  We 
have tentatively defined "double branding" as such an identification 
both at the beginning of a call and again just before the call is 
connected.  NPRM, 5 FCC Rcd at 4632.

   26 Appendix B, s 64.703(b)(3).

   27 Id. s 64.705(a)(1)-(2).

   28 Id. s 64.705(b).

   29 Id. s 64.704.

   30 The Act requires 800 and 950 blocking to be addressed in this 
proceeding and the 10XXX blocking issue to be addressed in a separate 
proceeding.  47 U.S.C. s 226(d)(3)(A), (e);  see also para. 21, infra.

   31 Appendix B, s 68.318(d).

   32 Id. s 64.708.

   33 Id. s 64.705(a)(3)-(4).

   34 47 U.S.C. s 226(d)(4)(A).

   35 Id. s 226(d)(4)(B).

   36 NPRM, 5 FCC Rcd at 4634-35.

   37 47 U.S.C. s 226(d)(1)(B).

   38 Comments on the matters contained in Section 226(h)(3) of the Act 
must be filed separately from those on other issues in this proceeding 
and must be designated, in the caption, "CC Docket No. 90-313--Phase 
II."

   39 Section 226(h)(3)(A)(iii) also directs us to report on service 
offerings. We expect to glean the information necessary for such reports 
from the tariffs that must be filed under Section 226(h)(1).  Comments 
on improvements in service, which we have solicited infra, may also 
contain helpful information in this regard.

   40 See NPRM, 5 FCC Rcd at 4639 n. 28.

   41 47 U.S.C. s 226(e);  see also id. s 226(d)(3)(A) (the regulations 
prescribed in the "general" rule making shall implement the provisions 
of the Act "other than the requirements established by the rule making 
under subsection (e) on access and compensation").  Section 226(e) 
states that the Commission must make two determinations in the separate 
rule making.  First, we must decide whether (a) aggregators must unblock 
10XXX access;  (b) OSPs must establish 800 or 950 access;  or (c) both 
(a) and (b).  Second, we must decide whether to prescribe compensation 
for owners of competitive public payphones for calls not routed through 
their presubscribed OSPs.  The Act requires the Commission to make 
determinations regarding the access and compensation issues within 9 
months of the statute's enactment, i.e., by July 17, 1991.

APPENDIX A

THE TELEPHONE OPERATOR CONSUMER SERVICES

IMPROVEMENT ACT OF 1990, as amended

Pub.L. No. 101-435, 104 Stat. 986 (1990)

 SECTION 1. SHORT TITLE.

  This Act may be cited as the "Telephone Operator Consumer Services 
Improvement Act of 1990".

 SEC. 2. FINDINGS.

  The Congress finds that--
   (1) the divestiture of AT & T and decisions allowing open entry for 
competitors in the telephone marketplace produced a variety of new 
services and many new providers of existing telephone services;
   (2) the growth of competition in the telecommunications market makes 
it essential to ensure that safeguards are in place to assure fairness 
for consumers and service providers alike;
   (3) a variety of providers of operator services now compete to win 
contracts to provide operator services to hotels, hospitals, airports, 
and other aggregators of telephone business from consumers;
   (4) the mere existence of a variety of service providers in the 
operator services marketplace is significant in making that market 
competitive only when consumers are able to make informed choices from 
among those service providers;
   (5) however, often consumers have no choices in selecting a provider 
of operator services, and often attempts by consumers to reach their 
preferred long distance carrier by using a telephone billing card, 
credit card, or prearranged access code number are blocked;
   (6) a number of State regulatory authorities have taken action to 
protect consumers using intrastate operator services;
   (7) from January 1988 through February 1990, the Federal 
Communications Commission received over 4,000 complaints from consumers 
about operator services;
   (8) those consumers have complained that they are denied access to 
the interexchange carrier of their choice, that they are deceived about 
the identity of the company providing operator services for their calls 
and the rates being charged, that they lack information on what they can 
do to complain about unfair treatment by an operator service provider, 
and that they are, accordingly, being deprived of the free choice 
essential to the operation of a competitive market;
   (9) the Commission has testified that its actions have been 
insufficient to correct the problems in the operator services industry 
to date;  and
   (10) a combination of industry self-regulation and government 
regulation is required to ensure that competitive operator services are 
provided in a fair and reasonable manner.

 SEC. 3. AMENDMENT.

  Title II of the Communications Act of 1934 is amended by inserting 
immediately after section 225 (47 U.S.C. s 225) the following new 
section:

 "SEC. 226. TELEPHONE OPERATOR SERVICES.

  "(a) Definitions.--As used in this section--
   "(1) The term 'access code' means a sequence of numbers that, when 
dialed, connect the caller to the provider of operator services 
associated with that sequence.
   "(2) The term 'aggregator' means any person that, in the ordinary 
course of its operations, makes telephones available to the public or to 
transient users of its premises, for interstate telephone calls using a 
provider of operator services.
   "(3) The term 'call splashing' means the transfer of a telephone call 
from one provider of operator services to another such provider in such 
a manner that the subsequent provider is unable or unwilling to 
determine the location of the origination of the call and, because of 
such inability or unwillingness, is prevented from billing the call on 
the basis of such location.
   "(4) The term 'consumer' means a person initiating any interstate 
telephone call using operator services.
   "(5) The term 'equal access' has the meaning given that term in 
Appendix B of the Modification of Final Judgment entered August 24, 
1982, in United States v. Western Electric, Civil Action No. 82-0192 
(United States District Court, District of Columbia), as amended by the 
Court in its orders issued prior to the enactment of this section.
   "(6) The term 'equal access code' means an access code that allows 
the public to obtain an equal access connection to the carrier 
associated with that code.
   "(7) The term 'operator services' means any interstate 
telecommunications service initiated from an aggregator location that 
includes, as a component, any automatic or live assistance to a consumer 
to arrange for billing or completion, or both, of an interstate 
telephone call through a method other than--
     "(A) automatic completion with billing to the telephone from which 
the call originated;  or

     "(B) completion through an access code used by the consumer, with 
billing to an account previously established with the carrier by the 
consumer.
   "(8) The term 'presubscribed provider of operator services' means the 
interstate provider of operator services to which the consumer is 
connected when the consumer places a call using a provider of operator 
services without dialing an access code.
   "(9) The term 'provider of operator services' means any common 
carrier that provides operator services or any other person determined 
by the Commission to be providing operator services.
  "(b) Requirements for Providers of Operator Services.--
   "(1) In general.--Beginning not later than 90 days after the date of 
enactment of this section, each provider of operator services shall, at 
a minimum--
     "(A) identify itself, audibly and distinctly, to the consumer at 
the beginning of each telephone call and before the consumer incurs any 
charge for the call;
     "(B) permit the consumer to terminate the telephone call at no 
charge before the call is connected;
     "(C) disclose immediately to the consumer, upon request and at no 
charge to the consumer--
       "(i) a quote of its rates or charges for the call;
       "(ii) the methods by which such rates or charges will be 
collected;  and
       "(iii) the methods by which complaints concerning such rates, 
charges, or collection practices will be resolved;
     "(D) ensure, by contract or tariff, that each aggregator for which 
such provider is the presubscribed provider of operator services is in 
compliance with the requirements of subsection (c) and, if applicable, 
subsection (e)(1);
     "(E) withhold payment (on a location-by-location basis) of any 
compensation, including commissions, to aggregators if such provider 
reasonably believes that the aggregator (i) is blocking access by means 
of "950" or "800" numbers to interstate common carriers in violation of 
subsection (c)(1)(B) or (ii) is blocking access to equal access codes in 
violation of rules the Commission may prescribe under subsection (e)(1);
     "(F) not bill for unanswered telephone calls in areas where equal 
access is available;
     "(G) not knowingly bill for unanswered telephone calls where equal 
access is not available;
     "(H) not engage in call splashing, unless the consumer requests to 
be transferred to another provider of operator services, the consumer is 
informed prior to incurring any charges that the rates for the call may 
not reflect the rates from the actual originating location of the call, 
and the consumer then consents to be transferred;  and
     "(I) except as provided in subparagraph (H), not bill for a call 
that does not reflect the location of the origination of the call.
   "(2) Additional requirements for first 3 years.--In addition to 
meeting the requirements of paragraph (1), during the 3-year period 
beginning on the date that is 90 days after the date of enactment of 
this section, each presubscribed provider of operator services shall 
identify itself audibly and distinctly to the consumer, not only as 
required in paragraph (1)(A), but also for a second time before 
connecting the call and before the consumer incurs any charge.

  "(c) Requirements for Aggregators.--
   "(1) In general.--Each aggregator, beginning not later than 90 days 
after the date of enactment of this section, shall--
     "(A) post on or near the telephone instrument, in plain view of 
consumers--
       "(i) the name, address, and toll-free telephone number of the 
provider of operator services;
       "(ii) a written disclosure that the rates for all operator-
assisted calls are available on request, and that consumers have a right 
to obtain access to the interstate common carrier of their choice and 
may contact their preferred interstate common carriers for information 
on accessing that carrier's service using that telephone;  and
       "(iii) the name and address of the enforcement division of the 
Common Carrier Bureau of the Commission, to which the consumer may 
direct complaints regarding operator services;
     "(B) ensure that each of its telephones presubscribed to a provider 
of operator services allows the consumer to use "800" and "950" access 
code numbers to obtain access to the provider of operator services 
desired by the consumer;  and
     "(C) ensure that no charge by the aggregator to the consumer for 
using an "800" or "950" access code number, or any other access code 
number, is greater than the amount the aggregator charges for calls 
placed using the presubscribed provider of operator services.
   "(2) Effect of state law or regulation.--The requirements of 
paragraph (1)(A) shall not apply to an aggregator in any case in which 
State law or State regulation requires the aggregator to take actions 
that are substantially the same as those required in paragraph (1)(A).
  "(d) General Rulemaking Required.--
   "(1) Rulemaking proceeding.--The Commission shall conduct a 
rulemaking proceeding pursuant to this title to prescribe regulations 
to--
     "(A) protect consumers from unfair and deceptive practices relating 
to their use of operator services to place interstate telephone calls;  
and
     "(B) ensure that consumers have the opportunity to make informed 
choices in making such calls.
   "(2) Deadlines.--The Commission shall initiate the proceeding 
required under paragraph (1) within 60 days after the date of enactment 
of this section and shall prescribe regulations pursuant to the 
proceeding not later than 210 days after such date of enactment.  Such 
regulations shall take effect not later than 45 days after the date the 
regulations are prescribed.
   "(3) Contents of regulations.--The regulations prescribed under this 
section shall--
     "(A) contain provisions to implement each of the requirements of 
this Section, other than the requirements established by the rulemaking 
under subsection (e) on access and compensation;  and
     "(B) contain such other provisions as the Commission determines 
necessary to carry out this section and the purposes and policies of 
this section.
   "(4) Additional requirements to be implemented by regulations.--The 
regulations prescribed under this section shall, at a minimum--
     "(A) establish minimum standards for providers of operator services 
to use in the routing and handling of emergency telephone calls;  and
     "(B) establish a policy for requiring providers of operator 
services to
 make public information about recent changes in operator services and 
choices available to consumers in that market.
  "(e) Separate Rulemaking on Access and Compensation.--
   "(1) Access.--The Commission, within 9 months after the date of 
enactment of this section, shall require--
     "(A) that each aggregator ensure within a reasonable time that each 
of its telephones presubscribed to a provider of operator services 
allows the consumer to obtain access to the provider of operator 
services desired by the consumer through the use of an equal access 
code;  or
     "(B) that all providers of operator services, within a reasonable 
time, make available to their customers a "950" or "800" access code 
number for use in making operator services calls from anywhere in the 
United States;  or
     "(C) that the requirements described under both subparagraphs (A) 
and (B) apply.
   "(2) Compensation.--The Commission shall consider the need to 
prescribe compensation (other than advance payment by consumers) for 
owners of competitive public pay telephones for calls routed to 
providers of operator services that are other than the presubscribed 
provider of operator services for such telephones.  Within 9 months 
after the date of enactment of this section, the Commission shall reach 
a final decision on whether to prescribe such compensation.
  "(f) Technological Capability of Equipment.--Any equipment and 
software manufactured or imported more than 18 months after the date of 
enactment of this section and installed by any aggregator shall be 
technologically capable of providing consumers with access to interstate 
providers of operator services through the use of equal access codes.
  "(g) Fraud.--In any proceeding to carry out the provisions of this 
section, the Commission shall require such actions or measures as are 
necessary to ensure that aggregators are not exposed to undue risk of 
fraud.
  "(h) Determinations of Rate Compliance.--
   "(1) Filing of informational tariff.--
     "(A) In general.--Each provider of operator services shall file, 
within 90 days after the date of enactment of this section, and shall 
maintain, update regularly, and keep open for public inspection, an 
informational tariff specifying rates, terms, and conditions, and 
including commissions, surcharges, any fees which are collected from 
consumers, and reasonable estimates of the amount of traffic priced at 
each rate, with respect to calls for which operator services are 
provided.  Any changes in such rates, terms, or conditions shall be 
filed no later than the first day on which the changed rates, terms, or 
conditions are in effect.
     "(B) Waiver authority.--The Commission may, after 4 years following 
the date of enactment of this section, waive the requirements of this 
paragraph only if--
       "(i) the findings and conclusions of the Commission in the final 
report issued under paragraph (3)(B)(iii) state that the regulatory 
objectives specified in subsection (d)(1) (A) and (B) have been 
achieved;  and
       "(ii) the Commission determines that such waiver will not 
adversely affect the continued achievement of such regulatory 
objectives.
   "(2) Review of informational tariffs.--If the rates and charges filed 
by any provider of operator services under paragraph (1) appear upon 
review by the
 Commission to be unjust or unreasonable, the Commission may require 
such provider of operator services to do either or both of the 
following:
     "(A) demonstrate that its rates and charges are just and 
reasonable, and
     "(B) announce that its rates are available on request at the 
beginning of each call.
   "(3) Proceeding required.--
     "(A) In general.--Within 60 days after the date of enactment of 
this section, the Commission shall initiate a proceeding to determine 
whether the regulatory objectives specified in subsection (d)(1) (A) and 
(B) are being achieved.  The proceeding shall--
       "(i) monitor operator service rates;
       "(ii) determine the extent to which offerings made by providers 
of operator services are improvements, in terms of service quality, 
price, innovation, and other factors, over those available before the 
entry of new providers of operator services into the market;
       "(iii) report on (in the aggregate and by individual provider) 
operator service rates, incidence of service complaints, and service 
offerings;
       "(iv) consider the effect that commissions and surcharges, 
billing and validation costs, and other costs of doing business have on 
the overall rates charged to consumers;  and
       "(v) monitor compliance with the provisions of this section, 
including the periodic placement of telephone calls from aggregator 
locations.
     "(B) Reports.--(i) The Commission shall, during the pendency of 
such proceeding and not later than 5 months after its commencement, 
provide the Congress with an interim report on the Commission's 
activities and progress to date.
       "(ii) Not later than 11 months after the commencement of such 
proceeding, the Commission shall report to the Congress on its interim 
findings as a result of the proceeding.
       "(iii) Not later than 23 months after the commencement of such 
proceeding, the Commission shall submit a final report to the Congress 
on its findings and conclusions.
   "(4) Implementing regulations.--
     "(A) In general.--Unless the Commission makes the determination 
described in subparagraph (B), the Commission shall, within 180 days 
after submission of the report required under paragraph (3)(B)(iii), 
complete a rulemaking proceeding pursuant to this title to establish 
regulations for implementing the requirements of this title (and 
paragraphs (1) and (2) of this subsection) that rates and charges for 
operator services be just and reasonable.  Such regulations shall 
include limitations on the amount of commissions or any other 
compensation given to aggregators by providers of operator service.
     "(B) Limitation.--The requirement of subparagraph (A) shall not 
apply if, on the basis of the proceeding under paragraph (3)(A), the 
Commission makes (and includes in the report required by paragraph 
(3)(B)(iii)) a factual determination that market forces are securing 
rates and charges that are just and reasonable, as evidenced by rate 
levels, costs, complaints, service quality, and other relevant factors.
  "(i) Statutory Construction.--Nothing in this section shall be 
construed to alter the obligations, powers, or duties of common carriers 
or the Commission under the other sections of this Act.".

APPENDIX B

PROPOSED RULES
A provider of operator services shall:
   (1) identify itself, audibly and distinctly, to the consumer at the 
beginning of each telephone call and before the consumer incurs any 
charge for the call;
   (2) permit the consumer to terminate the telephone call at no charge 
before the call is connected;  and
   (3) disclose immediately to the consumer, upon request and at no 
charge to the consumer,
     (A) a quotation of its rates or charges for the call;
     (B) the methods by which such rates or charges will be collected;  
and
     (C) the methods by which complaints concerning such rates, charges, 
or collection practices will be resolved.
  (b) Each aggregator shall post on or near the telephone instrument, in 
plain view of consumers:
   (1) the name, address, and toll-free telephone number of the provider 
of operator services;
   (2) a written disclosure that the rates for all operator-assisted 
calls are available on request, and that consumers have a right to 
obtain access to the interstate common carrier of their choice and may 
contact their preferred interstate common carriers for information on 
accessing that carrier's service using that telephone;  and
   (3) the name and address of the Enforcement Division of the Common 
Carrier Bureau of the Commission (FCC, Enforcement Division, CCB, Room 
6202, Washington, D.C. 20554), to which the consumer may direct 
complaints regarding operator services.
  (c) Additional requirements for first 3 years.  In addition to meeting 
the requirements of paragraph (a), each presubscribed provider of 
operator services shall, during the 3-year period beginning on the 
effective date of this section, identify itself audibly and distinctly 
to the consumer, not only as required in paragraph (a)(1), but also for 
a second time before connecting the call and before the consumer incurs 
any charge.
  (d) Effect of state law or regulation.  The requirements of paragraph 
(b) shall not apply to an aggregator in any case in which State law or 
State regulation requires the aggregator to take actions that are 
substantially the same as those required in paragraph (b).
  (e) Each provider of operator services shall ensure, by contract or 
tariff, that each aggregator for which such provider is the 
presubscribed provider of operator services is in compliance with the 
requirements of paragraph (b).

  3. A new Section 64.704 is added to read as follows:
   s 64.704 Call blocking prohibited.
  (a) Each aggregator shall ensure that each of its telephones 
presubscribed to a provider of operator services allows the consumer to 
use "800" and "950" access code numbers to obtain access to the provider 
of operator services desired by the consumer.
  (b) Each provider of operator services shall:
   (1) ensure, by contract or tariff, that each aggregator for which 
such provider is the presubscribed provider of operator services is in 
compliance with the requirements of paragraph (a);  and
   (2) withhold payment (on a location-by-location basis) of any 
compensation, including commissions, to aggregators if such provider 
reasonably believes that the aggregator is blocking access to interstate 
common carriers in violation of paragraph (a).
  4. A new Section 64.705 is added to read as follows:
   s 64.705 Restrictions on charges related to the provision of operator 
services.
  (a) A provider of operator services shall:
   (1) not bill for unanswered telephone calls in areas where equal 
access is available;
   (2) not knowingly bill for unanswered telephone calls where equal 
access is not available;
   (3) not engage in call splashing, unless the consumer requests to be 
transferred to another provider of operator services, the consumer is 
informed prior to incurring any charges that the rates for the call may 
not reflect the rates from the actual originating location of the call, 
and the consumer then consents to be transferred;
   (4) except as provided in paragraph (3), not bill for a call that 
does not reflect the location of the origination of the call;  and
   (5) ensure, by contract or tariff, that each aggregator for which 
such provider is the presubscribed provider of operator services is in 
compliance with the requirements of paragraph (b).
  (b) An aggregator shall ensure that no charge by the aggregator to the 
consumer for using an "800" or "950" access code number, or any other 
access code number, is greater than the amount of the aggregator charges 
for calls placed using the presubscribed provider of operator services.
  5. A new Section 64.706 is added to read as follows:
   s 64.706 Minimum standards for the routing and handling of emergency 
telephone calls.  Upon receipt of any emergency telephone call initiated 
through use of a dialing sequence associated with such calls (e.g., "0," 
"911") in the call's originating location, a provider of operator 
services shall immediately connect the call to the appropriate emergency 
service of the call's originating location.
  6. A new Section 64.707 is added to read as follows:
   s 64.707 Public dissemination of information by providers of operator 
services.  Providers of operator services shall regularly publish and 
make available at no cost to inquiring consumers written materials that 
describe any recent changes in operator services and in the choices 
available to consumers in that market.
  7. A new Section 64.708 is added to read as follows:

   s 64.708 Definitions.  As used in sections 64.703 through 64.707 and 
68.318, 47 C.F.R. ss 64.703-64.707, 68.318:
     (a) the term "access code" means a sequence of numbers that, when 
dialed, connect the caller to the provider of operator services 
associated with that sequence;
     (b) the term "aggregator" means any person that, in the ordinary 
course of its operations, makes telephones available to the public or to 
transient users of its premises, for interstate telephone calls using a 
provider of operator services;
     (c) the term "call splashing" means the transfer of a telephone 
call from one provider of operator services to another such provider in 
such a manner that the subsequent provider is unable or unwilling to 
determine the location of the origination of the call and, because of 
such inability or unwillingness, is prevented from billing the call on 
the basis of such location;
     (d) the term "consumer" means a person initiating any interstate 
telephone call using operator services;
     (e) the term "equal access" has the meaning given that term in 
Appendix B of the Modification of Final Judgment entered by the United 
States District Court on August 24, 1982, in United States v. Western 
Electric, Civil Action No. 82-0192 (D.D.C.1982), as amended by the Court 
in its orders issued prior to the effective date of this section;
     (f) the term "equal access code" means an access code that allows 
the public to obtain an equal access connection to the carrier 
associated with that code;
     (g) the term "operator services" means any interstate 
telecommunications service initiated from an aggregator location that 
includes, as a component, any automatic or live assistance to a consumer 
to arrange for billing or completion, or both, of an interstate 
telephone call through a method other than:
       (1) automatic completion with billing to the telephone from which 
the call originated;  or
       (2) completion through an access code used by the consumer, with 
billing to an account previously established with the carrier by the 
consumer;
     (h) the term "presubscribed provider of operator services" means 
the interstate provider of operator services to which the consumer is 
connected when the consumer places a call using a provider of operator 
services without dialing an access code;
     (i) the term "provider of operator services" means any common 
carrier that provides operator services or any other person determined 
by the Commission to be providing operator services.
 It is proposed that Part 68 of Title 47 of the Code of Federal 
Regulations be amended as follows:
  1. The authority citation for Part 68 is amended to read as follows:
   Authority:  Secs. 4, 201, 202, 203, 204, 205, 208, 215, 218, 226, 
313, 314, 403, 404, 410, 602, 48 Stat., as amended, 1066, 1070, 1071, 
1072, 1073, 1076, 1077, 1087, 1094, 1098, 1102, 47 U.S.C. ss 154, 201, 
202, 203, 204, 205, 208, 215, 218, 226, 313, 314, 403, 404, 410, 602, 
unless otherwise noted.
  2. Section 68.318 is amended by adding paragraph (d) to read as 
follows:
   s 68.318 Additional limitations.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 
* * * *

     (d) Requirement that registered equipment allow access to common 
carriers. Any equipment or software manufactured or imported on or after 
April 17, 1992, and installed by any aggregator shall be technologically 
capable of providing consumers with access to interstate providers of 
operator services through the use of equal access codes.  The terms used 
in this paragraph shall have the meanings defined in Section 64.708, 47 
C.F.R. s 64.708.

   1 Pub.L. No. 101-435, 104 Stat. 986 (1990) (to be codified at 47 
U.S.C. s 226) ("Operator Services Act").  The text of the Act is 
attached as Appendix A.

   2 S.Rep. No. 101-439, 101st Cong., 2d Sess. 1 (1990);  see also 
H.R.Rep. No. 101-213, 101st Cong., 1st Sess. 2 (1989) ("The purpose of 
[the Act is to protect telephone consumers against unfair prices and 
practices of some operator service providers (OSPs), yet allow the 
legitimate companies in the industry the opportunity to compete in the 
market.").

   3 47 U.S.C. s 226(d), (h)(3).

   4 Id. s 226(d)(2), (h)(3)(A).

   5 Policies and Rules Concerning Operator Service Providers, Notice of 
Proposed Rule Making, 5 FCCRcd 4630 (1990) (hereinafter NPRM).

   6 See 47 U.S.C. s 226(h)(3)(A).

   7 See id. s 226(e).

   8 NPRM, 5 FCCRcd at 4630.  A full discussion of the development of 
the operator services industry and the proceedings related to operator 
service issues is contained in the NPRM.  See id. at 4630-31.

   9 See 47 U.S.C. s 226(a)(2).

   10 An access code is a sequence of numbers that, when dialed, 
connects the caller to the OSP associated with that sequence.  See id. s 
226(a)(1).

   11 NPRM, 5 FCCRcd at 4630.

   12 Telecommunications Research & Action Center v. Central Corp., 4 
FCCRcd 2157 (Com.Car.Bur.1989) (hereinafter TRAC Order), application for 
review pending.

   13 Id. at 2159;  see also id. at 2160 nn. 5-6 (definitions of "call 
blocking" and "call splashing").

   14 See Petition of the National Association of Regulatory Utility 
Commissioners, RM-6767 (filed April 17, 1989) (hereinafter "NARUC 
Petition").

   15 NPRM, 5 FCCRcd at 4631 (also denying the petition in part).

   16 Id. at 4631-35, 4637-38.

   17 Id. at 4632-35 (these issues included double branding, charging 
for unanswered or uncompleted calls, and standards for the handling of 
emergency calls).

   18 Policies and Rules Concerning Operator Service Providers, CC 
Docket No. 90-313, Order, DA 90-1383 (released Oct. 5, 1990) (deadline 
for filing reply comments extended to Oct. 23, 1990).

   19 Public Notice, DA 90-1773 (released Dec. 4, 1990).

   20 See 47 U.S.C. ss 226(a)(7), (9), (h)(1)(A).

   21 Many commenting parties have expressed a preference for additional 
Commission action beyond our initial NPRM.  For example, some parties 
have suggested that a fuller record on certain issues must be developed.  
See, e.g., Reply Comments of BellSouth Tel. Cos. (further rule making 
necessary for establishment of emergency call standards).  Other parties 
have indicated that clarification is necessary for certain statutory 
requirements.  See, e.g., Reply Comments of The American Public 
Communications Council (branding, information posting).

   22 47 U.S.C. s 226(d).

   23 The Act requires that, by May 15, 1991, the Commission adopt the 
general regulations prescribed under Section 226(d)(2).  These 
regulations must take effect by June 29, 1991.  Id.

   24 Appendix B contains the text of the new proposed rules.

   25 Appendix B, s 64.703(c).  "Branding" occurs when an operator 
service provider audibly identifies itself to a caller before the call 
is connected. 47 U.S.C. s 226(b)(1)(A);  NPRM, 5 FCCRcd at 4630.  We 
have tentatively defined "double branding" as such an identification 
both at the beginning of a call and again just before the call is 
connected.  NPRM, 5 FCCRcd at 4632.

   26 Appendix B, s 64.703(b)(3).

   27 Id. s 64.705(a)(1)-(2).

   28 Id. s 64.705(b).

   29 Id. s 64.704.

   30 The Act requires 800 and 950 blocking to be addressed in this 
proceeding and the 10XXX blocking issue to be addressed in a separate 
proceeding.  47 U.S.C. s 226(d)(3)(A), (e);  see also para. 21, infra.

   31 Appendix B, s 68.318(d).

   32 Id. s 64.708.

   33 Id. s 64.705(a)(3)-(4).

   34 47 U.S.C. s 226(d)(4)(A).

   35 Id. s 226(d)(4)(B).

   36 NPRM, 5 FCCRcd at 4634-35.

   37 47 U.S.C. s 226(d)(1)(B).

   38 Comments on the matters contained in Section 226(h)(3) of the Act 
must be filed separately from those on other issues in this proceeding 
and must be designated, in the caption, "CC Docket No. 90-313--Phase 
II."

   39 Section 226(h)(3)(A)(iii) also directs us to report on service 
offerings. We expect to glean the information necessary for such reports 
from the tariffs that must be filed under Section 226(h)(1).  Comments 
on improvements in service, which we have solicited infra, may also 
contain helpful information in this regard.

   40 See NPRM, 5 FCCRcd at 4639 n. 28.

   41 47 U.S.C. s 226(e);  see also id. s 226(d)(3)(A) (the regulations 
prescribed in the "general" rule making shall implement the provisions 
of the Act "other than the requirements established by the rule making 
under subsection (e) on access and compensation").  Section 226(e) 
states that the Commission must make two determinations in the separate 
rule making.  First, we must decide whether (a) aggregators must unblock 
10XXX access;  (b) OSPs must establish 800 or 950 access;  or (c) both 
(a) and (b).  Second, we must decide whether to prescribe compensation 
for owners of competitive public payphones for calls not routed through 
their presubscribed OSPs.  The Act requires the Commission to make 
determinations regarding the access and compensation issues within 9 
months of the statute's enactment, i.e., by July 17, 1991.




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