Telecom/1996-04-telecom-walnutcreek.iso/legal-fcc/aos.rules-procedures

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FCC 90-231

300.303 General Powers of Commission

                               In the Matter of
           Policies and Rules Concerning Operator Service Providers

                             CC Docket No. 90-313

                                    RM6767

              Adopted:  June 14, 1990;  Released:  July 17, 1990

By the Commission:
I. INTRODUCTION

 1. The Communications Act of 1934, as amended, ("the Act") mandates that this
Commission regulate interstate telecommunications services "so as to make
available ... to all the people of the United States ... efficient,
nationwide ... communication service with adequate facilities at reasonable
charges." [FN1]  Recent technological and marketplace evolution in the
provision of operator services, [FN2] along with widespread consumer
dissatisfaction over the rates and practices of many operator service
providers, [FN3] now oblige us to reexamine many of our requirements and
policies as they pertain to this rapidly changing segment of the
telecommunications industry. [FN4]  Specifically, we propose to adopt new rules
and policies that we tentatively conclude are required to promote the
objectives of the Communications Act.  We therefore initiate this Rule Making
proceeding and begin with a discussion of the development of the modern
operator services industry.

                        NOTICE OF PROPOSED RULE MAKING

                                II. BACKGROUND

A. The Development of the Operator Services Industry

 2. In the aftermath of the AT & T divestiture, [FN5] as regulation of the
telecommunications industry changed, the operator services industry evolved to
include companies offering alternatives to the traditional Bell System-provided
operator services.  These companies, sometimes referred to as alternative
operator service providers, typically 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." [FN6]  The telephones for which an OSP provides
service are said to be "presubscribed" to that OSP.  Barring some affirmative
action by the caller, such as dialing a 10XXX or a 950 or 800 number, a call
aggregator's customers are automatically connected to the presubscribed OSP
when they make certain operator-assisted calls using the aggregator's
telephone.  Most companies, other than the local exchange companies and AT & T,
are classified as nondominant carriers under our Competitive Carrier
decisions. [FN7]

B. Related Proceedings

1. The TRAC proceeding

 3. In July 1988, two consumer advocacy groups, the Telecommunications Research
and Action Center ("TRAC") and Consumer Action, filed a formal complaint
against five AOS companies, alleging that under Competitive Carrier the
defendants were operating as dominant carriers and should be subject to the
full panoply of Title II regulation, including tariff filing and certification
requirements.  The complainants contended that the defendants possessed market
power because of the purported control they, along with their call aggregators,
exercise over what the complainants characterized as "bottleneck" facilities.
The complainants further alleged that this market power permitted the
defendants to charge excessive rates and engage in practices that effectively
deprive "captive" consumers on the aggregator's premises of information and
competitive options.  The complainants urged the Bureau to reclassify the
defendant companies as dominant carriers, to find their rates and practices to
be unjust, unreasonable, and contrary to the public interest, and to revoke
their operating authority.
 4. In a Memorandum Opinion and Order released February 27, 1989, [FN8] the
Bureau granted the complaint in part, finding a number of the defendants'
practices involving consumer disclosure, call blocking, and call splashing to
be unjust and unreasonable in violation of Section 201(b) of the Act. [FN9]  It
ordered several specific forms of relief designed to eliminate the unlawful
practices.
 5. First, the Bureau ordered the defendant companies to provide consumer
information to their customers in the form of tent cards, phone stickers, or
some other form of printed documentation that could be placed on, or in close
proximity to, all presubscribed phones. [FN10]  These materials were required
to set forth the company's identity (name, address, and a customer service
number for receipt of further information), as well as information advising
users that the company's rates would be quoted upon request.  The Bureau said
that new contracts between OSPs and call aggregators must contain provisions
requiring aggregators to display these materials on, or in close proximity to,
all presubscribed telephones.  In addition, the defendants were ordered to
amend existing contracts with call aggregators to reflect this requirement.
[FN11]
 6. Second, the Bureau found it to be an unlawful practice for an OSP not to
identify itself audibly before a call is connected.  This identification
process is known as "call branding."  In addition, the Bureau directed the
defendant AOS companies to provide a sufficient delay period after the branding
to permit a caller to either hang up or advise the operator to transfer the
call to the caller's preferred carrier.  The Bureau ordered these procedures to
be implemented by the defendants immediately upon the effective date of the
order. [FN12]
 7. Third, the Bureau determined call blocking [FN13] to be an unlawful
practice and ordered the defendants to discontinue the practice immediately.
[FN14]  The Bureau also required the defendants to amend existing contracts
with call aggregators to prohibit blocking by the aggregators. [FN15]
 8. Finally, the Bureau determined that the problem of call splashing [FN16]
reflects the technological characteristics of the network and that a solution
could best be obtained through the industrywide cooperation of operator service
providers, including AT & T and the Bell Operating Companies.  Because of
concerns that splashing might have an adverse economic impact on consumers, the
Bureau required the defendant AOS companies to bring the matter before the
Carrier Liaison Committee of the Exchange Carrier Standards Association and to
report back to the Bureau.  The defendants were required, however, to eliminate
immediately any call splashing that was within the technical capability of
their existing networks. [FN17]
 9. While the TRAC Order was specifically issued against the five defendants,
the Bureau's reasoning made it clear that such practices would be unlawful if
engaged in by any OSP.  Therefore, the TRAC Order requirements would apply to
any participant in the operator services industry, including, for example,
other AOS companies and AT & T. [FN18]

2. The NARUC Rule Making petition

 10. On April 17, 1989, shortly after the issuance of the TRAC Order, the
National Association of Regulatory Utility Commissioners ("NARUC") filed a
petition for Rule Making [FN19] to address a number of issues regarding the
practices, policies, and appropriate regulatory treatment of OSPs. [FN20]
Specifically, NARUC urges the Commission to adopt, inter alia, minimum
regulatory guidelines applicable to operator service companies in the following
areas:  (1) rate levels, (2) customer notification, (3) billing practices, (4)
quality of service, (5) complaint resolution procedures, and (6) customer
choice. [FN21]  NARUC, while voicing general support for the measures taken by
the Bureau to resolve the TRAC complaint, argues that the Commission should
broaden the scope of its inquiry into OSP practices beyond those encompassed by
the TRAC complaint proceeding. [FN22]  NARUC maintains that certain issues,
such as the Commission's definition of firms with market power, cannot be
considered adequately in other than a Rule Making proceeding. [FN23]  In a Rule
Making context, NARUC argues, the Commission would be in a position to consider
detailed evidence and arguments on operator service issues submitted by a wide
range of interested parties who may not have participated in the TRAC
proceeding. [FN24]
 11. On May 23, 1989, the Bureau issued a Public Notice inviting comments on
NARUC's petition. [FN25]  A number of commenters responded favorably to NARUC's
petition and encouraged the Commission to institute a proceeding to adopt
additional regulatory restraints on OSPs. [FN26]  Other commenters, including
the TRAC proceeding defendants and other interested parties, opposed the
petition as unnecessary or inappropriate in light of the Bureau's TRAC Order
and other Commission proceedings. [FN27]  We will grant NARUC's petition
insofar as it seeks a broader Commission inquiry into the practices of operator
service providers, and, accordingly, we address in this proceeding many of the
issues raised by NARUC and the comments filed on its Rule Making petition.  We
are not persuaded, however, that we should consider modifying our rules and
policies regarding the classification of AOS providers as non-dominant
carriers.  While the concerns expressed by NARUC and others over the rates
charged by many OSPs raise important issues, we tentatively conclude that the
rules and policies proposed in this Notice, which will enable consumers to make
informed choices and to reach their carriers of choice, will constitute a
sufficient check on the rates and practices of service providers and will
eliminate those that are harmful to consumers.  In this regard, we also
tentatively conclude that the rules proposed herein will reduce or eliminate
any market power that OSPs arguably may have.  We therefore tentatively reject
the NARUC proposal to the extent that it requests that we reexamine our
Competitive Carrier policies and consider the adoption of specific rules to
regulate the rate levels of operator service providers.

C. Legislative Proposals

 12. Congress, too, is concerned over problems related to operator services and
has expressed this concern in the form of specific legislative proposals aimed
at curbing certain practices of OSPs as well as preserving the customers' right
to just and reasonable rates.  Currently, there are three bills pending:  one
in the House, H.R. 971, 101st Cong., 1st Sess. (1989), and two in the Senate,
S. 1643, 101st Cong., 1st Sess. (1989), and S. 1660, 101st Cong., 1st Sess.
(1989).  During hearings on the proposed legislation before the Senate
Subcommittee on Communications in February 1990, the Chief of the Common
Carrier Bureau expressed the Commission's agreement with the overall goal of
the legislation and informed the Subcommittee of our intention to institute
this Rule Making proceeding to address continuing issues and concerns.  Several
of the legislative provisions, such as those concerning call blocking and
customer information and notification practices, are similar in all pertinent
respects to the remedies adopted in the TRAC Order and are reflected in the
rules we propose herein.  Other provisions, such as those concerning equipment
and software modifications, were not contemplated in the TRAC proceeding:
nevertheless, these too are encompassed by this Notice.

D. Continuing Concerns

 13. In the wake of the TRAC Order, the Commission has attempted to address
problems with operator services through consumer education and awareness
efforts and by maintaining a dialogue with industry participants.  While the
number of complaints received by the Commission has diminished by half,
significant problems persist. [FN28]  In light of this situation, we now
propose the following rules and policies.

                                III. DISCUSSION

A. Proposed Rules [FN29]

1. Customer Information

 14. We first propose rules that pertain to a subject that is vital to the
operation of an open and competitive operator services marketplace:  customer
information and notification. [FN30]  In the TRAC Order, the Bureau noted that
a "gap in [customer] information thwarts effective [customer] choice and
creates the opportunity for any [operator service] company to charge excessive
rates." [FN31]  We view this Rule Making proceeding as an opportunity to ensure
application of the TRAC Order remedies throughout the operator services
industry, by AOS providers and "traditional" OSPs alike.  Our proposed Section
64.703 would generally implement several customer information requirements that
were applied to the defendants in the TRAC proceeding.
 15. The initial parts of Section 64.703 prescribe customer information that
must be provided by the operator service companies themselves.  Section
64.703(a)(1) requires OSPs to engage in "call branding," which is the process
by which an OSP audibly and distinctly identifies itself to every person who
uses its operator services.  This branding must be done before the customer
incurs any charges from the OSP, and, under Section 64.703(a)(2), the OSP must
allow sufficient time after the branding for the customer either to terminate
the call without charge or to advise the operator to transfer the call to the
customer's preferred carrier without charge.  We emphasize that all calls must
be branded, regardless of what devices are used to process the calls. [FN32]
We also seek comment on whether we should require double branding, which is an
identification both at the beginning of a call and again just before the call
is connected. [FN33]  Double branding would, by emphasizing the identity of the
operator service company, more fully ensure that the customer has freely chosen
to use that company's services.
 16. Section 64.703(a)(3) requires OSPs to disclose, upon request by the
customer, the rates or charges for the anticipated call, collection methods for
those rates or charges, and the OSP's complaint resolution methods.  This
information is necessary both to allow the customer to make a free and
knowledgeable choice among OSPs and to help avoid or resolve disputes over
charges.
 17. Call aggregators would also, under our proposed rules, play an important
part in informing customers of their choices in the operator services
marketplace.  Pursuant to the proposed Section 64.703(b), the call aggregator
would have to provide, for the customer's use, printed documentation that
informs the customer of the OSP's identity, address, and toll-free customer
service telephone number, and that contains a statement that the OSP's rates
will be quoted upon request.  This documentation must also inform customers
that they have a right to use their carriers of choice and must contain
instructions on how to contact those carriers.  While we expect that most
aggregators will choose to display this information either on tent cards near
the telephones or on stickers or signs affixed to the telephones, we seek
comment on whether the aggregators should have the option of giving the
necessary printed documentation to the customer in person.  A customer at a
hotel or a patient at a hospital, for example, could be given this information
while checking in.  Although we see this alternative as a way for aggregators
to ensure that each customer is properly notified, we would expect aggregators
that choose this option to make certain that every customer is, in fact, aware
that the written material being provided contains the information described
above.  As Section 64.703(c) indicates, we propose to place the responsibility
for providing this onsite information jointly on the OSP, the aggregator, and
the owner of the telephone, such as LECs that own pay telephones. [FN34]  Joint
responsibility would help ensure that the customer will be fully informed when
choosing an operator service provider and would eliminate the possibility that
one of these entities could, with impunity, thwart the efforts of the others.
[FN35]

2. Call Blocking

 18. Next, in proposed Section 64.704, we address the problem of call blocking,
an unlawful practice that the Bureau has previously determined acts to "distort
and impede the operation of a fully competitive operator services industry,"
[FN36] a finding that we now affirm.  Our goal in addressing this problem is to
allow all customers access to their carriers of choice through alternative
access methods.  As we are doing elsewhere in this Notice, we seek comment on a
variety of means to our stated end and will study the comments to determine
which steps or combinations of steps will best achieve our goal.  Subsections
(b), (c), and (d) of this proposed rule prohibit blocking by OSPs, call
aggregators, and pay telephone owners, and, under subsection (e), all
applicable contracts or tariffs must be modified to delete any blocking
requirements and to prohibit blocking explicitly.  We also seek comment on
whether and to what extent it would be appropriate to grant any limited waivers
of this section's blocking prohibition.  We currently contemplate that any
exceptions to the blocking prohibition will likely be limited in scope and
duration and focused on a physical problem faced in a specific location.  We
encourage interested parties to suggest criteria we might use in making a
waiver determination. [FN37]
 19. The TRAC Order defines call blocking as "the process of screening the
calls dialed from the presubscribed telephone for certain predetermined
numbers, and preventing or 'blocking' the completion of calls [that] would
allow the caller to reach [an OSP] different from the [presubscribed operator
service] company." [FN38]  In other proceedings and filings before us, [FN39] a
number of parties have suggested that we redefine call blocking so that it
applies to 800, 950, and 10XXX-0+ traffic only. [FN40]  This revision would
allow OSPs the option of blocking 10XXX-1+ traffic in order to protect against
unauthorized, fraudulent, or otherwise uncollectible calls being charged to
payphone owners and other "hospitality"-type aggregators, such as hotels,
hospitals, airports, and universities, who may be particularly vulnerable to
this type of fraudulent or unauthorized calling from their telephones.  Parties
supporting the refined definition state that while an OSP receiving a 0+ call
can collect all pertinent billing information and bill the end-user for the
call.  1+ calls are usually charged to the originating line by a carrier with
whom the aggregator has no account.  Even when the call is placed by the end-
user in anticipation that he will be billed for the call (e.g., from a hotel
guest room), the aggregator may receive the bill from the carrier long after
the guest has left.  The parties state that if 10XXX-1+ blocking is allowed,
callers will still have access to their carrier of choice through 800, 950, or
10XXX-0+ dialing.
 20. It appears that the blocking of 1+ calls may have an insubstantial impact
on the ability of callers to access their carriers of choice, while at the same
time serving as an effective means of protecting against unauthorized or
uncollectible calls. [FN41]  Therefore, we seek comment on whether the blocking
prohibition proposed in this Notice should apply only to 0+ calls, [FN42] and
we propose the adoption of the following definition:  call blocking occurs when
an end-user is prevented from accessing the preferred carrier through
alternative dialing methods--800, 950, and 10XXX-0+.  Nevertheless, because it
appears that some existing equipment may not be technically capable of blocking
1+ traffic without also blocking 0+ calls, we seek comment on the extent to
which our proposed rules and policies might be applied to 1+ calls and how such
an application could be narrowly tailored to affect only the appropriate
classes of 1+ calls. [FN43]
 21. The final part of Section 64.704 prohibits the payment of any compensation
by OSPs to call aggregators at locations where blocking occurs.  This provision
is intended to reduce or eliminate an incentive aggregators may have to engage
in blocking, and we emphasize that this provision would cover all types of
compensation, including, for example, flat fees, per call charges, and various
rental arrangements.  We seek comment on how this provision should be
effectuated.

3. Equipment Capabilities

 22. We expect OSPs and call aggregators to take maximum advantage of the
capabilities of their existing networks and equipment to implement our blocking
prohibition and ensure consumer choice.  We are aware, however, that there are
telephones at many locations for which 10XXX access is not available because of
a combination of network design and equipment limitations.  We therefore
propose the amendment of Section 68.318 with the intention of requiring the
modification or replacement of PBXs and other customer premises equipment (CPE)
that is technically incapable of providing access through each of the three
access code dialing sequences, 800, 950, and 10XXX-0+.  Under the new
subsection (d), both new and existing equipment must have or be modified to
have the capability of providing access to interstate common carriers through
the use of each of the three access codes within eighteen months of the
effective date of the proposed rule.  Further, existing equipment that is
modified to comply with this rule must be re-registered if required by Section
68.214.  In order to avoid service dislocations not anticipated by our proposed
rule, we believe waivers should be granted when there is a clear showing that
compliance with the rule is not technically or economically feasible and that
our existing procedures, such as Part 68 re-registration, cannot accommodate
the circumstances.  We ask interested parties to recommend standards for the
granting of waivers of the modification requirement.  In general, we seek
comments, along with supporting data, on the extent to which existing software
and equipment are technically capable of allowing unrestricted access to 10XXX-
0+ dialing and the feasibility of implementing proposed Section 68.318(d) in
terms of the costs involved, the time necessary for equipment manufacturers to
develop the required hardware and software modifications, and installation
timetables.
 23. We recognize that the modification of existing equipment may involve
software changes, circuit card replacement, or the installation of additional
devices.  Under Section 68.214 of the Rules, any hardware modification of
registered equipment that would result in changes in the information contained
in the original Part 68 application may be made only after the granting of a
new registration application.  Changes that do not result in any change in the
information in the original application, such as circuit card changes not
affecting protective circuitry, may be made only by the registrant or the
registrant's authorized agent.  To the extent that the proposal set forth in
proposed Section 68.318(d) affects Part 68 compliance, re-registration may be
necessary.  Such re-registration could be performed by the current registrant,
who would then be responsible for implementing the required modifications in
compliance with Part 68.  Alternatively, the user could register the PBX and
install the necessary modification.  We note that some 3000 models of PBXs have
been registered under Part 68, representing hundreds of thousands of PBXs in
use.  In some cases, the manufacturer is no longer in business, and there may
be no agent authorized to perform the needed modification, thus requiring the
user to either re-register the PBX or replace it.  We ask commenters to provide
data on the number PBXs in use that would require Part 68 re-registration or
replacement and on the costs associated with such re-registration or
replacement.
 24. The majority of extant PBXs are software-controlled, which means that, for
those PBXs, compliance with our proposed rule does not require re-registration
under Part 68.  In order to assure that OSPs and call aggregators implement the
blocking prohibition on a consistent basis, however, we propose that only the
equipment registrant or the registrant's agent be allowed to make the software
changes required to comply with our rule.  Under proposed Section 68.318(d)(2),
we would permit the registrant or agent to rely on any technology that would
effectively prevent the user of the equipment from inadvertently or
intentionally reprogramming the equipment to circumvent the requirements of our
proposed rule.  For example, the access code sequence control software might
contain secret codes or be embedded in "read only memory" (ROM) integrated
circuits obtainable only from the manufacturer of the equipment.  We seek
comment on the feasibility, cost, and time necessary for such software changes
to be made.

4. Unanswered and Uncompleted Calls

 25. We next request comment on proposed restrictions on billing practices
related to the provision of operator services, beginning with charges for
unanswered or uncompleted calls.  The Commission receives numerous complaints
from consumers who allege they are being billed by carriers for such calls.
Charges associated with unanswered or uncompleted calls are often attributed to
the lack of answer supervision capabilities [FN44] in areas where equal access
is not available. [FN45]  Without answer supervision, carriers are incapable of
properly monitoring the progress of calls forwarded through the network and may
inadvertently charge callers for unanswered or uncompleted calls if, for
example, the carrier automatically begins charging after a certain number of
rings.  In other cases, carriers may actually lose revenues if the lack of
answer supervision results in the carrier's billing equipment not being
activated.  In our Section 68.314 Rule Making, we are reviewing in detail the
technical aspects of answer supervision and are considering the adoption of
rules aimed at, inter alia, identifying the conditions and circumstances under
which answer supervision should be required and those instances in which
unanswered and uncompleted calls should be exempted from billing. [FN46]  We
seek comment on the need for and feasibility of adopting a rule that would
prohibit operator service providers from charging any caller for unanswered or
uncompleted calls.  We expect that any such requirement would closely track the
rules and policies ultimately adopted in our Section 68.314 Rule Making.  We
encourage interested parties to consider fully the proposals set forth in that
proceeding when fashioning their comments.

5. Call Splashing

 26. Proposed Section 64.705 addresses the problem of call splashing.  As
described in the TRAC Order, call splashing occurs when an OSP transfers a call
to another carrier at a point different from that at which the caller is
located, thereby causing the caller's bill to contain a charge that reflects
the transfer of the call at the distant point. [FN47]  The Call Splashing Task
Force, assembled for the purpose of identifying and recommending possible
solutions to the splashing problem, has suggested that we adopt the following
definition, which it believes will facilitate industry efforts to eliminate the
problem:  "[c]all splashing occurs when a call transfer (whether caller-
requested or OSP-initiated) results in incorrect billing because the point from
which the call is rated and/or billed is different from the point from which
the call originates." [FN48]  The Task Force states that the refined definition
reflects the need to differentiate call splashing from those situations where a
call is simply "handed off" or "transferred" from one OSP to another.  We
tentatively conclude that the definition suggested by the Task Force more
appropriately reflects the nature and extent of the splashing problem and
should be adopted for the purpose of applying proposed Section 64.705.  We
invite comments, however, on whether and to what extent even this new
definition should be modified.
 27. Many of the problems associated with call splashing may be eliminated when
call blocking ceases, since customers will be able to dial their carriers of
choice directly.  Because call splashing results in incorrect billing to the
consumer, however, we would be concerned if any splashing occurs.  Therefore,
our proposed rule in Section 64.705 directs OSPs to eliminate the practice of
call splashing.
 28. The Call Splashing Report suggested a myriad of solutions to the call
splashing problem, some of which have advantages that may make them more
effective than others.  For example, one recommendation would require OSPs to
modify their systems to provide reorigination of calls back to pay telephones
or to CPE located on aggregator premises.  According to the Report,
reorigination capability at the CPE would:  allow transferred calls to be
correctly rated and billed by the OSP receiving the transferred call;  spare
the customer the inconvenience of redialing;  solve billing problems associated
with splashing;  avoid transmission degradation;  and reduce the originating
OSP's problems with unnecessary switched access connections and associated
costs.  The Call Splashing Report also states, however, that such a requirement
will likely involve substantial replacement or modification of existing CPE and
payphone equipment by OSPs or aggregators and payphone owners, as well as the
development of new switching capabilities to generate the reorigination tone.
We invite comment generally on the recommendations in the Call Splashing Report
as solutions to the splashing problem.  We encourage parties commenting on
these proposals to provide supporting data on equipment replacement and
modification requirements as well as implementation costs and timetables.

6. Access Codes of Interexchange Carriers

 29. The last rule that we specifically propose, Section 64.706, concerns the
access codes of interexchange carriers.  By requiring carriers to establish at
least one alternative to "10XXX" [FN49] access under subsection (a), we hope to
mitigate any lingering problems with equipment that is incapable of providing
10XXX access because of technical limitations or its inability to protect
against fraud.  With such an alternative, customers should be technically able
to exercise their right to contact their preferred carriers.  The establishment
of an alternative to 10XXX access may not be a complete solution to blocking
problems, however, because other access codes can also, in theory, be blocked.
Nevertheless, such an alternative should provide some relief from splashing
problems that occur when a call must be transferred at a distant point because
the caller is technically unable to use the 10XXX access code and no
alternative is available for the preferred carrier.
 30. Subsection (b), requiring LECs to provide access codes to calling
customers upon request, will allow customers to use readily the codes that
carriers must establish under subsection (a).  By subsection (b), we intend
only that the LECs must provide the access codes for specifically requested
carriers.  We seek comment on whether such information is readily available to
LECs and whether LECs will, in a practical sense, be able to provide it to
callers.
 31. In subsection (c), we propose a rule requiring each LEC to place in every
edition of any "white pages" telephone directory it distributes, supplies, or
provides, a set of instructions indicating the ways by which the 10XXX, 950,
and 800 dialing methods can be used to reach interexchange carriers and OSPs.
The LECs would also be required to list the 10XXX codes and the 950 and 800
numbers of interexchange carriers and OSPs serving any part of the area that is
the subject of the directory.  Under this subsection, LECs would be prohibited
from charging carriers and OSPs for listing such information, and the listed
carriers and OSPs would be responsible for supplying the necessary information
for this listing.  These requirements would take effect ninety days after the
adoption of this section.  As an alternative to this subsection, we could
instead require carriers and OSPs to place advertisements listing their access
codes in the appropriate telephone directories.  We seek comment on these
proposals, which will, we hope, ensure that callers have a ready source of the
information necessary for reaching their carriers of choice.
 32. Our proposed rule in Section 64.706(a) requiring carriers to establish
only one alternative to 10XXX access may seem inconsistent with our provision
concerning equipment capabilities, Section 68.318(d), because the latter
requires equipment to have the capability of processing all access methods.  We
think it is necessary, however, for equipment to have this broader capability
because carriers would, under Section 64.706(a), have the discretion to choose
whichever 10XXX alternative they desire.  The result will be that some carriers
may choose, for example, the 950 alternative, while others may implement 800
access.  Under these circumstances, equipment must be able to process all
access methods in order to allow callers to reach all carriers in a prompt and
convenient way.  Similarly, our blocking prohibition, in proposed Section
64.704, must be equally broad so that all carriers may be reached through the
methods they choose to implement.

B. Miscellaneous Issues

 33. Finally, we seek comment on an additional issue related to operator
services.  NARUC has recommended that we consider adopting nationwide standards
for the handling of emergency calls by OSPs in order to ensure that such calls
are efficiently routed to the appropriate local public safety organization.
[FN50]  We have traditionally deferred to the states in this area because the
overwhelming majority of emergency calls are local in nature and the handling
of such calls is of primary concern to local communities.  State agencies have
been active in ensuring that operator service providers complete emergency
calls efficiently and have adopted different standards to address this
particular situation.  Nevertheless, in light of NARUC's request that we
explore the extent of problems concerning emergency calls, we invite interested
parties to comment on the appropriate federal role in the resolution of such
problems.
 34. In the discussion above, we have generally raised a wide array of
alternatives to the rules that are actually proposed.  We encourage attention
to and seek comment on these alternatives so that we may develop a record that
will allow us to consider fully the implications of both the proposed rules and
their alternatives.  Our final determination will then be made with a view
toward adopting the most effective and appropriate provisions of both.  More
broadly, we seek comment on the extent to which the proposed rules, or a
combination of some but not necessarily all of the proposals, are necessary for
achieving our goal in this proceeding, which is to assure that consumers are
fully informed about their operator service options and are able to choose
freely among the available services and providers.

                               IV. LEGAL ISSUES

 35. OSPs, as providers of interstate common carrier service, are squarely
within our jurisdiction under Title II of the Communications Act.  We also
tentatively conclude that we have jurisdiction over call aggregators, such as
hotels, under Title II. [FN51]
 36. We intend to exercise our jurisdiction against offending OSPs and
aggregators alike by making appropriate use of our forfeiture authority.  This
authority under Section 205(b) of the Communications Act [FN52] has recently
been increased so that we can now impose a forfeiture of up to $12,000 per
offense against any carrier or agent of a carrier who knowingly fails or
neglects to obey any Commission order prescribing just, fair, and reasonable
practices.  This section provides that every distinct violation is a separate
offense and that, in the case of a continuing violation, each day is to be
deemed a separate offense.  Further, under the recently amended Section 503, we
can impose substantial forfeitures for willful and repeated general violations
of the Act or our Rules, regulations, or orders;  for common carriers subject
to the Act, up to $100,000 for each violation or each day of a continuing
violation, up to a total of $1,000,000 for a continuing violation;  and for
others, up to $10,000 for each violation or day of a continuing violation, up
to a total of $75,000. [FN53]  We will not hesitate to use our forfeiture
authority against violators of our Rules.

                V. REGULATORY FLEXIBILITY ACT INITIAL ANALYSIS

 37. Reason for Action.  The Commission is issuing this 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.
 38. Objectives.  The objective of this Notice of Proposed Rule Making is to
ensure that operator services are provided in a manner that fosters a fully
competitive operator services industry and that allows calling customers to
exercise choice freely in selecting services.
 39. Legal Basis.  Sections 1, 4(i), 4(j), 201-205, 218, and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C. ss 151, 154(i), 154(j), 201-
205, 218, 303(r).
 40. Description, potential impact, and number of small entities affected.  The
proposed rules will mandate that entities in the operator services industry
provide information that is necessary for customers to make knowledgeable
choices among services.  The rules will also help to eliminate certain
practices and charges involving the provision of operator services that reduce
customer choice and competitiveness within the industry.  The equipment
modifications required under the proposed rules will likewise further these
goals.  Small entities, especially certain call aggregators, may feel some
economic impact due to the proposed equipment modification requirements, but we
have proposed the granting of waivers to lessen such burdens when appropriate.
In addition, this Notice seeks comments and evidence regarding the actual
impact on small entities.
 41. 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.
 42. Federal rules which overlap, duplicate, or conflict with the Commission's
proposal:  None.
 43. Any significant alternatives minimizing impact on small entities and
consistent with stated objectives:  We have indicated a willingness to waive
the proposed blocking and equipment modification requirements in the
appropriate circumstances.  In addition, we have suggested alternatives to
several of the proposed rules and have requested comment on them.
 44. Comments are solicited.  We request written comments on this 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
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 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

 45. 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 which 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.
 46. In general, an ex parte presentation is any presentation directed to the
merits or outcome of the proceeding made to decision-making personnel which (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.
 47. 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, which
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.
 48. 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

 49. In summary, the rules proposed in this Notice are intended to remedy
problems related to operator services that have thwarted customer choice and
have impeded and distorted the operation of a fully competitive operator
services industry.  By requiring both operator service providers and call
aggregators to provide customers with information on their services, we hope to
eliminate the situation in which consumers are unaware of how to exercise their
options in the operator services field.  We also intend these rules to prohibit
practices such as call blocking and splashing that are inimical to the exercise
of customers' rights and to competition in the industry.  Consistent with this
aim, the proposed rules require the modification of equipment that blocks
calls.  Overall, we expect the proposed rules to free customers 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.  Interested parties are
invited to submit comments and supporting data that will assist us in pursuing
these goals.  We are particularly interested in evidence regarding the
technical and operational complexities of implementing the proposed rules and
the economic impact of implementation in terms of costs to or burdens on
consumers, carriers, and call aggregators.
 50. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 4(j), 201-205,
218, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. ss
151, 154(i), 154(j), 201-205, 218, 303(r), that a NOTICE OF PROPOSED RULE
MAKING IS ISSUED, proposing the amendment of 47 C.F.R. Parts 64 and 68 as
indicated above.
 51. 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 Notice and the proposed rules
contained in the Appendix below by September 7, 1990, and reply comments by
September 24, 1990.  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.
 52. IT IS FURTHER ORDERED that the Chief, 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.
 53. IT IS FURTHER ORDERED that the Secretary shall cause a copy of this
Notice, including the 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 Notice to
appear in the Federal Register.
 54. IT IS FURTHER ORDERED that the Petition of the National Association of
Regulatory Utility Commissioners, RM-6767, filed April 17, 1989, IS GRANTED to
the extent indicated herein and is otherwise DENIED.  All related pleadings and
comments filed with regard to NARUC's petition are hereby incorporated by
reference.
FEDERAL COMMUNICATIONS COMMISSION
Donna R. Searcy
Secretary

FN1 47 U.S.C. s 151.

FN2 The vast majority of "0" calls fall into one of three categories:  calling
card, collect, and third number billing.  We recently noted that while operator
services used to require the intervention of a human operator, some functions
previously performed by human operators are now sometimes performed by
computers.  See Competition in the Interstate Interexchange Market, Notice of
Proposed Rule Making, CC Docket No. 90-132, FCC No. 90-90, para. 76, n. 125
(released April 13, 1990).  For the purposes of this Notice, we use the term
"operator services" to refer to "0" calls, whether or not they require the
intervention of an operator.

FN3 Complaints concerning operator services comprise the single largest
category of consumer complaints received by the Common Carrier Bureau (Bureau),
with 125 to 150 informal complaints currently being filed each month.  Since
early 1988, thousands of these complaints have been filed.

FN4 An operator service provider ("OSP") as used here is any entity that
provides operator services, including AT & T as well as the newer entrants into
the operator services industry.  We will use the term "alternative operator
service" provider or "AOS" where necessary to distinguish then ewer providers.

FN5 See United States v. American Tel. & Tel. Co., 552 F.Supp. 131
(D.D.C.1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001 (1983).

FN6 "Call aggregators," as we use the term in this Notice, are entities that
have telephones available for use by their customers, patrons, or other
transient users.  Aggregators include, for example, hotels, hospitals,
airports, and universities.

FN7 See Policy and Rules Concerning Rates for Competitive Common Carrier
Services and Facilities Authorization:  Notice of Inquiry and Proposed Rule
Making, 77 FCC2d 308 (1979) ("Notice");  First Report and Order, 85 FCC2d 1
(1980) ("First Competitive Carrier Order");  Further Notice of Proposed Rule
Making, 84 FCC2d 445 (1981) ("Further Notice");  Second Report and Order, 91
FCC2d 59 (1982) ("Second Competitive Carrier Report"), recon. denied, 93 FCC2d
59 (1983);  Fourth Report and Order, 95 FCC2d 554 (1983) ("Fourth Competitive
Carrier Order");  Fifth Report and Order, 98 FCC2d 1191 (1984) ("Fifth
Competitive Carrier Order");  Sixth Report and Order, 99 FCC2d 1020, vacated
and remanded sub nom. MCI v. FCC, 765 F.2d 1186 (D.C.Cir.1985);  (hereinafter
collectively "Competitive Carrier").

FN8 Telecommunications Research and Action Center v. Central Corporation, et
al., 4 FCCRcd 2157 (Com.Car.Bur.1989) (hereinafter "TRAC Order").  The Bureau
concluded that while most controversies over operator services concern "0+"
calls, the issues and remedies adopted in the order are equally applicable to
"1+" calls, which include calls from coin-operated telephones that are paid in
cash, the so-called "sent paid" calls.  Id. at 2160, n. 4.

FN9 TRAC Order, 4 FCCRcd at 2159.  The Bureau, however, denied the complaint
insofar as it sought a reclassification of the defendant AOS companies as
dominant carriers under the Commission's regulatory structure and revocation of
their operating authority.  Id. at 2158.  The Bureau also concluded that the
complainants had provided no facts or arguments that would be legally
sufficient to sustain a finding that the defendants' rates were unjust and
unreasonable under the Act.  Id.

FN10 4 FCCRcd at 2159.

FN11 Id.

FN12 Id.

FN13 The TRAC Order defines call blocking as
  the process of screening the calls dialed from the presubscribed telephone
for certain predetermined numbers, and preventing or "blocking" the completion
of calls [that] would allow the caller to reach [an OSP] different from the
[presubscribed operator service] company.
4 FCCRcd at 2160 n. 6.  We noted above that the TRAC Order extends the blocking
prohibition to 1+ as well as 0+ traffic.  See supra note 8.  Asdiscussed below,
we tentatively conclude that the blocking definition should be refined to allow
OSPs the option of blocking 1+ traffic.

FN14 4 FCCRcd at 2159.  The Bureau stated, however, that it would consider
petitions to waive the blocking prohibition under some circumstances, such as
when an OSP could make the requisite showing that blocking is required in order
to prevent fraudulent use of the network.  In April 1989, four of the
defendants in the TRAC proceeding, National Telephone Services, Inc.,
International Telecharge, Inc., Payline Systems, Inc. and Telesphere Network,
Inc. filed petitions requesting general, systemwide waivers of the TRAC Order's
blocking prohibition so as to allow blocking of 10XXX access.

FN15 4 FCCRcd at 2159.

FN16 The TRAC Order describes "call splashing" as occurring
  when a caller requests a transfer from [a presubscribed operator service]
company operator to [the caller's] preferred ... carrier.  Since the call is
handed off to the preferred carrier in the city where the [operator service]
company's operations center and switch are located, the point from which the
call will be billed will often be different from the caller's originating
location, and the call may be billed at a rate different than the caller may
have anticipated.

Id. at 2160 n. 5.  For the reasons discussed below, however, we tentatively
conclude that the call splashing definition should be refined to reflect more
appropriately the nature and extent of the splashing problem and to facilitate
industry efforts to obtain a workable solution.

FN17 4 FCCRcd at 2159.

FN18 On March 29, 1989, the complainants filed an application for review of the
Bureau's decision.

FN19 See Petition of the National Association of Regulatory Utility
Commissioners, RM-6767 (filed April 17, 1989) (hereinafter "NARUC Petition").

FN20 The provision of AOS services had been the subject of considerable
discussion and study by NARUC prior to the time it filed its Rule Making
petition.  See, e.g., NARUC Staff Subcomm. on Telecommunications, State Task
Force Report on the Results of the Alternative Operator Services (AOS) Survey
(June 24, 1988);  NARUC Staff Subcomm. on Telecommunications, State Task Force
Report on the Results of the Alternative Operator Services (AOS) Survey II
(February 15, 1989).

FN21 NARUC Petition at 7.

FN22 NARUC Petition at 5.

FN23 NARUC Petition at 5-6.

FN24 NARUC Petition at 7.

FN25 Public Notice, DA 89-571 (released May 23, 1989).

FN26 See, e.g., Comments of Pacific Bell and Nevada Bell Telephone Companies;
Comments of National Association of State Utility Consumer Advocates;  Comments
of Florida Public Service Commission;  Comments of Iowa State Utilities Board;
Comments of The American Public Communications Council;  Comments of The
National Telephone Cooperative Association.

FN27 See, e.g., Comments of National Telephone Services, Inc.;  Comments of
International Telecharge, Inc.;  Comments of Telesphere Network, Inc.;
Comments of U.S. Operators, Inc.;  Comments of The Operator Service Providers
of America;  Comments of U.S. Long Distance, Inc.

FN28 As noted above, consumer complaints regarding OSP rates and practices
continue to comprise the single largest category of complaints received by the
Common Carrier Bureau.  On April 10-11, 1990, staff members from our
Washington, D.C. office and our thirty-five field offices conducted an informal
nationwide audit of selected telephones in an effort to gauge the level of
compliance with the TRAC Order requirements and to educate call aggregators as
well as OSPs about those requirements.  While we do not rely on the results of
the audit as a basis for our proposed rules, we note that the results do appear
to corroborate the fact that problems in the operator services industry
generally continue to exist for AOS providers and "traditional" OSPs alike.

FN29 The text of the proposed rules is contained in an Appendix to this Notice.

FN30 As used herein, the word "customer" refers to a caller who initiates
services through an OSP.

FN31 TRAC Order, 4 FCCRcd at 2159.

FN32 It has been brought to our attention that certain adjunct devices used by
aggregators, such as the so-called "store-and-forward" or "bong-in-the-box"
devices, allow callers to make and be billed for 1+ calls from an aggregator's
telephones, and, as such, the caller is never connected to the presubscribed
OSP's live operator for branding purposes.  We seek comment on how our branding
requirement should be applied when such devices are used.

FN33 A number of states, including Florida, Georgia, Kansas, Kentucky, and
Massachusetts, currently require some form of double branding.  In general, we
welcome any comments or evidence from states regarding their experiences with
operator services and their efforts to address consumer and industry problems.
On February 16, 1990, the Chairman of the FCC solicited comments from all of
the state attorneys general about these concerns, and several responses have
been received that describe current state laws and regulations in this area.
See, e.g., Letter from the Attorney General of Washington to Chairman Alfred C.
Sikes (February 26, 1990).  These letters and any similar ones received will be
included in the record of this proceeding.

FN34 In some cases, the owner of the telephone may not be the aggregator on
whose premises the telephone is located.  For example, a pay telephone that is
owned by a LEC or a private company may be located on the premises of an
aggregator such as a hotel or airport.

FN35 In this regard, proposed Section 64.703 goes beyond the TRAC Order, which,
in effect, placed the primary responsibility for informing the customer on the
operator service provider.  See 4 FCCRcd at 2159.

FN36 TRAC Order, 4 FCCRcd at 2159.

FN37 For example, factors we might consider in deciding whether to grant a
waiver could include the size of the aggregator, the realistic prospect of a
fraud problem, the limitations of the type of equipment in question, and the
cost and time involved in upgrading or replacing the equipment.

FN38 4 FCCRcd at 2159, 2160 n. 6.

FN39 See, e.g., Report of the Call Splashing Task Force at 5-6 (June 1, 1989)
(hereinafter "Call Splashing Report");  Comments Supporting Waiver Petitions
(ENF-89-08), filed May 30, 1989 by U.S. Operators, Inc.;  Comments In Support
of Waiver Petitions filed May 30, 1989 by ComSystems, Inc., Nycom Information
Services, Inc., and Call Technologies, Inc.

FN40 The current alternative dialing methods, 800, 950, and 10XXX, are
sometimes referred to as "access codes."  This term denotes a dialing sequence,
unique to individual carriers, that allows a caller to gain access to a
particular carrier.  The "XXX" is known as the Carrier Identification Code
(CIC).  CICs are assigned to carriers by Bell Communications Research and are
used with both the 10XXX dialing method and the 950 method, in the form of
either 950-0XXX or 950-1XXX.  See Industry Analysis Division, FCC, Report on
the Number of Carriers Holding Carrier Identification Codes at 2 (released
April 24, 1990) (hereinafter "CIC Report").  It appears that while most OSPs
provide at least two of three alternative types of access, AT & T now relies
exclusively on 10XXX and does not provide 800 or 950 access to its services.

FN41 We recognize, however, that operator-assisted calls may cost more than 1+
calls.  For example, a hotel guest who is billed directly by the hotel for a 1+
call may be charged less than would be the case with the operator-assisted call
that would be necessary if 1+ calls were blocked.  We seek comment on the
degree of these cost differentials and on whether such costs outweigh the fraud
concerns that justify our permitting 1+ blocking.

FN42 Pending disposition of this Rule Making proceeding, we will not enforce
the prohibition regarding 1+ blocking.

FN43 For example, there is no danger of fraud with "sent paid" 1+ calls from
pay telephones because the caller pays for these calls in cash.  It therefore
might be appropriate to apply our blocking prohibition to such calls.

FN44 "Answer supervision" is the term used by telephone companies to describe
the signal that the called station (or other CPE) emits to tell the telephone
companies' billing equipment that a call has been answered and that billing
should commence.  See Petition for Adoption of New Section 68.314(h) of the
Commission's Rules, Notice of Proposed Rule Making, CC Docket No. 89-114, FCC
No. 89-152, 4 FCCRcd 4577, 4585 n. 3 (released June 1, 1989) (hereinafter
"Section 68.314 Rule Making").

FN45 Currently, equal access is available for approximately 93% of the nation's
telephone lines.  As the conversion of the remaining lines to equal access
proceeds and answer supervision becomes more readily available, we anticipate
that the problem with charges for uncompleted or unanswered calls will decline.

FN46 See Section 68.314 Rule Making, 4 FCCRcd at 4581-83.

FN47 See TRAC Order, 4 FCCRcd at 2160 n. 5.

FN48 Call Splashing Report at 3.

FN49 We use "10XXX" generically;  it includes all 10XXX-type access codes,
including any eventual expansion to 10XXXX.  As described in note 40, supra,
the Carrier Identification Code, XXX, is used in both the 10XXX and the 950
dialing methods.  According to the CIC Report, 774 CICs had been assigned as of
March 1990, CIC Report at 4.  We seek comment on the anticipated length of time
until an expansion to a four-digit CIC is required and on what action, if any,
the Commission could take to ensure the efficient use of these codes.

FN50 See NARUC Petition at 7, Appendix C.

FN51 Ambassador, Inc. v. United States, 325 U.S. 317, 322, 326 (1945);  United
States v. AT & T, 57 F.Supp. 451, 454 (S.D.N.Y.1944), aff'd sub nom. Hotel
Astor v. United States, 325 U.S. 837 (1945).  Any commenters who believe we
lack jurisdiction under Title II should also address why we do not have
ancillary jurisdiction over call aggregators.  See 47 U.S.C. s 152(a) ("The
provisions of this act shall apply to all interstate and foreign communications
by wire....").  See generally United States v. Southwestern Cable Co., 392 U.S.
157 (1968).

FN52 47 U.S.C. s 205(b).

FN53 47 U.S.C. s 503(b)(1), (2).

                                   APPENDIX

                                PROPOSED RULES

 It is proposed that Part 64 of Title 47 of the Code of Federal Regulations be
amended as follows:
 1. The authority citation for Part 64 continues to read as follows:

AUTHORITY:  Sec. 4, 48 Stat. 1066, as amended;  47 U.S.C. 154, unless otherwise
noted.  Interpret or apply secs. 201, 218, 48 Stat. 1070, as amended, 1077;  47
U.S.C. 201, 218, unless otherwise noted.

2. A new Section 64.703 is added to read as follows:

s 64.703 Customer information.

  (a) An operator service provider shall:
  (1) identify itself, audibly and distinctly, to the customer before the
customer incurs any charges;
  (2) after the identification, allow sufficient time before the call is
connected to permit the customer either to terminate the call at no charge or
to advise the operator to transfer the call to the customer's preferred
interstate or international common carrier at no charge;  and
  (3) disclose immediately, upon request by, and without charge to, the
customer.
    (A) the rates or charges for the customer's intended call;
    (B) the methods by which such rates or charges will be collected;  and
    (C) the methods by which complaints concerning rates, charges, or
collection practices will be resolved.
  (b) Each call aggregator shall display plainly on or in close proximity to
all telephones available for customer use, or shall provide to customers
personally, printed documentation containing:
  (1) the name(s), address(es), and toll-free telephone number(s) of the
operator service provider(s) to which the telephones are presubscribed;
  (2) a statement that the rates of the operator service provider(s) will be
quoted upon request;  and
  (3) a written disclosure that informs customers that they have a right to
obtain access to the carrier of their choice if said carrier provides service
in that area and that informs them of how to contact that carrier.
  (c) Satisfaction of the requirements of subsection (b) shall be the joint
responsibility of the operator service provider, the call aggregator, and the
owner of the telephone;  applicable contracts or tariffs, if any, shall be
modified accordingly.
 3. A new Section 64.704 is added to read as follows:

s 64.704 Call blocking prohibited.

 (a) Call blocking occurs when an end-user is prevented from accessing the
preferred carrier through alternative dialing methods--800, 950, and 10XXX-0+.
 (b) Operator service providers shall neither require nor participate in the
blocking of any customer's access to the customer's carrier of choice.
 (c) Call aggregators shall neither require nor participate in the blocking of
any customer's access to the customer's carrier of choice.
 (d) Owners of pay telephones shall neither require nor participate in the
blocking of any customer's access to the customer's carrier of choice.
 (e) Applicable contracts or tariffs shall be modified so as to effectuate the
provisions of subsections (b), (c), and (d).
 (f) Operator service providers shall not pay compensation of any kind to call
aggregators at locations at which any blocking of access to any common carrier
occurs.
 4. A new Section 64.705 is added to read as follows:

s 64.605 Restrictions on charges related to the provision of operator services.

 Call splashing.  Operator service providers shall not charge customers for a
distance that is more than the distance, in a straight line, between the
calling party's point of origination and point of termination of the telephone
call.
 5. A new Section 64.706 is added to read as follows:

s 64.706 Access codes of interexchange carriers.

 (a) All interexchange common carriers shall establish within twelve (12)
months of the effective date of this section a "10XXX" access code and at least
one alternative form of access (e.g., a "950" or an "800" number).
 (b) Local exchange carriers shall provide to calling customers, upon request,
the access codes for specifically requested carriers operating in that local
exchange area.
 (c) Each local exchange carrier shall place in every edition of any "white
pages" telephone directory it distributes, supplies, or provides on or after
[ninety (90) days after the adoption of this section]:
 (1) instructions indicating the ways by which the 10XXX, 950, and 800 dialing
methods can be used to reach interexchange carriers and operator service
providers;  and
 (2) a listing of the 10XXX access codes and the 950 and 800 numbers of
interexchange carriers and operator service providers that serve any part of
the area that is the subject of the directory.  This listing shall be placed by
the local exchange carrier at no cost to the listed carriers or operator
service providers, and the listed carriers and operator service providers shall
bear responsibility for supplying the necessary information for this listing.
 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 continues to read as follows:

AUTHORITY:  Secs. 4, 201, 202, 203, 204, 205, 208, 215, 218, 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. 154, 201, 202, 203, 204, 205, 208, 215, 218,
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.
 (1) Any equipment that is manufactured, imported, or installed more than
eighteen (18) months after the effective date of this subsection and that is
used by any call aggregator shall be capable of providing callers with access
to common carriers through the use of all access methods--800, 950, and 10XXX-
0+.
 (2) All equipment used by call aggregators shall, within eighteen (18) months
of the effective date of this subsection, provide callers with access to common
carriers through the use of all access methods--800, 950, and 10XXX-0+.  Such
equipment shall be modified as necessary and re-registered if required by
Section 68.214.  Any software modifications required to achieve compliance with
this subsection shall be installed in a manner that cannot readily be altered
by the user.
FCC