HBA-ALS H.B. 1729 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1729 By: Danburg State Affairs 3/4/1999 Introduced BACKGROUND AND PURPOSE The purpose of this bill is to ensure that consumers are given adequate and sufficient information regarding telecommunications services and products so that they may make informed choices and protect themselves against fraudulent and deceptive business practices, and to prevent the switching of a customer's chosen telecommunications utility without the customer's permission. H.B. 1729 imposes rules regarding billing for telecommunications products and services by a provider of a telecommunications product or service (provider), and grants the Public Utility Commission of Texas (commission) rulemaking authority to enforce those rules. This bill amends and codifies the Public Utility Regulatory Act, which grants rulemaking authority to the commission to adopt rules that apply to all local exchange telephone service, interexchange telecommunications service, and other telecommunications service provided by telecommunications utilities. In doing so, the bill sets out prohibitions on deceptive practices in obtaining authorizations and verifications to change a customer's telecommunications utility; provides requirements, corrective action, and penalties for a provider who makes an unauthorized or unverified change to a customer's telecommunications utility selection; and allows the commission to prohibit a utility from engaging in a deceptive or fraudulent practice. H.B.1729 also provides the conditions relating to customer consent and retention of records that must be met by a provider in order to charge for a product or service on a customer's telephone bill. In addition, this bill prohibits providers, billing telephone companies, and billing agents from using misrepresentation while soliciting customers; provides enforcement measures and penalties for violations of this subchapter; requires the establishment of rules by the commission relating to customer complaints about telephone bill charges; and requires the commission to adopt rules and issue orders necessary to protect consumer rights and enforce this subchapter. H.B. 1729 does not apply to customer-initiated services, operator services, or services carried over a telecommunications network if the dialed digits are displayed on the customer's bill, except for recurring charges arising from the use of a customer-initiated service. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Public Utility Commission of Texas in SECTIONS 1 and 3 (Section 55.011, 55.326, and 55.328, Utilities Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter A, Chapter 55, Utilities Code, by adding Section 55.011, as follows: Sec. 55.011. TELECOMMUNICATIONS BILLING. (a) Provides that it is the state's policy to ensure that consumers are given adequate and sufficient information regarding services and products in order to make informed choices, eliminate confusion, and protect against fraudulent and deceptive business practices. (b) Provides that a bill for telecommunications products or services must contain an account summary that is located at the beginning of the bill, and a following summary page which separately identifies basic service, optional services and features, toll service, and long-distance service, and include the current status of the customer's services, the customer's presubscribed interstate carrier, intrastate toll carrier, and local exchange, and whether carrier freezes or other blocking mechanisms have been implemented. Prohibits the summary pages from including an advertisement or charge for a product or service unless it is a telecommunications product or service. Provides that the summary page must notify a customer of a change or addition to products or services which appears in the bill. Requires the provider of a telecommunications product or service (provider) to notify the billing telephone company of a change or addition to a customer's bill, and allow the company to recover the cost of providing such notices from a service provider or billing agent. Defines "billing agent" and "billing telephone company." (c) Provides that each charged product or service appearing on the bill must be described using plain and unambiguous language, and may not be described as "miscellaneous" or in misleading terms. Provides that the bill must include the name of the provider of each product or service, the name of an underlying carrier, and a toll-free complaint number. (d) Prohibits a provider from engaging in negative option billing or negative enrollment of services. (e) Prohibits the inclusion of a surcharge or line item unless it is specifically authorized by federal or state law. (f) Grants the Public Utility Commission of Texas (commission) all necessary jurisdiction to adopt and enforce rules that are required by this section. Authorizes the commission to notify or require another person to notify customers of their rights under this section. SECTION 2. Amends and codifies Section 3.312,, Article 1446c-0, V.T.C.S., as added by Section 1, Chapter 919, Acts of the 75th Legislature, Regular Session, 1997 (Public Utility Regulatory Act of 1995), as Subchapter K, Chapter 55, Utilities Code, as follows: SUBCHAPTER K. SELECTION OF TELECOMMUNICATIONS UTILITIES Sec. 55.301. STATE POLICY. Makes no change to this section. Sec. 55.302. COMMISSION RULES. Makes no change to this section. Sec. 55.303. VERIFICATION OF CARRIER-INITIATED CHANGE. Makes no change to this section. Sec. 55.304. CUSTOMER-INITIATED CHANGE. Makes no change to this section. Sec. 55.305. UNAUTHORIZED CHANGE. Requires a telecommunications utility that initiates an unauthorized customer change to pay the customer a penalty of $25 for each violation if the commission directs it to do so. Makes a conforming change. Sec. 55.306. CORRECTIVE ACTION AND PENALTIES. Makes no change to this section. Sec. 55.307. REPEATED AND RECKLESS VIOLATION. Authorizes the commission to deny, in addition to suspending, restricting, or revoking, the registration, certificate, or amended certificate of a telecommunications utility that is found by the commission to have repeatedly and recklessly violated the commission's telecommunications utility selection rules if it is in the public's interest. Sec. 55.308. DECEPTIVE OR FRAUDULENT PRACTICE. Adds this section to authorize the commission to prohibit a utility from engaging in a deceptive or fraudulent practice, including a marketing practice, involving the selection of a customer's telecommunications utility. Authorizes the commission to define deceptive and fraudulent practices under this section. SECTION 3. Amends Chapter 55, Utilities Code, by adding Subchapter L, as follows: SUBCHAPTER L. UNAUTHORIZED CHARGES ON TELEPHONE BILLS Sec. 55.321. DEFINITIONS. Defines "billing agent" and "billing telephone company." Sec. 55.322. PREVENTION OF UNAUTHORIZED CHARGES. (a) Prohibits a provider, billing telephone company, or billing agent from charging for a product or service on a customer's telephone bill or submitting such charges to a billing telephone company for inclusion on a customer's bill unless specified conditions are met. (b) Requires the provider to retain records of a customer's consent to charges until the first anniversary of the date of the consent, and upon request, to provide a copy of the record to that customer, the telephone billing company, the commission, and the office of public utility counsel. (c) Requires the provider to maintain records authorizing a provider to bill for a service or product on the billing telephone company's bill until the first anniversary of the date of permanent discontinuation of the billing arrangement. (d) Entitles the customer to an adjustment on the bill plus interest for a payment made by the customer for an unauthorized charge, or the removal of the charges if the provider, billing telephone company, or billing agent cannot provide evidence of the customer's consent pursuant to this section. Prohibits the interruption or termination of telephone service while the charges are under dispute if the undisputed portion of the bill is paid or of local exchange telephone service if charges for that service is paid. (e) Provides that a written authorization must be separate from any solicitation material, and the sole purpose of the consent or order must be to explain the nature and extent of the transaction. Provides that the authorization materials must be unambiguous, legible, in a minimum of 10-point type. Provides that written or oral solicitation materials must be in the same language as the written order or written consent. Prohibits the authorization document from being used as an entry from for a sweepstakes, contest, or any program offering prizes or gifts. Sec. 55.323. MISREPRESENTATION OF ASSOCIATION OR AFFILIATION. Prohibits a provider from misrepresenting its association or affiliation with a billing telephone company when it solicits, induces, or implements the customer's agreement to purchase the product or service. Sec. 55.324. ENFORCEMENT. Authorizes the commission to implement penalties and enforcement actions against a telecommunications utility or telecommunications provider under Subchapter B, Chapter 15 (Judicial Review, Enforcement, and Penalties), if the commission finds that the utility or provider has violated this subchapter. Authorizes the commission to enforce Sections 15.021-15.028 and 15.030-15.033 (relating to enforcement and penalties for violations) against a provider of a product service or billing agent as if it were regulated by the commission if the commission finds that provider violated this subchapter or knowingly provided false information to the commission on a matter subject to this subchapter. Provides that this subchapter does not grant the commission jurisdiction to regulate a provider or billing agent except as specified by this subchapter. Sec. 55.325. TERMINATION OF SERVICES. Authorizes the commission to order a billing telephone company to terminate the billing and collection services for a provider or billing agent if it finds that the provider or billing agent has violated this subchapter. Authorizes a billing telephone company to act on its own to terminate billing and collection services. Sec. 55.326. REPORT OF COMPLAINTS; COOPERATION. Requires the commission to establish rules requiring a provider, billing telephone company, and billing agent to provide complaint reports made by customers regarding charges to the commission and the Office of the Public Utility Counsel, and to cooperate with the commission's efforts to enforce this subchapter. Sec. 55.327. LIMITATION ON EFFECT OF SUBCHAPTER. Provides that this subchapter is not applicable to customer-initiated services, operator services or services carried over a telecommunications network if the dialed digits are displayed on the telephone bill except for recurring charges for use of a customer-initiated service. Provides that a billing telephone company is not obligated under this subchapter to provide billing and collection services to a provider or billing agent. Sec. 55.328. RULES. Requires the commission to adopt rules and issue orders as necessary to protect consumers' rights and to enforce this subchapter. SECTION 4. Amends Section 52.102, Utilities Code, to make conforming and nonsubstantive changes. SECTION 5. Amends Section 15.024(c), Utilities Code, to provide that this subsection, which prohibits the assessment of a penalty against a person who remedies a violation before the 31st day after the person received the specified notice, does not apply to a violation under Subchapter K or L, Chapter 55. SECTION 6. Provides that this Act does not limit the attorney general's authority. SECTION 7. Requires the commission to adopt nondiscriminatory and competitively neutral rules needed to implement Section 2 of this Act by November 1, 1999. SECTION 8. Provides that in accordance with Section 311.031(c), Government Code (giving effect to a substantive amendment enacted by the same legislature that codifies the amended statute), the text of Section 52.102, Utilities Code, and Subchapter K, Chapter 55, Utilities Code, as set out in this Act, gives effect to changes made by Chapter 919, Acts of the 75th Legislature, Regular Session, 1997. Provides that to the extent of any conflict, the text of Section 52.102, Utilities Code, as set out in this Act, controls over another Act of the 76th Legislature, Regular Session, 1999 relating to nonsubstantive additions and corrections in enacted codes. SECTION 9.Effective date: September 1, 1999. SECTION 10.Emergency clause.