Telecom Consumer Protection Seminar Flags Potential Pitfalls

Posted: 8/2003

Telecom Consumer Protection
Seminar Flags Potential Pitfalls

By James M. Smith

"We establish policies that
encourage entry into the marketplace, firms compete based on price and service
quality, and consumers make choices that maximize their welfare. In the end,
some firms succeed and some might fail," summed up FCC Commissioner
Kathleen Q. Abernathy at the daylong "Telecom Consumer Protection
2003" seminar hosted by Davis Wright Tremaine LLP (DWT). The program,
attended by about 60 telecom company executives, addressed the changing and
increasingly treacherous landscape of consumer protection requirements imposed
on telecom service providers by federal and state regulators. The day’s topics
included FCC, FTC and state consumer protection regulations in the areas of
telemarketing, spamming, customer proprietary network information (CPNI),
slamming, cramming and customer verification, service quality and detariffing.

Commissioner Abernathy, who has
specialized in consumer protection issues during her two years at the FCC, began
her keynote luncheon address by citing FCC Chairman Michael Powell’s mantra that
"everything we do is about consumer." She said while the FCC should
trust the market and allow competition to thrive wherever possible, both the
agency and industry must educate the public on their rights as
telecommunications consumers, and that the FCC and state public utility
commisions must be willing to step in and enforce their consumer protection
rules when the market fails to protect consumers. She cited the FCC’s policy of
largely relying on market forces to govern most aspects of the emerging wireless
industry as proof of the wisdom of its "trust the market" philosophy.
She hailed the agency’s increased consumer outreach efforts and the creation of
its new Consumer and Governmental Affairs Bureau, but added that "stringent
enforcement is crucial when we rely on market forces rather than prescriptive
regulations," noting that the FCC has levied about $17.5 million in
penalties in the past three years for slamming violations alone.

The balance of the seminar comprised
presentations by DWT attorneys, FCC officials and outside experts on the key
telecom consumer protection issues and on new and changing federal and state
rules they must follow in order to satisfy consumers and avoid massive
liabilities:

• New FTC and FCC national
  "do-not-call" and related telemarketing initiatives.

• Proliferation of unsolicited
  commercial e-mail and wireless text messages, recent legislative and
  regulatory efforts to curb and punish spammers both in the United States and
  abroad.

• FCC’s new and modified CPNI
  rules, which restrict telecom providers’ use and external dissemination of
  customer-specific information for cross-marketing, "winback" and
  other purposes.

• Heightened federal and state
  agency enforcement of their slamming, cramming and customer verification
  rules.

• New state and federal service
  quality initiatives, especially with respect to wireless services.

• The loss of interstate tariff
  rules and the filed rate doctrine.

The seminar may be repeated in a
West Coast city in the fall. Interested parties should contact the author or DWT.

James M. Smith, a former president
of CompTel, is an attorney with the Washington, D.C., office of Davis Wright
Tremaine LLP. He can be reached at +1 202 508 6688 or [email protected].