FCC hits slammers with $1.2 million fine

The commission levies a fine against a New Jersey long distance telephone company, marking the first punch against telephone "slammers."

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
2 min read
The Federal Communications Commission levied a $1.2 million fine against a New Jersey long distance telephone company today, marking the first punch in what is likely to be a one-two combination against telephone "slammers" this week.

The fine was part of a consent agreement with telephone reseller Minimum Rate Pricing, which had earlier been the subject of slamming complaints in several states. MRP did not admit that they were in the wrong in the agreement, but said it will pay the fine and will have to abide by restrictions on its marketing efforts for three years.

The FCC is expected to follow up the consent decree by passing a new set of anti-slamming regulations at tomorrow's commission meeting.

Slamming, which is the practice of switching a consumer's telephone provider without their permission, is now the number one source of complaints directed to the FCC. More than 16,000 long distance subscribers have told federal regulators their service was changed without their knowledge this year alone, according to the commission.

The practice also has attracted the attention of Washington politicians. A bill banning the practice fell flat at the end of this year's congressional session, after getting caught up in a controversy over email spamming.

A group of largely Republican congressmen--including some of those who have been the FCC's most vocal critics in recent months--sent a letter to the FCC earlier this week asking the body to pass its own anti-slamming rules where Congress had failed.

At its meeting tomorrow, the commission will debate whether to exempt consumers whose service has been switched without permission from paying the new company any fees for a period of time. The commission is also expected to look at methods to regulate the way companies can switch consumers, such as requiring that a third party verify the consumer's decision.

The rules being discussed tomorrow are similar to the conditions imposed on Minimum Rate Pricing as a part of today's consent decree. Under that agreement, the company will not be able to do any telemarketing until January of next year, can not have any "switch back" provisions--which automatically return subscribers to its service after leaving--in its contracts, and must have any customer changes verified by a third party.

The slamming fine levied on MRP, which has also been the target of state actions in Florida and Tennessee, was the largest yet coming as a part of a federal consent decree.