1. (a) Purpose and Application.

   1. (1) Purpose. The provisions of this section are intended to ensure that all customers in this state are protected from an unauthorized change in a customer's local or long-distance telecommunications utility.
   2. (2) Application. This section, including any references in this section to requirements in 47 Code of Federal Regulations (C.F.R.) §64.1120 and §64.1130 (changing long distance service), applies to all "telecommunications utilities," as that term is defined in §26.5 of this title (relating to Definitions). This section does not apply to an unauthorized charge unrelated to a change in preferred telecommunications utility which is addressed in §26.32 of this title (relating to Protection Against Unauthorized Billing Charges ("Cramming")).

2. (b) Definitions. The following words and terms when used in this section shall have the following meanings unless the context indicates otherwise:

   1. (1) Authorized telecommunications utility - Any telecommunications utility that submits a change request that is in accordance with the requirements of this section.
   2. (2) Customer - Any person, and that person's spouse, in whose name telephone service is billed, including individuals, governmental units at all levels of government, corporate entities, and any other entity with legal capacity to be billed for telephone service.
   3. (3) Executing telecommunications utility - Any telecommunications utility that effects a request that a customer's preferred telecommunications utility be changed. A telecommunications utility may be treated as an executing telecommunications utility; however, if it is responsible for any unreasonable delays in the execution of telecommunications utility changes or for the execution of unauthorized telecommunications utility changes, including fraudulent authorizations.
   4. (4) Submitting telecommunications utility - Any telecommunications utility that requests on behalf of a customer that the customer's preferred telecommunications utility be changed.
   5. (5) Unauthorized telecommunications utility - Any telecommunications utility that submits a change request that is not in accordance with the requirements of this section.

3. (c) Changes in preferred telecommunications utility.

   1. (1) Changes by a telecommunications utility. Before a change order is processed, the submitting telecommunications utility must obtain verification from the customer that such change is desired for each affected telephone line(s) and ensure that such verification is obtained in accordance with 47 C.F.R. §64.1120. In the case of a change by written solicitation, the submitting telecommunications utility must obtain verification as specified in 47 C.F.R. §64.1130, and subsection (d) of this section, relating to Letters of Agency. The submitting telecommunications utility shall submit a change order within 60 days after obtaining verification from the customer. The submitting telecommunications utility must maintain records of all changes, including verifications, for a period of 24 months and shall provide such records to the customer, if the customer challenges the change, and to the Public Utility Commission (commission) staff upon request. A change order must be verified by one of the following methods:

      1. (A) Written or electronically signed authorization from the customer in a form that meets the requirements of subsection (d) of this section. A customer shall be provided the option of using another authorization method in lieu of an electronically signed authorization.

      2. (B) Electronic authorization placed from the telephone number which is the subject of the change order except in exchanges where automatic recording of the automatic number identification (ANI) from the local switching system is not technically possible. The submitting telecommunications utility must:

         1. (i) ensure that the electronic authorization confirms the information described in subsection (d)(3) of this section; and
         2. (ii) establish one or more toll-free telephone numbers exclusively for the purpose of verifying the change so that a customer calling toll-free number(s) will reach a voice response unit or similar mechanism that records the required information regarding the change and automatically records the ANI from the local switching system.

      3. (C) Oral authorization by the customer for the change that meets the following requirements:

         1. (i) The customer's authorization shall be given to an appropriately qualified and independent third party that confirms appropriate verification data such as the customer's date of birth or mother's maiden name.
         2. (ii) The verification must be electronically recorded in its entirety on audio tape, a wave sound file, or other recording device that is compatible with the commission's equipment.
         3. (iii) The recording shall include clear and conspicuous confirmation that the customer authorized the change in telephone service provider.
         4. (iv) The third party verification shall elicit, at minimum, the identity of the customer, confirmation that the person on the call is authorized to make the change in service, the names of the telecommunications utilities affected by the change, the telephone number(s) to be switched, and the type of service involved.
         5. (v) The third party verification shall be conducted in the same language used in the sales transaction.
         6. (vi) Automated systems shall provide customers the option of speaking with a live person at any time during the call.
         7. (vii) A telecommunications utility or its sales representative initiating a three-way call or a call through an automated verification system shall drop off the call once a three-way connection has been established.

         8. (viii) The independent third party shall:

            1. (I) not be owned, managed, or directly controlled by the telecommunications utility or the telecommunications utility's marketing agent;
            2. (II) not have financial incentive to confirm change orders; and
            3. (III) operate in a location physically separate from the telecommunications utility or the telecommunications utility's marketing agent.
   2. (2) Changes by customer request directly to the local exchange company. If a customer requests a change in preferred telecommunications utility by contacting the local exchange company directly and the local exchange company is not the chosen carrier or affiliate of the chosen carrier, the verification requirements in paragraph (1) of this subsection do not apply. The local exchange company shall maintain a record of the customer's request for 24 months.

4. (d) Letters of Agency (LOA). A written or electronically signed authorization from a customer for a change of telecommunications utility shall use a letter of agency (LOA) as specified in this subsection:

   1. (1) The LOA shall be a separate or easily separable document or located on a separate screen or webpage containing only the authorizing language described in paragraph (3) of this subsection for the sole purpose of authorizing the telecommunications utility to initiate a telecommunications utility change. The LOA must be signed and dated by the customer requesting the telecommunications utility change. An LOA submitted with an electronically signed authorization shall include the consumer disclosures required by the Electronic Signatures in Global and National Commerce Act §101(c).

   2. (2) The LOA shall not be combined with inducements of any kind on the same document, screen, or webpage except that the LOA may be combined with a check as specified in subparagraphs (A) and (B) of this paragraph:

      1. (A) An LOA combined with a check may contain only the language set out in paragraph (3) of this subsection, and the necessary information to make the check a negotiable instrument.
      2. (B) A check combined with an LOA shall not contain any promotional language or material but shall contain on the front and back of the check in easily readable, bold-faced type near the signature line, a notice similar in content to the following: "By signing this check, I am authorizing (name of the telecommunications utility) to be my new telephone service provider for (the type of service that will be provided)."

   3. (3) LOA language.

      1. (A) At a minimum, the LOA shall be printed with sufficient size and readable type to be clearly legible and shall contain clear and unambiguous language that confirms:

         1. (i) the customer's billing name and address and each telephone number to be covered by the preferred telecommunications utility change order;
         2. (ii) the decision to change preferred carrier from the current telecommunications utility to the new telecommunications utility and identifies each;
         3. (iii) that the customer designates (name of the new telecommunications utility) to act as the customer's agent for the preferred carrier change;
         4. (iv) that the customer understands that only one preferred telecommunications utility may be designated for each type of service (local, intraLATA, and interLATA) for each telephone number. The LOA shall contain separate statements regarding those choices, although a separate LOA for each service is not required; and
         5. (v) that the customer understands that any preferred carrier selection the customer chooses may involve a one-time charge to the customer for changing the customer's preferred telecommunications utility and that the customer may consult with the carrier as to whether a fee applies to the change.
      2. (B) The following LOA form meets the requirements of this subsection. Other versions may be used, but shall comply with all of the requirements of this subsection.
         Attached Graphic
         
   4. (4) The LOA shall not require that a customer take some action in order to retain the customer's current telecommunications utility.
   5. (5) If any portion of an LOA is translated into another language, then all portions must be translated. The LOA must be translated into the same language as promotional materials, oral descriptions or instructions provided with the LOA.

5. (e) Notification of alleged unauthorized change.

   1. (1) When a customer informs an executing telecommunications utility of an alleged unauthorized telecommunications utility change, the executing telecommunications utility shall immediately notify both the authorized and alleged unauthorized telecommunications utility of the incident.
   2. (2) Any telecommunications utility, executing, authorized, or alleged unauthorized, that is informed of an alleged unauthorized telecommunications utility change shall direct the customer to contact the Public Utility Commission of Texas.
   3. (3) The alleged unauthorized telecommunications utility shall remove all unpaid charges pending a determination of whether an unauthorized change occurred.
   4. (4) The alleged unauthorized telecommunications utility may challenge a complainant's allegation of an unauthorized change by notifying the complainant to file a complaint with the Public Utility Commission of Texas within 30 days. If the complainant does not file a complaint within 30 days, the unpaid charges may be reinstated.
   5. (5) The alleged unauthorized telecommunications utility shall take all actions within its control to facilitate the customer's prompt return to the original telecommunication utility within three business days of the customer's request.
   6. (6) The alleged unauthorized telecommunications utility shall also be liable to the customer for any charges assessed to change the customer from the authorized telecommunications utility to the alleged unauthorized telecommunications utility in addition to charges assessed for returning the customer to the authorized telecommunications utility.

6. (f) Unauthorized changes.

   1. (1) Responsibilities of the telecommunications utility that initiated the change. If a customer's telecommunications utility is changed without verification consistent with this section, the telecommunications utility that initiated the unauthorized change shall:

      1. (A) take all actions within its control to facilitate the customer's prompt return to the original telecommunication utility within three business days of the customer's request;
      2. (B) pay all charges associated with returning the customer to the original telecommunications utility within five business days of the customer's request;
      3. (C) provide all billing records to the original telecommunications utility related to the unauthorized change of services within ten business days of the customer's request;
      4. (D) pay the original telecommunications utility any amount paid to it by the customer that would have been paid to the original telecommunications utility if the unauthorized change had not occurred, within 30 business days of the customer's request;

      5. (E) return to the customer within 30 business days of the customer's request:

         1. (i) any amount paid by the customer for charges incurred during the first 30 days after the date of an unauthorized change; and
         2. (ii) any amount paid by the customer after the first 30 days in excess of the charges that would have been charged if the unauthorized change had not occurred; and
      6. (F) remove all unpaid charges.

   2. (2) Responsibilities of the original telecommunications utility. The original telecommunications utility shall:

      1. (A) inform the telecommunications utility that initiated the unauthorized change of the amount that would have been charged for identical services if the unauthorized change had not occurred, within ten business days of the receipt of the billing records required under paragraph (1)(C) of this subsection;
      2. (B) where possible, provide to the customer all benefits associated with the service, such as frequent flyer miles that would have been awarded had the unauthorized change not occurred, on receiving payment for service provided during the unauthorized change;

      3. (C) maintain a record of customers that experienced an unauthorized change in telecommunications utilities that contains:

         1. (i) the name of the telecommunications utility that initiated the unauthorized change;
         2. (ii) the telephone number(s) affected by the unauthorized change;
         3. (iii) the date the customer asked the telecommunications utility that made the unauthorized change to return the customer to the original telecommunications utility; and
         4. (iv) the date the customer was returned to the original telecommunications utility; and
      4. (D) not bill the customer for any charges incurred during the first 30 days after the unauthorized change, but may bill the customer for unpaid charges incurred after the first 30 days based on what it would have charged if the unauthorized change had not occurred.

7. (g) Notice of customer rights.

   1. (1) Each telecommunications utility shall make available to its customers the notice set out in paragraph (3) of this subsection.
   2. (2) Each notice provided under paragraph (5)(A) of this subsection shall contain the name, address and telephone numbers where a customer can contact the telecommunications utility.
   3. (3) Customer notice. The notice shall state:
      Attached Graphic
      
   4. (4) The customer notice requirements in paragraph (3) of this subsection may be combined with the notice requirements of §26.32(g)(1) and (2) of this title (relating to Protection Against Unauthorized Billing Charges ("Cramming")) if all of the information required by each is in the combined notice.

   5. (5) Language, distribution and timing of notice.

      1. (A) Telecommunications utilities shall send the notice to new customers at the time service is initiated, and upon customer request.
      2. (B) Each telecommunications utility shall print the notice in the white pages of its telephone directories, beginning with any directories published 30 days after the effective date of this section and thereafter. The notice that appears in the directory is not required to list the information contained in paragraph (2) of this subsection.
      3. (C) The notice shall be in both English and Spanish as necessary to adequately inform the customer. The commission may exempt a telecommunications utility from the Spanish requirement if the telecommunications utility shows that 10% or fewer of its customers are exclusively Spanish-speaking, and that the telecommunications utility will notify all customers through a statement in both English and Spanish that the information is available in Spanish by mail from the telecommunications utility or at the utility's offices.

8. (h) Compliance and enforcement.

   1. (1) Records of customer verifications and unauthorized changes. A telecommunications utility shall provide a copy of records maintained under the requirements of subsections (c), (d), and (f)(2)(C) of this section to the commission staff upon request.
   2. (2) Administrative penalties. If the commission finds that a telecommunications utility is in violation of this section, the commission shall order the utility to take corrective action as necessary, and the utility may be subject to administrative penalties pursuant to the Public Utility Regulatory Act (PURA) §15.023 and §15.024.
   3. (3) Certificate revocation. If the commission finds that a telecommunications utility is repeatedly and recklessly in violation of this section, and if consistent with the public interest, the commission may suspend, restrict, deny, or revoke the registration or certificate, including an amended certificate, of the telecommunications utility, thereby denying the telecommunications utility the right to provide service in this state.
   4. (4) Coordination with the office of the attorney general. The commission shall coordinate its enforcement efforts regarding the prosecution of fraudulent, misleading, deceptive, and anticompetitive business practices with the office of the attorney general in order to ensure consistent treatment of specific alleged violations.

9. (i) Notice of identity of a customer's telecommunications utility. Any bill for telecommunications services must contain the following information in easily-read, bold type in each bill sent to a customer. Where charges for multiple lines are included in a single bill, this information must appear on the first page of the bill if possible or displayed prominently elsewhere in the bill:

   1. (1) The name and telephone number of the telecommunications utility providing local exchange service if the bill is for local exchange service.
   2. (2) The name and telephone number of the primary interexchange carrier if the bill is for interexchange service.
   3. (3) The name and telephone number of the local exchange and interexchange providers if the local exchange provider is billing for the interexchange carrier. The commission may, for good cause, waive this requirement in exchanges served by incumbent local exchange companies serving 31,000 access lines or less.
   4. (4) A statement that customers who believe they have been slammed may contact the Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas 78711-3326, (512) 936-7120 or in Texas (toll-free) 1 (888) 782-8477, fax: (512) 936-7003, e-mail address: customer@puc.state.tx.us. Hearing and speech-impaired individuals with text telephones (TTY) may contact the commission at (512) 936-7136. This statement may be combined with the statement requirements of §26.32(g)(4) of this title if all of the information required by each is in the combined statement.

10. (j) Preferred telecommunications utility freezes.

    1. (1) Purpose. A preferred telecommunications utility freeze ("freeze") prevents a change in a customer's preferred telecommunications utility selection unless the customer gives consent to the local exchange company that implemented the freeze.
    2. (2) Nondiscrimination. All local exchange companies that offer freezes shall offer freezes on a nondiscriminatory basis to all customers regardless of the customer's telecommunications utility selection except for local telephone service.
    3. (3) Type of service. Customer information on freezes shall clearly distinguish between intraLATA and interLATA telecommunications services. The local exchange company offering a freeze shall obtain separate authorization for each service for which a freeze is requested.

    4. (4) Freeze information. All information provided by a telecommunications utility about freezes shall have the sole purpose of educating customers and providing information in a neutral way to allow the customer to make an informed decision, and shall not market or induce the customer to request a freeze. The freeze information provided to customers shall include:

       1. (A) a clear, neutral explanation of what a freeze is and what services are subject to a freeze;
       2. (B) instructions on lifting a freeze that make it clear that these steps are in addition to required verification for a change in preferred telecommunications utility;
       3. (C) an explanation that the customer will be unable to make a change in telecommunications utility selection unless the customer lifts the freeze; and
       4. (D) a statement that there is no charge to the customer to impose or lift a freeze.

    5. (5) Freeze verification. A local exchange company shall not implement a freeze unless the customer's request is verified using one of the following procedures:

       1. (A) A written and signed or electronically signed authorization that meets the requirements of paragraph (6) of this subsection.
       2. (B) An electronic authorization placed from the telephone number on which a freeze is to be imposed. The electronic authorization shall confirm appropriate verification data such as the customer's date of birth or mother's maiden name and the information required in paragraph (6)(G) of this subsection. The local exchange company shall establish one or more toll-free telephone numbers exclusively for this purpose. Calls to the number(s) will connect the customer to a voice response unit or similar mechanism that records the information including the originating ANI.

       3. (C) An appropriately qualified independent third party obtains the customer's oral authorization to submit the freeze and confirms appropriate verification data such as the customer's date of birth or mother's maiden name and the information required in paragraph (6)(G) of this subsection. This shall include clear and conspicuous confirmation that the customer authorized a freeze. The independent third party shall:

          1. (i) not be owned, managed, or directly controlled by the local exchange company or the local exchange company's marketing agent;
          2. (ii) not have financial incentive to confirm freeze requests; and
          3. (iii) operate in a location physically separate from the local exchange company or its marketing agent.
       4. (D) Any other method approved by Federal Communications Commission rule or order granting a waiver.

    6. (6) Written authorization. A written freeze authorization shall:

       1. (A) be a separate or easily separable document with the sole purpose of imposing a freeze;
       2. (B) be signed and dated by the customer;
       3. (C) not be combined with inducements of any kind;
       4. (D) be completely translated into another language if any portion is translated;
       5. (E) be translated into the same language as any educational materials, oral descriptions, or instructions provided with the written freeze authorization;
       6. (F) be printed with readable type of sufficient size to be clearly legible; and

       7. (G) contain clear and unambiguous language that confirms:

          1. (i) the customer's name, address, and telephone number(s) to be covered by the freeze;
          2. (ii) the decision to impose a freeze on the telephone number(s) and the particular service with a separate statement for each service to be frozen;
          3. (iii) that the customer understands that a change in telecommunications utility cannot be made unless the customer lifts the freeze; and
          4. (iv) that the customer understands that there is no charge for imposing or lifting a freeze.

    7. (7) Lifting freezes. A local exchange company that executes a freeze request shall allow customers to lift a freeze by:

       1. (A) written and signed or electronically signed authorization stating the customer's intent to lift a freeze;
       2. (B) oral authorization stating an intent to lift a freeze confirmed by the local exchange company with appropriate confirmation verification data such as the customer's date of birth or mother's maiden name;
       3. (C) a three-way conference call with the local exchange company, the telecommunications utility that will provide the service, and the customer; or
       4. (D) any other method approved by Federal Communications Commission rule or order granting a waiver.
    8. (8) No customer charge. The customer shall not be charged for imposing or lifting a freeze.
    9. (9) Local service freeze prohibition. A local exchange company shall not impose a freeze on local telephone service.
    10. (10) Marketing prohibition. A local exchange company shall not initiate any marketing of its services during the process of implementing or lifting a freeze.
    11. (11) Freeze records retention. A local exchange company shall maintain records of all freezes and verifications for a period of 24 months and shall provide these records to customers and to the commission staff upon request.
    12. (12) Suggested freeze information language. Telecommunications utilities that inform customers about freezes may use the following language. Other versions may be used, but shall comply with all of the requirements of paragraph (4) of this subsection.
        Attached Graphic
        
    13. (13) Suggested freeze authorization form. The following form is recommended for written authorization from a customer requesting a freeze. Other versions may be used, but shall comply with all of the requirements of paragraph (6) of this subsection.
        Attached Graphic
        
    14. (14) Suggested freeze lift form. The following form is recommended for written authorization to lift a freeze. Other versions may be used, but shall comply with all of the requirements of paragraph (7) of this subsection.
        Attached Graphic
        

11. (k) Transferring customers from one telecommunications utility to another.

    1. (1) Any telecommunications utility that will acquire customers from another telecommunications utility that will no longer provide service due to acquisition, merger, bankruptcy or any other reason, shall provide notice to every affected customer. The notice shall be in a billing insert or separate mailing at least 30 days prior to the transfer of any customer. If legal or regulatory constraints prevent sending the notice at least 30 days prior to the transfer, the notice shall be sent promptly after all legal and regulatory conditions are met. The notice shall:

       1. (A) identify the current and acquiring telecommunications utilities;
       2. (B) explain why the customer will not be able to remain with the current telecommunications utility;
       3. (C) explain that the customer has a choice of selecting a service provider and may select the acquiring telecommunications utility or any other telecommunications utility and that the customer may incur a charge if the customer selects another telecommunications utility;
       4. (D) explain that if the customer wants another telecommunications utility, the customer should contact that telecommunication utility or the local telephone company;
       5. (E) explain the time frame for the customer to make a selection and what will happen if the customer makes no selection;
       6. (F) identify the effective date that customers will be transferred to the acquiring telecommunications utility;
       7. (G) provide the rates and conditions of service of the acquiring telecommunications utility and how the customer will be notified of any changes;
       8. (H) explain that the customer will not incur any charges associated with the transfer;
       9. (I) explain whether the acquiring carrier will be responsible for handling complaints against the transferring carrier; and
       10. (J) provide a toll-free telephone number for a customer to call for additional information.
    2. (2) The acquiring telecommunications utility shall provide the Customer Protection Division (CPD) with a copy of the notice when it is sent to customers.

12. (l) Complaints to the commission. A customer may file a complaint with the commission's Customer Protection Division against a telecommunications utility for any reasons related to the provisions of this section.

    1. (1) Customer complaint information. CPD shall request the following information:

       1. (A) the customer's name, address, and telephone number;
       2. (B) a brief description of the facts of the complaint;
       3. (C) a copy of the customer's and spouse's legal signature; and
       4. (D) a copy of the most recent phone bill and any prior phone bill that shows the switch in carrier.

    2. (2) Telecommunications utility's response to complaint. After review of a customer's complaint, CPD shall forward the complaint to the telecommunications utility. The telecommunications utility shall respond to CPD within 21 calendar days after CPD forwards the complaint. The telecommunications utility's response shall include the following:

       1. (A) all documentation related to the authorization and verification used to switch the customer's service; and
       2. (B) all corrective actions taken as required by subsection (f) of this section, if the switch in service was not verified in accordance with subsections (c) and (d) of this section.
    3. (3) CPD investigation. CPD shall review all of the information related to the complaint and make a determination on whether or not the telecommunications utility complied with the requirements of this section. CPD shall inform the complainant and the alleged unauthorized telecommunications utility of the results of the investigation and identify any additional corrective actions that may be required. CPD shall also inform the authorized telecommunications utility if there was an unauthorized change in service.

13. (m) Reporting requirement. Each telecommunications utility shall file a semiannual slamming report with the commission's Central Records in the assigned project number as required by paragraphs (1) and (2) of this subsection. A project number will be assigned each calendar year for this report.

    1. (1) The report shall use the format and information required by 47 C.F.R. §64.1180 containing only Texas-specific data.
    2. (2) Reports shall be submitted on August 31 (covering January 1 through June 30) and February 28 (covering July 1 through December 31).

Source Note:The provisions of this §26.130 adopted to be effective February 21, 1999, 24 TexReg 941; amended to be effective July 13, 2000, 25 TexReg 6491; amended to be effective July 9, 2002, 27 TexReg 6010.