The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court, issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.
TELECOM
FCC
The FCC imposed a penalty of $7,620,000 against Optic Internet Protocol, Inc., for changing the carriers of ten consumers without their authorization verified in accordance with FCC rules (slamming) and placing unauthorized or crammed charges for its long distance service on 71 consumers’ telephone bills. The FCC also found that Optic; (1) relied on fabricated audio recordings as purported proof that consumers had authorized the switch of their long distance provider and the resulting charges for service; and (2) provided those fabricated recordings to the FCC, consumers, and state regulatory officials as “proof” that the consumers had authorized its service. The FCC’s Forfeiture Order was issued because Optic failed to file a response to the FCC’s July 2014 Notice of Apparent Liability for Forfeiture. See the Regulatory Mix dated 7/17/14 The FCC said that it has now taken nearly 30 enforcement actions for cramming or slamming in the past five years and that these actions “announced more than $90 million in penalties, and are slated to return more than $200 million to consumers.”
FTC
The Federal Trade Commission announced it has charged DIRECTV, the country’s largest provider of satellite television services, with violating the FTC act by making deceptive claims or omissions of material facts in advertisements and on its website. Specifically, the FTC charges that DIRECTV: (1) promotes its television service and programming package prices “for 12 months,” without clearly and prominently disclosing that these deals require consumers to sign a two-year contract (with a substantial early cancellation fee) and that the cost of the programming packages jumps $25 to $45 a month in the second year of the contract; and (2) represents that consumers will receive premium channels, such as HBO and Showtime, “free for 3 months,” without adequately disclosing that: consumers will be enrolled in a negative option continuity plan that charges for the premium channels after the trial period; consumers must contact DIRECTV to cancel the plan before the trial period ends to avoid incurring the charges; DIRECTV will use consumers’ credit or debit card information to charge them after the trial period ends; and there are specific costs associated with the negative option continuity plan. The FTC also alleged that the company violated the Restore Online Shoppers’ Confidence Act (ROSCA) by failing to clearly and conspicuously disclose on its website all of the material terms of offers with a negative option component. The FTC is seeking a court order that permanently bars DIRECTV from engaging in the allegedly illegal conduct, as well as a monetary judgment that could be used to provide refunds to affected consumers.
