Court Suspends FCC’s Tough New Rules Against Slamming

A U.S. appeals court on Tuesday suspended tough new federal rules aimed at cracking down on the unauthorized switching of consumers’ long-distance phone service.

The suspension of the Federal Communications Commission’s regulations means consumers must continue to pursue administrative remedies to resolve complaints about unauthorized phone service switching--or so-called slamming.

The FCC’s new rules had offered the promise of treating phone subscribers much like credit card users by letting them off the hook for charges incurred for 30 days after an unauthorized switch.

FCC Chairman William E. Kennard, who this week had publicly chastised MCI WorldCom and other long-distance carriers for opposing his agency’s anti-slamming rules, expressed disappointment in the one-page decision issued by the U.S. Court of Appeals in Washington. Kennard vowed his agency “will continue the fight to protect consumers from slamming.”

But neither he nor other FCC officials would say whether the FCC would appeal the court ruling.

Long-distance carriers praised the ruling. And industry experts predicted the FCC would now embrace a plan that the long-distance carriers presented to the agency on March 30 calling for creation of a third-party group to handle consumer complaints about slamming.

Under that plan, an independent group funded by telephone carriers would investigate slamming complaints and determine liability.

Under the FCC rules suspended by the appeals court, carriers themselves would have to resolve slamming disputes and pay any aggrieved subscribers the difference between the illegal and legal telephone charges.

“We are hopeful that the FCC will use the opportunity to adopt workable, independent protections for consumers,” said Jonathan B. Sallet, chief policy counsel for MCI WorldCom.

“As MCI WorldCom and its customers are major victims of slamming, we want to work with the FCC in its prompt consideration of the industry plan.”

“The court’s decision is a victory for consumers because it clears the way for a workable, more consumer-friendly solution to the slamming problem,” AT&T; Corp. said in a statement.