Telephone Slamming Prevention Act of 1998

Telephone Slamming Prevention Act of 1998 - Amends the Communications Act of 1934 (the Act) to require procedures prescribed by the Federal Communications Commission (FCC) to verify a subscriber's selection of a provider of telephone exchange or toll service to: (1) preclude the use of negative option letters of agency; and (2) require the retention of a subscriber's selection verification.

Allows a subscriber whose provider is changed in violation of such Act to pay the former provider for all services provided by the unauthorized provider.

Authorizes civil penalties: (1) of a minimum of $50,000 for the first offense and $100,000 for any additional offense by carriers who submit or execute an unauthorized change of provider service; and (2) in the case of a carrier that submits or executes unauthorized changes on behalf of its agents or resellers. Prescribes criminal penalties of a fine and up to one year in prison for a first offense and up to five years in prison for a subsequent offense for such a willful violation by any person.

Prohibits any person or company convicted of such violations from participating in the provision of universal telecommunications service and related activities authorized under the Act. Authorizes reinstatement of such participation, but no earlier than five years after such prohibition, if found by the FCC to be in the public interest.

Authorizes a State to bring an action on behalf of its residents when it has reason to believe that a carrier has or is engaging in a pattern or practice of making such unauthorized changes in service providers.

Requires each carrier to report to the FCC on the number of complaints of unauthorized provider changes submitted to such carrier by its subscribers. Directs the FCC to utilize such information to identify carriers that engage in patterns and practices of unauthorized provider changes.

Directs the FCC to report to the Congress on: (1) its enforcement against carriers for violations of this Act; (2) the adequacy and effectiveness of carrier licensing requirements and procedures in determining whether a carrier is suitable for such license; and (3) additional actions the FCC could take to ensure that new licenses are not issued to persons or carriers that have previously lost such license due to violations covered by this Act or that have engaged in egregious violations covered by this Act.