[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Rules and Regulations]
[Pages 34488-34498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16223]
[[Page 34487]]
_______________________________________________________________________
Part V
Federal Communications Commission
_______________________________________________________________________
47 CFR Part 64
Truth-in-Billing and Billing Format; Final Rule and Proposed Rule
Federal Register / Vol. 64, No. 122 / Friday, June 25, 1999 / Rules
and Regulations
[[Page 34488]]
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CC Docket 98-170; FCC 99-72]
Truth-in-Billing and Billing Format
AGENCY: Federal Communications Commission
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document establishes common-sense billing principles to
ensure that consumers are provided with basic information they need to
make informed choices among telecommunications services and providers.
First, consumer telephone bills must be clearly organized, clearly
identify the service provider, and highlight any new providers. Second,
bills must contain full and non-misleading descriptions of charges that
appear therein. Third, bills must contain clear and conspicuous
disclosure of any information the consumer may need to make inquiries
about, or contest charges, on the bill. These requirements are intended
to protect consumers against inaccurate and unfair billing practices.
More specifically, the principles adopted herein will enhance
consumers' ability to detect cramming and slamming.
DATES: These rules which contain information collection requirements
are effective upon OMB approval, but no sooner than thirty (30) days
after publication in the Federal Register. The Commission will publish
a document in the Federal Register announcing the effective date.
FOR FURTHER INFORMATION CONTACT: Enforcement Division, Common Carrier
Bureau. (202) 418-0960.
SUPPLEMENTARY INFORMATION:
I. The Importance of Clear and Informative Bills in Competitive
Telecommunications Markets
1. In this Order, we undertake common-sense steps to ensure that
consumers are provided with basic information they need to make
informed choices in a competitive telecommunications marketplace, while
at the same time protecting themselves from unscrupulous competitors.
We believe that the ``truth-in-billing'' principles adopted herein will
significantly further consumers' opportunity to reap fully the benefits
envisioned by the Telecommunications Act of 1996 (1996 Act), which
amended the Communications Act of 1934 (Act).
2. In this Order, we adopt generally the ``truth-in-billing''
principles proposed in the Proposed Rules, 63 FR 55077, in order to
ensure that consumers receive thorough, accurate, and understandable
bills from their telecommunications carriers. Specifically, we will
require:
(1) That consumer telephone bills be clearly organized, clearly
identify the service provider, and highlight any new providers;
(2) That bills contain full and non-misleading descriptions of
charges that appear therein; and,
(3) That bills contain clear and conspicuous disclosure of any
information the consumer may need to make inquiries about, or contest
charges, on the bill.
Additionally, we adopt minimal, basic guidelines that explicate
carriers' binding obligations pursuant to these broad principles. These
principles and guidelines are designed to prevent the types of consumer
fraud and confusion evidenced in the tens of thousands of complaints we
have received. Moreover, we believe that they represent fundamental
principles of fairness to consumers and just and reasonable practices
by carriers.
3. By implementing these principles through broad, binding
guidelines as described more fully below, we allow carriers
considerable discretion to satisfy their obligations in a manner that
best suits their needs and those of their customers. Thus, carriers
that wish to distinguish themselves through creative and consumer-
friendly billing formats have wide latitude to compete in this manner
(i.e., by producing bills on 8\1/2\ x 11 inch paper).
II. Truth-in-Billing Principles
A. Adoption of Guidelines
4. Through this Order, we adopt broad, binding principles to
promote truth-in-billing, rather than mandate detailed rules that would
rigidly govern the details or format of carrier billing practices. We
envision that carriers may satisfy these obligations in widely
divergent manners that best fit their own specific needs and those of
their customers. Indeed, our decision to adopt broad, binding
principles, rather than detailed, comprehensive rules, reflects a
recognition that there are typically many ways to convey important
information to consumers in a clear and accurate manner.
5. Yet purely voluntary guidelines would be insufficient to combat
misleading bills that facilitate slamming and cramming. The extent of
the current problem shows that voluntary action alone is inadequate for
many carriers. Failure to codify these principles and implementing
guidelines might result in carriers ignoring our requirements, to the
detriment of consumers. Our Order permits carriers to render bills
using the format of their choice, so long as the bills comply with the
implementing guidelines that we adopt today. We consider our principles
and guidelines to be flexible enough that carriers will be able to
comply with them without incurring unnecessary expense. In fact, we
note that many carriers commented that their current practices already
comport with proposals we outlined in the Proposed Rules.
6. Commercial Mobile Radio Service (CMRS) Carriers. We believe that
the broad principles we adopt to promote truth-in-billing should apply
to all telecommunications carriers, both wireline and wireless. The
principles we adopt today represent fundamental statements of fair and
reasonable practices. Like wireline carriers, wireless carriers also
should be fair, clear, and truthful in their billing practices.
7. The record does not, however, reflect the same high volume of
customer complaints in the CMRS context, nor does the record indicate
that CMRS billing practices fail to provide consumers with the clear
and non-misleading information they need to make informed choices. If
current CMRS billing practices are clear and non-misleading to
consumers, then it might be appropriate either to forbear from specific
wireline rules or not to apply them in the first instance. Furthermore,
in some instances, the rules we have adopted might simply be
inapplicable in the wireless context.
8. Despite the fact that some rules may be inapplicable or
unnecessary in the CMRS context, there are two rules that we think are
so fundamental that they should apply to all telecommunications common
carriers: (1) that the name of the service provider associated with
each charge be clearly identified on the bill; and (2) that each bill
should prominently display a telephone number that customers may call
free-of-charge in order to inquire or dispute any charge contained on
the bill.
9. We also intend to require CMRS carriers to comply with
standardized labels for charges resulting from Federal regulatory
action, if and when such requirements are adopted. As a practical
matter, this rule will not apply until we issue an order that adopts
the standard labels for federal line-item charges. We expect to apply
the same rule to both wireline and CMRS carriers, however, because we
believe that labels assigned to charges related to federal regulatory
[[Page 34489]]
action should be consistent, understandable, and should not confuse or
mislead customers.
B. Legal Authority
10. We find that our authority to enact the truth-in-billing
guidelines set forth herein stems from both section 201(b) and section
258 of the Act. Section 201(b) requires that all carrier charges,
practices, classifications, and regulations ``for and in connection
with'' interstate communications service be just and reasonable, and
gives the Commission jurisdiction to enact rules to implement that
requirement. Section 258 of the Act further authorizes the Commission
to adopt verification requirements to deter slamming in both the
interstate and the intrastate markets. The Supreme Court has ruled that
section 201(b) provides the Commission with authority to implement all
of the provisions of the Act, including those that apply to intrastate
communications. As explained in this Order, with the exception of the
guideline discussed at section II(C)(2)(c) of this Order, which
involves standardized labels for charges relating to federal regulatory
action, the truth-in-billing principles and guidelines adopted herein
are justified as slamming verification requirements pursuant to section
258, and thus can be applied to both interstate and intrastate
services. We recognize, however, that the standardized label guideline
rests exclusively on our authority under section 201(b) and therefore
is limited to interstate services.
C. Specific Truth-in-Billing Guidelines
1. Clear Organization and Highlighting New Service Provider Information
11. We adopt the threshold principle set forth in the Proposed
Rules that telephone bills must be clearly organized and highlight new
service provider information. We conclude that such a basic principle
is essential to facilitate consumers' understanding of services for
which they are being charged, and thereby discourage consumer fraud
such as slamming. The goal of these requirements is to deter slamming,
as well as cramming, and accordingly, we possess jurisdiction to impose
these requirements under sections 201(b) and 258 of the Act. Based on
our review of the record and experience handling consumer complaints of
fraudulent carrier practices, we further conclude that implementation
of this principle translates into three broad, binding guidelines on
which we sought comment in the Proposed Rules: (1) The name of the
service provider associated with each charge must be clearly
identified; (2) charges must be separated by service provider; and (3)
clear and conspicuous notification of any change in service provider
must be made manifest. Through ensuring that the billed information
concerning service providers is clear and conspicuous, these guidelines
enhance consumers' ability to review individual charges contained in
their telephone bills and detect unwarranted charges or unauthorized
changes in their service arrangements.
12. In our view, a clear description of the name of the service
provider is both rudimentary to any reasonable billing practice and
essential to combat unfair carrier practices, including slamming and
cramming. Consumers will be able to detect whether or when they have
been slammed, crammed, or even overcharged only if they can readily
identify their current service providers. Clear identification of
service providers is also an essential predicate for consumers to be
able to communicate complaints and dispute billed charges. Indeed, our
complaint experience suggests that consumers are both confused and
potentially hampered in obtaining information about billed charges or
lodging complaints when the only entity name associated with a charge
is, for example, that of a ``billing aggregator.'' Regardless of
whether the billing aggregator can handle the consumer inquiry or
complaint on behalf of the service provider, we believe that
identification of the service provider is essential to enable consumers
to monitor their service arrangements and judge the accuracy of the
charges levied. Accordingly, we find that the name of the service
provider must be clearly listed on the bill in connection with that
entity's charges to the consumer.
13. We conclude that, where telephone bills include charges from
more than one service provider, the charges should be displayed
according to service provider with clear visual separation--although
not necessarily separate pages--to distinguish the different providers.
We believe that listing charges by service provider should produce
bills that can be reviewed by consumers more easily than those that
would list charges by service type, and facilitate the prompt detection
of unreasonable and fraudulent carrier practices. For instance, if a
consumer were slammed, a bill segregated by provider would show, in a
distinct portion of the bill, all the charges billed on behalf of the
unauthorized carrier. A bill segregated by service type, on the other
hand, could list together long distance charges from the unauthorized
carrier, the authorized carrier, and any carrier that was used to place
dial-around calls. This intermingling of authorized and unauthorized
charges could make it more difficult for a consumer to realize that he
or she has been slammed.
14. As a final corollary to our guidelines concerning providers, we
conclude that new service providers must be clearly and conspicuously
identified on the bill. We contemplate that such clear and conspicuous
identification would involve all service providers that did not bill
for services on the previous billing statement, and would describe,
where applicable, any new presubscribed or continuing relationship with
the customer. Clear identification of new service providers will
improve consumers' ability to detect slamming and cramming. For
instance, consumers' discovery of fraudulent charges would be prompted
by noticing that an unfamiliar service provider has charges appearing
on the bill. Indeed, because cramming complaints most commonly emanate
from charges levied by service providers that do not have a pre-
existing business relationship with the consumer, highlighting the name
of a new service provider should prompt a subscriber to examine closely
the particular charges billed by that provider and facilitate detection
of cramming.
15. Carriers have discretion to determine the best means to
highlight the required information; we do not require that separate
bill pages be used to show the charges billed by each service provider.
Again, we are cognizant of commenters' concerns that any rigid
formatting rule that required separate pages, or produced ``dead
space'' on the bill, may frustrate consumers and substantially, or even
prohibitively, increase carriers' billing expenses. Accordingly, we do
not mandate any particular means of complying with the guidelines set
forth herein, but rather permit and contemplate that carriers will
employ a variety of practices that would be consistent with this Order.
In adopting a provider-based guideline and affording wide latitude to
determine the most efficient way to convey the service provider
information, we have balanced consumers' need for clear, logical, and
easily understood charges against concerns that rigid formatting and
disclosure requirements would inhibit innovation and greatly increase
carrier costs.
[[Page 34490]]
2. Full and Non-Misleading Billed Charges
16. We adopt the second core principle set forth in the Proposed
Rules that bills should contain full and non-misleading descriptions of
the service charges that appear therein. In our view, providing clear
communication and disclosure of the nature of the service for which
payment is expected is fundamental to a carrier's obligation of
reasonable charges and practices. Indeed, we find it difficult to
imagine any scenario where payment could be lawfully demanded on the
basis of inaccurate, incomplete, or misleading information. Moreover,
to permit such practices in the context of telecommunications services
is particularly troublesome in light of the rapid technological and
market developments, and associated new terminology, that can confuse
even the most informed and savvy telecommunications consumer.
Accordingly, as discussed below, we adopt three guidelines that
implement this core disclosure principle.
a. Billing Descriptions
17. We conclude that services included on the telephone bill must
be accompanied by a brief, clear, plain language description of the
services rendered. The description of the charge must be sufficiently
clear in presentation and specific enough in content so that customers
can accurately assess that the services for which they are billed
correspond to those that they have requested and received, and that the
costs assessed for those services conform to their understanding of the
price charged. Requiring clear descriptions of billed charges will
assist consumers in understanding their bills, and thereby, deter
slamming, as well as cramming.
18. We contemplate that sufficient descriptions will convey enough
information to enable a customer reasonably to identify and to
understand the service for which the customer is being charged.
Conversely, descriptions that convey ambiguous or vague information,
such as, for example, charges identified as ``miscellaneous,'' would
not conform to our guideline. Similarly, in our view, a charge
described by what it is not, such as, for example, ``service not
regulated by the Public Service Commission'' is inherently ambiguous
and does not disclose sufficient information. There is no way for a
consumer to discern from this description that the charge refers to,
for example, inside wiring maintenance insurance.
19. Although carriers must provide sufficient information, we
emphasize that full descriptions do not mean redundant or unnecessary
explanations. In particular, carriers need not define those terms that
are already generally understood by consumers, such as ``local
service'' or ``long distance service.'' Similarly, carriers need not
identify every long distance call as being a long distance call.
Rather, they may simply identify a section of the telephone bill as
``long distance service,'' followed by an itemized description of calls
showing the destination cities, the numbers dialed, the date, and the
charge for each call. We do not prescribe any particular methods of
presentation, organization, or language, but rather encourage carriers
to be innovative in designing bills that provide clear descriptions of
services rendered.
20. Although we decline to formulate standardized descriptions, we
encourage carriers to develop uniform terminology. We believe that
industry is better equipped than the Commission to develop, in
conjunction with consumer focus groups, standardized descriptions that
are compatible with the character limitations for text messages and
other operational restrictions found in the systems currently used for
billing. Adopting understandable common descriptions for services
offered could enable consumers to comparison shop more readily, and
thereby take full advantage of the benefits of a competitive
telecommunications market.
b. ``Deniable'' and ``Non-Deniable'' Charges
21. We further conclude that, where additional carrier charges are
billed along with local wireline service, reasonable practice
necessitates that carriers clarify when non-payment for service would
not result in the termination of the consumer's basic local service.
More specifically, we adopt the guideline we proposed in the Proposed
Rules that telephone bills differentiate between what are commonly
referred to as ``deniable'' and ``non-deniable'' charges. A
``deniable'' charge is a charge that, if not paid, may result in the
termination--``denial''--of the customer's local exchange service.
Conversely, a ``non-deniable'' charge is a charge that will not result
in the termination of the customer's basic service for non-payment,
even though the particular service for which the charge has been
levied, e.g., paging service, could be terminated. We agree with the
comments of state regulatory agencies and consumer advocacy groups that
distinguishing between such charges on consumers' bills protects
consumers from paying contestable, unauthorized charges out of fear of
losing basic telephone service for non-payment. We agree that consumers
should not be intimidated into paying contestable charges because of
fear that they will lose telephone service. We likewise believe that
consumers must be fully empowered and apprised of their right to refuse
to pay for unauthorized charges. Accordingly, we conclude that carriers
must clearly identify on bills those charges for which non-payment will
not result in disconnection of basic, local service.
22. We agree with those commenters who state that the terms
``deniable'' and ``non-deniable'' are inherently confusing, if not
counter-intuitive, and therefore fail to achieve the basic goal of
signalling to consumers their rights with respect to such charges.
Rather than mandate any particular means for accomplishing this goal,
however, we merely require that carriers clearly and conspicuously
identify those charges for which nonpayment will not result in
termination of local service.
23. We emphasize, however, that this guideline only applies where
carriers include in a single bill both ``deniable'' and ``non-
deniable'' charges. Accordingly, a carrier that bills directly for
service that includes no charges for basic, local wireline service
would not have a disclosure obligation. In this direct billing
circumstance, we are persuaded that consumers understand that, for
example, their wireless or interexchange service may be disconnected
should they fail to pay the bill for the specific service involved, but
that their basic local service, billed on a separate invoice, will not
be disconnected. Accordingly, requiring carriers to disclose such
information on direct bills that contain no basic local service charges
would place a burden on carriers without any corresponding consumer
benefit. We further note that, whether a charge is or is not
``deniable'' varies according to state law. Our requirement is not
meant to preempt states that have yet to adopt such a distinction.
24. We are unpersuaded by some commenters that customers should be
informed of these rights through a ``dunning message'' issued prior to
termination of service for non-payment, rather than through the
telephone bill. Such an approach does not protect those consumers who
pay charges that they did not authorize out of the mistaken fear that
their service will be disconnected if they fail to pay. The complaints
we receive demonstrate that
[[Page 34491]]
many consumers pay disputable charges immediately, even if they believe
the charge is unauthorized, out of fear of losing local service. These
consumers would not receive any dunning notice and, thus, would remain
unaware of their rights with regard to these charges.
c. Standardized Labels For Charges Resulting from Federal
Regulatory Action
25. We conclude that the principle of full and non-misleading
descriptions also extends to carrier charges purportedly associated
with federal regulatory action. Consistent with our core principle that
charges should be clearly described in a manner that allows consumers
to understand them, we expressed concern in the Proposed Rules that
consumers may be less likely to engage in comparative shopping among
service providers if they are led erroneously to believe that certain
rates or charges are federally mandated amounts from which individual
carriers may not deviate. Moreover, we noted that complaints received
by the Commission indicate considerable consumer confusion with regard
to various line item charges appearing on their monthly service bills
that are assessed by carriers ostensibly to recover costs incurred as a
result of specific government action. Charges resulting from federal
regulatory action are ``charges, practices [or] classifications * * *
for and in connection with'' interstate communication service pursuant
to section 201(b), and accordingly, we possess jurisdiction to require
carriers to employ standardized labels for such charges.
26. We find that the substantial record on this issue supports our
adoption of guidelines to address customers' confusion and potential
for misunderstanding concerning the nature of these charges.
Specifically, for the reasons discussed more fully below, we adopt our
proposals that require carriers to identify line item charges
associated with federal regulatory action through a standard industry-
wide label and provide full, clear and non-misleading descriptions of
the nature of the charges, and display a toll-free number associated
with the charge for customer inquiries. While we adopt guidelines to
facilitate consumer understanding of these charges and comparison among
service providers, we decline the recommendations of those that would
urge us to limit the manner in which carriers recover these costs of
doing business.
27. We focus particularly on three types of line items that have
appeared on consumers' bills. Specifically, the 1996 Act instructed the
Commission to establish support mechanisms to ensure that all Americans
have access to affordable telecommunications services. Pursuant to this
directive, the Commission is in the process of fundamentally altering
the manner in which long distance carriers pay for access to the
networks of local carriers and for supporting the universal
availability of telecommunications services at just, reasonable, and
affordable rates. Although the Commission did not direct the manner in
which carriers could recover their universal service contributions or
access fees directly from their customers, and substantially reduced
the access rates charged to long distance carriers to offset their new
universal service obligations, some carriers began including on their
customers' bills line item charges purportedly intended to recover
these costs. These fees have been charged in connection with consumers'
long distance service. The amounts charged and the name describing the
universal service-related fees, however, have varied considerably among
carriers. For example, some carriers have labelled the fee as
``Universal Connectivity Charge,'' ``Federal Universal Service Fee,''
``Carrier Universal Service Charge,'' and even ``Local Service
Subsidy,'' and charges have ranged from $.93 per bill to 5% of the
customers' net interstate and international charges. Access related
charges and associated names have likewise varied by carrier. The
nature of these charges is, in some instances, further confused because
different charges may be assessed on the consumer's ``primary,'' or
first line, than on a consumer's subsequent or ``non-primary'' lines.
28. Local exchange carriers have also chosen to assess various line
item charges associated with federal regulatory action. Since 1985, the
Commission has allowed local exchange carriers to assess a ``subscriber
line charge,'' (SLC), also known as the end-user common line charge.
This charge allows local exchange carriers to recover a portion of the
costs for providing local loops. More recently, pursuant to the
dictates of the 1996 Act, the Commission permitted local exchange
carriers to recover through a line-item charge on end-user bills the
costs associated with implementing local number portability, which
allows a consumer to retain the same phone number when changing local
phone companies. This local number portability charge first appeared on
some consumers' bills in February, 1999. The amount of the charge,
however, as well as the name describing it varies by carrier (e.g.,
``number portability surcharge;'' ``local number portability service
charge;'' ``federal charge--service provider number portability'').
29. The record in this proceeding supports our concern that the
failure of carriers to label and accurately describe certain line item
charges on their bills has led to increased consumer confusion about
the nature of these changes. Several factors appear to have contributed
to this confusion. The names associated with these charges as well as
accompanying descriptions (or entire lack thereof) may convince
consumers that all of these fees are federally mandated. In addition, a
lack of consistency in the way such charges are labelled by carriers
makes it difficult for consumers accurately to compare the price of
telecommunications services offered by competing carriers.
30. We adopt the guideline proposed in our Proposed Rules that
line-item charges associated with federal regulatory action should be
identified through standard and uniform labels across the industry. We
agree that standardized labels will promote consumers' ability to
understand their bills, thus facilitating their ability to compare
rates and packages among competing providers. Such comparisons are very
difficult when carriers choose different names for the same charge. In
considering which specific labels would be most accurate, descriptive
and consumer-friendly, however, we believe that consumer groups are
particularly well suited to assist in the development of the uniform
terms. Accordingly, through a Further Notice of Proposed Rules in this
proceeding, we encourage consumer and industry groups to come together,
conduct consumer focus groups, and propose jointly to the Commission
standard labels for these line item charges. We will choose the
standard labels based on the suggestions we receive in response to our
Further Notice of Proposed Rules.
31. We decline to take a more prescriptive approach as to how
carriers may recover these costs. We recognize that several commenters
assert that service providers should be required to combine all
regulatory fees into one charge, or should be prohibited from
separating out any fees resulting from regulatory action. Other
commenters urge us to go even farther and require carriers to include
on bills per-minute rates that include all fees associated with the
service. We decline at this time to mandate such requirements, but
rather prefer to afford carriers the
[[Page 34492]]
freedom to respond to consumer and market forces individually, and
consider whether to include these charges as part of their rates, or to
list the charges in separate line items. We believe that so long as we
ensure that consumers are readily able to understand and compare these
charges, competition should ensure that they are recovered in an
appropriate manner. Moreover, we are concerned that precluding a
breakdown of line item charges would facilitate carriers' ability to
bury costs in lump figures. Insofar as the regulatory-related charges
have different origins, and are applied to different service and
provider offerings, we also question whether implementation of a lump-
sum figure for all charges resulting from federal regulatory action
could be presented in a manner in which consumers could clearly
understand the origin of such a charge. On the other hand, we recognize
that consumers may benefit from a simplified, total charge approach. As
a result, we encourage industry and consumer groups to consider further
whether some categorization and aggregation of charges would be
advisable. For example, we seek further comment on whether the line
item charges associated with long distance service could be or should
be identified as a single, uniformly described, charge, while those
charges associated with local service be identified by a separate
standardized term.
32. Although we adopt the guideline that charges be identified
through standard labels, carriers may nevertheless choose to include
additional language further describing the charges. We are persuaded by
the record not to adopt any particular ``safe-harbor'' language, as set
forth in the Proposed Rules, or mandate specific disclosures. Rather,
we believe carriers should have broad discretion in fashioning their
additional descriptions, provided only that they are factually accurate
and non-misleading. For example, for purposes of good customer
relations, a carrier may wish to elaborate on the nature and origin of
its universal service charge. A full, accurate and non-misleading
description of the charge would be fully consistent with our guideline.
In contrast, we would not consider a description of that charge as
being ``mandated'' by the Commission or the Federal Government to be
accurate. Instead, it is the carriers' business decision whether, how,
and how much of such costs they choose to recover directly from
consumers through separately identifiable charges. Accordingly, to
state or imply that the carrier has no choice regarding whether or not
such a charge must be included on the bill or the amount of the charge
would be misleading.
33. In the Proposed Rules, we sought comment on whether it is a
violation of section 201(b) for a carrier to bill customers for more
than their pro rata share of universal service and access fees. We
decline to adopt specific rules addressing these concerns. Some
commenters assert that it may be impractical accurately to allocate
some line-item charges to an individual customer on a per-bill basis.
For example, a carrier's universal service contributions may depend on
variables whose values are not known at the time the carrier issues a
bill, such as the total revenue contribution base of all carriers and
the high-cost and low-income projections for universal service support.
At least one commenter argues that carriers should be allowed to
account for uncollectibles, billing expenses, and administrative
expenses in setting the amount of their line item assessments for
universal service. Although we decline to adopt specific rules here, we
caution that we will not hesitate to take action on a case-by-case
basis under section 201(b) of the Act against carriers who impose
unjust or unreasonable line-item charges.
34. We also decline suggestions to require carriers to provide a
detailed breakdown of their costs and cost reductions on their customer
bills. The purpose behind these proposals in the Proposed Rules was to
enhance consumers' understanding of the costs of telecommunications
services, thereby increasing their ability to determine whether such
services are fairly priced. We agree, however, that long explanations
of a carrier's cost calculations may add complexity to telephone bills,
creating confusion that outweighs the benefits of providing such
descriptions. For these reasons, we also decline to adopt specific
language describing the distinction between primary and non-primary
residential lines. We conclude that LECs may craft their own
descriptions to convey the Commission's primary/non-primary definition
to their customers, provided that the information is conveyed
truthfully and accurately. We believe, however, that our purpose of
enhancing consumers' understanding will be adequately met through the
guidelines adopted herein.
35. We decline to specify any periodic notification to consumers
providing additional explanation of any charges resulting from federal
regulatory action. We believe our guideline requiring standard labels
for such charges should, even without further non-misleading
description, provide consumers with, at minimum, notice of these
charges. In this regard, we point out that such line-item charges, like
all other charges on the bill, are subject to our guideline requiring
the prominent display of a toll-free number for consumer inquiries and
disputes. We emphasize that carriers' customer service representatives
must be prepared to explain fully the nature and purpose of these
charges if asked to do so.
36. In balancing the legitimate interest of consumers and carriers,
we reject suggestions that standardized labels would violate the First
Amendment. We therefore disagree with ACTA's comment that the
Commission cannot discourage use of other line-item labels ``as a
matter of constitutional law,'' if such descriptions are accurate. We
emphasize that we have not mandated or limited specific language that
carriers utilize to describe the nature and purpose of these charges;
each carrier may develop its own language to describe these charges in
detail. Commercial speech that is misleading is not protected speech
and may be prohibited. Furthermore, commercial speech that is only
potentially misleading may be restricted if the restrictions directly
advance a substantial governmental interest and are no more extensive
than necessary to serve that interest. Finally, commercial speech that
is neither actually nor potentially misleading may be regulated if the
government satisfies a three-pronged test: first, the government must
assert a substantial interest in support of its regulation; second, the
government must demonstrate that the restriction on commercial speech
directly and materially advances that interest; and third, the
regulation must be ``narrowly drawn.'' We concluded that our
requirement that carriers use standard terms to label charges resulting
from federal regulatory action passes this three-prong test.
3. Clear and Conspicuous Disclosure of Inquiry Contacts
37. The final fundamental truth-in-billing principle we adopt is
that consumers must have the necessary tools to challenge charges for
unauthorized services. We conclude that carriers must prominently
display on their monthly bill a toll-free number or numbers by which
customers may inquire or dispute any change on that bill. This
telephone number shall be provided in a clear and conspicuous manner,
so that the customer can easily identify the appropriate number to use
to inquire about each charge. We are cognizant, however, that the
service
[[Page 34493]]
provider is not necessarily the most appropriate entity for consumers
to call. A service provider may, for example, contract with the LEC or
an independent billing aggregator to provide inquiry and dispute
resolution services for charges billed through the local telephone
bill. A carrier may list a toll-free number for a billing agent,
clearinghouse, or other third party, provided that such party possesses
sufficient information to answer questions concerning the customer's
account and is fully authorized to resolve consumer complaints on the
carrier's behalf. This will enable customers to avoid feeling that they
are ``getting the run around.'' We decline to require carriers to
provide a business address on each telephone bill for the receipt of
consumer inquiries and complaints. As several commenters have noted,
most customers call when they have questions--they do not write.
Accordingly, the inclusion of a business address will not significantly
enhance consumers' ability to contact the billing entity. We do
require, however, that each carrier make its business address available
upon request to consumers through its toll-free number, for those
consumers who wish to follow up their complaint or inquiry in writing.
38. We conclude that conspicuous display of a toll-free inquiry and
dispute resolution number is an essential linchpin to consumers'
exercise of the rights we seek to protect in this Order, as well as in
other proceedings such as our new slamming rules. Consumers often
experience considerable difficulty in contacting the entity whose
charges appear on the telephone bill. This results in delayed
resolution of billing problems, often necessitating the intervention of
other parties such as the LEC, the state public service commission, or
the Commission. Requiring that each telephone bill include at a minimum
a toll-free telephone number for the receipt of consumer inquiries and
complaints will minimize customer confusion regarding charges on
telephone bills and enable consumers to resolve their billing disputes
easily and promptly.
39. We decline at this time to adopt standards for the provision of
accurate information by carrier customer service representatives. We
expect such personnel to be well-trained and that the number of
employees is sufficient to handle call volumes, and we assume that
competition will provide a strong incentive for each carrier to set
appropriate standards on its own initiative. Although we decline to
mandate any particular standards for customer service, we remind
carriers that the intentional provision of untruthful or misleading
information to a customer regarding the nature and purpose of charges
or fees would constitute a violation of section 201(b) of the Act.
III. Procedural Matters
A. Final Regulatory Flexibility Analysis
40. As required by the Regulatory Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the Proposed
Rules in Truth-in-Billing and Billing Format. The Commission sought
written public comment on the proposals in the Proposed Rules,
including comment on the IRFA. The comments received are discussed
below. This present Final Regulatory Flexibility Analysis (FRFA)
conforms to the RFA.
1. Need for and Objectives of this Order and the Rules Adopted Herein
41. Section 258 of the Act makes it unlawful for any
telecommunications carrier ``to submit or execute a change in a
subscriber's selection of a provider of telephone exchange service or
telephone toll service except in accordance with such verification
procedures as the Commission shall prescribe.'' Accordingly, the
Commission adopts in this Order principles to ensure that consumers
receive thorough, accurate, and understandable bills from their
telecommunications carriers. First, consumer telephone bills must be
clearly organized, clearly identify the service provider, and highlight
any new providers; second, bills must contain full and non-misleading
descriptions of charges that appear therein; and third, bills must
contain clear and conspicuous disclosure of any information the
consumer may need to make inquiries about, or contest charges, on the
bill. Additionally, the Commission adopts minimal, basic guidelines
that explicate carriers' obligations pursuant to these broad
principles. These principles and guidelines are designed to prevent the
types of consumer fraud and confusion evidenced in the tens of
thousands of complaints that this Commission, and state commissions,
receive each year. In enacting the principles and guidelines contained
in this Order, our goal is to implement the provisions of sections
201(b) and 258 to prevent telecommunications fraud, as well as to
encourage full and fair competition among telecommunications carriers
in the marketplace.
2. Summary of the Significant Issues Raised by the Public Comments in
Response to the IRFA
42. In the IRFA, we found that the rules we proposed to adopt in
this proceeding may have a significant impact on a substantial number
of small businesses as defined by 5 U.S.C. 601(3). The IRFA solicited
comment on the number of small businesses that would be affected by the
proposed rules and on alternatives to the proposed rules that would
minimize the impact on small entities consistent with the objectives of
this proceeding.
43. PCIA, Liberty, RTG and others argue that the cost of compliance
faced by smaller carriers would be particularly burdensome. PCIA
asserts that medium- and small-sized carriers will be less likely to
have billing systems in place that ``can simply be `tweaked' to produce
the required modifications.'' Indeed, PCIA states that smaller carriers
may be forced to replace their entire billing systems in order to
comply with the format and content mandates of the proposed rules. RTG
agrees, arguing that rural carriers are particularly sensitive to
increased regulatory requirements with significant costs.
44. The Office of Management and Budget (OMB) received a large
number of comments in response to the Proposed Rules. The commenters
generally agree that new charges or services need to be easily
identifiable on customer bills; that definitions of services and other
terms are difficult to reach and could be counterproductive; that more
information, including point of contact toll-free numbers for service
providers or billing agents needs to be included in billing materials;
that materials should be clear, concise, and relatively simple; that
the Commission must account for costs of any changes to bills that will
be passed on to consumers in making decisions; that CMRS and other
wireless firms that provide services only to businesses should be
exempt from most new requirements that would be imposed on wireline
carriers; that every effort should be made so that billing standards
are uniform across the nation; that reseller information should be
included; and that, where possible, market-based solutions should be
adopted unless there is conclusory evidence that the Commission must
enact regulations that affect billing practices. As a result, OMB
recommends that we not impose undue burdens on wireless providers and
small wireline services, and urges that flexibility be given to small
companies that may experience significant cost and
[[Page 34494]]
managerial issues related to implementation of billing requirements.
Moreover, OMB recommends that the Commission allow companies sufficient
time to address their necessary Year 2000-related modifications to
their computer systems as well as modifying their billing systems to
meet any new requirements. OMB also recommends that the Commission make
a concerted effort to work with the industry to establish voluntary
guidelines in lieu of mandatory requirements that restrict the ability
of firms to tailor their billing to meet the needs of customers.
45. We have considered these comments and believe we appropriately
balanced the concerns of carriers that detailed rules may increase
their costs against our goal of protecting consumers against fraud. We
have exempted CMRS carriers from certain of our requirements on ground
that the requirements may be inapplicable or unnecessary in the CMRS
context. Moreover, we consider our principles and guidelines to be
flexible enough that carriers will be able to comply with them without
incurring unnecessary expense.
3. Description and Estimates of the Number of Small Entities to Which
the Rules Adopted in the Order in CC Docket No. 98-170 May Apply
46. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the adopted rules. The RFA generally defines the term
``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA).
47. The most reliable source of information regarding the total
numbers of certain common carrier and related providers nationwide, as
well as the numbers of commercial wireless entities, appears to be data
the Commission publishes annually in its Telecommunications Industry
Revenue report, regarding the Telecommunications Relay Service (TRS).
According to data in the most recent report, there are 3,459 interstate
carriers. These carriers include, inter alia, local exchange carriers,
wireline carriers and service providers, interexchange carriers,
competitive access providers, operator service providers, pay telephone
operators, providers of telephone toll service, providers of telephone
exchange service, and resellers.
48. The SBA has defined establishments engaged in providing
``Radiotelephone Communications'' and ``Telephone Communications,
Except Radiotelephone'' to be small businesses when they have no more
than 1,500 employees. Below, we discuss the total estimated number of
telephone companies falling within the two categories and the number of
small businesses in each, and we then attempt to refine further those
estimates to correspond with the categories of telephone companies that
are commonly used under our rules.
49. Although some affected incumbent LECs may have 1,500 or fewer
employees, we do not believe that such entities should be considered
small entities within the meaning of the RFA because they are either
dominant in their field of operations or are not independently owned
and operated, and therefore by definition not ``small entities'' or
``small business concerns'' under the RFA. Accordingly, our use of the
terms ``small entities'' and ``small businesses'' does not encompass
small ILECs. Out of an abundance of caution, however, for regulatory
flexibility analysis purposes, we will separately consider small ILECs
within this analysis and use the term ``small ILECs'' to refer to any
ILECs that arguably might be defined by the SBA as ``small business
concerns.''
50. Total Number of Telephone Companies Affected. The U.S. Bureau
of the Census (``Census Bureau'') reports that, at the end of 1992,
there were 3,497 firms engaged in providing telephone services, as
defined therein, for at least one year. This number contains a variety
of different categories of carriers, including local exchange carriers,
interexchange carriers, competitive access providers, cellular
carriers, mobile service carriers, operator service providers, pay
telephone operators, personal communications services providers,
covered specialized mobile radio providers, and resellers. It seems
certain that some of those 3,497 telephone service firms may not
qualify as small entities or small ILECs because they are not
``independently owned and operated.'' For example, a PCS provider that
is affiliated with an interexchange carrier having more than 1,500
employees would not meet the definition of a small business. It is
reasonable to conclude that fewer than 3,497 telephone service firms
are small entity telephone service firms or small ILECs that may be
affected by our principles and guidelines.
51. Wireline Carriers and Service Providers. The SBA has developed
a definition of small entities for telephone communications companies
except radiotelephone (wireless) companies. The Census Bureau reports
that there were 2,321 such telephone companies in operation for at
least one year at the end of 1992. According to the SBA's definition, a
small business telephone company other than a radiotelephone company is
one employing no more than 1,500 persons. All but 26 of the 2,321 non-
radiotelephone companies listed by the Census Bureau were reported to
have fewer than 1,000 employees. Thus, even if all 26 of those
companies had more than 1,500 employees, there would still be 2,295
non-radiotelephone companies that might qualify as small entities or
small ILECs. We do not have data specifying the number of these
carriers that are not independently owned and operated, and thus are
unable at this time to estimate with greater precision the number of
wireline carriers and service providers that would qualify as small
business concerns under the SBA's definition. Consequently, we estimate
that fewer than 2,295 small telephone communications companies other
than radiotelephone companies are small entities or small ILECs that
may be affected by our principles and guidelines.
52. Local Exchange Carriers. Neither the Commission nor the SBA has
developed a definition for small providers of local exchange services
(LECs). The closest applicable definition under the SBA rules is for
telephone communications companies other than radiotelephone (wireless)
companies. According to the most recent Telecommunications Industry
Revenue data, 1,371 carriers reported that they were engaged in the
provision of local exchange services. We do not have data specifying
the number of these carriers that are either dominant in their field of
operations, are not independently owned and operated, or have more than
1,500 employees, and thus are unable at this time to estimate with
greater precision the number of LECs that would qualify as small
business concerns under the SBA's definition. Consequently, we estimate
that fewer than 1,371 providers of local exchange service are small
entities or small ILECs that may be affected by our principles and
guidelines.
53. Interexchange Carriers. Neither the Commission nor the SBA has
developed a definition of small entities
[[Page 34495]]
specifically applicable to providers of interexchange services (IXCs).
The closest applicable definition under the SBA rules is for telephone
communications companies other than radiotelephone (wireless)
companies. According to the most recent Telecommunications Industry
Revenue data, 143 carriers reported that they were engaged in the
provision of interexchange services. We do not have data specifying the
number of these carriers that are not independently owned and operated
or have more than 1,500 employees, and thus are unable at this time to
estimate with greater precision the number of IXCs that would qualify
as small business concerns under the SBA's definition. Consequently, we
estimate that there are fewer than 143 small entity IXCs that may be
affected by our principles and guidelines.
54. Competitive Access Providers. Neither the Commission nor the
SBA has developed a definition of small entities specifically
applicable to competitive access services providers (CAPs). The closest
applicable definition under the SBA rules is for telephone
communications companies other than except radiotelephone (wireless)
companies. According to the most recent Telecommunications Industry
Revenue data, 109 carriers reported that they were engaged in the
provision of competitive access services. We do not have data
specifying the number of these carriers that are not independently
owned and operated, or have more than 1,500 employees, and thus are
unable at this time to estimate with greater precision the number of
CAPs that would qualify as small business concerns under the SBA's
definition. Consequently, we estimate that there are fewer than 109
small entity CAPs that may be affected by our principles and
guidelines.
55. Resellers (including debit card providers). Neither the
Commission nor the SBA has developed a definition of small entities
specifically applicable to resellers. The closest applicable SBA
definition for a reseller is a telephone communications company other
than radiotelephone (wireless) companies. According to the most recent
Telecommunications Industry Revenue data, 339 reported that they were
engaged in the resale of telephone service. We do not have data
specifying the number of these carriers that are not independently
owned and operated or have more than 1,500 employees, and thus are
unable at this time to estimate with greater precision the number of
resellers that would qualify as small business concerns under the SBA's
definition. Consequently, we estimate that there are fewer than 339
small entity resellers that may be affected by our principles and
guidelines.
56. Rural Radiotelephone Service. The Commission has not adopted a
definition of small entity specific to the Rural Radiotelephone
Service. A significant subset of the Rural Radiotelephone Service is
the Basic Exchange Telephone Radio Systems (BETRS). We will use the
SBA's definition applicable to radiotelephone companies, i.e., an
entity employing no more than 1,500 persons. There are approximately
1,000 licensees in the Rural Radiotelephone Service, and we estimate
that almost all of them qualify as small entities under the SBA's
definition.
57. International Services. The Commission has not developed a
definition of small entities applicable to licensees in the
international services. Therefore, the applicable definition of small
entity is generally the definition under the SBA rules applicable to
Communications Services, Not Elsewhere Classified (NEC). This
definition provides that a small entity is expressed as one with $11.0
million or less in annual receipts. According to the Census Bureau,
there were a total of 848 communications services providers, NEC, in
operation in 1992, and a total of 775 had annual receipts of less than
$9,999 million. The Census report does not provide more precise data.
58. Telex. Neither the Commission nor the SBA has developed a
definition of small entities specifically applicable to telex. The most
reliable source of information regarding the number of telegraph
service providers of which we are aware is the data the Commission
collects in connection with the International Telecommunications Data.
According to our most recent data, 5 facilities based and 2 resale
provider reported that they engaged in telex service. Consequently, we
estimate that there are fewer than 7 telex providers that may be
affected by our principles and guidelines.
59. Message Telephone Service. Neither the Commission nor the SBA
has developed a definition of small entities specifically applicable to
message telephone service. The most reliable source of information
regarding the number of message telephone service providers of which we
are aware is the data the Commission collects in connection with the
International Telecommunications Data. According to our most recent
data, 1,092 carriers reported that they engaged in message telephone
service. Consequently, we estimate that there are fewer than 1,092
message telephone service providers that may be affected by our
principles and guidelines.
60. Cellular Licensees. Neither the Commission nor the SBA has
developed a definition of small entities applicable to cellular
licensees. Therefore, the applicable definition of small entity is the
definition under the SBA rules applicable to radiotelephone (wireless)
companies. This provides that a small entity is a radiotelephone
company employing no more than 1,500 persons. According to the Bureau
of the Census, only twelve radiotelephone firms out of a total of 1,178
such firms which operated during 1992 had 1,000 or more employees.
Therefore, even if all twelve of these firms were cellular telephone
companies, nearly all cellular carriers were small businesses under the
SBA's definition. In addition, we note that there are 1,758 cellular
licenses; however, a cellular licensee may own several licenses. In
addition, according to the most recent Telecommunications Industry
Revenue data, 804 carriers reported that they were engaged in the
provision of either cellular service or Personal Communications Service
(PCS) services, which are placed together in the data. We do not have
data specifying the number of these carriers that are not independently
owned and operated or have more than 1,500 employees, and thus are
unable at this time to estimate with greater precision the number of
cellular service carriers that would qualify as small business concerns
under the SBA's definition. Consequently, we estimate that there are
fewer than 804 small cellular service carriers that may be affected by
the final rules.
61. 220 Mhz Radio Services. Because the Commission has not yet
defined a small business with respect to 220 MHz services, we will
utilize the SBA definition applicable to radiotelephone companies,
i.e., an entity employing no more than 1,500 persons. With respect to
220 MHz services, the Commission has proposed a two-tiered definition
of small business for purposes of auctions: (1) for Economic Area (EA)
licensees, a firm with average annual gross revenues of not more than
$6 million for the preceding three years and (2) for regional and
nationwide licensees, a firm with average annual gross revenues of not
more than $15 million for the preceding three years. Given that nearly
all radiotelephone companies under the SBA definition employ no more
than 1,500 employees (as noted supra), we will consider the
approximately 1,500 incumbent licensees in this service as small
businesses under the SBA definition.
[[Page 34496]]
62. Private and Common Carrier Paging. The Commission has proposed
a two-tier definition of small businesses in the context of auctioning
licenses in the Common Carrier Paging and exclusive Private Carrier
Paging services. Under the proposal, a small business will be defined
as either (1) an entity that, together with its affiliates and
controlling principals, has average gross revenues for the three
preceding years of not more than $3 million, or (2) an entity that,
together with affiliates and controlling principals, has average gross
revenues for the three preceding calendar years of not more than $15
million. Because the SBA has not yet approved this definition for
paging services, we will utilize the SBA's definition applicable to
radiotelephone companies, i.e., an entity employing no more than 1,500
persons. At present, there are approximately 24,000 Private Paging
licenses and 74,000 Common Carrier Paging licenses. According to the
most recent Telecommunications Industry Revenue data, 172 carriers
reported that they were engaged in the provision of either paging or
``other mobile'' services, which are placed together in the data. We do
not have data specifying the number of these carriers that are not
independently owned and operated or have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of paging carriers that would qualify as small business concerns
under the SBA's definition. Consequently, we estimate that there are
fewer than 172 small paging carriers that may be affected by the final
rules. We estimate that the majority of private and common carrier
paging providers would qualify as small entities under the SBA
definition.
63. Mobile Service Carriers. Neither the Commission nor the SBA has
developed a definition of small entities specifically applicable to
mobile service carriers, such as paging companies. As noted above in
the section concerning paging service carriers, the closest applicable
definition under the SBA rules is that for radiotelephone (wireless)
companies, and the most recent Telecommunications Industry Revenue data
shows that 172 carriers reported that they were engaged in the
provision of either paging or ``other mobile'' services. Consequently,
we estimate that there are fewer than 172 small mobile service carriers
that may be affected by the final rules.
64. Broadband Personal Communications Service. The broadband PCS
spectrum is divided into six frequency blocks designated A through F,
and the Commission has held auctions for each block. The Commission
defined ``small entity'' for Blocks C and F as an entity that has
average gross revenues of less than $40 million in the three previous
calendar years. For Block F, an additional classification for ``very
small business'' was added and is defined as an entity that, together
with their affiliates, has average gross revenues of not more than $15
million for the preceding three calendar years. These regulations
defining ``small entity'' in the context of broadband PCS auctions have
been approved by the SBA. No small businesses within the SBA-approved
definition bid successfully for licenses in Blocks A and B. There were
90 winning bidders that qualified as small entities in the Block C
auctions. A total of 93 small and very small business bidders won
approximately 40% of the 1,479 licenses for Blocks D, E, and F. Based
on this information, we conclude that the number of small broadband PCS
licensees will include the 90 winning C Block bidders and the 93
qualifying bidders in the D, E, and F blocks, for a total of 183 small
entity PCS providers as defined by the SBA and the Commission's auction
rules.
65. Narrowband PCS. The Commission has auctioned nationwide and
regional licenses for narrowband PCS. There are 11 nationwide and 30
regional licensees for narrowband PCS. The Commission does not have
sufficient information to determine whether any of these licensees are
small businesses within the SBA-approved definition for radiotelephone
companies. At present, there have been no auctions held for the major
trading area (MTA) and basic trading area (BTA) narrowband PCS
licenses. The Commission anticipates a total of 561 MTA licenses and
2,958 BTA licenses will be awarded by auction. Such auctions have not
yet been scheduled, however. Given that nearly all radiotelephone
companies have no more than 1,500 employees and that no reliable
estimate of the number of prospective MTA and BTA narrowband licensees
can be made, we assume, for purposes of this IRFA, that all of the
licenses will be awarded to small entities, as that term is defined by
the SBA.
66. Specialized Mobile Radio (SMR). The Commission awards bidding
credits in auctions for geographic area 800 MHz and 900 MHz SMR
licenses to firms that had revenues of no more than $15 million in each
of the three previous calendar years. In the context of 900 MHz SMR,
this regulation defining ``small entity'' has been approved by the SBA;
approval concerning 800 MHz SMR is being sought. We do not know how
many firms provide 800 MHz or 900 MHz geographic area SMR service
pursuant to extended implementation authorizations, nor how many of
these providers have annual revenues of no more than $15 million. One
firm has over $15 million in revenues. We assume, for purposes of this
IRFA, that all of the remaining existing extended implementation
authorizations are held by small entities, as that term is defined by
the SBA.
67. The Commission has held auctions for geographic area licenses
in the 900 MHz SMR band, and recently completed an auction for
geographic area 800 MHz SMR licenses. There were 60 winning bidders who
qualified as small entities in the 900 MHz auction. In the recently
concluded 800 MHz SMR auction there were 524 licenses awarded to
winning bidders, of which 38 were won by small or very small entities.
68. Cable Service Providers. The SBA has developed a definition of
small entities for cable and other pay television services that
includes all such companies generating no more than $11 million in
revenue annually. This definition includes cable systems operators,
closed circuit television services, direct broadcast satellite
services, multipoint distribution systems, satellite master antenna
systems, and subscription television services. According to the Census
Bureau, there were 1,758 total cable and other pay television services
and 1,423 had less than $11 million in revenue. We note that cable
system operators are included in our analysis due to their ability to
provide telephony.
4. Summary of Projected Reporting, Recordkeeping and Other Compliance
Requirements
69. Our binding principles require that all telecommunications
carriers, both wireline and wireless, ensure (1) that consumer
telephone bills be clearly organized, clearly identify the service
provider, and highlight any new providers; (2) that bills contain full
and non-misleading descriptions of charges that appear therein; and (3)
that bills contain clear and conspicuous disclosure of any information
the consumer may need to make inquiries about, or contest charges, on
the bill. In addition, carriers must comply with the Commission's rules
found below under ``Rule Changes.''
[[Page 34497]]
5. Steps Taken To Minimize the Significant Economic Impact of This
Order on Small Entities and Small Incumbent LECs, Including the
Significant Alternatives Considered
70. In this Order, we decline to adopt many of the proposals made
in the Proposed Rules that would be most costly for subject carriers to
implement. For example, we decline to adopt our proposal to require
carriers to indicate each new service ordered by a customer each month.
We also decline to require that carriers provide a detailed breakdown
of their costs incurred due to federal regulatory action, and instead
permit carriers to use their discretion to describe the nature and
purpose of these charges to their customers. We have adopted general
principles rather than stringent rules governing the organization of,
and information included in, customer bills. We also exempt CMRS
carriers from certain of our requirements. By implementing principles
through broad guidelines, we allow carriers considerable discretion to
satisfy their obligation in a manner that best suits their needs and
those of their customers, thus minimizing the economic impact on small
carriers to the greatest possible extent. The principles adopted here
are common-sense requirements that make good business sense, and we
believe that many, if not most, subject carriers already conform to
these requirements. Many carriers will therefore find that little or no
change to their existing billing practices will be needed.
71. The Commission will send a copy of the Order, including this
FRFA, in a report to be sent to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996. In addition, the
Commission will send a copy of the Order, including the FRFA, to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the Order and FRFA (or summaries thereof) will also be published in
the Federal Register.
B. Final Paperwork Reduction Act of 1995 Analysis
72. The decision herein has been analyzed with respect to the
Paperwork Reduction Act of 1995, Pubic Law 104-13, and the Office of
Management and Budget (OMB) has approved some of its requirements in
OMB No. 3060-0854. Among its recommendations, OMB ``strongly
encourage[d]'' us not to adopt an approach that imposes undue burden on
wireless carriers, and ``urges flexibility be given to small companies
that may experience significant cost'' as a result of our proposals. In
this Order, we have exempted CMRS carriers from certain of the
requirements we adopt to promote truth-in-billing. Moreover, we have
established general principles and guidelines, rather than rigid
formatting rules, which provide sufficient flexibility to small
carriers to meet these requirements without incurring undue cost. Some
of the proposals have been modified or added, however, and therefore
some of the information collection requirements in this item are
contingent upon approval by the OMB.
C. Further Information
73. For further information concerning this proceeding, contact
David Konuch, Enforcement Division, Common Carrier Bureau at (202) 418-
0199 (voice), (202) 418-0485 (TTY).
74. Alternate formats (computer diskette, large print, audio
cassette and Braille) are available to persons with disabilities by
contacting Martha Contee at (202) 418-0260 (voice), (202) 418-2555
(TTY), or at mcontee@fcc.gov. The First Report and Order and Further
Notice of Proposed Rules can be downloaded in WP or ASCII text at:
http//www.fcc.gov/dtf/.
V. Ordering Clauses
75. Accordingly, it is ordered, pursuant to sections 1, 4(i) and
(j), 201-209, 254, 258, and 403 of the Communications Act, as amended,
47 U.S.C. 151, 154(i), 154(j), 201-209, 254, 258, and 403 that this
First Report and Order is hereby adopted, effective 30 days after
publication of a summary in the Federal Register. The collections of
information contained within are contingent upon approval by the Office
of Management and Budget.
76. It is further ordered that 47 CFR part 64, is amended as set
forth in Rule Changes.
77. It is further ordered that, to the extent issues from CC Docket
No. 97-181, Defining Primary Lines, are resolved here, we incorporate
the relevant portions of the record in that docket.
78. It is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this First
Report and Order, including the Final Regulatory Flexibility Analysis,
to the Chief Counsel for Advocacy of the Small Business Administration.
List of Subjects in 47 CFR Part 64
Communications common carriers, Consumer protection,
Telecommunications.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 64 as follows:
PART 64--[AMENDED]
1. The authority citation for Part 64 continues to read as follows:
Authority: 47 U.S.C. 10, 201, 218, 226, 228, 332, unless
otherwise noted.
2. Section 64.2000 is added to read as follows:
Sec. 64.2000 Purpose and scope.
(a) The purpose of these rules is to reduce slamming and other
telecommunications fraud by setting standards for bills for
telecommunications service. These rules are also intended to aid
customers in understanding their telecommunications bills, and to
provide them with the tools they need to make informed choices in the
market for telecommunications service.
(b) These rules shall apply to all telecommunications common
carriers, except that Secs. 64.2001(a)(2), 64.2001(b), and 64.2001(c)
shall not apply to providers of Commercial Mobile Radio Service as
defined in Sec. 20.9 of this chapter, or to other providers of mobile
service as defined in Sec. 20.7 of this chapter, unless the Commission
determines otherwise in a further rulemaking.
(c) Preemptive effect of rules. The requirements contained in this
subpart are not intended to preempt the adoption or enforcement of
consistent truth-in-billing requirements by the states.
3. Section 64.2001 is revised to read as follows:
Sec. 64.2001 Truth-in-Billing Requirements.
(a) Bill organization. Telephone bills shall be clearly organized,
and must comply with the following requirements:
(1) The name of the service provider associated with each charge
must be clearly identified on the telephone bill.
(2) Where charges for two or more carriers appear on the same
telephone bill, the charges must be separated by service provider, and
the telephone bill must provide clear and conspicuous notification of
any change in service provider, including notification to the customer
that a new provider has begun providing service.
[[Page 34498]]
(i) ``Clear and conspicuous notification'' means notice that would
be apparent to a reasonable consumer.
(ii) ``New service provider'' is any provider that did not bill for
services on the previous billing statement. The notification should
describe the nature of the relationship with the customer, including a
description of whether the new service provider is the presubscribed
local exchange or interexchange carrier.
(b) Descriptions of billed charges. Charges contained on telephone
bills must be accompanied by a brief, clear, non-misleading, plain
language description of the service or services rendered. The
description must be sufficiently clear in presentation and specific
enough in content so that customers can accurately assess that the
services for which they are billed correspond to those that they have
requested and received, and that the costs assessed for those services
conform to their understanding of the price charged.
(c) ``Deniable'' and ``Non-Deniable'' Charges. Where a bill
contains charges for basic local service, in addition to other charges,
the bill must distinguish between charges for which non-payment will
result in disconnection of basic, local service, and charges for which
non-payment will not result in such disconnection. The carrier must
explain this distinction to the customer, and must clearly and
conspicuously identify on the bill those charges for which non-payment
will not result in disconnection of basic, local service. Carriers may
also elect to devise other methods of informing consumers on the bill
that they may contest charges prior to payment.
(d) Clear and Conspicuous Disclosure of Inquiry Contacts. Telephone
bills must contain clear and conspicuous disclosure of any information
that the customer may need to make inquiries about, or contest charges,
on the bill. Common carriers must prominently display on each bill a
toll-free number or numbers by which customers may inquire or dispute
any charge contained on the bill. A carrier may list a toll-free number
for a billing agent, clearinghouse, or other third party, provided that
such party possesses sufficient information to answer questions
concerning the customer's account and is fully authorized to resolve
consumer complaints on the carrier's behalf. Each carrier must make its
business address available upon request to consumers through its toll-
free number.
[FR Doc. 99-16223 Filed 6-24-99; 8:45 am]
BILLING CODE 6712-01-P
