[Congressional Record Volume 144, Number 40 (Wednesday, April 1, 1998)]
[Senate]
[Pages S2973-S2975]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Ms. Snowe, and Mr. Kerrey):
  S. 1897. A bill to require accurate billing by telecommunications 
carriers with respect to the costs and fees resulting from the 
enactment of the Telecommunications Act of 1996, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


                      THE CONSUMER protection act

  Mr. ROCKEFELLER. Mr. President, it took Congress a decade to forge 
consensus necessary to pass the 1996 Telecommunication Act. This bold 
law was designed to promote competition in the dynamic 
telecommunications industry, but such competition is to be balanced by 
maintaining the commitment to universal service, a fundamental 
principle which has ensured affordable access to communications for 
every American, especially those in rural areas.

  I voted for this historic legislation because in my view it struck 
the right balance.
  I support competition, but I will insist on universal service.
  And I will insist on time to fully implement the Act. This bold law 
seeks to move the $200 billion telecommunications industry to a more 
competitive market, but it will not happen overnight. President Clinton 
signed this major legislation into law in February 1998, just two years 
ago. This started the telecommunications industry on the path toward 
competition, but there have been some road blocks along the way with 
implementation snags, mergers instead of competition, and excessive 
litigation.
  The current result, unfortunately, is confusion.
  I do not want to reopen the Telecommunications Act, but I do want to 
relieve the confusion among consumers who seem to be bearing the brunt 
of this transition. Today, I am introducing bipartisan legislation 
called the Consumer Protection Act to ensure ``truth in billing.'' I 
believe that consumers deserve to have the truth, the whole truth about 
changes in billings.
  As the telecommunications industry moves from a regulated, 
monopolistic model into a more competitive model, we need to ensure 
that consumers get the information they need to make wise decisions in 
selecting their telecommunications carriers. In a regulated market, the 
regulations are intended to protect consumers' interests. Under a more 
competitive model, we need to ensure that accurate information is 
provided to consumers so they can protect themselves and use their 
ability to choose in the market place.
  This legislation is very simple. It directs the Federal 
Communications Commission (FCC) and the Federal Trade Commission (FTC) 
to investigate billing practices, and report on the findings to 
Congress. If this investigation exposes misleading practices, we need 
to have disciplinary action to protect consumers.
  If telecommunications companies choose to use line-items on phones 
bills, those companies must accurately report all regulatory actions, 
including how federal actions reduce costs, such as the $1.5 billion in 
access reductions provided in July 1997.
  This legislation ensures that telecommunications companies cannot 
selectively disclose only those pieces of information that are in the 
companies' interest. When federal actions bring rates down, consumers 
have the right to know. As the industry makes the transition to a more 
competitive market, consumers deserve a full accounting so they can 
make informed decisions when they choose their telecommunications 
provider.
  The Consumer Protection Act will ensure that consumers will see on 
their own bill how companies allocate savings resulting from 
deregulation of the industry, as companies are required to disclose how 
savings are passed along to residential rates, small business rates and 
other customer payment

[[Page S2974]]

plans. This is not re-regulation. Nothing in this dictates how much 
companies can charge for their services. And nothing prevents companies 
from putting line items on bills. Those choices are still entirely at 
the companies' discretion. This legislation simply requires them to 
tell the whole truth if they choose to put a line item on customers 
bills.
  The legislation has a third provision that requires companies using a 
line-item on customer bills to file with the FCC all the revenue and 
company reports they now file with the Securities and Exchange 
Commission (SEC).
  The idea behind this requirement is simple. Since we require 
companies to report their revenues to the SEC in order to protect 
stockholders, shouldn't we provide the same information to the FCC in 
order to protect consumers?
  During this period of transition from a monopoly-based system to a 
market-based system, there will be some ups and downs. But we should 
act to minimize confusion and protect consumers as the new market 
evolves.
  At the state level, public service commissions are beginning to take 
steps to provide fuller, more accurate information to consumers. In 
January of this year, New York Administrative Law Judge Eleanor Stein 
recommended that telecommunications carriers be required to disclose 
fully, in bills of all classes of customers, the fee increases and fee 
reductions resulting from the enactment of the 1996 Telecommunications 
Act.
  In February the National Association of Regulatory Utility 
Commissioners (NARUC) passed a resolution that clearly noted that line-
items are a business choice made by companies not a mandate from the 
federal government. The NARUC resolution called on the FCC to take 
action to require interstate carriers to provide accurate customer 
notice and the purpose of line-items.
  Some state officials are taking action. NARUC is calling on the FCC 
to lead. Now Congress needs to end the confusion, and tell consumers 
the truth.
  I am proud that the Consumers Union supports this bipartisan 
legislation. I welcome the support of my colleagues, Senator Snowe of 
Maine and Senator Kerrey of Nebraska.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1897

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. FINDINGS; PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) Billing practices by telecommunications carriers may 
     not reflect accurately the cost or basis of the additional 
     telecommunications services and benefits that consumers 
     receive as a result of the enactment of the 
     Telecommunications Act of 1996 (Public Law 104-104) and other 
     Federal regulatory actions taken since the enactment of that 
     Act.
       (2) Congress has never enacted a law with the intent of 
     permitting providers of telecommunications services to 
     misrepresent to customers the costs of providing services or 
     the services provided.
       (3) Certain providers of telecommunications services have 
     established new, specific charges on customer bills commonly 
     known as ``line-item charges''.
       (4) Certain providers of telecommunications services have 
     described such charges as ``Federal Universal Service Fees'' 
     or similar fees.
       (5) Such charges have generated significant confusion among 
     customers regarding the nature of and scope of universal 
     service and of the fees associated with universal service.
       (6) The State of New York is considering action to protect 
     consumers by requiring telecommunications carriers to 
     disclose fully in the bills of all classes of customers the 
     fee increases and fee reductions resulting from the enactment 
     of the Telecommunications Act of 1996 and other regulatory 
     actions taken since the enactment of that Act.
       (7) The National Association of Regulatory Utility 
     Commissioners adopted a resolution in February 1998 
     supporting action by the Federal Communications Commission to 
     require interstate carriers to provide accurate customer 
     notice regarding the implementation and purpose of end user 
     charges.
       (b) Purpose.--It is the purpose of this Act to require the 
     Federal Communications Commission and the Federal Trade 
     Commission to protect consumers of telecommunications 
     services by assuring accurate cost reporting and billing 
     practices by telecommunications carriers nationwide.

     SEC. 2. INVESTIGATION OF TELECOMMUNICATIONS CARRIERS BILLING 
                   PRACTICES.

       (a) Investigation.--
       (1) Requirement.--The Federal Communications Commission and 
     the Federal Trade Commission shall jointly conduct an 
     investigation of the billing practices of telecommunications 
     carriers.
       (2) Purpose.--The purpose of the investigation is to 
     determine whether the bills sent by carriers to their 
     customers accurately assess and correctly characterize any 
     additional fees paid by such customers for telecommunications 
     services as a result of the enactment of the 
     Telecommunications Act of 1996 (Public Law 104-104) and other 
     Federal regulatory actions taken since the enactment of that 
     Act.
       (b) Determinations.--In carrying out the investigation 
     under subsection (a), the Federal Communications Commission 
     and the Federal Trade Commission shall determine the 
     following:
       (1) The amount, if any, of additional fees imposed by 
     telecommunications carriers on their customers as a result of 
     the requirements of the Telecommunications Act of 1996 
     (including the amendments made by that Act) and other Federal 
     regulatory actions taken since the enactment of that Act 
     during the period beginning on June 30, 1997, and ending on 
     the date of enactment of that Act.
       (2) In the event that additional fees described in 
     paragraph (1) are being imposed, the following:
       (A) Whether the amount of such fees accurately reflect--
       (i) the additional costs to carriers as a result of the 
     enactment of that Act (including the amendments made by that 
     Act) and other Federal regulatory actions taken since the 
     enactment of that Act; and
       (ii) any reductions in costs, or other financial benefits, 
     to carriers as a result of the enactment of that Act 
     (including such amendments) and other Federal regulatory 
     actions taken since the enactment of that Act.
       (B) Whether the bills that impose such fees characterize 
     correctly the nature and basis of such fees.
       (c) Review of Records.--
       (1) Authority.--For purposes of the investigation under 
     subsection (a), the Federal Communications Commission and the 
     Federal Trade Commission may obtain from any 
     telecommunications carrier any record of the carrier that is 
     relevant to the investigation.
       (2) Use.--The Federal Communications Commission and the 
     Federal Trade Commission may use records obtained under this 
     subsection only for purposes of the investigation.
       (d) Disciplinary Actions.--
       (1) In general.--In the event that the Federal 
     Communications Commission or the Federal Trade Commission 
     determine as a result of the investigation under subsection 
     (a) that the bills sent by a telecommunications carrier to 
     its customers does not accurately assess or correctly 
     characterize any fee addressed in the investigation, the 
     Federal Communications Commission or the Federal Trade 
     Commission, as the case may be, shall take such actions 
     against the carrier as such Commission is authorized to take 
     under law.
       (2) Additional actions.--If the Federal Communications 
     Commission or the Federal Trade Commission determines that 
     such Commission does not have adequate authority under law to 
     take appropriate actions under paragraph (1), the Federal 
     Communications Commission and the Federal Trade Commission 
     shall notify Congress of that determination in the report 
     under subsection (e).
       (e) Report.--Not later than 45 days after the date of 
     enactment of this Act, the Federal Communications Commission 
     and the Federal Trade Commission shall jointly submit to 
     Congress a report on the results of the investigation under 
     subsection (a). The report shall include the determination, 
     if any, of either Commission under subsection (d)(2) and any 
     recommendations for further legislative action that the 
     Commissions consider appropriate.

     SEC. 3. REQUIREMENTS FOR TELECOMMUNICATIONS CARRIERS IMPOSING 
                   CERTAIN FEES FOR SERVICES.

       (a) Requirements.--Any telecommunications carrier that 
     includes on any of the bills sent to its customers a charge 
     described in subsection (b) shall--
       (1) specify in the bill imposing such charge any reduction 
     in charges or fees allocable to all classes of customers 
     (including customers of residential basic service, customers 
     of other residential services, small business customers, and 
     other business customers) by reason of any regulatory action 
     of the Federal Government; and
       (2) submit to the Federal Communications Commission the 
     reports required to be submitted by the carrier to the 
     Securities and Exchange Commission under sections 13(a) and 
     15(d) of the Securities and Exchange Act of 1934 (15 U.S.C. 
     78m(a), 78o(d)).
       (b) Covered Charges.--Subsection (a) applies in the case of 
     the following charges:
       (1) Any specific charge included after June 30, 1997, if 
     the imposition of the charge is attributed to a regulatory 
     action of the Federal Government.
       (2) Any specific charge included before that date if the 
     description of the charge is changed after that date to 
     attribute the imposition of the charge to a regulatory action 
     of the Federal Government.

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