[Federal Register Volume 63, Number 198 (Wednesday, October 14, 1998)]
[Proposed Rules]
[Pages 55077-55083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27351]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 98-170; FCC 98-232]


Truth-in-Billing and Billing Format

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission adopted a Notice of Proposed Rulemaking (NPRM) 
seeking comment on how to make telephone bills more readable and 
accurate to enable consumers to make informed choices in a competitive 
telecommunications marketplace. Problems with bill clarity make it 
difficult for consumers to detect fraud and to compare carrier rates. 
The NPRM outlines three guidelines to help promote ``truth-in-
billing:'' telephone bills should be clearly organized and highlight 
any new charges or changes to the consumer's service; telephone bills 
should contain full and non-misleading descriptions of all charges and 
clear identification of service providers; telephone bills should 
contain clear and conspicuous disclosure of all information a consumer 
may need to make inquiries about charges. The NPRM seeks comment on 
proposals that would follow these guidelines.

DATES: Written comments by the public on the NPRM and the proposed 
information collections are due on or before November 13, 1998. Reply 
comments are due on or before November 30, 1998. Written comments by 
OMB on the proposed information collections are due on or before 
December 14, 1998.

ADDRESSES: Comments and reply comments should be sent to the Office of 
the Secretary, Federal Communications Commission, 1919 M Street, NW., 
Suite 222, Washington, DC 20554, with a copy to Anita Cheng, Federal 
Communications Commission, Common Carrier Bureau, Enforcement Division, 
Formal Complaints and Investigations Branch, 2025 M Street, NW., Room 
6334, Washington, DC 20554. Parties should also file one copy of any 
documents filed in this docket with the Commission's copy contractor, 
International Transcription Services, Inc., 2100 M Street, NW., Suite 
140, Washington, DC 20037. In addition to filing comments with the 
Secretary, a copy of any comments on the information collections 
contained herein should be submitted to Judy Boley, Federal 
Communications Commission, Room 234, 1919 M Street, NW., Washington, DC 
20554, or via the Internet to [email protected], and to Timothy Fain, OMB 
Desk Officer, 10236 NEOB, 725-17th Street, NW., Washington, DC 20503 or 
via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Anita Cheng, Federal Communications 
Commission, Common Carrier Bureau, Enforcement Division, Formal 
Complaints and Investigations Branch, 2025 M Street, NW., Room 6334, 
Washington, DC 20554, (202) 418-0960. For additional information 
concerning the information collections contained in this NPRM contact 
Judy Boley at 202-418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's NPRM 
in CC Docket No. 98-170, adopted and released on September 17, 1998. 
The full text of the NPRM, including separate Commissioners' 
statements, is available for inspection and copying during normal 
business hours in the FCC Reference Center, Room 239, 1919 M Street, 
NW., Washington, DC The complete text of this decision may also be 
purchased from the Commission's duplicating contractor, International 
Transcription Services, Inc., 2100 M Street, NW., Suite 140, 
Washington, DC 20037.

Paperwork Reduction Act

    This NPRM contains a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collections contained in 
this NPRM, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13. Public and agency comments are due at the same time as 
other comments on this NPRM; OMB notification of action is due December 
14, 1998. Comments should address: (a) Whether the proposed collection 
of information is necessary for the proper performance of the functions 
of the Commission, including whether the information shall have 
practical utility; (b) the accuracy of the Commission's burden 
estimates; (c) ways to enhance the quality, utility, and clarity of the 
information collected; and (d) ways to minimize the burden of the 
collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.
    OMB Approval Number: None.
    Title: Truth-in-Billing and Billing Format.
    Form No.: NA.
    Type of Review: New collection.
    Respondents: Business or other for-profit.

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                                                                                  Estimated time
                   Annual proposed collections                      Respondents    per response    Total burden
----------------------------------------------------------------------------------------------------------------
1. Bill organization............................................           1,800             100         180,000
2. Full & non-misleading descriptions...........................           1,800               2           3,600
3. Provision of consumer complaint/inquiry information..........           1,800               1           1,800
----------------------------------------------------------------------------------------------------------------

    Total Annual Burden: 185,400 hours.
    Estimated costs per respondent: $1,000-$5,000.
    Needs and Uses: The information will be used by consumers to help 
them understand their telephone bills. Consumers need this information 
to protect themselves against fraud and to compare carrier rates to 
obtain the best value for themselves. The proposals will also enable 
consumers to resolve billing disputes on their own.

Initial Regulatory Flexibility Analysis

    Pursuant to the Regulatory Flexibility Act (RFA), the Commission 
has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on small entities of the policies 
and rules proposed in this NPRM. Written public comments are requested 
on this IRFA. Comments must be identified as responses to the IRFA and 
must be filed by the deadlines for comments on other issues in this 
NPRM.
    1. Need for and Objectives of the Proposed Rules. This NPRM seeks 
comment on whether the Commission should promulgate specific rules

[[Page 55078]]

concerning billing disclosures. Comment is requested on proposals 
regarding: (1) the manner in which carriers organize their telephone 
bills; (2) descriptions of services and carriers; and (3) the provision 
of the names and toll-free telephone numbers of service providers for 
the receipt of consumer inquiries and complaints. This NPRM seeks 
comment on the extent to which consumers need clearer and more accurate 
information, and on specific proposals. Based upon the comments 
received in the NPRM, the Commission may issue new rules regarding 
billing information.
    2. Legal Basis. The proposed action is supported by sections 1, 
4(i) and (j), 201, 208, 254, and 303(r) of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 201, 208, 254, and 
303(r).
    3. Description and Estimate of the Number of Small Entities That 
May Be Affected by this NPRM. The RFA generally defines ``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).
    4. The small entities possibly affected by the proposed rules, if 
adopted, include wireline, wireless, satellite, and other entities, as 
described below. The SBA has defined a small business for Standard 
Industrial Classification (SIC) categories 4812 (Radiotelephone 
Communications) and 4813 (Telephone Communications, Except 
Radiotelephone) to be small entities having no more than 1,500 
employees. Although some affected incumbent local exchange carriers 
(ILECs) 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. 
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.''
    5. 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.
    6. 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. 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 the proposed rules, if 
adopted.
    7. Wireline Carriers and Service Providers. 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 the proposed rules, if adopted.
    8. Local Exchange Carriers. We estimate that fewer than 1,371 local 
exchange carriers or small ILECs may be affected by the proposed rules, 
if adopted.
    9. Interexchange Carriers. We estimate that there are fewer than 
143 small entity IXCs that may be affected by the proposed rules, if 
adopted.
    10. Competitive Access Providers. We estimate that there are fewer 
than 109 small entity CAPs that may be affected by the proposed rules, 
if adopted.
    11. Resellers. (including debit card providers). We estimate that 
there are fewer than 339 small entity resellers that may be affected by 
the proposed rules, if adopted.
    12. International Services. The applicable 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.
    13. Cellular Licensees. We estimate that there are fewer than 804 
small cellular service carriers that may be affected by the proposed 
rules, if adopted.
    14. 220 Mhz Radio Services. We will consider the approximately 
1,500 incumbent licensees in this service as small businesses under the 
SBA definition.
    15. Private and Common Carrier Paging. We estimate that there are 
fewer than 172 small paging carriers that may be affected by the 
proposed rules, if adopted. We estimate that the majority of private 
and common carrier paging providers would qualify as small entities 
under the SBA definition.
    16. Mobile Service Carriers. We estimate that there are fewer than 
172 small mobile service carriers that may be affected by the proposed 
rules, if adopted.
    17. Broadband Personal Communications Service. We estimate 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.
    18. 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 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.
    19. Rural Radiotelephone Service. 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.
    20. 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

[[Page 55079]]

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.
    21. 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.
    22. Wireless Communications Services. The Commission auctioned 
geographic area licenses in the WCS service. In the auction, there were 
seven winning bidders that qualified as very small business entities, 
and one that qualified as a small business entity. We conclude that the 
number of geographic area WCS licensees that may be affected by the 
proposed rules, if adopted, include eight entities.
    23. Telex. We estimate that there are fewer than 7 telex providers 
that may be affected by the proposed rules, if adopted.
    24. Message Telephone Service. We estimate that there are fewer 
than 1,092 message telephone service providers that may be affected by 
the proposed rules, if adopted.
    25. 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. 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.
    26. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. We seek comment on methods to provide 
complete, accurate, and understandable information to consumers in 
their telephone bills. Comment is requested on proposals regarding: (1) 
the manner in which carriers organize their telephone bills; (2) 
descriptions of services and carriers; and (3) the provision of the 
names and toll-free telephone numbers of service providers for the 
receipt of consumer inquiries and complaints.
    27. Steps taken to Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered. As noted, we seek 
comment on proposals regarding: (1) the manner in which carriers 
organize their telephone bills; (2) descriptions of services and 
carriers; and (3) the provision of the names and toll-free telephone 
numbers of service providers for the receipt of consumer inquiries and 
complaints. Such proposals could provide consumers with the necessary 
information to enable them to reap the benefits of the competitive 
telecommunications marketplace while at the same time protecting 
themselves from unscrupulous competitors. We seek comment on any 
alternatives that might be especially beneficial to small entities.
    28. Federal Rules that May Duplicate, Overlap, or Conflict With the 
NPRM: None.

Summary of Notice of Proposed Rulemaking

I. Introduction

    29. One of the primary goals of the Telecommunications Act of 1996 
(1996 Act) is to make available to consumers new services and 
technologies by promoting the development of competition in all aspects 
of telecommunications services. In today's marketplace, increased 
competition has generated many new telephone-related services. While 
the nature of the charges appearing on consumers' telephone bills has 
changed dramatically due to the proliferation of services and service 
providers, the bills themselves do not seem to reflect this new era. 
Increasingly, consumers are concerned about telephone bills that do not 
provide sufficient information in a user-friendly format to enable them 
to understand the services being provided and the charges assessed 
therefor, and to identify the entities providing those services.
    30. A review of the bills we have received in conjunction with 
consumer complaints demonstrates that even the most sophisticated 
consumer would often be unable, based on the information provided in 
the bills, to identify the services for which the consumer is being 
charged or the providers of those services. Similarly, we have received 
many complaints and inquiries resulting from the practice of some 
carriers of including in their bills line item charges for universal 
service or access charges, without adequate explanation of the basis 
for these charges.
    31. The difficulty experienced by consumers in understanding their 
telephone bills is not simply an inconvenience. Rather, consumers must 
have adequate information about the services they are receiving, and 
the alternatives available to them, if they are to reap the benefits of 
a competitive market. Conversely, the rapid growth of competitive 
options in the telecommunications market, without an equivalent 
development in the area of consumer education, clearly has been a 
significant contributing factor in the growth of telecommunications-
related fraud. Complaints filed with the Commission also demonstrate 
that consumers are frustrated frequently in their efforts to resolve 
problems with charges on their bills because the bills themselves do 
not provide the necessary information for identifying and contacting 
the responsible company.
    32. We are not alone in our concerns in this area. The National 
Association of Regulatory Utilities Commissions (NARUC), for example, 
recently issued a ``White Paper'' emphasizing the increased importance 
of providing consumers with information in an understandable manner in 
order to allow them ``to make the most of a competitive marketplace.'' 
NARUC has also passed a resolution expressing its concern about certain 
interstate carriers that have passed the costs of their universal 
service contributions directly on to consumers in the form of line item 
charges, stating that some of these carriers identify such charges as 
being mandated by the Commission even though the Commission did not 
mandate the method of recovery of such charges.
    33. Several members of Congress and consumer interest groups have 
also expressed concern about the failure of telephone bills to provide 
consumers with important information. Congressional concern over 
confusing and misleading telephone bills has resulted in pending 
legislation to regulate telephone bill format, including requirements 
that carriers make certain disclosures when notifying subscribers of 
changes in their bills that result from federal regulatory action.
    34. Although much attention has been focused on local telephone 
bills, the issues raised by this proceeding are equally applicable to 
all bills for telecommunications services that are furnished to 
consumers, including bills for local service, interexchange service, 
and commercial mobile radio service (CMRS). We wish to initiate a 
dialogue with the states, consumer advocacy

[[Page 55080]]

groups, and the industry on how to help consumers to understand more 
readily the services they are receiving and from whom, to make 
comparisons to determine the best value for themselves, and to 
determine if they are victims of fraud.

II. Discussion

    35. In developing the proposals detailed below, we have looked to 
other regulatory contexts regarding the content of bills and other 
disclosure documents sent to consumers. Of particular relevance is the 
Telephone Disclosure and Dispute Resolution Act (TDDRA), which added 
Section 228 to the Communications Act of 1934 (Act) requiring the 
Commission and the Federal Trade Commission (FTC) to adopt rules both 
to promote the legitimate development of pay-per-call services and to 
shield telephone subscribers from fraudulent and deceptive practices. 
Among other things, the Commission's rules require carriers to show, in 
a portion of the bill separate from ordinary telephone charges, the 
amount of pay-per-call charges, the type of services for which the 
consumer is being charged, and the date, time, and duration of pay-per-
call calls.
    36. We have also looked to required disclosures in the area of 
credit transactions. The Truth in Lending Act (TILA) and its 
implementing regulations impose minimum disclosure requirements for 
credit card bills in order to ``assure a meaningful disclosure of 
credit terms so that the consumer will be able to compare more readily 
the various credit terms available to him and . . . to protect the 
consumer against inaccurate and unfair credit billing and credit card 
practices.'' We seek comment generally on whether and to what extent 
consumers should have similar protections when charges are billed 
through telephone bills rather than through other means.
    37. We have also looked to recent efforts initiated by the industry 
to address the problem of unclear or unauthorized charges on consumers' 
bills. At the request of the Commission, a group of LEC providers of 
billing and collection services recently developed a set of voluntary 
guidelines that represent best practices to combat cramming. These 
guidelines primarily address the relationship between LECs and the 
service providers for whom they provide billing services. It is not the 
intent of this NPRM to interfere with, nor duplicate, practices 
addressed by the LEC guidelines. Rather, the focus of this proceeding 
is on the relationship between the carriers and their end user 
customers, and, in particular, on improving the clarity of telephone 
bill formats.
    38. This body of ``truth-in-billing'' concepts yields the 
fundamental principle that consumers should be treated fairly. Fairness 
in billing mandates that bills be both intelligible and legitimate. To 
advance this principle of fairness in billing, we consider three 
guidelines. First, bills should be clearly organized and highlight any 
new charges or changes to consumers' services. Second, bills should 
contain full and non-misleading descriptions of all charges that appear 
therein and clear identification of the service provider responsible 
for each charge. Third, a bill should contain clear and conspicuous 
disclosure of any information that the consumer may need to make 
inquiries about the charges on the bill.
    39. The importance of providing an accurate and understandable 
telephone bill, however, must be balanced against the costs incurred to 
provide that information. We seek comment generally on the extent to 
which any carriers already have in place practices similar to, or that 
have the same effect as the proposals in this NPRM. Commenters should 
also assess the burdens that would be imposed by the proposals in this 
NPRM and suggest less burdensome practices that would achieve the same 
goals. We also seek comment on the extent to which the proposals 
detailed below might be unduly burdensome to small or rural carriers, 
and on specific proposals that may be necessary to accommodate the 
needs of such carriers.

A. Legal Authority

    40. Our examination of the issues described above requires us to 
consider both a billing carrier's relationship with its end user 
customer, and a billing carrier's relationship with the other entities 
for whom it provides billing and collection services. With respect to 
the first type of relationship, the Commission has recognized that a 
carrier's billing and collection for communications service that it 
offers is subject to regulation as a common carrier service under Title 
II of the Act. With respect to the second type of relationship, the 
Commission has found that although a carrier's provision of billing and 
collection services for an unaffiliated carrier is not subject to Title 
II, such third party billing services may be subject to the 
Commission's ancillary jurisdiction pursuant to Title I of the Act.
    41. The Commission's focus in this proceeding is on the 
relationship between carriers and their end user customers, and in 
particular on the provision of necessary information, in a clear and 
understandable manner, in a telephone bill. We believe that we have 
jurisdiction to begin this proceeding to address what has become a 
problem of national proportions. Carriers have the obligation to have 
charges, practices, and classifications that are just and reasonable, 
pursuant to section 201(b). We believe that the telephone bill is an 
integral part of the relationship between a carrier and its customer. 
The manner in which charges are identified and articulated on the bills 
is essential to the consumer's understanding of the services that have 
been rendered, such that a carrier's provision of misleading or 
deceptive billing information may be an unjust and unreasonable 
practice in violation of section 201(b) of the Act. We seek comment on 
whether the Commission has jurisdiction to adopt each of the proposals 
in this NPRM and ask commenters to address the jurisdictional basis of 
any additional proposals raised on the record of this proceeding.
    42. We seek comment particularly on how our jurisdiction should 
complement that of the states and other agencies. We recognize that 
many states and their public utility commissions have in place or are 
considering requirements designed to protect their consumers from 
abuses associated with questionable billing practices. Furthermore, 
other agencies such as the Federal Trade Commission may have 
overlapping or concurrent jurisdiction with regard to these issues. We 
intend to work closely with such entities in order to ensure that 
consumers are protected in all billing contexts. The proposals that we 
set forth in this NPRM are a starting point for what we hope will be an 
open exchange with the states, federal agencies, consumer advocacy 
groups, and industry members on how best to provide consumers with 
information necessary to allow them to obtain the benefits of an 
increasingly competitive telecommunications marketplace.
    43. We are also cognizant of the First Amendment considerations 
that must inform our efforts to ensure that customers are truthfully 
informed of the significance of entries on their bills. The Supreme 
Court has held that, consistent with the First Amendment, the 
government may require a commercial message to ``appear in such a form, 
or include such additional information, warnings, and disclaimers, as 
are necessary to prevent its being deceptive.'' On the other hand, 
restrictions on speech that ban truthful,

[[Page 55081]]

non-misleading commercial speech about a lawful product cannot 
withstand scrutiny under the First Amendment.

B. Organization of the Bill

    44. Telephone bills should be organized to be readable and to 
present important information clearly and conspicuously. One manner in 
which telephone bills may be better organized is to present separate 
categories of services (such as charges for local, long distance, and 
miscellaneous services) in clearly separate sections within the 
telephone phone bill, and, if possible, on separate pages. We 
alternatively seek comment on whether bills should be organized by 
provider with a description of the services furnished by each provider, 
since distinctions between categories of service may blur over time 
when providers begin to offer multiple services (e.g., local exchange 
companies offering interstate interexchange service). We seek comment 
on these proposals and on any other proposals that organize information 
in a clear fashion.
    45. It may also be helpful for bills to include a single page or 
section summarizing the current status of the customer's services, 
including applicable information regarding: (1) The consumer's 
presubscribed interstate toll carrier; (2) the consumer's presubscribed 
intrastate toll carrier, if such carrier is not the same as the 
consumer's presubscribed interstate toll carrier; (3) the consumer's 
presubscribed local exchange carrier; (4) any other service providers, 
including those providing telecommunications and non-telecommunications 
related services, for whom charges are being billed; (5) whether 
carrier or preferred carrier (PC) freezes or other blocking mechanisms 
have been implemented for any presubscribed telecommunications 
services. We seek comment on this proposal and on any other information 
that would appropriately be included in the summary of the current 
status of the consumer's services.
    46. We seek comment on the benefits of having each telephone bill 
include, near the front of the bill, a separate page or section that 
highlights any changes in the consumer's service status information or 
new charges since the consumer's last bill. This ``Status Changes'' 
page could include applicable information on: (1) Changes in 
presubscribed carriers; (2) any new service providers for whom charges 
are being billed for the first time or whose charges did not appear on 
the last telephone bill; (3) changes in any carrier or PC freeze status 
or blocking mechanism status; (4) explanations of any new types of line 
item charges appearing on the bill for the first time. We seek comment 
on whether this proposal would help consumers defend themselves against 
cramming, slamming, and other types of fraud. We also seek comment on 
any other proposals that would serve to highlight to consumers any 
changes that have occurred on their telephone bills.

C. Full and Non-Misleading Descriptions

    47. Carriers should provide consumers with full and non-misleading 
descriptions of all charges contained in their telephone bills, as well 
as clear identification of the service providers associated with those 
charges. Vague or inaccurate descriptions of charges make it difficult 
for consumers to determine exactly what they are paying for and whether 
they received the services that correspond to such charges. In 
addition, we find that in many of the calls and complaints the 
Commission receives, consumers have been unable to determine from 
reading their bills the names of service providers or the nature of the 
services being billed to them. Furthermore, the Commission has received 
numerous consumer complaints and inquiries concerning the practice of 
some carriers of implementing new charges that reflect--or are at least 
related to--federally-mandated changes to the structure of IXC costs of 
obtaining access services from LECs and of supporting universal service 
mechanisms. Some of these carriers also have apparently identified such 
charges as being required by the Commission, even though the Commission 
has not mandated such specific recovery of access and universal service 
costs.
1. Descriptions of Services and Identification of Providers
    48. Both NARUC and the National Consumers League have proposed that 
each charge on a consumer's telephone bill be accompanied by a brief, 
clear, plain language description of the services rendered. We seek 
comment on whether such itemization would help consumers determine the 
precise nature of the services for which they are being billed. We also 
seek comment on the types of information that would assist consumers in 
understanding the charges on the bill.
    49. We propose that the name of the service provider be clearly and 
conspicuously identified in association with that entity's charges. We 
propose that the name of the service provider itself must be included, 
and that listing the name of the billing aggregator or clearinghouse 
alone will not be sufficient, even if the aggregator or clearinghouse 
has full legal responsibility for the charges. We also propose that, in 
the case of an entity reselling the service of a facilities-based 
carrier, the name of the reseller must appear on the telephone bill. We 
seek comment on whether these proposals would help consumers determine 
the actual identity of the carrier that is providing service and also 
enable them to detect quickly if they have been slammed by another 
carrier. We also seek comment on whether these proposals would decrease 
consumer frustration by enabling the consumer to identify the correct 
carrier in the first instance, rather than being told by one entity 
after another that it is not the consumer's service provider.
    50. We seek comment on whether telephone bills should differentiate 
between ``deniable'' and ``non-deniable'' charges. Deniable charges are 
those charges that, if unpaid, could result in the termination of local 
exchange or long distance telephone service. Non-deniable charges are 
those charges for which basic communications services would not be 
terminated for non-payment. Based on our experience with consumer 
complaints, we believe that many consumers pay charges that they did 
not authorize solely because they erroneously perceive a risk of having 
their service disconnected. We seek comment on methods for 
differentiating between deniable and non-deniable charges, such as 
including a prominent disclosure at the top of the page or section 
stating that non-payment of certain charges would not result in the 
termination of the customer's local exchange or long distance service. 
We note that the pay-per-call rules require bills to contain a 
statement that carriers may not disconnect local or long distance 
service for non-payment of charges for information services.
2. Descriptions of Charges Resulting from Federal Regulatory Action
    51. We have also seen consumer concern and confusion with respect 
to line item charges that are related to the implementation of 
universal service support mechanisms and to access charges. Pursuant to 
the 1996 Act, the Commission undertook a fundamental overhaul of 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. 
Following this restructuring, some long distance carriers began 
including on

[[Page 55082]]

their customers' bills line item charges purportedly intended to 
recover the costs incurred in obtaining access and in meeting their 
universal service obligations. While the Commission did not dictate the 
manner in which long distance carriers must recover these costs, both 
the Commission and the states have received numerous complaints and 
inquiries from consumers suggesting that many consumers are confused 
about the nature of these charges. These charges are often inaccurately 
identified, and the descriptions for some charges even imply that such 
charges have been imposed directly on consumers by federal law. 
Moreover, the amount of these charges for a particular customer may not 
correspond to the actual costs to the carrier of universal service 
support and access charges attributable to that customer.
    52. We seek comment on the extent to which carriers that pass on to 
their customers all or part of the costs of their universal service 
contributions or access charge obligations are also providing complete, 
accurate, and understandable information regarding the basis for these 
new charges and their amounts. This inquiry applies to all providers 
that include universal service contributions as a separate line item on 
customer bills.
    53. Commenters should address whether the Commission should 
prescribe ``safe harbor'' language that carriers, or some subset of 
carriers, could use to ensure that they are meeting their obligations 
to provide truthful and accurate information to subscribers with 
respect to the recovery of universal service, access, and similar 
charges, and how such language could be distributed most effectively. 
Commenters are asked to propose specific safe harbor language for 
inclusion in bills of service providers that choose to include charges 
for recovering universal service contributions as separate line items 
on their bills.
    54. To the extent we decide to adopt safe harbor language for 
carriers that include a line item for universal service charges, we 
seek comment on the types of information that such language should 
include to ensure that consumers understand fully the nature and 
purpose of such line item charges. We seek comment on whether any safe 
harbor language should include a description of the scope and purpose 
of universal service support mechanisms. These programs help keep local 
telephone service affordable in rural and high-cost areas of the United 
States, support low-income consumers, and also provide certain 
discounted services to schools, libraries, and rural health care 
providers. With respect to long distance carriers, we note that since 
the 1996 Act, the annual costs incurred by the long distance telephone 
companies as a result of government-mandated obligations have been 
lowered by over two billion dollars, even as support for universal 
service has been maintained and expanded. We thus seek comment on 
whether long distance carriers that include a separate line item for 
the recovery of universal service contributions should be required to 
explain the net reduction in their costs of providing long distance 
service since enactment of the 1996 Act.
    55. We also seek comment on what language might be appropriate in 
the case of long distance carriers that include separate line items for 
the recovery of access charges. The impact from access charge changes 
on a consumer's total bill may vary depending on that consumer's usage 
and how his or her carrier has decided to revise its rates to reflect 
these changes. Commenters should propose specific additional safe 
harbor language as appropriate.
    56. We also seek comment on the frequency of publication of safe 
harbor language. For example, should a carrier using the safe harbor 
language approach print such language in each monthly telephone bill? 
Or should carriers send safe harbor language on a one-time basis, 
annually, or using some other interval? Furthermore, if the safe harbor 
approach is inappropriate, we ask commenters to suggest alternative 
approaches.
    57. We seek to determine whether it is misleading or unreasonable, 
under Section 201(b) of the Act, for a carrier to bill a consumer for 
an amount identified as attributable to a particular cost while 
charging more than the actual cost incurred. We note that in a 
competitive market, consumers may react to price increases by exploring 
their options with alternative companies. Consumers may be less likely 
to compare among service providers if they are led to believe that 
certain rates are fixed by the government, not the carrier or the 
market. This highlights the need for truthful billing by carriers with 
respect to their assessments and descriptions of universal service 
charges. We seek comment on whether it would be helpful to consumers if 
carriers were required to explain in customer bills their reasons for 
assessing a flat fee or percentage charge that exceeds the costs the 
carrier incurs. Should carriers attributing line items to new 
government action be required to disclose exact cost reductions, such 
as a reduction in access charge costs, or other related benefits 
arising from government action? Also, should carriers who assess a 
presubscribed interexchange carrier charge (PICC) be required to show 
whether the corresponding reduction in the per-minute rate was actually 
passed on to that individual consumer? Should carriers include the 
exact cost of PICC and universal service obligations incurred as a 
result of serving that customer? We also seek comment on the benefits 
to consumers of identifying PICC and universal services charges by a 
standard name throughout the industry.
    58. Finally, we seek comment as to whether these proposals with 
regard to line item charges for universal service and access charges 
would be too regulatory and burdensome to carriers or possibly 
confusing to consumers.

D. Provision of Consumer Inquiry/Complaint Information

    59. Each telephone bill should contain all the necessary 
information to enable a consumer to take action on his or her own 
behalf to dispute the charges contained in the bill. We find that, 
particularly with slamming and cramming, consumers often experience 
considerable difficulty in contacting the entity whose charges appear 
on the telephone bill. This results in delayed resolution and 
oftentimes in the consumer's inability to correct even straightforward 
billing problems without the intervention of other parties such as the 
LEC, the state public service commission, or the Commission.
    60. The LECs, NARUC, and the National Consumers League have made 
proposals that would require each telephone bill to include, in 
addition to the name of each service provider, a business address and 
toll-free telephone number for the receipt of consumer inquiries and 
complaints. We seek comment on whether these requirements would enable 
consumers to initiate action to resolve any billing questions or 
inquiries. We also seek comment on how to ensure that carriers provide 
consumers with correct information when consumers call with complaints 
or inquiries, and on any other proposals to ensure that consumers 
receive all information necessary to resolve billing disputes.

III. Procedural Matters

A. Ex Parte Presentations

    61. This matter shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex

[[Page 55083]]

parte rules. Persons making oral ex parte presentations are reminded 
that memoranda summarizing the presentations must contain summaries of 
the substance of the presentations and not merely a listing of the 
subjects discussed. More than a one or two sentence description of the 
views and arguments presented is generally required.

B. Deadlines and Instructions for Filing Comments

    62. Pursuant to Secs. 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments 30 days after 
Federal Register publication, and reply comments on or before 45 days 
after Federal Register publication. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS) or by filing paper 
copies.
    63. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to <http://www.fcc.gov/e-file/ecfs.html>. 
Generally, only one copy of an electronic submission must be filed. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit an 
electronic comment by Internet e-mail. To get filing instructions for 
e-mail comments, commenters should send an e-mail to [email protected], and 
should include the following words in the body of the message, ``get 
form [email protected] and to 
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, NW., 
Washington, DC 20503 or via the Internet to [email protected].

IV. Conclusion

    67. The problem of inaccurate, deceptive, or unclear charges and 
information on telephone bills is a growing concern for consumers, the 
states, the Commission, Congress, and all other entities that deal with 
consumer protection. The telecommunications market of today requires a 
telephone bill that reflects the profusion of services that are 
available from a multitude of providers. We initiate this proceeding to 
evaluate how telephone bills can provide necessary information in a 
manner that allows consumers to take full advantage of the benefits of 
this robust competition while also empowering them to protect 
themselves from unscrupulous providers. We seek comment on guidelines 
and proposals that will provide consumers with the necessary 
information to protect themselves from fraudulent or deceptive 
practices and to make comparisons to determine the best value for 
themselves.

V. Ordering Clauses

    68. Accordingly, it is ordered, pursuant to sections 1, 4(i) and 
(j), 201-209, 254, and 403 of the Communications Act, as amended, 47 
U.S.C. 151, 154(i), 154(j), 201-209, 254, and 403 that this Notice of 
Proposed Rulemaking is hereby adopted and comments are requested as 
described above.
    69. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Certification and Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Communications Common Carriers.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-27351 Filed 10-13-98; 8:45 am]
BILLING CODE 6712-01-P