[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]]

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Part V





Federal Communications Commission





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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

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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 [email protected]. 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