[Federal Register Volume 65, Number 135 (Thursday, July 13, 2000)]
[Rules and Regulations]
[Pages 43251-43258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17719]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 98-170; FCC 00-111]


Truth-in-Billing and Billing Format

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document concerning Truth-in Billing and Billing 
Format, we grant, in part, petitions for reconsideration of the 
requirements that telephone bills highlight new service providers and 
prominently display inquiry contact numbers. We deny all other 
petitions seeking reconsideration, but provide clarification with 
respect to certain issues. We note that several petitioners make 
arguments substantially similar to those addressed previously in the 
Truth-in-Billing Order and offer no new information to persuade us that 
our decisions in the Truth-in-Billing Order were erroneous. This 
document addresses only those new arguments raised in the petitions 
that we have not already considered and rejected.

DATES: Effective July 13, 2000 except for the amendments to 
Secs. 64.2401(a), (d), and (e), which contain information collection 
requirements that are not effective until approved by the Office of 
Management Budget (OMB). The Commission will publish a document in the 
Federal Register announcing the effective date of these sections.

FOR FURTHER INFORMATION CONTACT: Michele Walters, Associate Division 
Chief, Accounting Policy Division, Common Carrier Bureau, (202) 418-
7400.

SUPPLEMENTARY INFORMATION: This is a summary of a Commission's Order on 
Reconsideration in CC Docket No. 98-170 released on March 29, 2000. The 
full text of this document is available for public inspection during 
regular business hours in the FCC Reference Center, Room CY-A257, 445 
Twelfth Street, SW, Washington, DC, 20554.

I. Introduction and Background

    1. In this Order, we address several petitions for reconsideration 
or clarification of the principles and guidelines contained in Truth-
in-Billing and Billing Format, First Report and Order (TIB Order), 64 
FR 34487 (June 25, 1999), 64 FR 55163 (October 12, 1999), 64 FR 56177 
(October 18, 1999). In the TIB Order, we adopted principles and 
guidelines designed to reduce telecommunications fraud such as slamming 
and cramming by making telephone bills easier for consumers to read and 
understand, and thereby, making such fraud easier to detect and report. 
Our truth-in-billing principles and guidelines require common carriers 
to: (1) Identify the telecommunications service provider, separate 
charges on bills by service provider, and notify customers when a new 
entity has begun providing service; (2) provide on telephone bills 
brief, clear, non-misleading, plain language descriptions of services 
rendered; and (3) provide a toll-free number for customers to call to 
lodge a complaint or to obtain information about any charge contained 
in the bill. Carriers also must identify on bills those charges for 
which failure to pay will not result in disconnection of the customer's 
basic, local service. Finally, we held that carriers must use 
standardized labels on bills to refer to certain line item charges 
relating to federal regulatory activity, such as the PICC, local number 
portability, and subscriber line charge.
    2. Six parties filed petitions for reconsideration and/or 
clarification of the principles and guidelines adopted in the TIB 
Order. In this Order, we grant, in part, petitions for reconsideration 
of the requirements that telephone bills highlight new service 
providers and prominently display inquiry contact numbers. We deny all 
other petitions seeking reconsideration, but provide clarification with 
respect to certain issues. We note that several petitioners make 
arguments substantially similar to those addressed previously in the 
TIB Order and offer no new information to persuade us that our 
decisions in the TIB Order were erroneous. This Order

[[Page 43252]]

addresses only those new arguments raised in the petitions that we have 
not already considered and rejected.

II. Discussion

A. Identification of New Service Providers

    3. In the TIB Order, we adopted rules requiring that telephone 
bills ``provide clear and conspicuous notification of any change in 
service provider, including notification to the customer that a new 
provider has begun providing service.'' We concluded in that order that 
such a requirement would act as an important tool in deterring both 
slamming and cramming by enabling consumers to detect more readily 
charges for unauthorized services. On reconsideration, we retain the 
fundamental aspects of this requirement. In response to arguments 
raised by some Petitioners, however, we modify this rule to apply only 
to subscribed services for which the provider will (absent a decision 
by the subscriber to terminate) continue to place periodic charges on 
the subscriber's bill. Thus, for example, preferred carrier changes 
would be subject to this rule, as would charges for other services 
where a continuing month-to-month relationship exists. By contrast, 
services that are billed solely on a per-transaction basis, such as 
dial-around and directory assistance services, would not be subject to 
the rule. As explained, however, these services would continue to be 
subject to the requirement that charges be separated by provider. We 
conclude that this modification substantially addresses the concerns 
raised by Petitioners, without significantly impairing the 
effectiveness of this rule in protecting consumers.
    4. In light of the modification to our rules described, we are 
otherwise unpersuaded by carrier assertions that highlighting of new 
service providers will be costly and difficult. Petitioners argue that 
compliance with this rule will require the construction of expensive 
``stare and compare'' databases to compare current providers with those 
that have provided service in the past. The record demonstrates, 
however, that development of such a database is not necessary in order 
to comply with our rules, particularly as clarified in this Order. In 
particular, we clarify that local exchange carriers and other billing 
agents may satisfy this obligation by requiring the parties for which 
they bill to include, as part of the electronic billing information 
submitted to the billing agent, information identifying the provider as 
a new provider subject to this rule with respect to a particular 
customer. We note that the industry already has taken steps to 
facilitate provision of this information by service providers to 
billing agents by agreeing to modify the standard industry electronic 
billing documentation and notification to include this information. 
Accordingly, LECs and other billing entities will be able to comply 
with the modified requirements to highlight new providers in a low-cost 
and effective manner.
    5. As modified by this order, our rule requiring highlighting of 
new service providers will apply only to providers that have continuing 
arrangements with the subscriber that result in periodic charges on the 
subscriber's telephone bill. Thus, changes in a subscriber's 
presubscribed local and long-distance service providers clearly would 
be subject to the rule. Additionally, charges on telephone bills for 
such services as voice mail and internet access would also be subject 
to the rule because these services typically involve monthly or other 
periodic charges on an ongoing basis until the service is cancelled. On 
the other hand, our modified rule excludes services billed solely on a 
per transaction basis, such as dial-around interexchange access 
service, operator service, directory assistance, and non-recurring pay-
per-call services. These services typically are ordered intermittently 
with no formal, ongoing relationship between the carrier and the 
customer. Because they are used just for occasional convenience, such a 
carrier is and will always be a ``new'' provider with regard to a 
consumer using its services. Highlighting of such providers, in fact, 
might confuse consumers into thinking that the provider is a new 
presubscribed carrier. We also note that, with regard to pay-per-call 
services, the Commission's pay-per-call rules already require specific 
disclosures that accomplish many of the same goals as the requirement 
to highlight new service providers. Although the modification we adopt 
in this order restrict somewhat the application of our rule requiring 
highlighting of new services, we emphasize that these other services 
remain subject to the rules adopted in the TIB Order requiring charges 
to be separated by provider. As we explained in the TIB Order, this 
obligation, like the highlighting requirement, also serves to help 
consumers identify unauthorized charges on their bills. Taking into 
consideration the additional costs of highlighting these intermittent 
services, as asserted by Petitioners, we conclude that our modified 
rule draws an appropriate balance between the needs of consumers and 
any impact on the industry.
    6. Finally, we have modified slightly the language in the rule 
concerning when the highlighting requirement is triggered. The original 
rule states that the highlighting requirement is triggered if a 
provider ``did not bill for services on the previous billing 
statement.'' Under the revised rule, the highlighting requirement is 
triggered if a provider ``did not bill for services, in its last 
billing cycle, with respect to a particular subscriber.'' This 
modification recognizes that the billing cycles of service providers 
often may be different from the billing cycles of their billing agents. 
For example, if a voicemail provider bills quarterly through a LEC, the 
voicemail provider's charges will only appear on every third monthly 
LEC bill. Under the original rule, the voicemail provider would be 
highlighted as a new provider every cycle, even though it was not a new 
provider, because the subscriber's last monthly bill would not have 
contained voicemail charges. Under the revised rule, the voicemail 
provider would not be highlighted as a new provider because the 
subscriber was billed during the voicemail provider's last billing 
cycle, even if that charge was not reflected on the subscriber's last 
monthly LEC bill. We make this modification in order to minimize the 
burden on service providers and billing agents, as well as to reduce 
possible consumer confusion.

B. Identification of Deniable and Non-Deniable Charges

    7. We retain our requirement that carriers distinguish on telephone 
bills those charges that consumers may refuse to pay without 
jeopardizing the provision of basic, local service, and charges for 
which non-payment may result in such disconnection. As we noted in the 
TIB Order, distinguishing between such charges on consumers' bills 
protects consumers from paying contestable, unauthorized charges 
because they believe that they will lose basic telephone service for 
non-payment. We are unpersuaded by U S West's argument that compliance 
with this rule will be costly because it would require the creation and 
maintenance of a database containing the necessary information. We note 
that, even absent the Commission's truth-in-billing requirements, 
carriers need such a database to remain knowledgeable about state law 
requirements regarding disconnection of customers for non-payment.
    8. Equally important, we find that compliance with this truth-in-
billing

[[Page 43253]]

requirement need not involve an expensive or complicated billing 
process. In the TIB Order, we refrained from mandating any particular 
method of distinguishing between deniable and non-deniable charges in 
order to give carriers maximum flexibility in complying with our rules. 
Because of the concerns raised in the petitions for reconsideration 
and/or clarification, however, we clarify that a carrier need not label 
every charge as either deniable or non-deniable. For example, SNET's 
bill, complies with the rule by listing the total amount due, the 
amount of charges owed for deniable, basic local service, and includes 
an explanatory statement that basic, local service can only be 
disconnected for failure to pay the charges for basic, local service. 
Although SNET's bill does not label each individual charge as either 
deniable or non-deniable, we find that its format appropriately places 
consumers on notice that they may dispute the non-deniable portion of 
their bills without fear that their local service will be cut off for 
failure to pay such charges. While we approve of SNET's approach, we 
reiterate that carrier's retain broad flexibility to use other methods 
on telephone bills that adequately provide this essential information 
to consumers. We also note that, upon customer inquiry, a carrier's 
customer service personnel must explain this distinction to customers.

C. Bundled Services

    9. Section 64.2401(a)(2) of our rules provides that, where charges 
for two or more telephone companies appear on the same bill, the 
charges must be separated by service provider. SBC seeks clarification 
on the applicability of Sec. 64.2401(a)(2) to bundled services. Bundled 
services are various types of services, such as telephone, cable, and 
Internet services, that are offered and billed by a single entity, even 
though they may be provisioned by multiple carriers. We clarify that, 
where an entity bundles a number of services (some of which may be 
provided by various carriers) as a single package offered by a single 
company, such offering may be listed on the telephone bill as a single 
offering, rather than listed as separate charges by provider. Carriers 
providing bundled services in this manner must, however, make sure that 
an inquiry contact number or numbers appears on the bill for customer 
questions or complaints concerning the services provided through the 
bundle, as required by Sec. 64.2401(d).

D. Clear Identification of Providers

    10. We decline to reconsider the timetable for implementation of 
the requirement to identify each provider. We note that we have already 
delayed implementation of this requirement for certain carriers, and we 
find further delay to be unwarranted. We clarify, however, that this 
guideline may be satisfied by listing the carrier's trade name, rather 
than its precise corporate or corporate subsidiary name. That is, the 
carrier name on the telephone bill should be the name by which such 
company is known to its consumers for the provision of the respective 
service.

E. Toll Free Contact Numbers

    11. Section 64.2401(d) of the Commission's rules requires that 
common carriers prominently display on each bill a toll-free number or 
numbers by which consumers may inquire about or dispute charges on 
their bills. While agreeing that it is reasonable to expect carriers to 
provide adequate inquiry information to their customers, MCIW requests 
that carriers be permitted to provide means other than toll-free 
numbers for consumers to access a carrier's customer service. MCIW 
specifically notes that some carriers offer customer service via a web 
site or e-mail. We decline to modify the generally applicable 
requirement adopted in the TIB Order that carriers include toll-free 
numbers on their bills for customers to inquire about or dispute 
charges. Since the bills at issue are for telephone service, it 
naturally follows that those questioning these charges will have 
telephone access; on the other hand, Internet access remains far from 
universally available. We will, however, modify this requirement by 
creating a limited exception where the customer does not receive a 
paper copy of his or her telephone bill, but instead accesses that bill 
only by e-mail or Internet. Under such circumstance, we find it 
reasonable to expect that customers can adequately resolve their 
inquiries and disputes through e-mail or web site communications. As 
MCI recognizes in its Petition, consumers contacting a service provider 
though such means continue to be entitled to have their communications 
reach and be responded to by an individual with the necessary 
information and authority to timely resolve their inquiry or dispute. 
We also note that any carrier may provide on customers' bills other 
means for consumers to make inquiries, such as an e-mail address, in 
addition to the toll-free number required by the rule.

F. Regulatory Flexibility Analysis in the TIB Order

    12. We reject NTCA's contention that we failed to perform 
adequately our regulatory flexibility analysis in the TIB Order because 
we did not give sufficient consideration to the needs of small 
carriers. We conclude that the regulatory flexibility analysis in the 
TIB Order adequately addressed the concerns of small carriers. In the 
TIB Order, we noted that, in order to decrease the economic impact of 
our rules on small carriers, we declined to adopt several proposals 
made in the Notice of Proposed Rulemaking and gave carriers 
considerable discretion in implementing our guidelines. Moreover, the 
modifications in this Order and the extensions of time that we have 
granted to carriers provide evidence of our continuing concern for the 
impact of our guidelines on small carriers.
    13. USTA requests that we find that small ILECs constitutes small 
businesses under the definition of the United States Small Business 
Administration (SBA). We have included small ILECs in this RFA 
analysis. A ``small business'' under the RFA is one that, inter alia, 
meets the pertinent small business size standard (e.g., a telephone 
communications business having 1,500 or fewer employees), and ``is not 
dominant in its field of operation.'' The SBA's Office of Advocacy 
contends that, for RFA purposes, small ILECs are not dominant in their 
field of operation because any such dominance is not ``national'' in 
scope. We have therefore included small ILECs in this RFA analysis, 
although we emphasize that this RFA action has no effect on FCC 
analyses and determinations in other, non-RFA contexts.

III. Procedural Matters

A. Effective Date of Existing Rules

    14. Our existing truth-in-billing rules took effect on November 18, 
1999 with compliance required as of April 1, 2000. Thus, absent action 
on our part, carriers would be bound by the existing rules as of April 
1, despite the fact that today we amend those rules to become effective 
upon OMB approval. In view of these circumstances, we stay the portions 
of the existing Sec. 64.2401 detailed below for which compliance was 
required as of April 1, 2000 until such time as today's amendments of 
Sec. 64.2401 become effective. The portions of the existing 
Sec. 64.2401 that are subject to this stay are: (1) That portion of 
Sec. 64.2401(a)(2) that requires that each carrier's ``telephone bill 
must provide clear and conspicuous notification of any change in 
service provider, including

[[Page 43254]]

notification to the customer that a new provider has begun providing 
service,'' (2) Sec. 64.2401(a)(2)(ii) and (3) Sec. 64.2401(d). The 
existing provisions of Secs. 64.2401(a)(1), (a)(2)(i) and the portion 
of (a)(2) requiring ``[w]here charges for two or more carriers appear 
on the same telephone bill, the charges must be separated by service 
provider,'' will continue to take effect on April 1, 2000. Nothing in 
this order modifies the effective dates of existing Secs. 64.2401(b) 
and (c). Upon their effective date, the rules, as amended, will 
supercede the existing rules. We take this action because we find that 
requiring carriers to comply with the existing rules for a short time 
prior to the effective date of today's amendments would be unduly 
burdensome and that it could result in the very sort of consumer 
confusion that today's amendments seek to avoid.

B. Final Supplemental Regulatory Flexibility Act Analysis

    15. As required by the Regulatory Flexibility Act (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice 
in Truth-in-Billing and Billing Format. The Commission sought written 
public comment on the proposals in the Notice, including comment on the 
IRFA. The comments received are discussed. The TIB Order included a 
Final Regulatory Flexibility Analysis (FRFA) that conformed to the RFA. 
The Supplemental FRFA included herein addresses only the modifications 
adopted in this Order on Reconsideration, and conforms with RFA.
1. Need for and Objectives of This Order and the Rules Adopted Herein
    16. 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 adopted in the TIB 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 adopted 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 the TIB Order, our goal was 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. This Order on Reconsideration seeks to respond to 
requests for modification and clarification received by certain 
carriers in response to the TIB Order. Specifically, we modify our rule 
concerning highlighting of new service providers to apply only to 
subscribed services for which a provider will continue to place 
periodic charges on the subscriber's bill.
2. Summary of the Significant Issues Raised by the Public Comments in 
Response to the IRFA
    17. 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 regulations and on alternatives to the proposed rules that 
would minimize the impact on small entities consistent with the 
objectives of this proceeding.
    18. PCIA, Liberty, RTG and others argued that the cost of 
compliance faced by smaller carriers would be particularly burdensome. 
PCIA asserted 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 stated that smaller 
carriers may be forced to replace their entire billing systems in order 
to comply with the format and content mandates proposed in the NPRM. 
RTG agreed, arguing that rural carriers are particularly sensitive to 
increased regulatory requirements with significant costs.
    19. The Office of Management and Budget (OMB) received a large 
number of comments in response to the NPRM. The commenters generally 
agreed 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 
recommended that we not impose undue burdens on wireless providers and 
small wireline services, and urged that flexibility be given to small 
companies that may experience significant cost and managerial issues 
related to implementation of billing requirements. Moreover, OMB 
recommended 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 recommended 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.
    20. The TIB Order considered these comments and found that we 
appropriately balanced the concerns of carriers that detailed rules may 
increase their costs against our goal of protecting consumers against 
fraud. We exempted CMRS carriers from certain of our requirements on 
grounds that the requirements may be inapplicable or unnecessary in the 
CMRS context. Moreover, we considered our principles and guidelines to 
be flexible enough that carriers will be able to comply with them 
without incurring unnecessary expense. Since the modifications adopted 
in this Order were made in response to requests from carriers, and are 
designed to ease any burden on such carriers from implementing our 
rules, we find that nothing we have done in this Order causes us to 
reconsider our previous evaluation of this issue. Specifically, in 
response to petitions from various carriers, we have modified

[[Page 43255]]

our rule concerning highlighting of new service providers to apply only 
to subscribed services for which a provider will continue to place 
periodic charges on the subscriber's bill. Thus, the rule will apply to 
a narrower range of charges than contemplated in the original rule, 
thereby reducing the compliance costs on small businesses and other 
entities.
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
    21. 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 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).
    22. 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.
    23. 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. 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.
    24. We have included small incumbent LECs in this present RFA 
analysis. As noted, a ``small business'' under the RFA is one that, 
inter alia, meets the pertinent small business size standard (e.g., a 
telephone communications business having 1,500 or fewer employees), and 
``is not dominant in its field of operation.'' The SBA's Office of 
Advocacy contends that, for RFA purposes, small incumbent LECs are not 
dominant in their field of operation because any such dominance is not 
``national'' in scope. We have therefore included small incumbent LECs 
in this RFA analysis, although we emphasize that this RFA action has no 
effect on FCC analyses and determinations in other, non-RFA contexts.
    25. 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.
    26. 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.
    27. 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.
    28. Interexchange Carriers. Neither the Commission nor the SBA has 
developed a definition of small entities 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

[[Page 43256]]

may be affected by our principles and guidelines.
    29. 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 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.
    30. 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.
    31. 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. 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.
    32. 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.
    33. 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 7 or fewer telex providers that may be affected 
by our principles and guidelines.
    34. 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.
    35. 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 proposed rules, if adopted.
    36. 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 
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), we will consider the approximately 
1,500 incumbent licensees in this service as small businesses under the 
SBA definition.
    37. 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,

[[Page 43257]]

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 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.
    38. 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 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 proposed rules, if adopted.
    39. 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.
    40. 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. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements
    41. In this Order on Reconsideration, we have responded to 
petitions from various carriers by modifying the rules adopted in the 
TIB Order concerning highlighting of new service providers to apply 
only to subscribed services for which a provider will continue to place 
periodic charges on the subscriber's bill. The modified rule will apply 
to a narrower range of charges than contemplated in the original rule, 
thereby reducing the compliance costs on small businesses and other 
entities.
5. Steps Taken To Minimize the Significant Economic Impact of This 
Order on Small Entities and Small Incumbent LECs, Including the 
Significant Alternatives Considered
    42. In this Order, we make minor modifications to our previously 
adopted rules on Truth-In-Billing. Specifically, we modify our rule 
concerning highlighting of new service providers to apply only to 
subscribed services for which a provider will continue to place 
periodic charges on the subscriber's bill. The modified rule will apply 
to a narrower range of charges than contemplated in the original rule, 
thereby reducing the compliance costs on small businesses and other 
entities. The modifications adopted herein were made at the request of 
carriers, including small local carriers, and are specifically intended 
to reduce the burden on such entities in implementing the previously 
adopted rules. Accordingly, adoption of these rules should actually 
reduce the economic impact of our Truth-In-Billing rules on these 
entities.
6. Report to Congress
    43. The Commission will send a copy of the Order on 
Reconsideration, including this Supplemental 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 on Reconsideration, including the Supplemental FRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration. A copy 
of the Order on Reconsideration and Supplemental FRFA (or summaries 
thereof) will also be published in the Federal Register.

C. Paperwork Reduction Act Analysis

    44. The action contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1995 and found to impose new or modified 
reporting and recordkeeping requirements or burdens on the public. 
These rules contain information collections which have not been 
approved by OMB. The Commission will publish a document in the Federal 
Register announcing the effective date of these rules.

IV. Ordering Clauses

    45. Pursuant to the authority contained in sections 1, 4(i), 4(j) 
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 
154(j), and Sec. 1.429 of the Commission's rules, the petitions for 
reconsideration and/or clarification filed by AT&T Corp., MCI WorldCom, 
Inc., National Telephone Cooperative Association, SBC Communications, 
Inc., United States Telephone Association, U S West Communications, 
Inc. are granted in part and denied in part to the extent discussed.
    46. (1) That portion of Sec. 64.2401(a)(2) that requires that each 
carrier's ``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,'' (2) 
Sec. 64.2401(a)(2)(ii), and (3) Sec. 64.2401(d) of the existing rules 
took effect November 12, 1999 with compliance required as of April 1, 
2000 are stayed until such time as the amendments adopted herein are 
effective. The amendments to Sec. 64.2401 of the Commission's rules, 47 
CFR 64.2401(a), (d), and (e), set forth are effective upon OMB approval 
but no

[[Page 43258]]

sooner than 30 days following publication of these rules in the Federal 
Register. The Commission will publish a document announcing the 
effective date of these rules.
    47. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Order on Reconsideration, 
including the Supplemental Final Regulatory Flexibility Certification, 
to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in Part 64

    Claims, Communications common carrier, Computer technology, 
Consumer protection, Reporting and recordkeeping requirements, 
Telephone.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Final Rules

    Part 64 of title 47 of the Code of Federal Regulations is amended 
as follows:

PART 64--[AMENDED]

Subpart Y--Truth-in-Billing Requirements for Common Carriers

    1. The authority citation for part 64 continues to read as follows:

    Authority: 47 U.S.C. 151, 154, 201, 202, 205, 218-220, and 332 
unless otherwise noted . Interpret or apply sections 201, 218, 225, 
226, 227, 229, 332, 48 Stat. 1070, as amended. 47 U.S.C. 201-204, 
208, 225, 226, 227, 229, 332, 501 and 503 unless otherwise noted.

    2. Subpart Y of Part 64 consists of Sec. 64.2400 and Sec. 64.2401. 
The heading for Subpart Y is added to read as set forth above. \1\
---------------------------------------------------------------------------

    \1\ See 64 FR 34497 (June 25, 1999); 64 FR 55163 (October 12, 
1999); 64 FR 56177 (October 18, 1999); 65 FR 36637 (June 9, 2000).

    3. A Note is added to Sec. 64.2401 as set forth below effective 
---------------------------------------------------------------------------
July 13, 2000.

    4. In Sec. 64.2401, revise paragraphs (a) and (d), and add 
paragraph (e) to read as follows:


Sec. 64.2401  Truth-in-Billing Requirements

    Note to Sec. 64.2401: The following provisions, for which 
compliance would have been required as of April 1, 2000, have been 
stayed until such time as the amendments to Sec. 64.2401(a), (d), 
and (e) become effective (following their approval by the Office of 
Management and Budget and the publication by the Commission of a 
document in the Federal Register announcing the effective date of 
these amended rules) and will be superceded by the amended rules: 
(1) That portion of Sec. 64.2401(a)(2) that requires that each 
carrier's ``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,'' (2) Sec. 64.2401(a)(2)(ii), and (3) Sec. 64.2401(d).

    (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 and conspicuously 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.
    (3) The telephone bill must clearly and conspicuously identify any 
change in service provider, including identification of charges from 
any new service provider. For purpose of this subparagraph ``new 
service provider'' means a service provider that did not bill the 
subscriber for service during the service provider's last billing 
cycle. This definition shall include only providers that have 
continuing relationships with the subscriber that will result in 
periodic charges on the subscriber's bill, unless the service is 
subsequently canceled.
* * * * *
    (d) Clear and conspicuous disclosure of inquiry contacts. Telephone 
bills must contain clear and conspicuous disclosure of any information 
that the subscriber 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 subscribers may inquire or 
dispute any charges on the bill. A carrier may list a toll-free number 
for a billing agent, clearinghouse, or other third party, provided such 
party possesses sufficient information to answer questions concerning 
the subscriber's account and is fully authorized to resolve the 
consumer's complaints on the carrier's behalf. Where the subscriber 
does not receive a paper copy of his or her telephone bill, but instead 
accesses that bill only by e-mail or internet, the carrier may comply 
with this requirement by providing on the bill an e-mail or web site 
address. Each carrier must make a business address available upon 
request from a consumer.
    (e) Definition of clear and conspicuous. For purposes of this 
section, ``clear and conspicuous'' means notice that would be apparent 
to the reasonable consumer.
[FR Doc. 00-17719 Filed 7-12-00; 8:45 am]
BILLING CODE 6712-01-P