Truth-in-Billing and Billing Format

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

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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.

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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

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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

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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