*Pages 1--101 from Microsoft Word - 15706* Federal Communications Commission FCC 99- 72 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D. C. 20554 [CORRECTED VERSION] In the Matter of ) ) Truth- in- Billing ) CC Docket No. 98- 170 and ) Billing Format ) FIRST REPORT AND ORDER AND FURTHER NOTICE OF PROPOSED RULEMAKING Adopted: April 15, 1999 Released: May 11, 1999 Comment Date: 14 days from Federal Register publication for comments concerning standardized labels for charges relating to federal regulatory action; 30 days from Federal Register publication for comments concerning applicability of truth- in- billing principles and guidelines to Commercial Mobile Radio Service (CMRS) carriers Reply Date: 21 days from Federal Register publication for comments concerning standardized labels for charges relating to federal regulatory action; 45 days from Federal Register publication for comments concerning applicability of truth- in- billing principles and guidelines to CMRS carriers By the Commission: Commissioner Ness issuing a statement, Commissioner Powell concurring and issuing a statement, and Commissioner Furchtgott- Roth dissenting and issuing a statement. Table of Contents I. THE IMPORTANCE OF CLEAR AND INFORMATIVE BILLS IN COMPETITIVE TELECOMMUNICATIONS MARKETS............................................... 1 II. TRUTH- IN- BILLING PRINCIPLES.................................................................................. 9 A. Adoption of Guidelines................................................................................................................ 9 B. Legal Authority.................................................................................................................. 20 C. Specific Truth- In- Billing Guidelines ....................................................................................... 28 1. Clear Organization and Highlighting New Service Provider ....................... 2. Full and Non- Misleading Billed Charges ....................................................................... 37 a. Billing Descriptions ................................................................................... 38 b. "Deniable" and "Non- Deniable" Charges.................................................. 44 1 Federal Communications Commission FCC 99- 72 2 c. Descriptions of Charges Resulting From Federal Regulatory .......... 3. Clear and Conspicuous Disclosure of Inquiry Contacts ..................................... 65 III. FURTHER NOTICE OF PROPOSED RULEMAKING .................................................... 68 A. Discussion.............................................................................................................. 68 1. Application of Rules to CMRS Carriers .................................................... 68 2. Standard Labels for Line- Item Charges..................................................... 71 IV. PROCEDURAL MATTERS ............................................................................................. 72 A. Final Regulatory Flexibility Analysis.................................................................... 72 1. Need for and Objectives of this Order and the Rules Adopted Herein............... 73 2. Summary of the Significant Issues Raised by the Public Comments in Response to the IRFA ................................................................................................ 74 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.................... 78 4. Summary of Projected Reporting, Recordkeeping and other Compliance Requirements ........................................................................................... 101 5. Steps Taken to Minimize the Significant Economic Impact of This Order on Small Entities and Small Incumbent LECs, Including the Significant Alternatives Considered........................................................................... 102 B. Final Paperwork Reduction Act of 1995 Analysis .............................................. 104 C. Initial Regulatory Flexibility Analysis for Policies Proposed in the Further Notice .. 105 D. Initial Paperwork Reduction Act of 1995 Analysis for the Further Notice ......... 112 E. Comment Filing Procedure .................................................................................. 113 F. Further Information.............................................................................................. 117 V. ORDERING CLAUSES ..................................................................................................... 119 APPENDIX A Final Rules APPENDIX B List of Commenters 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 2 Federal Communications Commission FCC 99- 72 3 (Act). 1 2. By the 1996 Act, Congress intended to facilitate the introduction by private firms of new consumer services, service providers and technologies by promoting the development of competition and deregulation in all telecommunications markets. 2 The Act instructs the Commission and state public utility commissions to open telecommunications markets to competition and to reform universal service support mechanisms to ensure their consistency with competitive markets. The proper functioning of competitive markets, however, is predicated on consumers having access to accurate, meaningful information in a format that they can understand. Unless consumers are adequately informed about the service choices available to them and are able to differentiate among those choices, they are unlikely to be able fully to take advantage of the benefits of competitive forces. 3. Unfortunately, as a by- product of these changes, we also have seen growing consumer confusion concerning the provision of these services and an increase in the number of entities willing to take advantage of this confusion. 3 The most glaring manifestations of consumer confusion may be the dramatic growth in the number of slamming and cramming complaints received by the Commission and the states. 4 As we explained in the Notice of Proposed Rulemaking (Notice) in this proceeding, 5 our review of the complaints received by this 1 Telecommunications Act of 1996, Pub. L. No. 104- 104, 110 Stat. 56 (1996). 2 The principal goal of the Act is to "provide for a pro- competitive, deregulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition." See Joint Statement of Managers, S. Conf. Rep. No. 104- 230, 104th Cong., 2d Sess. Preamble (1996) (Joint Explanatory Statement). 3 See, e. g., NCL comments at 2- 3 (noting that unscrupulous companies take advantage of consumer confusion over phone bills, and that fraud is increasing). 4 Slamming occurs when a company changes a subscriber's carrier selection without that subscriber's knowledge or explicit authorization. Cramming refers to the practice of causing unauthorized, misleading, or deceptive charges to be placed on consumers' telephone bills. Notice, 13 FCC Rcd at 18177- 78. In 1998, our Common Carrier Bureau Enforcement Division processed 20,154 complaints of slamming and 4,558 complaints of cramming. We received 8,761 slamming complaints in 1995, 12,795 in 1996, and 20,475 in 1997. Prior to 1998, the Commission did not track cramming complaints. Consumer Complaints and Inquiries, Consumer Protection Branch, Enforcement Division, Common Carrier Bureau, Federal Communications Commission (Oct. 31, 1998). The Federal Trade Commission (FTC) states it received 9,000 cramming complaints in the 12 month period prior to filing its comments in this proceeding. FTC comments at 5. State commissions also have received thousands of complaints. See, e. g., Vermont comments at 8. 5 Truth- in- Billing and Billing Format, Notice of Proposed Rulemaking, CC Docket No. 98- 170, 13 FCC Rcd 18176 (1998). 3 Federal Communications Commission FCC 99- 72 4 Commission plainly demonstrates that the difficulty consumers experience in trying to understand their bills for telecommunications service has been a significant, contributing factor in the growth of these fraudulent activities. The comments in this proceeding reinforce this conclusion. 6 Beyond these frauds, however, we have seen a substantial rise in the number of complaints generally arising out of consumers' confusion concerning charges on their telephone bills. 7 Since, for most consumers, the monthly telephone bill is their primary source of information and point of contact with respect to their telecommunications services providers, these complaints are strong evidence that consumers are not getting necessary information in a format that allows them to make informed choices in this market. 8 Indeed, it is apparent from our review of consumer complaints that, while the nature and variety of the services charged on consumers' telephone bills have changed dramatically in recent years, the format of the bills themselves have remained largely unchanged since the court ordered divestiture of the Bell System in 1983. 9 4. Nor are we alone in this concern. Virtually every state and consumer advocacy group that commented in this proceeding urges us to take action to address the growing problem 6 See, e. g., Missouri Commission comments at 5 (statistics of National Fraud Information Center show use phone bill is a "preferred" method for "con artists" seeking to defraud consumers). See also TCA comments at 2 (telecommunications fraud "a growth industry" in Texas); Georgia comments at 2 (complaints of slamming and cramming far outnumber all other types of telecommunications complaints Georgia receives); NYCPB comments at 5 (companies engaged in cramming rely on consumer confusion over bills to encourage consumers to pay for services that they have not authorized); FTC comments at 3, 6 (unclear telephone bills have led to a proliferation of cramming, and LEC anti- cramming voluntary guidelines do not obviate the need for additional consumer safeguards); CompTel comments at 3 (confusing and unclear local telephone bills create opportunity for unscrupulous carriers to take advantage of consumers). 7 See, e. g., Vermont Commission comments at 8 (state and federal regulators have received "literally thousands" of complaints and inquiries suggesting many consumers are confused about the nature of charges contained on their telephone bills); TOPC comments at 3 (sixty percent of the calls that agency receives involve complaints about telephone billing); Bills Project comments at 1 (due to the "complexity and inscrutability of consumers' bills" many billing errors brought to Bills Project's attention went undetected for significant periods of time before consumers noticed them and complained). 8 NASUCA notes that, when fraud is discovered, consumers remain greatly disadvantaged when disputing unauthorized charges because bills often lack vital information, such as the name, address, and telephone number of the service provider. NASUCA comments at 9. 9 See, e. g., USTA comments at 5; Qwest comments at 6- 7 (discussing "legacy" billing systems). "Legacy" system refers to a non- standard or proprietary, typically older, computer system that cannot easily be upgraded and is incompatible with other computer systems. The breakup of the Bell System is described in United States v. Western Elec. Co., 569 F. Supp. 1057 (D. D. C. 1983), aff'd sub nom. California v. United States, 464 U. S. 1013 (1983). 4 Federal Communications Commission FCC 99- 72 5 of consumer confusion with their telephone bills. 10 Similarly, our colleagues at the Federal Trade Commission assert that intervention on our part is necessary to help consumers avoid "falling prey" to unscrupulous service providers who hide or mislabel unauthorized charges on consumers' telephone bills. 11 Several members of Congress also have identified consumer confusion with their telephone bills as a growing concern that should be addressed by this Commission. 12 5. Accordingly, in this Order, we adopt generally the "truth- in- billing" principles proposed in the Notice in order to ensure that consumers receive thorough, accurate, and understandable bills from their telecommunications carriers. Specifically, we will require: First, that consumer telephone bills be clearly organized, clearly identify the service provider, and highlight any new providers; Second, that bills contain full and non- misleading descriptions of charges that appear therein; and, Third, 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. 13 Moreover, we believe that they represent fundamental principles of fairness to 10 See, e. g., Small Business comments at 1- 2; NCL comments at 2; NAAG comments at 3; Bills Project comments at 1- 2; West Virginia Commission comments at 1; Vermont Commission comments at 3- 4; Washington Commission Staff comments at 2; California Commission comments at 2; Maine Commission comments at 2; Minnesota OAG comments at 4; TCA comments at 2 (absent billing and formatting reforms, consumers will remain unable to discern legitimate services and charges from fraudulent cramming and slamming); UCAN comments at 1- 3; NASUCA comments at 7- 8. See also NYCPB comments at 3, 6 (favoring non- binding guidelines); Missouri Commission comments at 2 (same); Florida Commission comments at 4 (Commission should act as national forum and adopt model procedures which states can use to develop their own truth- in- billing rules). 11 FTC comments at 3. 12 See, e. g., Cramming: An Emerging Telephone Billing Fraud, Hearing Before the Permanent Subcommittee on Investigations of the Senate Committee on Governmental Affairs, S. Hrg. 105- 646, 105th Cong., 2d. Sess. (1998) (opening statements). 13 State commissions and the FTC also have received thousands of complaints. See, e. g., FTC comments at 5; Vermont Commission comments at 8. See also NASUCA reply at 2 (complaints received by FCC represent "tip of the iceberg"). 5 Federal Communications Commission FCC 99- 72 6 consumers and just and reasonable practices by carriers. 14 6. In taking action today, we recognize that, at this time, competitive pressures alone do not ensure that consumers receive clear, informative and consumer- friendly telephone bills from certain carriers. We acknowledge, for example, that most consumers continue to have both their local and long distance service billed together by their local exchange company (and, indeed, consumers have generally expressed a preference for a single bill), and most consumers do not yet have significant choice in who they select as a provider of local service. 15 We certainly hope that, as competition develops for the provision of local telephone service, all carriers, including those upon which we impose requirements here will seek to distinguish their services by providing clear, informative, and accessible bills to their customers. Moreover, 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 8½ x 11 inch paper). 16 7. Even in competitive markets, however, disclosure rules are needed to protect consumers. 17 Indeed, our adoption of these truth- in- billing principles is in large part designed to bring to consumers some of the protections to which they would be entitled if these services were billed in the same manner as other credit purchases. 18 For example, the Truth in Lending 14 47 U. S. C. § 201( b) (common carrier practices and charges must be "just and reasonable"). 15 See, e. g., Local Competition, Industry Analysis Division, Common Carrier Bureau, Federal Communications Commission (Dec. 1998) at 9. 16 Our principles and guidelines are broad enough to allow carriers to continue to differentiate themselves from their competitors based on their billing practices, and accordingly, we disagree with GTE and ALTS, who argue that truth- in- billing requirements could take away the competitive edge of carriers who already possess consumer- friendly bills. See, e. g., GTE comments at 9; ALTS comments at 5. 17 TOPC reply at 3. Because mature markets also require disclosure rules, we disagree with ALTS' argument that any confusion over billing formats that exists today is merely the result of the transition to fully competitive telecommunications markets. See ALTS comments at 3. 18 We note that, to some degree, it is significantly easier to bill fraudulent charges on telephone bills than on credit card bills. While credit card charges require access to a customer account number that consumers understand should be treated confidentially, all that is often required to get a charge billed on a local telephone bill is the consumer's telephone number. This number is not only expected to be widely distributed, but can easily be "captured" by an entity even when the consumer has not authorized charges or made a purchase. See Policies and Rules Governing Interstate Pay- Per- Call and Other Information Services Pursuant to the Telecommunications Act of 1996, Order and Notice of Proposed Rulemaking, CC Docket No. 96- 146, 11 FCC Rcd 14738, 14741 (1996) (noting that automatic number identification has been used to charge telephone subscribers for calls to toll- free 6 Federal Communications Commission FCC 99- 72 7 Act (TILA) and implementing rules require credit card issuers to provide information concerning the amount and date of each transaction appearing on a bill, the seller's name, and the location where the transaction took place. 19 These requirements are intended to "protect the consumer against inaccurate and unfair billing and credit card practices." 20 In a similar manner, our principles and guidelines will protect consumers from misleading and inaccurate billing practices. 8. In sum, we take this action in furtherance of the pro- competitive goals of the 1996 Act and our responsibility to ensure that all consumers have a fair opportunity to share in the benefits of competitive telecommunications markets. Certainly, in a competitive marketplace, consumers should investigate the choices available to them and decide which services best fit their needs. They also have a responsibility to be vigilant in protecting themselves from perpetrators of fraud. In this item, we seek to provide consumers with the basic tools they need to participate meaningfully in a competitive telecommunications marketplace. II. TRUTH- IN- BILLING PRINCIPLES A. Adoption of Guidelines 9. 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. The majority of commenters in this proceeding support such a flexible approach. 21 We use the terms principles and guidelines in this Order to distinguish our approach from a more detailed regulatory approach urged by some commenters. That is, we envision that carriers may satisfy these obligations in widely divergent manners that best fit their own specific numbers). 19 See, e. g., TILA, 15 U. S. C. 1601, et seq., 12 C. F. R. § 226. Congress passed TILA to ensure that consumers are given meaningful information about credit transactions and to create important protections for consumers using credit card billing and collections systems. FTC comments at 4- 5. 20 15 U. S. C. § 1601. 21 States and consumer groups are generally supportive of our efforts. See, e. g., Small Business comments at 1- 2; Bills Project comments at 1- 2; NCL comments at 2; West Virginia Commission comments at 1; Vermont Commission comments at 1- 2; Washington Commission Staff comments at 2; NAAG comments at 3; California Commission comments at 2; Maine Commission comments at 2; Minnesota OAG comments at 4; TCA comments at 2. See also NYCPB comments at 3, 6 (supporting voluntary guidelines); Missouri Commission comments at 2 (same); Florida Commission comments at 4 (urging this Commission to issue model rules for states to enact). Most carriers oppose rules, but state that, if the Commission determines to act, we should do so in the form of broad guidelines that carriers may comply with in a number of different ways. See, e. g., USTA comments at 3, 8; TRA comments at 3; U S West comments at 5. 7 Federal Communications Commission FCC 99- 72 8 needs and those of their customers. We incorporate these principles and guidelines into the Commission's rules, because we intend for these obligations to be enforceable to the same degree as other rules. Thus, while we provide carriers flexibility in their compliance, we fully expect them to meet their obligation to provide consumers with the accurate and meaningful information contemplated by these principles. 10. 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. For this reason, we disagree with those commenters who assert that more prescriptive rules are necessary to combat consumer fraud through the use of misleading telephone bills. 22 Instead, our principles provide carriers flexibility in the manner in which they satisfy their truth- in- billing obligations. Accordingly, this approach responds to the concerns of many carriers that detailed regulations could increase their costs, 23 and that rigid rules might prevent competing carriers from differentiating themselves on the basis of the clarity of their bills. 24 11. Conversely, we disagree with commenters who suggest that purely voluntary guidelines would be sufficient to combat misleading bills that facilitate slamming and cramming. 25 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 Notice. 26 Although complying with these principles certainly may require expenditures by some carriers whose bills currently do not meet these standards, we conclude that such costs do not outweigh the benefits consumers will reap from better 22 See, e. g., NASUCA comments at 21. 23 ALTS comments at 7; MCI comments at 4. 24 See, e. g., GTE comments at 9; ALTS comments at 5. We also find that this flexibility addresses the concerns expressed by CompTel that adoption of rules could make bills longer and more complex. CompTel comments at 6. Concise bills are more likely, not less likely, to comport with our principles that bills be clear and understandable because excessively long bills may confuse consumers. 25 NYCPB comments at 7 n. 3. 26 See, e. g., Ameritech comments at 13; BellSouth comments at 4; SBC comments at 4 (all noting that their bills already segregate charges by service provider). 8 Federal Communications Commission FCC 99- 72 9 understanding their service charges. Particularly in light of the flexibility we provide carriers to satisfy these guidelines, we find that the comments do not provide any detailed information by which we could make such a finding. 27 Accordingly, we conclude that the approach we adopt today appropriately balances the rights of consumers and the concerns of carriers, in furtherance of the deregulatory thrust of the 1996 Act, and we decline to accept the assertions of some rural and other carriers that compliance will be too costly for such carriers. 28 12. As we conclude in section II. B., infra, the ability of consumers to read and understand their bills is crucial to their ability to protect themselves against slamming. We note, however, that some consumers with disabilities may, due to the nature of their disability, be unable to read and understand their telephone bills if they do not have the ability to receive their bills in accessible formats. Persons with disabilities, therefore, due to barriers in standard billing formats, may not be able to determine whether their interexchange carrier has been changed without their authorization. In this Order, we are not setting forth requirements that carriers provide their bills in accessible formats for persons with disabilities. We note, however, that the issue of access to telecommunications service bills will be addressed in the pending rulemaking underway to implement section 255 of the Act. Section 255 states that providers of telecommunications services and manufacturers of telecommunications equipment must make their services and equipment "accessible to and usable by" persons with disabilities if readily achievable. Billing would appear to be included in the usability requirements of section 255. We believe that the section 255 proceeding is a more appropriate place to address the issue of accessibility to telecommunications service bills. In the meantime, however, we strongly encourage carriers to provide billing information in accessible formats for their customers with disabilities upon request, so that those customers may effectively understand their bills and protect themselves against unauthorized carrier changes. Of course, carriers also are expected to comply with any existing state requirements regarding accessibility of telecommunications services and related bills. 27 Several wireless industry commenters provided specific cost estimates, but only for implementation of proposals mentioned in the Notice, such as requiring separate status pages, that we do not adopt. See e. g., GTE comments at 11 (cost of mailing an additional page of wireless bill would add $9. 6 million per year); BellSouth comments at 15 (one additional page on wireless bill would cost between $500,000 and $1 million for programming costs, resulting in 7 cent per customer per month charge); Bell Atlantic Mobile reply at 8 ($ 5 million in systems development work to add separate page to highlight any changes form prior billing period and to provide a visual separation of difference services organized by provider.) 28 In fact, according to telecommunications consulting firm Detecon, although telephone bill format rules might cause carrier costs to increase in the short term, our rules ultimately may reduce carriers' costs. Detecon contends that costs incurred by carriers to implement our rules ultimately will be offset by cost savings resulting from quicker collection of revenues, because bills issued pursuant to rules requiring clear telephone bill formats are less likely to be disputed. This will reduce the amount of calls to customer service representatives, resulting in lower staffing costs. Detecon comments at 2. 9 Federal Communications Commission FCC 99- 72 10 13. 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. Consumers deserve no less. 14. We therefore reject the threshold arguments that certain classes of carriers should be wholly exempted from complying with the guidelines that we announce today solely because competition exists in the markets in which they operate. 29 We emphasize that one of the fundamental goals of our truth- in- billing principles is to provide consumers with clear, well-organized, and non- misleading information so that they may be able to reap the advantages of competitive markets. We anticipate that, as competition evolves and convergence occurs, wireless carriers will increasingly compete for wireline customers. In a world of bundled packages and multiple service providers, clear and truthful bills are paramount. 15. As we stated above, however, we reject the detailed regulatory approach urged by some commenters, because we envision that carriers may satisfy these obligations in widely divergent manners that best fit their own specific needs and those of their customers. Nonetheless, in the wireline context, we incorporated these principles and guidelines into Commission rules for enforcement purposes. We have adopted these rules after considering an extensive record on both the nature and volume of customer complaints, as well as substantial information about wireline billing practices. 16. The record does not, however, reflect the same high volume of customer complaints in the CMRS 30 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. For example, because CMRS carriers are excluded from equal access obligations, 31 it appears that CMRS carriers will seldom need to indicate a new long 29 See, e. g., C& W comments at 3; AT& T comments at 4- 5; TRA comments at 5; MCI comments at 5 (rules should apply only to bills rendered by LECs and not to IXC direct billing). 30 See 47 C. F. R. § 20.9 (enumerating classes of CMRS providers). Requirements established for CMRS in this order apply similarly to providers of mobile services, as defined in Section 20.7 of the Commission's rules, that are regulated as telecommunications common carriers. 31 See Implementation of the Subscriber Carrier Selection Changes Provision of the Telecommunications Act of 1996 and Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, Second 10 Federal Communications Commission FCC 99- 72 11 distance service provider on the bill. 17. 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. As a practical matter, we believe that most CMRS bills already contain the name of the service provider and a contact number. Thus, complying with these obligations should be neither onerous nor costly. But, in the unlikely event that a CMRS bill does not contain the name of the service provider or a contact number, we believe that, at a minimum, consumers expect and should receive this basic information. 18. 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 action should be consistent, understandable, and should not confuse or mislead customers. Uniform labels will also enable customers to compare such charges among all providers. 19. Furthermore, notwithstanding our decision at this time not to apply these several guidelines to CMRS providers, we note that such providers remain subject to the reasonableness and nondiscrimination requirements of sections 201 and 202 of the Act, and our decision here in no way diminishes such obligations as they may relate to the billing practices of CMRS carriers. 32 B. Legal Authority 20. We conclude that it is critical to the effective operation of a competitive telecommunications marketplace to ensure that telephone bills provide consumers with the information they need to make informed telecommunications choices, as well as the tools to Report and Order and Further Notice of Proposed Rulemaking, CC Docket No. 94- 129, FCC 98- 334 at ¶ 85 (Dec. 23, 1998) (1998 Slamming Order and Further Notice). 32 See 47 U. S. C. §§ 201( b), 202. Also 47 U. S. C. § 332( c)( 1)( A). In our recent Order declining to forbear from applying sections 201and 202 of the Act to wireless providers, we emphasized that these sections "codif[ y] the bedrock consumer protection obligations of common carriers . . ." Wireless Forbearance Order, 11 FCC Rcd 16857, 16865. We also noted that their importance would increase "as customers begin to rely on CMRS as a partial or complete substitute for wireline service . . ." Id. at 16870. 11 Federal Communications Commission FCC 99- 72 12 protect themselves against telecommunications- related fraud. As explained in the Notice, the telephone bill is an integral part of the relationship between a carrier and its customer. 33 As such, the manner in which charges and providers are identified on the telephone bill is essential to consumers' understanding of the services that have been rendered, the charges imposed for those services, and the entities that have provided such services. 21. Most commenters agree that we possess, at minimum, concurrent jurisdiction with states to address these problems. 34 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. 35 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. 36 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. 37 As explained in detail below, with the exception of the guideline discussed at section II( C)( 2)( c) of this Order, 38 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 therefore reject arguments by ALTS and other commenters that, as a threshold matter, authority to regulate local 33 Notice, 13 FCC Rcd at 18182. 34 See, e. g., GTC comments at 10- 13 (Commission possesses jurisdiction under both under Title I and Title II of the Act); ACTA comments at 3- 4 (same); BellSouth comments at 2 (Commission possesses jurisdiction under both under Title I and Title II of the Act, states possess concurrent jurisdiction); Minnesota OAG comments at 3 (billing constitutes "practices in connection with communication service" under 201( b), although Commission jurisdiction extends primarily to interstate toll charges); Billing Coalition comments at 8- 10; MCI comments at 21 n. 15 (Commission possesses jurisdiction under Section 201( b) to enforce "consumer protection obligations of common carriers"); ELNC comments at 2- 3 (same); ECA comments at 3- 5; NASUCA comments at 12 (Commission possesses authority to issue directives to providers under Title II of Act concerning manner in which charges are described or disclosed to customers). 35 See 47 U. S. C. §§ 201( b), 258. In addition, section 332 of the Act, 47 U. S. C. § 332, also provides us with jurisdiction to enact rules concerning CMRS carriers. 36 47 U. S. C. § 201( b). 37 AT& T Corp. v. Iowa Utils. Bd., 119 S. Ct. 721 (1999). 38 See infra Section II( C)( 2)( c). 12 Federal Communications Commission FCC 99- 72 13 exchange carrier (LEC) billing practices resides solely with the states. 39 We recognize, however, that the standardized label guideline rests exclusively on our authority under section 201( b) and therefore is limited to interstate services. 22. Section 258 of the Act provides us with jurisdiction to regulate the billing practices of interstate, as well as intrastate, carriers to the extent that our regulations serve as a means of verifying carrier changes. Section 258( a) 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." 40 The Commission has previously concluded that this provision encompasses both interstate and intrastate service providers. 41 The language of section 258 makes clear that Congress charged the Commission with the responsibility to promulgate verification rules to prevent slamming in both the interstate and intrastate markets. Pursuant to the mandates of section 258, in the 1998 Slamming Order and Notice we adopted verification procedures and liability rules, as well as rules regarding the administration of preferred carrier freezes, 42 in order to deter the incidence of slamming by both interstate and intrastate carriers. 43 Importantly, in the 1998 Slamming Order and Notice we also stated that our slamming rules are intended to establish a new comprehensive framework, in accordance with the provisions of section 258, to combat aggressively and deter slamming in the future. 44 23. The truth- in- billing guidelines we adopt in this Order are intended to function as a 39 See, e. g., ALTS comments at 2 n. 2 (stating that the Commission has no jurisdiction to adopt rules relating to billing of intrastate services); Ameritech comments at 4 (stating that the Commission does not have jurisdiction over intrastate bills except for pay- per- call services); AT& T comments at 11 n. 8 (stating that the Commission's jurisdiction likely only extends to billing of interstate telecommunications services); Bell Atlantic comments at Attachment, "Answers to Specific Questions," at 2 (stating that the Commission lacks jurisdiction over charges for intrastate telecommunications services or over how those charges are billed); NYCPB comments at 7 n. 3 (stating that the authority to address the format and content of bills rendered by local telephone companies resides with the states). 40 47 U. S. C. § 258( a). 41 1998 Slamming Order and Further Notice at ¶ 86. 42 A preferred carrier freeze prevents a change in a subscriber's preferred carrier selection unless the subscriber gives the carrier from whom the freeze was obtained his or her express written or oral consent. See 1998 Slamming Order and Further Notice at ¶ 112, n. 348. 43 Id. at ¶ 5. 44 Id. at ¶ 4. 13 Federal Communications Commission FCC 99- 72 14 critical component of the Commission's verification procedures. Many commenters have indicated that unclear bills prevent customers from realizing that their carrier of choice has been switched. 45 A clear indication on the bill of who is providing service and whether the service provider has changed since the last bill provides a necessary final step in the verification process by allowing customers readily to detect unauthorized changes. Thus, our first principle, requiring telephone bills to indicate when a consumer's presubscribed interstate or intrastate carrier has been changed, is adopted as a verification requirement. Our second principle, requiring bills to provide full and non- misleading descriptions of services, will also serve a verification function, by helping consumers to detect slamming by ensuring that consumers do not confuse the name of any carrier with the service it provides. 46 Finally, our third principle, requiring telephone bills to contain clear and conspicuous disclosure of consumer inquiry information, 47 will enable consumers to report slamming and begin the process of returning to their authorized carriers. Therefore, these truth- in- billing principles serve as the final step in verifying service provider changes, and such rules are authorized by section 258 of the Act. 24. Our truth- in- billing principles and guidelines also will deter carriers from engaging in unjust and unreasonable practices in violation of section 201( b). Under section 201( b), carrier practices must be just and reasonable. As we stated above, the Commission has authority to promulgate rules implementing that requirement as to the provision of interstate services. Thus, section 201( b) provides further authority for the guidelines adopted herein. We emphasize that a carrier's provision of misleading or deceptive billing information is an unjust and unreasonable practice in violation of section 201( b) of the Act. 48 The principles and guidelines established in this Order are intended to define more specifically what would constitute a violation of section 201 in the billing context for the covered carriers. Moreover, the 45 See, e. g., NCL comments at 2 (stating that fraudulent companies take advantage of consumer confusion over phone bills); NYCPB comments at 5 (stating that consumers often complain that telephone bills do not facilitate the detection of slamming); Texas Commission comments at 6 (stating that focus group found it difficult to find changes in services unless they were specifically anticipating and looking for one). 46 For example, if a carrier is named "Phone Calls," the name of such carrier on a telephone bill could be confused with telephone service, and the consumer may not realize that he or she has been switched to an unauthorized carrier. See infra, Section II( C)( 2). We note the standardized label guideline provides an important consumer protection, as discussed infra Section II( C)( 2)( c), but is not, however, related to deterring slamming. See supra ¶ 21. 47 See infra, Section II( C)( 3). 48 For example, the Commission has previously warned a carrier that failure to correct misleading information it provided in connection with issuance of a calling card could constitute a violation of section 201( b) and result in enforcement action, including show cause or forfeiture proceedings. See, e. g., Robert E. Allen, Letter, 7 FCC Rcd 7529, 7530 (1992) (information provided by carrier in connection with issuance of calling cards "may have persuaded many consumers to unnecessarily destroy or discard otherwise valid calling cards"). 14 Federal Communications Commission FCC 99- 72 15 implementation of the general principles and guidelines set forth in this Order, such as requiring clear descriptions of services for which charges appear on the bill, will facilitate consumer detection of fraud, and thereby deter unscrupulous carriers from engaging in unreasonable practices such as cramming. In this regard, we note that the record supports our finding in the Notice that consumer difficulty in identifying unauthorized charges in telephone bills is a significant factor in the ability of unscrupulous entities to engage successfully in cramming. 49 25. Some commenters contend that our jurisdiction to adopt rules concerning carrier billing, if it exists at all, exists only pursuant to our ancillary jurisdiction under Title I of the Act. 50 The Commission has previously stated that it has jurisdiction under Title II to regulate the manner in which a carrier bills and collects for its own interstate offerings, because such billing is an integral part of that carrier's communications service. 51 The guidelines adopted here apply to the carrier providing service to customers, not to those carriers' billing agents. Thus, for example, even where an interexchange carrier (or other carrier) uses the billing and collection services of a LEC or other third- party billing agent, the interexchange carrier still bears the responsibility of ensuring that such charges appear on the bill remitted to the consumer in a manner that complies with the principles set forth in this Order. The Commission's Detariffing Order specifically stated that a carrier's billing and collection for its own service, as opposed to billing services provided to other carriers, is subject to the Commission's Title II jurisdiction. 52 Billing, like all other practices for and in connection with interstate service, must be just and reasonable. 53 Therefore we find that we possess Title II jurisdiction to adopt the principles and 49 See, e. g., NYCPB comments at 5; FTC comments at 3, 6. 50 See, e. g., ALTS comments at 2; AT& T comments at 11 n. 8; Time Warner comments at 7. 51 See Local Exchange Carrier Validation and Billing Information for Joint Use Calling Cards, Report and Order and Request for Supplemental Comment, CC Docket No. 91- 115, 7 FCC Rcd 3528, 3530- 3533 (1992), clarified on reconsideration, 12 FCC Rcd 1632, 1643- 1645 (1997); Public Service Commission of Maryland, Memorandum Opinion and Order, 4 FCC Rcd 4000, 4004- 4006 (1989), aff'd Public Service Commission of Maryland v. FCC, 909 F. 2d 1510 (D. C. Cir. 1990); Detariffing of Billing and Collection Services, Report and Order, CC Docket No. 85- 88, 102 F. C. C. 2d 1150, 1169- 71 (1986) (Detariffing Order). 52 The Detariffing Order states that: Although carrier billing and collection for a communication service that it offers individually or as a joint offering with other carriers is an incidental part of a communications service, we believe that carrier billing or collection for the offering of another unaffiliated carrier is not a communication service for purposes of Title II of the Communications Act. Detariffing Order 59 Rad. Reg. 2d (P & F) 1007, ¶ 31. 53 See 47 U. S. C. § 201( b). 15 Federal Communications Commission FCC 99- 72 16 guidelines set forth herein, and no reliance on our ancillary jurisdiction is necessary. 26. Notwithstanding the requirement of our 1998 Slamming Order and Further Notice that states must accept the same verification procedures as prescribed by the Commission, 54 states will be free to continue to enact and enforce additional regulation consistent with the general guidelines and principles set forth in this Order, including rules that are more specific than the general guidelines we adopt today. 55 In addition to whatever powers they may have to enforce their rules under state law, states also have express authority under section 258 to enforce the Commission's verification procedure rules, including the principles and guidelines adopted here, with respect to intrastate services. 56 We are aware of several states that have existing regulations that are consistent with the truth- in- billing guidelines we adopt here. For example, Pennsylvania has previously adopted "regulations to impose fair and equitable standards governing billing and customer complaint procedures." 57 Michigan prohibits the provision of misleading information in local exchange telephone bills, and requires notification of new services or changes in existing service. 58 We support these efforts. Additionally, we note that the National Association of Regulatory Utilities Commissions (NARUC) has published a White Paper giving guidance to states on how to provide consumer protection in the area of telephone service, including proposals to increase the clarity of telephone bills. 59 In setting forth its proposals, NARUC highlighted the need for "clear billing that customers can easily read and understand" and noted that "[ i] n many cases, this is not true of current telecommunications company bills, particularly those that come from the local exchange company." 60 Many of the principles and guidelines adopted in this Order are consistent with NARUC's proposals. We look upon this Order as another phase of our partnership with the states to promote competition and to combat telecommunications- related fraud. 61 Through 54 1998 Slamming Order and Further Notice at ¶ 87. 55 1998 Slamming Order and Further Notice at ¶¶ 86- 90; see, e. g., California Commission comments at 2 (stating that the Commission should set minimum standards, but not prevent states from applying stricter standards); Maine Commission comments at 2 (same); Minnesota OAG comments at 4 (same). 56 1998 Slamming Order and Further Notice at ¶ 90. 57 Pennsylvania Commission comments at 4. 58 Mich. Admin. Code MCL 484.322( a), 484.337 (1996). 59 NARUC, White Paper on Resolution Urging Support of Principles Promoting Consumer Awareness and Protection by Policy Makers Involved with Telecommunications Regulation, at 1 (NARUC White Paper). 60 Id. 61 See, e. g., 1998 Slamming Order and Further Notice at ¶ 87. 16 Federal Communications Commission FCC 99- 72 17 information sharing and dialogue, we intend to work together with the states towards the common objective of truth- in- billing. 27. Finally, we note that we possess complementary but distinct jurisdiction with the Federal Trade Commission (FTC) to ensure that consumers are treated fairly with regard to their telephone bills. The FTC does not have jurisdiction over activities of common carriers subject to Title II of the Communications Act. 62 Congress has, however, in limited circumstances, granted the FTC concurrent authority to establish rules relating to certain areas of telephone billing and collection. For example, the Telephone Disclosure and Dispute Resolution Act of 1992 (TDDRA) requires both the FCC and the FTC to adopt separate, complementary rules to promote legitimate pay- per- call services and protect telephone subscribers from fraudulent and abusive practices from both carriers and non- carrier entities, respectively. 63 We have enacted regulations pursuant to section 228 that, inter alia, require carriers to show, in a portion of the bill separate from ordinary telephone charges, the amount of pay- per- call charges, the type of services for which the consumer is being charged, and the date, time, and duration of pay- per-call calls. 64 We also require such segregation for interstate information charges assessed pursuant to a presubscription or comparable agreement. 65 The FTC is working currently to extend its pay- per- call authority to enact billing dispute rights akin to those available under the Fair Credit Reporting Act. 66 Our truth- in- billing guidelines will compel subject carriers to provide consumers with clear and necessary information in order to make informed choices and safeguard themselves against fraud. The FTC states that the goals of this truth- in- billing proceeding dovetail with the objectives of its own pay- per- call rulemaking, and that "[ c] learer bills that provide non- deceptive information will enhance the ability of consumers to take advantage of the improved billing dispute rights for telephone- billed purchases contemplated in the FTC's proposed Rule revisions." 67 We agree and shall continue to work closely with the FTC on ways to exercise our respective jurisdictions to ensure that all consumers receive the benefit of clear and understandable telephone bills. 62 See 15 U. S. C. § 45( a)( 2) (stating that the Federal Trade Commission does not have jurisdiction over "common carriers subject to the Acts to regulate commerce, air carriers, and foreign air carriers . . . ."); see also FTC Comments at 7 n. 10. 63 Pub. L. No. 102- 556, 106 Stat. 4181 (1992) (codified at 15 U. S. C. § 1507 et seq. and 47 U. S. C. § 228). 64 47 C. F. R. §§ 64.1510( a)( 2)( ii), (iii). 65 Id. at § 64.1510( b). 66 FTC comments at 7, citing Proposed Rules, Federal Trade Commission, 16 C. F. R. Part 308, Pay- Per- Call Rule, 63 Fed. Reg. 58,524 (1998). 67 FTC comments at 8. 17 Federal Communications Commission FCC 99- 72 18 C. Specific Truth- in- Billing Guidelines 1. Clear Organization and Highlighting New Service Provider Information 28. We adopt the threshold principle set forth in the Notice that telephone bills must be clearly organized and highlight new service provider information. 68 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. 69 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 Notice: (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. 70 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. 29. In our view, as well as that of virtually all commenters who addressed this issue, 71 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 68 Notice, 13 FCC Rcd at 18185- 86. 69 47 U. S. C. §§ 201( b), 258. 70 Notice, 13 FCC Rcd at 18185- 18188. 71 See, e. g., Minnesota OAG comments at 13- 15; NYDPS comments at 1; NYCPB comments at 12- 13; USP& C comments at 5- 6; NCL comments at 8- 9; Commonwealth comments at 4; Century comments at 5- 6; West Virginia Commission comments at 2- 3; Small Business comments at 8; SBC comments at 13- 14; Sprint comments at 13- 14; TCA comments at 5- 6; Americatel comments at 1- 6; Billing Coalition comments at 16; AT& T comments at 14- 15; Ameritech comments at 17; FTC comments at 14- 15; Maine Commission comments at 5- 6; Ohio Commission comments at 8; Wisconsin Commission comments at 4; Missouri Commission comments at 3- 4; Florida Commission comments at 6; Washington Commission Staff comments at 6; AFT comments at 1; NAAG comments at 5; BellSouth comments at 7; Bills Project comments at 6; UCAN comments at 9; Georgia comments at 3; Kansas Commission comments at 5; NACAA comments at 2; Pennsylvania Commission comments at 7; QCI comments at 5. 18 Federal Communications Commission FCC 99- 72 19 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. 72 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." 73 Regardless of whether the billing aggregator can handle the consumer inquiry or complaint on behalf of the service provider, 74 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. 30. We agree with NAAG that it is both unreasonable and unfair to expect consumers to undertake extensive investigations on their own simply to discover the identity of the service provider who placed a charge on their bill. 75 Accordingly, we find that, consistent with most carriers' existing practices, 76 our truth- in- billing guidelines require that the name of the service provider must be clearly listed on the bill in connection with that entity's charges to the consumer. 77 72 SBC comments at 13- 14 (this information will aid the consumer in identifying the carrier responsible for the charge, and most LECs already follow this practice); Sprint comments at 13- 14 (identifying carrier levying the charge is particularly important where a reseller uses the carrier identification code (CIC) of the underlying facilities provider, and arguing that LECs should be required to use the Switchless Reseller Indicator in their service order systems); FTC comments at 14- 15 (suggesting carriers list name of service provider and, where applicable, name and number of billing aggregator or clearinghouse with authority to resolve a consumer complaint). 73 See, e. g., Informal Complaint of WIS Sheet Metal Inc., IC No. 99- 00232 (submitted Jan. 13, 1999); Informal Complaint of Roberts & Roberts, IC No. 99- 04707 (submitted Feb. 5, 1999); see also NASUCA comments at 15 (stating that billing aggregators often are unable to provide consumers information about charges). Billing aggregators or clearinghouses consolidate charges from multiple providers of telephone services and contract with LECs for those charges to appear on consumers' telephone bills. Billing Coalition comments at 1. 74 See Section II( E), infra (requiring that bills must display a toll- free number for an entity authorized to resolve consumer complaints). 75 See NAAG comments at 5. NAAG further asserts that providers that do not wish to disclose their identity should not be permitted access to the billing process. Id. 76 See, e. g., Ameritech comments at 17; SBC comments at 13- 14; BellSouth comments at 7. 77 We note that this guideline does not require wireless carriers to identify all entities with which they have roaming arrangements. We agree that listing each such entity would be both unnecessary and potentially confusing to consumers. See e. g. Primeco comments at 9; Bell Atlantic Mobile comments at 12- 13; Airtouch comments at 6- 7; CenturyTel comments at 5; BellSouth reply at 7; Bell Atlantic Mobile reply at 9. 19 Federal Communications Commission FCC 99- 72 20 31. 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. In our view, this provider- based means of presenting charges establishes a logical, unambiguous framework to associate charges with a particular service provider, which in turn promotes clarity in billed charges and reduces customer confusion that gives rise to fraudulent carrier practices. In response to our query in the Notice, 78 commenters generally favor as most effective and economical a provider- based bill format over grouping charges exclusively by service category. 79 We agree 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. 32. It appears that listing charges by service provider presently is the industry standard. 80 Several carriers that are currently engaged in, or recently have completed, billing improvement projects report favorable customer reaction to bills that segregate charges by service provider. 81 Some commenters also note that listing charges by service provider rather than by service type avoids the confusion that might ensue if each component of a bundled service package were required to be listed and priced separately. 82 In particular, we agree with the observations of several commenters that consumers understand the bundled offerings they 78 Specifically, we asked whether telephone bills might be improved by listing all charges by service type (e. g., local, long distance, and miscellaneous services) in clearly separate sections of the bill or, alternatively, by grouping charges according to service provider. Notice, 13 FCC Rcd at 18185. 79 See, e. g., Florida Commission comments at 4- 5; NCL comments at 7, Maine Commission comments at 2- 3; Ohio Commission comments at 6; Ameritech comments at 13; BellSouth comments at 4; SBC comments at 4- 5. 80 See, e. g., Ameritech comments at 13; BellSouth comments at 4; SBC comments at 4. See also California Commission comments at 4 (stating that California law requires separate sections for each billing entity). 81 See, e. g., Ameritech comments at 2, 13; Bell Atlantic comments at Attachment, "Answers to Specific Questions," at 3- 4. 82 See, e. g., Bell Atlantic comments at Attachment, "Answers to Specific Questions," at 4- 5; Sprint comments at 4; GTE comments at 10; Time Warner comments at 10- 11; CTIA comments at 5; U S West comments at 17; SBC comments at 7; PCIA comments at 8; NCL comments at 7 (also stating that each service included in bundled offering should be itemized and described clearly). 20 Federal Communications Commission FCC 99- 72 21 purchase in terms of the single overall price of the services provided by carrier, and would be confused if the bundled offering were broken apart and the component parts priced separately solely for billing purposes. 83 33. 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. 84 Clear identification of new service providers will improve consumers' ability to detect slamming. 85 Currently, telephone bills do not always clearly show when there has been a change in presubscribed carriers. Telephone subscribers may realize that their presubscribed interexchange carrier has been changed only if they notice a carrier change charge on their bill. 86 Moreover, as noted in our Notice, the difficulty in detecting a change in carriers may be compounded by carriers that use potentially misleading names so that consumers may believe that a carrier's name refers to a service offering, rather than being the name of a carrier. 87 As noted previously, our recently enacted anti- slamming regulations can be fully effective only if consumers are able to detect promptly that a slam has occurred. Because our new slamming rules absolve consumers of liability for unpaid charges by unauthorized carriers for a period of 30 days after a slam has occurred, the efficacy of such rules hinge on consumers being able reasonably to discover a slam on the first bill that they receive after the unauthorized change in service occurs. 88 In the 1998 Slamming Order and Further Notice, we recognized the importance of the telephone bill in providing notice of a carrier change. 89 83 See, e. g., Sprint comments at 4- 5; BellSouth comments at 4. 84 That is, if a new provider has become the customer's new presubscribed intra or interLATA toll carrier, the bill must make this information apparent to the customer. 85 Small Business comments at 8 (arguing that merely listing name of billing aggregator or clearinghouse is insufficient, and that identifying the reseller instead of the underlying facilities- based carrier will assist consumers in detecting if they have been slammed by a reseller where the underlying facilities- based carrier remains the same). 86 A carrier change charge is a charge typically imposed by a local exchange carrier on a subscriber who has requested a change in presubscribed interexchange carrier. 87 Notice, 13 FCC Rcd at 18185. 88 See 47 C. F. R. § 64.1100( d). 89 We emphasized that this "absolution" rule would encourage telephone subscribers to examine their telephone bills early and carefully and observed that "a waiver of the 30- day limit might be appropriate if the subscriber's telephone bill failed to provide reasonable notice to the subscriber of a carrier change." 1998 Slamming Order and Further Notice at ¶¶ 20, 24. 21 Federal Communications Commission FCC 99- 72 22 34. Clear identification of new providers also will improve consumers' ability to detect cramming. We find that 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, 90 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. Moreover, although many LECs now participate in voluntary anti- cramming guidelines that enable LECs to remove cramming charges from the bill, 91 such measures do not protect consumers who pay their bills without realizing that they have been crammed. TCA cites results of a recent survey involving over 400 randomly selected Texas consumers who filed cramming complaints with the Texas Commission. Forty- four percent of the survey respondents claimed to have paid unauthorized charges totalling between $11 and $50. Another 25 percent paid unauthorized charges between $51 and $100, and 21 percent paid charges exceeding $100. 92 Our complaint records also indicate that consumers often pay unauthorized recurring charges for several months before they realize the questionable nature of the charges. 93 In our view, clear identification of new service providers will appropriately signal to consumers the need to scrutinize their bills to make sure that they are being billed only for authorized services. Moreover, some crammed charges may involve "telephone- billed purchases" 94 which trigger a range of consumer rights and protections 90 See, e. g., U S West comments at 11 (stating that most consumer billing complaints involve "third- party toll charges"). 91 FCC and Industry Announce Best Practice Guidelines to Protect Consumers from Cramming, FCC Press Release (July 22, 1998). 92 TCA comments at 2- 5. 93 See, e. g., Informal Complaint of Sarah Krank, IC No. 98- 29550. 94 Under the TDDRA, a telephone- billed purchase is defined as: any purchase that is completed solely as a consequence of the completion of the call or a subsequent dialing, touch tone entry, or comparable action of the caller. Such term does not include -- (A) a purchase by a caller pursuant to a preexisting agreement with the vendor; (B) local exchange telephone services or interexchange telephone services or any service that the Federal Communications Commission determines, by rule -- (i) is closely related to the provision of local exchange telephone services or interexchange telephone services; and (ii) is subject to billing dispute resolution procedures required by Federal or 22 Federal Communications Commission FCC 99- 72 23 under the TDDRA 95 and the Federal Trade Commission's implementing regulations. Our provider identification guidelines, which facilitate consumers' detection of crammed charges, appropriately protect consumers' opportunity to assert those rights. 35. In adopting these provider- based identification guidelines, we have considered the substantial implementation concerns raised by carriers in response to the Notice proposal that telephone bills explain any new types of charges appearing on the bill for the first time. 96 Virtually all carriers assert that their current billing systems cannot conduct a month- to- month comparison of all charges as would be necessary to identify and explain all new services being billed for the first time, and that the modifications necessary to perform this function would be prohibitively expensive. 97 36. 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 State statute or regulation; or (C) the purchase of goods or services which is otherwise subject to billing dispute resolution procedures required by Federal statute or regulation. 15 U. S. C. § 5724( 1). 95 Public Law l02- 556, 106 Stat. 4181, approved Oct. 28, 1992. 96 Notice, 13 FCC Rcd at 18185. 97 See, e. g., Ameritech comments at 11- 12; Sprint comments at 7- 8; RCA comments at 4; Bell Atlantic comments at Attachment, "Answers to Specific Questions," at 6 (identifying new service charges each month would require comparing approximately 40 million billing lines against previous month's entries); MCI comments at 34-35; U S West comments at 5, 20 (would require substantial and costly modification of three principal billing systems and approximately 30 interacting databases that are used to produce 12. 2 million bills per month); PCIA comments at 9. In contrast, highlighting each new service provider, as opposed to each new service, will be considerably more economical to implement. 97 97 Month- to- month comparison of service providers would involve far less data than comparison of all billed charges. Opponents also question the ultimate value of highlighting new charges to elucidate fraud. 97 97 See, e. g., PCIA comments at 7- 8; Ameritech comments at 10- 11; BellSouth Reply comments at 5; Billing Coalition comments at 15- 16. Highlighting charges for new types of service probably would involve a larger number of items than highlighting new service providers. This could significantly lengthen bills and confuse consumers by repeating a significant amount of information that is shown elsewhere in the bill. Given the more economical alternative of provider- based identification which effectively communicates changes in service to the consumer, we believe that highlighting those service providers that did not charge for service on the previous bill is the better choice to advance consumer education and our anti- cramming and slamming goals. 23 Federal Communications Commission FCC 99- 72 24 consumers 98 and substantially, or even prohibitively, increase carriers' billing expenses. 99 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. For example, following suggestions by the FTC and NCL, colored ink or different fonts or type sizes, along with explanatory notes, could be used to highlight, within the body of the bill or on an existing summary page, the names of new presubscribed carriers and service providers. 100 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. 2. Full and Non- Misleading Billed Charges 37. We adopt the second core principle set forth in the Notice 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. 101 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 38. We conclude that services included on the telephone bill must be accompanied by 98 See, e. g., Bell Atlantic comments at Attachment, "Answers to Specific Questions," at 5 (consumers already complain about too many pages); FTC comments at 10- 11. 99 See, e. g., Sprint comments at 6; USTA comments at 5 (reporting that small USTA member estimates that adding additional page to bill would increase mailing costs by $600,000 per year). 100 FTC comments at 10- 11; NCL comments at 7. 101 We agree with U S West that "no reputable business can be against the ideas associated with 'truth- in- billing' anymore than comparable ideas reflected in other 'truth- in- xxx' initiatives, such as truth- in- lending or truth- in- advertising." U S West comments at 1. See also Thompson Medical Co. Inc., v. Federal Trade Commission, 791 F. 2d 189, 195 (D. C. Cir. 1986) (a company has "no right to stay in business if the only way it can do so is to engage in false and misleading advertising"). 24 Federal Communications Commission FCC 99- 72 25 a brief, clear, plain language description of the services rendered. 102 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. 39. In the Notice, we observed that telephone bills often contain vague or inaccurate descriptions of the services for which the customer is being charged. For example, many complaints we have received involve charges identified on local telephone bills simply as "monthly fee" or "basic access," without further explanation. 103 The record in this proceeding persuades us that unclear or cryptic telephone bills exacerbate consumer confusion, as well as the problems of cramming and slamming. 104 Indeed, a common theme voiced in the consumer complaints we receive is that telephone bills contain insufficient information to enable consumers to determine the nature of the service for which they are being billed. In our view, clear billing descriptions of the services rendered will reduce these problems. Clear and easily understood service descriptions will enable consumers to verify the services they have ordered, thus facilitating the detection of slamming and cramming. Although the requirement of clear identification of service providers, discussed earlier, will solve a large portion of the problem, it does not eliminate the potential for fraudulent carrier practices. For example, the record indicates that some carriers choose corporate names that sound like telecommunications services, e. g., "Phone Calls," to confuse consumers and facilitate cramming, while others use corporate names such as "I Don't Know," "Whatever," and "Anyone is OK," as a device to trick consumers into unwittingly selecting the deceiver as their long- distance service provider. 105 Requiring descriptions of services, in combination with the clear identification of service providers, assists in the detection of slamming by enabling consumers to distinguish between the names of 102 We agree with Sprint that a customer should be able to determine what service a carrier has provided based on the service description presented in his or her telephone bill. See Sprint comments at 11- 13; see also TCA comments at 5- 6 (language and format of the bill must be sufficiently clear in presentation and specific enough in content that customers can accurately assess that the services for which they are billed correspond to those they have requested and received, and that the costs assessed for those services conform to their understanding of their price). 103 Notice, 13 FCC Rcd at 18177. 104 See supra Section II( A) (Adoption of Guidelines) and Section II( C) (Specific Truth- in- Billing Guidelines). 105 See Small Business comments at 7- 9 (highlighting the problem of misleading carrier company names). By using a corporate name such as "I Don't Know," an unscrupulous carrier can trick unwitting consumers into selecting it as their preferred carrier. For example, the telemarketing representative for the carrier I Don't Know may ask a leading question such as, "Who would you like to be your long distance carrier?" The consumer who responds, "I don't know," may then have his phone service switched to the carrier I Don't Know. 25 Federal Communications Commission FCC 99- 72 26 services ordered and the names of carriers. Accordingly, our jurisdiction to impose this requirement stems from section 258 and its goal of deterring slamming. 106 40. 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. 107 Conversely, descriptions that convey ambiguous or vague information, such as, for example, charges identified as "miscellaneous," would not conform to our guideline. 108 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. 109 41. 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 also invite carriers to consider using graphical presentations such as symbols, color coding, etc., to identify services in a space-efficient manner. 110 Such methods may make it easier for small carriers to comply with our rules since it may afford them flexibility to work within the technical parameters of their current billing systems. 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. 42. A few commenters have expressed concern that including full descriptions of the services appearing on telephone bills could overburden the rather limited capabilities of some 106 47 U. S. C. § 258. 107 See, e. g., NASUCA comments at 15- 16 (description should be conveyed in terms generally understood by ordinary customer); see also USP& C comments at 4- 5 (descriptions should not use terminology comprehensible only to those who are well versed in telecommunications regulatory matters). 108 We agree with NASUCA that no charge should be identified as "miscellaneous" or described by ambiguous terms that may confuse a customer or suggest that a service or product is regulated when in fact it is not. NASUCA comments at 16. 109 See Bills Project comments at 4 (describing Bell Atlantic line item charge). 110 See, e. g., UCAN comments at 8. 26 Federal Communications Commission FCC 99- 72 27 carrier legacy billing systems. 111 In response, we point out that several carriers recently have undertaken efforts to improve their billing formats, after recognizing that the format of old bills did not meet consumers' needs. 112 More importantly, we simply cannot accept that it is reasonable for consumers to be deprived of clear descriptions of the services they may have purchased because carriers have not upgraded their systems to accommodate this most basic of disclosure obligations. Nor are we persuaded that the meaningful consumer protection against slamming and cramming that our service description guideline will provide should be held hostage to claims of antiquated billing processes. Moreover, we believe the flexibility permitted under our guidelines affords carriers many options to enable them to provide clear and meaningful service descriptions that may not necessitate costly modifications to their existing billing systems. In any event, we agree with FTC and TOPC that telephone bills that accurately describe the services and charges appearing on them will enable consumers to take greater advantage of the new products and services available in the telecommunications marketplace. 113 43. Although we decline to formulate standardized descriptions, we encourage carriers to develop uniform terminology, as recommended by NCL, Bills Project, and the Kansas Commission. 114 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 111 See, e. g., USTA comments at 5 (mentioning 30 character limit for service descriptions; USTA also maintains that many legacy billing systems have limited capabilities with respect to changing bill formats or including significantly more information); U S West comments at 21 (character limits prevent detailed service descriptions); Qwest comments at 6- 7. But see CompTel comments at 5 (characterizing cost of providing summary and status pages and toll- free customer contact number as "modest"). 112 GTE comments at 5- 7; USTA comments at 8; Bell Atlantic comments at 3- 4; Ameritech comments at 2; MCI comments at 6- 7. 113 See, e. g., FTC comments at 3; TOPC reply at 2- 3. 114 NCL contends that we should create standard terms for carriers to use to describe services rendered, just as the Food and Drug Administration prescribes standard terms to refer to different food products. NCL suggests that providers that wish to use their own brand names or marketing terms should be obliged to also show the standard FCC description for each service. Developing standard terms should be collaborative process among companies, regulators, and consumer advocates, and NCL suggests that the proposed descriptions be tested with consumers to ensure they are understood. NCL comments at 7- 8. See also Bills Project comments at 4; Kansas Commission comments at 4. 27 Federal Communications Commission FCC 99- 72 28 44. 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 Notice that telephone bills differentiate between what are commonly referred to as "deniable" and "non- deniable" charges. 115 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. 116 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. 117 Based on this consumer protection rationale, many states, including New York, Pennsylvania, Ohio, California, Oregon, and Arizona have enacted similar requirements. 118 The FTC comments that providing this information on bills will reduce slamming and cramming by enabling consumers to question charges without fear of losing service. 119 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 115 Notice, 13 FCC Rcd at 18189. 116 Id. 117 See, e. g., Nevadacom comments at 4- 5 (distinguishing between deniable and non- deniable charges will reduce tendency of consumers to pay unauthorized charges out of fear that local service will be disconnected if they fail to pay and arguing that this Commission should reaffirm that it and state commissions, and not the LECs, have authority to determine which charges are deniable); Small Business comments at 13 (such disclosure is necessary so that small business users will know what charges they can contest and not pay pending resolution of their complaint without fear of having their service disconnected); TCA comments at 7- 9 (recounting specific instances where customer service representatives attempted to intimidate and to mislead intentionally consumers into believing that service would be cut off for failure to pay a non- deniable charge); Wisconsin Commission comments at 4 (noting that the threat of loss of service is not an appropriate collection tool); NASUCA comments at 16; USP& C comments at 6- 7; NYCPB comments at 13; BRTF comments at 3- 4; FTC comments at 15- 16; Maine Commission comments at 7; Ohio Commission comments at 9- 10; Missouri Commission comments at 4; Florida Commission comments at 6- 7; TOPC comments at 1- 2; AARP comments at 3; Bills Project comments at 7; UCAN comments at 9; Kansas Commission comments at 5; NACAA comments at 2; Pennsylvania Commission comments at 7; West Virginia Commission comments at 2. 118 See NYCPB comments at 13. 119 FTC comments at 15- 16. 28 Federal Communications Commission FCC 99- 72 29 carriers must clearly identify on bills those charges for which non- payment will not result in disconnection of basic, local service. 120 45. 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. 121 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. We note with approval the suggestions of some commenters that this may be best accomplished by noting charges with an asterisk or other symbol directing the consumer to an explanatory footnote. 122 This footnote could provide information similar to that mandated by the pay- per- call provisions of the Act. 123 Carriers may also elect to devise other methods of informing consumers on the bill that they may contest charges prior to payment. 124 46. 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. 125 Accordingly, requiring carriers to disclose 120 See 47 C. F. R. § 64. 1510( c)( 1); see also Policies and Rules Implementing the Telephone Disclosure and Dispute Resolution Act, Report and Order, 8 FCC Rcd 6885, 6898 (1993). 121 See, e. g., NASUCA comments at 16 (stating that terms "deniable" and "undeniable" are not easily understood by average customers, and that clear disclosure that basic service cannot be terminated if non- basic or unregulated charges are unpaid would be preferable); Maine Commission comments at 7. 122 See, e. g., AARP comments at 3 (noting that monthly bill could identify deniable charges with an asterisk and include a brief description of the terms deniable and non- deniable at the bottom of the bill); BellSouth comments at 9 (recommending use of an asterisk). 123 Section 228 of the Act states that carriers must annotate pay- per- call charges on telephone bills as follows: "Common carriers may not disconnect local or long distance service for failure to pay disputed charges for information service." 47 U. S. C. § 228( c)( 8)( B)( ii). 124 We note that the precise language used to describe clearly and conspicuously those charges for which non-payment would not result in termination of local service is at the discretion of the carrier that is seeking payment for these charges. Thus, while a carrier may elect to have another entity bill the charges, this guideline does not permit the billing entity to decide unilaterally the appropriate language. 125 See, e. g., US Cellular comments at 6- 7 (arguing that the distinction between "deniable" and "non- deniable" charges possesses little relevance for wireless carriers as all wireless charges are "deniable"). 29 Federal Communications Commission FCC 99- 72 30 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. 47. 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. 126 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. 127 The complaints we receive demonstrate that 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. 126 See, e. g., Media One comments at 3; Commonwealth comments at 5; Qwest comments at 7; Ameritech comments at 15. 127 Notice, 13 FCC Rcd at 18189. 30 Federal Communications Commission FCC 99- 72 31 48. We are also not persuaded by those commenters who contend that this guideline may lead to an increase in non- payment of legitimate charges that will outweigh the consumer benefits. 128 Although carriers must clearly identify those charges for which non- payment will not affect local service, the guideline does not prevent carriers from reminding customers of their obligation to pay all authorized charges and of the consequences, such as credit bureau reporting, of a failure to pay any authorized charge. Carriers may, for instance, remind customers that failure to pay a legitimate charge for paging would not result in the customer's loss of local exchange service, but might result in termination of the paging service, collection action by the paging provider, and damage to the customer's credit rating. We find that such notice will adequately deter consumers from withholding payment of authorized charges. Moreover, insofar as consumers do have a right to contest such charges without risk of losing basic service, any suggestion to the contrary -- either explicit or implicit -- is misleading and infringes on the customer's ability to exercise those rights. c. Standardized Labels For Charges Resulting from Federal Regulatory Action 49. 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 Notice 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. 129 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. 1 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. 128 See, e. g., GTC comments at 14- 16; Media One comments at 1- 4; PMT comments at 5- 6; NITCO comments at 4; Liberty comments at 4; CompTel comments at 7- 8; C& W comments at 11; Commonwealth comments at 4; Century comments at 5- 6; SBC comments at 14- 15; Sprint comments at 14- 16; Excel comments at 11; ALTS comments at 9- 10; Time Warner comments at 14; ACTA comments at 8; Bell Atlantic comments at Attachment, "Answers to Specific Questions," at 9- 10; Ameritech comments at 15- 16; GST comments at 21- 24. 129 Notice, 13 FCC Rcd at 18188. 130 For instance, from January 1998 through May 1998, the Federal Communications Commission's National Call Center received approximately 10,000 calls per month from consumers with questions regarding charges on their bills. 31 Federal Communications Commission FCC 99- 72 32 50. 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. 51. 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. 131 Although the Commission did not direct the manner in which carriers could recover their universal service contributions or access fees directly from their customers, 132 and substantially reduced the access rates charged to long distance carriers to offset their new universal service obligations, 133 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," 134 and charges have ranged from $. 93 per bill to 5% of the customers' net interstate and international charges. 135 Access related charges and associated names have likewise varied by carrier. 136 The 131 See Access Charge Reform, First Report and Order, CC Docket No. 96- 262, 12 FCC Rcd 15982 (1997) (Access Reform Order); Federal- State Joint Board on Universal Service, Report and Order, CC Docket No. 96- 45, 12 FCC Rcd 8776 (1997) (Universal Service Order). 132 See Universal Service Order, 12 FCC Rcd at 9211; Access Reform Order, 12 FCC Rcd at 16005. 133 The Presubscribed Interexchange Carrier Charge (PICC) is the charge billed by interexchange carriers to recover a portion of the fees paid to local telephone companies for access to their networks. 134 Florida Commission comments at Attachment A. 135 Id. 32 Federal Communications Commission FCC 99- 72 33 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. 137 52. 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. 138 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. 139 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"). 140 53. 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. 141 Several factors appear to have 136 Some labels for line- item charges for the recovery of access fees include "Carrier Line Charge," "National Access Fee," "Presubscribed Line Charge," and "PIC Charge." Id. 137 Pursuant to our access charge rules, carriers may set higher caps for the subscriber line charges and presubscribed interexchange carrier charges assessed on non- primary residential lines and multi- line business lines than on primary residential lines and single line business lines. In the Primary Lines Order, we adopted requirements for differentiating and identifying such lines and decided to consider whether to require carriers to provide consumers with a uniform disclosure statement describing the distinction between primary and non- primary residential lines in conjunction with this, our Truth- in- Billing proceeding. Defining Primary Lines, Report and Order & Further Notice of Proposed Rulemaking, CC Docket No. 97- 181, 1999 WL 125821 (1999) (Primary Lines Order). We hereby incorporate the comments from the Primary Lines rulemaking into the record of this proceeding. 138 Id. 139 Telephone Number Portability, Third Report and Order, CC Docket No. 95- 116, 13 FCC Rcd 11701 (1998). 140 See Jeannine Aversa, Yet Another New Fee Showing Up On Telephone Bills, Associated Press Newswires, Feb. 19, 1999. 141 See Bills Project comments at 4 (stating that "[ i] n general, consumers are confused by the various taxes, surcharges and other charges that appear on their bills"); NYCPB comments at 13 (stating that in their experience, "many consumers are confused by current explanations on telephone bills concerning access charges and universal 33 Federal Communications Commission FCC 99- 72 34 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. 142 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. 143 54. In the Notice, we generally sought comment on the methods by which the nature and purpose of these charges could be clarified. 1 We adopt the guideline proposed in our Notice, and supported by the great majority of commenters, 1 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. 1 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 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. 1 We will choose the standard labels based on the suggestions we receive in response to our Further Notice. 56. 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 service fees."). 142 See, e. g., Vermont Commission comments at 11 (stating that carriers should avoid suggesting that a charge is a government tax on the consumer); Maine Commission comments at 8 (asserting that carriers "should be required to clearly and unambiguously state that the surcharges are part of the carrier's rate structure and are not mandated by any regulatory or taxing entity."). 143 See AARP comments at 3 (arguing that consumers must be able to compare among carriers to select the best value, but making comparisons becomes difficult if carriers choose different names for the same charge). 144 Notice, 13 FCC Rcd at 18189- 90. 145 See, e. g., SBC comments at 21; Missouri Commission comments at 4; Texas Commission comments at 11; AARP comments at 3; NCL comments at 8; NASUCA reply at 7. 146 See, e. g., Federal- State Joint Board on Universal Service, Second Recommended Decision, 13 FCC Rcd 24744, 24772 (1998) (Second Recommended Decision) (stating that "[ s] tandard nomenclature could benefit consumers by having common language across carriers so that consumers can easily identify the charge."). 147 See infra at section III. A. 34 Federal Communications Commission FCC 99- 72 35 required to combine all regulatory fees into one charge, 148 or should be prohibited from separating out any fees resulting from regulatory action. 149 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. 150 We decline at this time to mandate such requirements, but rather prefer to afford carriers the 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. 151 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. Our goal is to enable consumers to make comparisons among different service providers in connection with these charges, but we expect that this end will be accomplished though several means. 57. 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 148 California Commission comments at 7- 8. 149 Minnesota OAG comments at 11- 12. See also RUS reply at 2 (stating that "[ e] fforts to break out new line items as universal service fees or taxes are misleading to consumers, particularly since none of the other costs of business, such as advertising, stock options, or salaries, are highlighted in this manner. . . A separate line item charge for universal service may disguise a rate increase, or allow a carrier to advertise an apparently low per- minute rate, a rate [that] doesn't actually exist once the line item is added to the bill."). 150 For example, NASUCA proposes that carriers be required to disclose the average per line universal service and access charges on the same page as a customer's individual statement of universal service and access charge-related line items. See NASUCA comments at 19. 151 Century reply at 8 (stating that "[ c] arriers should have the freedom to respond to consumer demand and market place forces in determining whether to include these charges as part of their rates, to bundle the charges as one line item or to list the charges in separate line items."). 35 Federal Communications Commission FCC 99- 72 36 set forth in the Notice, or mandate specific disclosures. 152 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. 153 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. 154 Our view is consistent with the recent decision of the Federal- State Joint Board on Universal Service which recommended that the Commission "prohibit carriers from depicting [universal service] charges as . . . mandated by the Commission or the federal government by terms or placement on the bill." 155 58. In the Notice, 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 152 Notably, several commenters state that such language may be regarded as de facto mandatory, and that it would be difficult to script language that would be relevant to all carriers in all situations. See MCI comments at 38- 39; Qwest comments at 7; Paging Network reply at 4. 153 See Bills Project comments at 5; Detecon comments at 4; Kansas Commission comments at 6; Pennsylvania Commission comments at 8. Some commenters suggest that the Commission should eliminate carriers' discretion as to how they recover universal service contributions, and require instead that contributions be recovered through federally mandated surcharges. See AT& T comments to Second Recommended Decision at 9; Ameritech comments to Second Recommended Decision at 11; U S West comments to Second Recommended Decision at 15. The Commission previously considered and rejected this approach in the Universal Service Order. Universal Service Order, 12 FCC Rcd at 9210- 11. Based on recommendations from the Joint Board, we concluded that, in a competitive telecommunications market, carriers should be allowed to decide how they should recover their contributions, and mandatory recovery through an end- user surcharge would eliminate carriers' pricing flexibility to the detriment of consumers. Id. In its Second Recommended Decision, the Joint Board reaffirmed its recommendation that carriers should have the flexibility to decide how they recover their universal service contributions. Second Recommended Decision, 13 FCC Rcd at 24,771. We find no compelling reason to depart from our earlier conclusions or the Joint Board's recommendations regarding this issue. 154 See, e. g., NCL comments at 8; Maine Commission comments at 7- 8. See also RUS reply at 2; Wisconsin Commission comments at 5. 155 Second Recommended Decision, 13 FCC Rcd at 24770. In the Universal Service Order, the Commission determined that it would be misleading for carriers to characterize their universal service contributions as a surcharge, because carriers retain the flexibility to structure the recovery of the costs of universal service in many ways. Universal Service Order, 12 FCC Rcd at 9211- 12. 36 Federal Communications Commission FCC 99- 72 37 fees. 156 Additionally, in the Second Recommended Decision, the Joint Board recommended that the Commission consider adopting a rule restricting a carrier from charging a line item assessment in an amount greater than the carrier's universal service assessment rate. 157 We decline, however, 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. 158 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. 159 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. 160 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. 161 59. We also decline suggestions to require carriers to provide a detailed breakdown of their costs and cost reductions on their customer bills. 162 The purpose behind these proposals in the Notice was to enhance consumers' understanding of the costs of telecommunications services, thereby increasing their ability to determine whether such services are fairly priced. For example, as we reduce the cap on access charges assessed by LECs against IXCs, it would 156 See Notice, 13 FCC Rcd at 18,190. 157 See Second Recommended Decision, 13 FCC Rcd at 24771. 158 See SBC comments at 20; Air Touch comments at 7; Nextel reply at 5- 6. 159 Omnipoint comments at 14- 15; PCIA comments at 15- 16; Nextel reply at 5- 6. 160 MCI comments to Second Recommended Decision at 20- 21. 161 47 U. S. C. § 201( b). 162 We asked for comment on a number of related proposals requiring carriers to disclose or explain particular costs in their monthly bills. Specifically, we asked: (1) whether long distance carriers that include a separate line item for the recovery of universal service contributions should be required to explain the net reduction in their costs of providing long distance service since enactment of the 1996 Act; (2) whether carriers attributing line items to new government action should be required to disclose exact cost reductions, such as reduction in access charge costs, or other related benefits arising from government action; (3) whether carriers who assess a PICC should be required to show whether the corresponding reduction in the per- minute rate was actually passed on to each individual consumer; (4) whether carriers should include the exact cost of PICC and universal service obligations incurred as a result of serving that customer; and (5) whether it would be helpful to consumers if carriers were required to explain in customer bills their reasons for assessing a flat fee or percentage charge to recover amounts that exceed the costs the carrier incurs. Notice, 13 FCC Rcd at 18189- 90. 37 Federal Communications Commission FCC 99- 72 38 be useful for an individual consumer to be informed of the extent to which his or her IXC passes those access charge reductions through to the consumer in the form of lower long distance rates, and to be able to make comparisons between IXCs on this basis. 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. 163 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. 164 We believe, however, that our purpose of enhancing consumers' understanding will be adequately met through the guidelines adopted herein. Indeed, we expect that standard identification of the charges associated with federal regulatory action, in conjunction with accurate and non- misleading descriptions, will enable market forces to reduce these charges to their most economically efficient level. 165 In addition, we note that unjust or unreasonable line- item charges are also subject to challenge pursuant to section 201( b) of the Act. 166 60. We decline to specify any periodic notification to consumers providing additional explanation of any charges resulting from federal regulatory action. 167 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. 168 We emphasize that carriers' customer service representatives must be prepared to 163 See SBC comments at 21 (stating that customers want shorter, simpler bills, not bills that attempt to explain the history of telephone regulation and the cost basis for all of the charges shown on the bill). 164 GTE comments at 17- 18 (filed in CC Docket No. 97- 181). 165 See, e. g., Sprint comments at 18- 19 (stating that "the Commission can and should rely upon market forces to determine long distance rate levels and to ensure that IXCs pass through any access charge reductions."). 166 47 U. S. C. § 201( b). We decline, however, to find that it is a per se violation of section 201( b) for a carrier to bill customers for more than their pro rata share of universal service and access fees. See Notice, 13 FCC Rcd at 18190. Some commenters assert that it may be impractical to allocate accurately some line- item charges to an individual customer on a per- bill basis. See SBC comments at 20; Air Touch comments at 7; Nextel reply at 5- 6. 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. Omnipoint comments at 14- 15; PCIA comments at 16; Nextel reply at 5- 6. 167 See Notice, 13 FCC Rcd at 18190. 168 See infra Section II( C)( 3) (Clear and Conspicuous Disclosure of Inquiry Contacts). 38 Federal Communications Commission FCC 99- 72 39 explain fully the nature and purpose of these charges if asked to do so. 169 We believe that the requirements adopted here strike a reasonable balance between the needs of consumers for access to accurate and truthful information regarding these line- item charges and any burden or cost that such requirements may impose on carriers. 61. 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. 170 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. 171 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. 172 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." 173 As explained below, our requirement that carriers use standard terms to label charges resulting from federal regulatory action passes this three- prong test. 62. First, the government's interest in standardized labelling is substantial. The ultimate goal of our regulation is to ensure that consumers pay fair and efficient rates, an interest the Supreme Court found to be substantial in Central Hudson. 174 As the record in this proceeding demonstrates, line- item charges are being labelled in ways that could mislead consumers by detracting from their ability to fully understand the charges appearing on their monthly bills, thereby reducing their propensity to shop around for the best value. Consumers 169 In addition, customer service representatives should give the caller the option of obtaining a hard copy of the descriptions of these charges via the Internet or regular mail, or both, according to the preference of the customer. 170 ACTA comments at 8. 171 Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U. S. 557, 563- 564 (1980) (Central Hudson). 172 Id. at 566. 173 Id. 174 Id. at 568. 39 Federal Communications Commission FCC 99- 72 40 misled into believing that these charges are federally mandated, or that the amounts of the charges are established by law or government action, could decide that such shopping would be futile. In addition, lack of standard labelling could make comparison shopping infeasible. Unlike most products purchased by consumers, these line- item charges cannot be attributed to individual tangible articles of commerce. For example, when a consumer purchases socks from the local department store, the consumer knows what item the bill refers to, whether it describes the product as socks, men's wear, hosiery, etc. In contrast, a consumer receives no tangible product in conjunction with a line- item charge on his or her telecommunications bill. If one carrier labels this charge, for example, as "Access Charge," and another uses the term "FCC-Mandated Charge," a consumer will be unable to discern that these labels refer to the same charges. This impedes the consumer's ability to compare and contrast telecommunications services offered by competing entities. The government's interest is substantial in preventing fraudulent and misleading practices by carriers and ensuring that consumers are able to make intelligent and well informed commercial decisions in the increasingly competitive telecommunications market that the 1996 Telecommunications Act is intended to foster. Moreover, consumers have a First Amendment interest in obtaining information on which to base a decision whether to buy a product, and this interest is "served by insuring that the information is not false or deceptive." 175 63. Second, the proposed regulation directly advances the governmental interest. The proposed regulation will ensure that the labels assigned to charges related to federal regulatory action are consistent, understandable, and do not confuse or mislead consumers. In addition, the regulatory scheme will encourage carriers to provide consumers with information that will enable them to understand their telecommunications bills, and prevent carriers from misleading consumers into believing they cannot "shop around" to find carriers that charge less for fees resulting from federal regulatory action. 64. When they take effect, following selection of standardized labels, our labelling regulations will be narrowly drawn to be no more extensive than necessary to serve the government's interest. Narrow tailoring requires a reasonable fit between regulatory ends and means: "[ n] ot necessarily the single best disposition but one whose scope is 'in proportion to the interest served. '" 176 The requirement that we adopt -- requiring telecommunications carriers to use specified, uniform labels to identify charges resulting from federal regulatory action -- is narrowly tailored to meet this substantial government interest and does not appreciably affect 175 National Commission on Egg Nutrition v. FTC, 570 F. 2d 157, 162 (7th Cir. 1977), cert. denied, 439 U. S. 821 (1978). 176 Board of Trustees v. Fox, 492 U. S. 469, 480 (1989) (citing In re R. M. J., 455 U. S. 191, 203 (1982)); see also Ward v. Rock Against Racism, 109 S. Ct. 2746, 2758 (1989) (a regulation is narrowly tailored if government interest would be achieved less effectively without the regulation). 40 Federal Communications Commission FCC 99- 72 41 carriers' ability to describe fully the nature and purpose of these charges in their own words. As stated above, 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. We only prescribe that these charges be presented using a standardized label, so that consumers can comparison shop. Our standardized label requirement is analogous to the disclosure requirements of the Truth in Lending Act (TILA). 177 TILA and its implementing regulations require, for example, that creditors in consumer credit transactions disclose the amount financed and provide descriptive explanations of the applicable annual percentage rate as specified by the Federal Reserve Board. 178 Although disclosure of the annual percentage rate must meet detailed requirements governing how it will be stated and calculated, these requirements have not been challenged as contrary to the First Amendment. Our standardized label requirement is even less onerous, requiring carriers to use the labels, but otherwise leaving them free to determine how best to describe charges related to federal regulatory action in a truthful and nonmisleading manner. The government interest underlying the standardized label requirement is also analogous to that underlying the Truth in Lending Act. The purpose of that statute is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him . . . and to protect the consumer against inaccurate and unfair credit billing and credit card practices." 179 Similarly, the principles that we adopt here seek to protect consumers from unreasonable billing practices while enabling them to make informed choices in the increasingly competitive telecommunications market that the Telecommunications Act of 1996 is intended to foster. 65. Finally, several commenters argue that 44 Liquormart v. Rhode Island 180 prevents us from requiring carriers to employ standard labels for charges resulting from federal regulatory action. We disagree. In 44 Liquormart, the Supreme Court struck down a ban on all dissemination of price advertising for alcoholic beverages on First Amendment grounds. Here, however, we ban no speech, so carriers remain free to develop their own descriptions of the nature and purpose of these charges, subject only to a labelling requirement. For this reason, 44 Liquormart is inapposite. Accordingly, we conclude that our regulation is valid under the limited scrutiny that has been afforded restrictions on commercial speech. 3. Clear and Conspicuous Disclosure of Inquiry Contacts 177 15 U. S. C. §§ 1601 et seq. 178 15 U. S. C. §§ 1606, 1638. 179 15 U. S. C. § 1601( a); Mourning v. Family Publications Service, Inc., 411 U. S. 356, 363, 365 (1973). 180 116 S. Ct. 1495 (1996) (44 Liquormart). 41 Federal Communications Commission FCC 99- 72 42 66. 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. 181 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. 182 We are cognizant, however, that the service 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. 183 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. 184 67. 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. 185 Consumers often 181 BellSouth comments at 9- 10 (stating that each provider of billed services should include on the bill page a toll- free telephone number which consumers may contact to obtain information and/ or register a complaint); U S West comments at 23 (asserting that it would be helpful to a consumer to have a phone number associated with every service provider, yet the number should not necessarily be that of the service provider itself, but should be a number that can handle inquiries on behalf of the service provider and provide customer resolution of disputes). See also Ameritech comments at 16; AT& T comments at 14- 15; Sprint comments at 21; C& W comments at 12; Excel comments at 14; NYCPB comments at 14; Wisconsin Commission comments at 6; Missouri Commission comments at 4- 5; Maine Commission comments at 8; Ohio Commission comments at 11; Washington Commission Staff comments at 7; NCL comments at 9; USTA comments at 8. 182 The toll- free number should be accessible to persons with disabilities. For example, the carrier could either have a toll- free TTY line, or their toll- free line should not have barriers to TRS service. 183 See, e. g., Bell Atlantic comments at 13. 184 Carriers should also provide an e- mail address so that their customers will have the option of communicating with the carrier via electronic mail. 185 See supra 1998 Slamming Order and Further Notice. 42 Federal Communications Commission FCC 99- 72 43 experience considerable difficulty in contacting the entity whose charges appear on the telephone bill. 186 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. 187 68. We decline at this time to adopt standards for the provision of accurate information by carrier customer service representatives. 188 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. 189 III. FURTHER NOTICE OF PROPOSED RULEMAKING A. Discussion 1. Application of Rules to CMRS Carriers 69. As we indicated in the Order, we seek comment on whether the remaining truth-in- billing rules we adopt in the wireline context should apply to CMRS carriers. More specifically, we seek comment on whether such rules should be imposed on CMRS carriers in order to protect consumers. As we stated in the Order, we believe that all consumers expect and should receive bills that are fair, clear, and truthful. However, absent evidence that there is a problem with wireless bills, it might not be necessary to apply the remaining rules in the CMRS context. Commenters may wish to address the applicability of a section 10 forbearance analysis. Those commenters who wish to apply such an analysis should address the specific elements of the standard set forth in section 10. 190 We also seek comment on the extent to which the 186 See, e. g., Washington Commission Staff comments at 7. 187 See, e. g., Ohio Commission comments at 11. 188 See Notice, 13 FCC Rcd at 18191. 189 47 C. F. R. § 201( b). 190 Under Section 10, the Commission shall forbear from applying any regulation to a telecommunications 43 Federal Communications Commission FCC 99- 72 44 presence of a competitive market is relevant to consumers' ability to protect themselves from the harms we address here. 70. We also note growing evidence that some consumers are substituting wireless for wireline service. 191 To what extent does this phenomenon affect our application of our guidelines to wireless providers? We also seek comment more generally on the benefit that consumers would derive from application of certain of the guidelines relative to the burden that such application would impose on CMRS carriers. First, as we indicated in the Order, all consumers are entitled to fair, clear, and reasonable practices. We seek comment on how to implement this principle in the CMRS context. For instance, we seek comment on the current billing practices of CMRS providers, including the types and descriptions of charges CMRS providers include in their bills. 71. Second, we seek comment on whether identifying new service providers and "deniable" charges makes sense in the wireless context. For example, because CMRS carriers are excluded from equal access obligations, 192 it appears that CMRS carriers will rarely if ever carrier or class of carriers if the Commission determines that -- (1) enforcement of such regulation or provision is not necessary to ensure that the charges, practices, classifications, or regulations by, for, or in connection with that telecommunications carrier or telecommunications service are just and reasonable and are not unjustly or unreasonably discriminatory; (2) enforcement of such regulation or provision is not necessary for the protection of consumers; and (3) forbearance from applying such provision or regulation is consistent with the public interest. With respect to the public interest analysis, the Commission must also consider whether forbearance from enforcing the provision or regulation will promote competitive market conditions, including the extent to which such forbearance will enhance competition among providers of telecommunications services. If the Commission determines that such forbearance will promote competition among providers of telecommunications services, that determination may be the basis for a Commission finding that forbearance is in the public interest. 191 See Annual Report and Analysis of Competitive Market Conditions With Respect to Commercial Mobile Services, 13 FCC Rcd 19746, 19817 (1998) (noting that “mobile telephone operators are beginning . . . to position their services as true replacements for the wire- based services of LECs”); Id. at 19819 (The Commission “should hasten the day when consumers begin to view wireless as a real substitute for wireline, and not just a complement.”) (Separate Statement of Chairman William E. Kennard). But see Application of BellSouth Corporation, BellSouth Telecommunications, Inc., and BellSouth Long Distance, Inc. for Provision of In- Region, InterLATA Services in Louisiana, CC Docket No. 98- 121 (rel. Oct. 13, 1998) at para. 43 (noting that BellSouth's wireline customers, particularly residential customers, are unlikely to switch to wireless service as a competitive alternative to wireline because of rate structure involved). 192 1998 Slamming Order and Further Notice at ¶ 85. 44 Federal Communications Commission FCC 99- 72 45 be required to indicate a new long distance service provider on the bill. Similarly, CMRS carriers indicate in their comments that, unlike the practice in connection with billing for wireline carriers that can give rise to cramming, CMRS carriers do not at this time include charges for services rendered by third party entities. 193 We seek comment on these assertions. Do CMRS providers bill for any other service providers? If so, for what types of services and how pervasive are these billing practices? Likewise, CMRS carriers, as non- LECs, that do their own billing do not have to distinguish between "deniable" and "nondeniable" charges because non payment of charges on a CMRS bill would not result in termination of basic local wireline service. 194 Therefore, our guideline to identify "deniable" charges may have no relevance, and add no benefit, to consumers' CMRS bills. 195 193 PCIA comments at 7; RCA comments at 2; Air Touch comments at 2; Nextel comments at 2. 194 See supra Section II( C)( 2)( b). 195 We recognize, however, that billing for CMRS may change or evolve from current practices. 45 Federal Communications Commission FCC 99- 72 46 2. Standard Labels for Line- Item Charges 72. As discussed in section II( C)( 2)( c), we adopt the guideline that carriers must use standardized labels to refer to certain charges relating to federal regulatory action. We seek comment, however, on the specific labels that carriers should adopt. We tentatively conclude that the following labels would be appropriate: "Long Distance Access" to identify charges related to interexchange carriers' costs for access to the networks of local exchange carriers; "Federal Universal Service" to describe line items seeking to recover from customers carriers' universal service contributions; and "Number Portability" to describe charges relating to local number portability. We tentatively conclude that such labels will adequately identify the charges and provide consumers with a basis for comparison among carriers, while at the same time be sufficiently succinct such that most carriers will be able to use them without requiring that they modify the field lengths of their current billing systems. We seek comment on these tentative conclusions. In addition, we seek comment on alternative labels, or appropriate abbreviations for the labeling of these charges. For example, the Florida Commission suggests the terms "Federal Long Distance Access Fee," "FCC Long Distance Access Fee," or "Interstate Long Distance Access Fee" to identify access charges, and "Federal Universal Service Fee," "FCC Universal Service Fee," or "Interstate Universal Service Fee" for universal service related charges. 196 Commenters should explain the merit and basis for their proposed labels, including, for example whether their proposals were chosen or evaluated by consumer focus groups. Indeed, we believe that consumer groups, with input from industry, can contribute greatly to our consideration of the appropriate labels. Finally, we seek comment on how carriers should identify line items that combine two or all of these charges into a single charge. We encourage parties to attempt to reach consensus on the appropriate labels. VI. PROCEDURAL MATTERS A. Final Regulatory Flexibility Analysis 73. As required by the Regulatory Flexibility Act (RFA), 197 an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice in Truth- in- Billing and Billing Format. 198 The Commission sought written public comment on the proposals in the Notice, including comment on the IRFA. The comments received are discussed below. This present 196 Florida Commission comments at 8. 197 See 5 U. S. C. § 603. The RFA, see 5 U. S. C. § 601 et. seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104- 121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). 198 Notice, 13 FCC Rcd at 18194. 46 Federal Communications Commission FCC 99- 72 47 Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA. 199 1. Need for and Objectives of this Order and the Rules Adopted Herein 74. 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 verificatioHprocedures as the Commission shall prescribe." 200 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. 201 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 75. 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. 76. PCIA, Liberty, RTG and others argue that the cost of compliance faced by smaller 199 See 5 U. S. C. § 604. 200 47 U. S. C. § 258. Our jurisdiction to enact truth- in- billing requirements also stems from section 201( b) of the Act. See supra Section II( B) (Legal Authority). 201 State commissions and the FTC also have received thousands of complaints. See, e. g., Kansas Commission comments at 1; FTC comments at 5. See also NASUCA reply at 2 (complaints received by FCC represent "tip of the iceberg"). See supra Sections I, II( A). 47 Federal Communications Commission FCC 99- 72 48 carriers would be particularly burdensome. 202 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." 203 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 proposed in the NPRM. 204 RTG agrees, arguing that rural carriers are particularly sensitive to increased regulatory requirements with significant costs. 205 77. The Office of Management and Budget (OMB) received a large number of comments in response to the NPRM. 206 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. 207 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 managerial issues related to implementation of billing requirements. 208 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. 209 OMB also recommends that the Commission make a concerted effort to work 202 PCIA comments at 9; Liberty comments at 2- 3; RTG comments at 6- 7; RCA comments at 3- 5; PMT comments at 3- 4. 203 PCIA reply at 9. 204 Id. 205 RTG comments at 6- 7. 206 OMB Action at 2. 207 Id. 208 Id. 209 Id. 48 Federal Communications Commission FCC 99- 72 49 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. 210 78. 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. 211 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 79. 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. 212 The RFA generally defines the term "small entity" as having the same meaning as the terms "small business," "small organization," and "small governmental jurisdiction." 213 In addition, the term "small business" has the same meaning as the term "small business concern" under the Small Business Act. 214 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). 215 80. 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 210 Id. 211 See infra Sections II( A), III( A). 212 5 U. S. C. § 603( b)( 3). 213 Id. at § 601( 6). 214 5 U. S. C. § 601( 3) (incorporating by reference the definition of "small business concern" in 15 U. S. C. § 632). Pursuant to the RFA, the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition( s) in the Federal Register." 5 U. S. C. § 601( 3). 215 Small Business Act, 15 U. S. C. § 632 (1996). 49 Federal Communications Commission FCC 99- 72 50 Industry Revenue report, regarding the Telecommunications Relay Service (TRS). 216 According to data in the most recent report, there are 3,459 interstate carriers. 217 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. 81. 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. 218 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. 82. 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." 219 216 FCC, Telecommunications Industry Revenue: TRS Fund Worksheet Data, Figure 2 (Number of Carriers Paying Into the TRS Fund by Type of Carrier) (Nov. 1997) (Telecommunications Industry Revenue). We believe that the TRS Fund Worksheet Data is the most reliable source of information for our purposes because carriers file the TRS worksheets yearly and are instructed to select the single category of type of service provision that best describes them. Other sources of carrier data, such as the tariffs on file with the Common Carrier Bureau, may not reflect the same figures as the TRS Fund Worksheet Data, because such sources are not updated annually. 217 Id. 218 13 C. F. R. § 121.201, Standard Industrial Classification (SIC) codes 4812 and 4813. See also Executive Office of the President, Office of Management and Budget, Standard Industrial Classification Manual (1987). 219 See 13 C. F. R. § 121.201, SIC code 4813. Since the time of the Commission's 1996 decision, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, First Report and Order, 11 FCC Rcd 15499, 16144- 45 (1996), 61 FR 45476 (August 29, 1996), the Commission has consistently addressed in its regulatory flexibility analyses the impact of its rules on such ILECs. 50 Federal Communications Commission FCC 99- 72 51 83. 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. 220 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." 221 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. 84. 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. 222 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. 223 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. 85. Local Exchange Carriers. Neither the Commission nor the SBA has developed a definition for small providers of local exchange services (LECs). The closest 220 U. S. Department of Commerce, Bureau of the Census, 1992 Census of Transportation, Communications, and Utilities: Establishment and Firm Size, at Firm Size 1- 123 (1995) (1992 Census). 221 See generally 15 U. S. C. § 632( a)( 1). 222 1992 Census, supra, at Firm Size 1- 123. 223 13 C. F. R. § 121.201, SIC code 4813. 51 Federal Communications Commission FCC 99- 72 52 applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. 224 According to the most recent Telecommunications Industry Revenue data, 1,371 carriers reported that they were engaged in the provision of local exchange services. 225 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. 86. 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. 226 According to the most recent Telecommunications Industry Revenue data, 143 carriers reported that they were engaged in the provision of interexchange services. 227 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. 224 Id. 225 Telecommunications Industry Revenue, Figure 2. 226 13 C. F. R. § 121.201, SIC code 4813. 227 Telecommunications Industry Revenue, Figure 2. 52 Federal Communications Commission FCC 99- 72 53 87. 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. 228 According to the most recent Telecommunications Industry Revenue data, 109 carriers reported that they were engaged in the provision of competitive access services. 229 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. 88. 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. 230 According to the most recent Telecommunications Industry Revenue data, 339 reported that they were engaged in the resale of telephone service. 231 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. 89. Rural Radiotelephone Service. The Commission has not adopted a definition of small entity specific to the Rural Radiotelephone Service. 232 A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio Systems (BETRS). 233 We will use the SBA's definition applicable to radiotelephone companies, i. e., an entity employing no more than 1,500 persons. 234 There are approximately 1,000 licensees in the Rural 228 13 C. F. R. § 121.201, SIC code 4813. 229 Telecommunications Industry Revenue, Figure 2. 230 13 C. F. R. § 121.201, SIC code 4813. 231 Telecommunications Industry Revenue, Figure 2. 232 The service is defined in Section 22.99 of the Commission's Rules, 47 C. F. R. § 22.99. 233 BETRS is defined in Sections 22.757 and 22.759 of the Commission's Rules, 47 C. F. R. §§ 22.757, 22.759. 234 13 C. F. R. § 121.201, SIC code 4812. 53 Federal Communications Commission FCC 99- 72 54 Radiotelephone Service, and we estimate that almost all of them qualify as small entities under the SBA's definition. 90. 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). 235 This definition provides that a small entity is expressed as one with $11.0 million or less in annual receipts. 236 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. 237 The Census report does not provide more precise data. 91. 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. 92. 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. 238 Consequently, we estimate that there are fewer than 1,092 message telephone service providers that may be affected by our principles and guidelines. 93. 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) 235 An exception is the Direct Broadcast Satellite (DBS) Service, infra. 236 13 C. F. R. § 120.121, SIC code 4899. 237 1992 Economic Census Industry and Enterprise Receipts Size Report, Table 2D, SIC code 4899 (U. S. Bureau of the Census data under contract to the Office of Advocacy of the U. S. Small Business Administration). 238 International Telecommunications Data, All Carriers: International Message Telephone Resale Service at Tbl. D1. 54 Federal Communications Commission FCC 99- 72 55 companies. This provides that a small entity is a radiotelephone company employing no more than 1,500 persons. 239 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. 240 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. 241 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. 94. 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. 242 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. 95. 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 239 13 C. F. R. § 121.201, SIC code 4812. 240 1992 Census, Series UC92- S- 1, at Table 5, SIC code 4812. 241 Telecommunications Industry Revenue, Figure 2. 242 13 C. F. R. § 121.201, SIC code 4812. 55 Federal Communications Commission FCC 99- 72 56 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. 243 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. 244 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. 96. 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, 245 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. 246 Consequently, we estimate that there are fewer than 172 small mobile service carriers that may be affected by the proposed rules, if adopted. 97. 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. 247 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 243 Id. 244 Telecommunications Industry Revenue, Figure 2. 245 13 C. F. R. § 121.201, SIC code 4812. 246 Telecommunications Industry Revenue, Figure 2. 247 See Amendment of Parts 20 and 24 of the Commission's Rules -- Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap, Report and Order, WT Docket No. 96- 59, 11 FCC Rcd 7824, 7850- 52 (1996), 61 FR 33859 (July 1, 1996) (Broadband PCS Competitive Bidding Order); see also 47 C. F. R. § 24.720( b). 56 Federal Communications Commission FCC 99- 72 57 for the preceding three calendar years. 248 These regulations defining "small entity'' in the context of broadband PCS auctions have been approved by the SBA. 249 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. 250 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. 98. 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. 99. 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. 251 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. 248 See Broadband PCS Competitive Bidding Order, 11 FCC Rcd at 7852. 249 See, e. g., Implementation of Section 309( j) of the Communications Act -- Competitive Bidding, PP Docket No. 93- 253, Fifth Report and Order, 9 FCC Rcd 5532, 5581- 84 (1994). 250 FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (released January 14, 1997). 251 See 47 C. F. R. § 90.814( b)( 1). 57 Federal Communications Commission FCC 99- 72 58 100. 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. 101. 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. 252 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 102. 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 in Appendix A. 5. Steps Taken to Minimize the Significant Economic Impact of This Order on Small Entities and Small Incumbent LECs, Including the Significant Alternatives Considered 103. In this Order, we decline to adopt many of the proposals made in the Notice 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 252 13 C. F. R. § 121.201, SIC 4841. 58 Federal Communications Commission FCC 99- 72 59 also exempt CMRS carriers from certain of our requirements. 253 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. 104. 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. 254 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. 255 253 See infra Section II( A), Section III( A). 254 See 5 U. S. C. § 801( a)( 1)( A). 255 See 5 U. S. C. § 604( b). B. Final Paperwork Reduction Act of 1995 Analysis 59 Federal Communications Commission FCC 99- 72 60 105. The decision herein has been analyzed with respect to the Paperwork Reduction Act of 1995, Pub. L. 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. 256 In this Order, we have exempted CMRS carriers from certain of the requirements we adopt to promote truth- in- billing. 257 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. Initial Regulatory Flexibility Analysis for Policies Proposed in the Further Notice 106. As required by the RFA, the Commission has prepared this present IRFA of the possible, significant, economic impact on small entities of the policies and rules proposed in this Further Notice. 258 Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Further Notice provided below in section IV( E). The Commission will send a copy of this Further Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. 259 In addition, the Further Notice and IRFA (or summaries thereof) will be published in the Federal Register. 260 107. Need for, and Objectives of, the Proposed Rules. This Further Notice seeks comment on a specific proposed rule concerning labelling of charges relating to federal regulatory action. In addition, the Further Notice seeks comment on whether certain of our truth- in- billing requirements should be applicable to CMRS carriers. The proposals made in this Further Notice are necessary to ensure that consumers receive clear and accurate telecommunications bills. 108. Legal Basis. The proposed action is authorized under Sections 4( i) and 4( j), 201, 256 OMB Action at 2. 257 See infra Section II( A), Section III( A). 258 See supra Section III. 259 See 5 U. S. C. § 603( a). 260 See id. 60 Federal Communications Commission FCC 99- 72 61 208, 254 and 303( r) of the Communications Act of 1934, as amended, 47 U. S. C. §§ 151, 154( i), 154( j), 201, 208, 254, and 303( r). 109. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. For purposes of this Further Notice, the Regulatory Flexibility Act defines a "small business" to be the same as a "small business concern" under the Small Business Act (SBA), 15 U. S. C. § 632, unless the Commission has developed one or more definitions that are appropriate to its activities. Under the SBA, "small business concern" is one that: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the SBA. In the FRFA pertaining to this action, we described in detail the small entities potentially subject to the rules adopted in this Order. These same entities possibly would by affected by the proposal made in this Further Notices. For purposes of this IRFA, therefore, we incorporate the list of potentially affected entities contained in section IV( A)( 3). 110. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements. We seek comment on a proposal designed to increase the accuracy and understandability of telephone bills to consumers. Comment is requested on a proposal to require uniform labels on line- item charges resulting from federal regulatory action. 111. Federal Rules that may Duplicate, Overlap, or Conflict with the Proposed Rule. None. 112. Any significant alternatives minimizing impact on small entities and are consistent with stated objectives. None. D. Initial Paperwork Reduction Act of 1995 Analysis for the Further Notice 113. The Further Notice portion of this Order contains either a proposed or modified information collection. As part of its continuing effort to reduce paperwork burdens, we invite the general public and the Office of Management and Budget (OMB) to comment on the information collections contained in the Further Notice of Proposed Rulemaking portion of this Order, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 104- 13. Public and agency comments are due at the same time as other comments on the Further Notice of Proposed Rulemaking; OMB comments are due 60 days from date of publication of this Order in the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. 61 Federal Communications Commission FCC 99- 72 62 E. Comment Filing Procedure 114. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C. F. R. §§ 1.415, 1.419, interested parties may file comments concerning the standardized labels for charges relating to federal regulatory action no later than 14 days after publication of this Further Notice in the Federal Register. Parties shall file comments concerning application of the truth- in- billing principles and guidelines to CMRS carriers no later than 30 days after publication of the Further Notice in the Federal Register. Parties may file reply comments no later than 21 days after publication of the Further Notice in the Federal Register concerning charges relating to federal regulatory action, and no later than 45 days after Federal Register publication concerning the CMRS issues raised in the Further Notice. Comments will be limited to 15 pages, not including appendices. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998). 115. Comments filed through the ECFS can be sent as an electronic file via the Internet to . Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions for e- mail comments, commenters should send an e- mail to ecfs@ fcc. gov, and should include the following words in the body of the message, "get form