On May 11, 1999, the Federal Communications Commission ("FCC") released its "Truth-in-Billing" Order and Further Notice of Proposed Rulemaking. This Order requires that all telephone bills meet three broad criteria. First, bills must be clearly organized, clearly identify the service provider, and highlight any new provider. Second, bills must contain full and non-misleading descriptions of charges. 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. Carriers have considerable latitude to implement these requirements.

Further, the Order requires charges resulting from federal regulatory action (e.g., universal service) to be identified more clearly and requests further comment on standard labels for these charges. In addition, further comment is requested on the extent to which certain of the rules should apply to mobile carriers.

At the outset, the FCC adopts broad, binding principles, rather than detailed rules. Thus, there will necessarily be some room for each carrier to interpret the rules as may best fit its own operations. Aside from the Further Notice inquiry as to the applicability of the rule to mobile carriers, the rule applies to all telecommunications carriers. A copy of the rule is attached; the requirements are as follows.

1. Clear Organization And Highlighting New Service Provider Information.

1. The rule requires the name of the service provider associated with each charge to be clearly identified. Further, charges must be visually separated by service provider, but not necessarily on separate pages.
2. Finally, bills must contain a clear and conspicuous notification of any new service provider -- that is, a provider for whom no bill was rendered the previous month. Carriers need not, however, highlight each new service. Carriers have the discretion to devise a method of highlighting new charges, but the Order favorably suggests using colored ink or different fonts or font sizes, along with explanatory notes to bring attention to changes. These methods may be used within the body of the bill or on an existing summary page. The notification also must make clear the nature of the new relationship with the customer (e.g., whether the new provider is now the consumer's preferred interexchange carrier).

2. Full And Non-Misleading Billed Charges

a. Billing Descriptions. The rule requires that charges included on the telephone bill must be accompanied by a brief, clear, plain language description of the services rendered. The Order points out that line items such as "Phone Calls" confuse customers, particularly where a corporate name can be confused with a description of a service. The Order notes, however, that some terms are already generally understood by consumers, and thus need little explanation. For example, carriers need not identify every long distance call as being a long distance call. Instead, they may identify a section of the bill as "long distance service," followed by an itemization of each call. Carriers are invited to use creative methods, such as color coding, to identify services, but this is not required. While the FCC declines to impose standardized descriptions of services, it encourages carriers to work together to develop uniform terminology.

b. "Deniable" And "Non-Deniable" Charges. The rule requires that bills indicate whether or not charges are "deniable." Carriers must clearly identify on bills those charges for which non-payment will not result in disconnection of basic, local service. The Order notes that the terms "deniable" and "non-deniable" are confusing, and it does not encourage the use of those terms. Rather, the Order notes with approval the method of identifying charges with an asterisk or other symbol directing the consumer to an explanatory footnote. Carriers may also use other methods to notify consumers on the bill that they are entitled to contest charges prior to payment. The Order explains that the precise language used is at the discretion of the carrier that is seeking payment for the charges. Where a carrier has elected to have another entity bill the charge, the billing entity may not decide unilaterally the appropriate language. Finally, the Order rejects arguments that clearly differentiating non-deniable charges will lead to non-payment of legitimate charges.

c. Descriptions Of Charges Resulting From Federal Regulatory Action. The Order responds to consumer confusion about regulatory charges, such as charges for universal service, the subscriber line charge, and the local number portability charge. The FCC seeks to disabuse consumers of the notion that these charges are federally mandated fees. To that end, the rule requires that line-item charges associated with federal regulatory action should be identified through standard and uniform labels. The Order finds that consumer groups are well suited to help develop uniform terms. Thus, through a Further Notice (discussed below), the FCC encourages consumer and industry groups to work together to propose standard labels. The FCC will choose the standard labels based on the suggestions it receives in response to the Further Notice. The Order also encourages the industry and consumer groups to consider whether aggregation or categorization of regulatory charges would help clarify the bill. Carriers are permitted to include additional explanatory text giving consumers more information.

3. Clear And Conspicuous Disclosure Of Inquiry Contacts

The rule requires carriers to "prominently display on their monthly bill a toll-free number or numbers by which customers may inquire or dispute any change {sic} on the bill." The Order expressly recognizes that the service provider may not be the most appropriate entity for consumers to call, and that often times service providers contract with LECs or independent billing aggregators to provide inquiry and dispute resolution services for charges billed through the local telephone bill. Thus, a carrier may list a toll-free number for a billing agent, clearinghouse, or other third party, as long as that party has sufficient information to answer consumers' questions and is fully authorized to resolve complaints on the carrier's behalf. While the FCC requested comment on whether a street address should be included for each charge, it ultimately declined to impose that requirement. Carriers must, however, provide that information upon request, and should also provide an e-mail address for written inquiries. The FCC declines to adopt standards for customer service representatives, such as a limit on the amount of time a consumer must wait on "hold" before a call is picked up.

The FCC requests additional comment on the application of rules to mobile carriers and on standard labels for federal regulatory charges.

1. Application Of Rules To Mobile Service, Including CMRS Service.

Three sections of the rule do not apply to mobile service, including CMRS service: (1) the requirement that when charges for two or more carriers appear on the same bill, the charges must be visually separated and the billing entity must provide clear and conspicuous notification of any change of service provider; (2) the requirement that charges must be accompanied by a brief, clear, non-misleading, plain language description of the service; and (3) the requirement that "deniable" and "non-deniable" charges be differentiated. The Further Notice requests comments on whether these sections of the rule should apply to mobile carriers and whether the FCC should forbear from applying the rules.

2. Standard Labels For Line-Item Charges

As discussed above, the Order requires carriers to use standardized labels to refer to certain regulatory charges. The Further Notice requests comment on what labels would be appropriate. The Further Notice tentatively concludes that the following labels would be appropriate: "Long Distance Access" for charges related to interexchange carriers' access costs; "Federal Universal Service" for recovery of universal service costs; and "Number Portability" for charges relating to local number portability. Comment is also sought on how carriers should identify line items that combine these charges. Parties are encouraged to attempt to reach consensus on the appropriate labels.

Other Findings

• The FCC acknowledges that "consumers have generally expressed a preference for a single bill."
• The rules are designed to bring consumers some of the same protections they would enjoy if making another credit purchase, such as using a credit card. The FCC notes that it is easier to bill a fraudulent charge on a telephone bill than on a credit card bill.
• The Order does not set forth requirements that carriers provide their bills in accessible formats for persons with disabilities. That issue is addressed in a separate proceeding.
• The Order draws authority from Section 258 of the Telecommunications Act of 1996, which prohibits changing a consumer's preferred carrier without authorization ("slamming"). The FCC characterizes its guidelines in this proceeding as "verification" methods to reduce slamming.
• Jurisdiction: According to the Order, the FCC clearly has jurisdiction to mandate these rules for carriers because of the integral relationship between the provision of service and the billing for that service. The Order purports not, however, to govern the activities of billing clearinghouses. The Order notes: "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 Order also notes that billing and collection for unaffiliated services has not been regulated since the 1986 detariffing order.

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