In July of 1998, a group of billing clearinghouses representing over 90 percent of the industry formed the Coalition to Ensure Responsible Billing ("CERB") in an effort to fight the proliferation of "cramming" (the addition of charges to a telephone bill for products or services that a consumer did not knowingly authorize). Billing clearinghouses are the entities that consolidate bills from many competitive telecommunications providers and submit the aggregated billing information to local telephone companies to be included on consumer telephone bills. In the last ten years, these competitive telecommunications providers have played an indispensable role in keeping telecommunications prices competitive, while developing new and innovative telecommunications products and services for consumer use. Without billing clearinghouses, and the access they provide to the local telephone bill, many small and medium sized telecommunications providers would have no economically viable mechanism for submitting their bills to consumers. Thus, the companies that formed CERB felt uniquely positioned to implement anti-cramming solutions that would both protect consumers from cramming and ensure the continued viability of an industry vital to competition in telecommunications. The members of CERB were Billing Concepts, Federal TransTel, HBS Billing Services, ILD Teleservices, Integretel, OAN Services, and USP&C.

As part of its pro-consumer program, CERB drafted mandatory Standards of Practice ("Standards") outlining responsible billing practices and invited billing clearinghouses to sign those standards. The Standards, which CERB initially released on October 1, 1998, require billing clearinghouses to: (1) pre-screen providers and services; (2) monitor providers and programs; (3) mandate the authorization of charges by service providers; (4) offer consumer-friendly bills; (5) supply helpful information to consumers who have complaints; and (6) make available to requesting authorities information about service providers who have been terminated, cramming practices that billing clearinghouses have encountered, and data concerning cramming complaints.

The implementation of the Standards, as well as other industry and government-based efforts, contributed to the reduction in cramming evidenced over the last year. According to Federal Communications Commission Chairman Kennard, such pro-consumer efforts resulted in a reduction in consumer cramming complaints of 65 percent per carrier on average. Despite this success, however, CERB continues to focus on methods to eliminate cramming and offer further protections to consumers.

Over the last year, CERB has identified independent third party verification ("TPV") as an anti-cramming method that, while successfully used to combat cramming, has not yet reached its full potential. CERB hosted a TPV workshop on September 24, 1999, which addressed ways to improve TPV. Based on the record developed during the forum, CERB has updated and revised the Standards ("Revised Standards"), which are attached. Under the Revised Standards, as under the initial Standards, service providers may verify a consumer's purchase through a letter of authorization, a sales order, a voice recording of a telephone authorization, or a recorded independent TPV. However, for service providers that use TPV, CERB members will now require that the TPV include the following:

• An initial statement that the purpose of the verification is to confirm the consumer's intention to accept the sales offer.
• A statement that the service provider is not affiliated with a LEC, where there is no affiliation.
• A unique consumer identifier.
• A review by third party personnel of the entire verification where the verification is automated.

Further, an independent third party verifier must meet the following criteria:

• It must be completely independent of the service provider and the telemarketer.
• It must not be owned, managed, controlled or directed by the service provider or the telemarketer.
• It must not have any financial incentive in the completion of the sale.
• It must operate in a location physically separate from the service provider and the telemarketer.

CERB is confident that the Revised Standards will go a long way toward protecting consumers by further reducing cramming incidents and other deceptive acts.