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Federal Communications Commission
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

Report No. CC 98-42 COMMON CARRIER ACTION November 10, 1998

FCC Orders MCI to Stop Charging "Non-Subscriber" Rates for Direct-Dialed Calls; Practice Deemed "Inherently Confusing" to Consumers

The Commission today ordered MCI to stop charging its "non-subscriber" rates for direct-dialed long distance calls. Consumers affected by this practice are those who remain presubscribed to MCI -- that is, consumers whose calls are handled by MCI when they dial "1" plus an area code and local telephone number -- after their accounts are removed from MCI's billing system. Noting that customers who are presubscribed to MCI may reasonably consider themselves "subscribers," the Commission concluded that the practice of charging these customers non-subscriber rates is inherently confusing and, therefore, unreasonable.

Today's action resolves two formal complaints by customers who were charged MCI's non-subscriber rates, otherwise known as "casual calling" rates, for long distance calls made over lines presubscribed to MCI. Specifically, the customers were charged $0.38 per minute and a $2.49 surcharge for each domestic long distance call, which is considerably higher than MCI's basic subscriber rates. The Commission ruled in favor of the complainants, concluding that customers who are presubscribed to MCI's service reasonably would not expect to be charged MCI's non-subscriber rates. In addition, the Commission found that use of the term "non- subscriber" to describe rates charged to customers who are presubscribed to a service is confusing; no matter how explicitly MCI may explain the circumstances that would cause a presubscribed customer to be charged non-subscriber rates, those labels have such accepted and well-known meanings that their use in this manner is unclear and unreasonable. As a result, the Commission found that (1) MCI's tariff (the document that sets forth the rates, terms, and conditions of a service offering) violates the Communications Act and FCC rules by failing to clearly and explicitly describe when MCI will charge non-subscriber rates for calls placed over lines presubscribed to MCI; and (2) MCI's application of its non-subscriber rates to calls placed over lines presubscribed to MCI is unreasonable in violation of the Act.

The Commission's order directs MCI to file an amended tariff within ten days and to immediately stop charging non-subscriber rates for calls placed by dialing "1" plus the area code and local telephone number. In addition, the order requires MCI to refund to the two complainants the difference between MCI's non-subscriber rates and MCI's basic subscriber rates for the calls at issue. Although the damages assessed in this order pertain only to the two complainants, Halprin, Temple, Goodman & Sugrue and Freedom Technologies, Inc. the order should, of course, serve as a precedent for any similarly affected customers.

Indeed, the record in this proceeding suggests that other customers may be have been subject to the practice found today to be unreasonable. The Commission has received numerous informal complaints that appear to raise issues similar to those raised by the complainants in this proceeding. The Commission, therefore, will not only ensure MCI's compliance with today's order but will also closely examine MCI's resolution of current and future informal complaints on these issues to determine if further inquiry or additional remedial action is necessary.

Action by the Commission November 10, 1998, by Memorandum Opinion and Order (FCC 98-297). Chairman Kennard, Commissioners Ness, Powell, and Tristani, with Commissioner Furchtgott-Roth not participating.


News media contact: Rochelle Cohen at (202) 418-0253.
Common Carrier Bureau contact: Deena Shetler at (202) 418-0960.