NARUC Winter Meeting
March 6, 2000
Commissioner Gloria Tristani
NARUC Winter Meeting
March 6, 2000
Good morning, it's a pleasure to be here with so many of my friends and colleagues from the state commissions. And I particularly want to thank you, Commissioner Gillis, for the opportunity to speak this morning.
I'm a relatively new member of the Committee on Consumer Affairs, and I'm delighted to be a part of the good work that the Committee is doing to advance a pro-consumer agenda. The Committee is taking up issues ranging from slamming to possible energy legislation to this morning's topic, truth-in-billing. Moreover, the Committee supports several important initiatives that should help to facilitate cooperation among federal and state regulators in our consumer protection efforts.
An increasingly competitive telecommunications marketplace requires us to be especially vigilant in protecting consumers' interests. Consumers have more choice than ever before among providers and among services. Detailed information, however, is often hard to get. And those choices can be overwhelming. Telecom providers offer countless service packages and rate plans containing intricate price terms and conditions. Where competition flourishes, there will always be competitors who take advantage of consumers. But by forging relationships regulators can effectively combat the anti-consumer practices of unscrupulous providers. I would like to highlight some of the areas where federal and state and interagency cooperation is particularly important.
For starters, the Telecommunications Act clearly envisioned that the FCC and the states should work together to battle slamming. Indeed, for some time now the states and the Commission have been productively working together to share information and develop new and creative solutions in this endeavor. The Consumer Committee has worked to revitalize one joint forum for addressing slamming issues: the SNAP, the State and National Action Plan, which includes staff from NARUC, the FCC, and the National Regulatory Research Institute. The group now meets regularly to develop joint public information strategies to increase awareness of telecom issues affecting consumers, coordinate enforcement to protect consumers against abuses in the marketplace, and coordinate regulatory initiatives.
Moreover, the FCC and NARUC have been working together to develop a database on slamming and cramming. The FCC's Consumer Information Bureau has created a prototype, on which I understand they received some feedback yesterday. Assuming NARUC and the SNAP find the prototype useful, the Consumer Information Bureau will partner with five to seven states to conduct a six-month trial, in order to assess the level of interest and the usefulness of the data. I'd like to give you a preview of the prototype today.
As you can see from the opening directory screen, the database is designed to allow a user to search by state or by company. Suppose you wanted to search by state, for example in Alabama. You can view a list of the names of the companies against whom consumers have filed complaints and the number of such complaints. Alternatively, you could search by the name of a phone company. In this example, by clicking on Alexander Phone Company, we view the states in which the company has allegedly slammed consumers and the number of complaints filed. The database also provides summary information by company and by state. Finally, the database will contain a list of definitional terms and a list of state agency contact information.
As you know, in December of 1998 the FCC adopted new slamming rules that strengthened the procedures by which carriers obtain customer verification. We also adopted aggressive rules to take the profit out of slamming by absolving subscribers of liability for some slamming charges. Although the majority of our rules took effect last April, the D.C. Circuit stayed the new liability rules that formed the core of our efforts against slamming.
I have every reason to think that these rules would have had the intended effect. Indeed, the Commission saw a sharp decline in slamming complaints during the period immediately prior to the May 1999 stay of the liability rules, which may have been attributable to carriers' recognition that the new rules would make slamming a practice they could not afford. While in April 1999, the Commission received 1,355 slamming complaints, in May 1999, it received only 840 such complaints. Local telephone companies reported similar declines in the number of complaints they received.
The Commission will, I hope, act soon to resolve pending petitions regarding its liability rules, so that we may ask the Court to lift the stay. In connection with those petitions, last year NARUC filed a letter on behalf of state commissions requesting that the Commission allow them to be the primary adjudicators of slamming disputes. State commissions generally have procedures in place for handling slamming complaints. In fact, a recent General Accounting Office report indicates that state processes have been quite effective in resolving slamming complaints.
Joint state-federal activities are clearly beneficial in preventing consumer fraud, and I am interested to hear from you regarding your level of interest in serving as the slamming administrators for consumers in your respective states. Do states feel they have sufficient resources to administer the FCC's liability rules in addition to state requirements? No matter how the Commission ultimately resolves the issue of who will administer the slamming rules, clearly there is an important role for the states to play.
Another consumer issue on which I urge continued federal/state cooperation is truth-in-billing. Last Spring the FCC adopted truth-in-billing principles that will make it easier for consumers to read and understand their telephone bills. In 1999 the FCC received over fifty thousands calls from consumers expressing confusion over their bills, by far the largest single category of caller concerns. Our Consumer Information Bureau is working hard to analyze these complaints to determine what aspects of their bills customers find confusing and how consumer concerns can be addressed. Certain billing practices - like failing to identify the carrier responsible for the charge and vague or inaccurate descriptions of charges - create confusion. And confused consumers are especially vulnerable to unscrupulous practices like slamming and cramming, two areas in which the FCC receives thousands of complaints each year.
Federal/state cooperation on billing issues is necessary to present a united front. We need to send carriers the message that we expect them to provide consumers the basic information that they need in order to make informed choices. We need to send carriers the message that we will not tolerate failure to comply with truth-in-billing requirements.
The FCC based its truth-in-billing rules on some basic principles. Consumers should know: 1) who is asking them to pay for service, 2) for what services they are being asked to pay, and 3) where they can go to get more information about the charges on their bills. While these rules may continue to be refined through the reconsideration process, the principles are sound.
A subgroup of your Consumer Committee has begun drafting some model state truth-in-billing rules. I encourage you to adopt the federal standards reflected in the FCC's rules as a minimum standard, imposing additional requirements if you find that your citizens need additional protections. By adopting guidelines that track the federal rules, the states can help ensure a standardized billing format, with itemized charges, that will allow accurate comparison shopping for consumers.
Truth-in-billing and truth-in-advertising, the subject of this afternoon's panel, must go hand in hand in order for consumers to make informed choices in a competitive marketplace. Clear and understandable bills allow consumers to understand where their telecommunications dollars are going. Likewise, truthful and non-misleading advertising that contains material information about the terms of service helps consumers make informed choices.
That's why I'm so pleased with the partnership forged between the FCC and the FTC to address truth-in-advertising issues. Just last week the two agencies issued a joint policy statement regarding advertising of dial-around and other consumer long-distance services. This partnership marries the FCC's common carrier expertise with the FTC's advertising law expertise. And the end result is a clear and concise statement on what are and are not acceptable advertising practices for the marketing of dial-around and other long distance services.
I hope that the FCC and the FTC will continue to work together and with the states to address truth-in-advertising issues. Indeed, I believe we could productively work together to address telemarketing issues as well. Many of us at the FCC are watching with particular interest the FTC's review of its do-not-call rules. I know that about twelve states have their own do-not-call requirements to curb unwanted telephone solicitations. And a number of other states, including Iowa, South Dakota, and Washington, are presently considering establishing do-not-call lists by state legislation.
Finally, we all must continue to work together to educate consumers. Consumer education and enforcement of pro-consumer rules must be closely linked. The Commission's newly-formed Consumer Information Bureau is an effort to maximize the ability of consumers to get information about their rights at the federal level. And we continue to be interested in learning about your experiences in the states. What sorts of outreach and education efforts have worked for you?
Combating slamming, promoting truth-in-billing and truth-in-advertising, and educating consumers are among the many ways in which we must continue our partnerships. I look forward now, to hearing from our distinguished panelists on the truth-in-billing issue. Thank you.